Jenny Browne, US Preferred Realtor

Interesting Poll completed by Realtor.com ---

Poll: Would-be homebuyers cautious as layoffs rise

By ALAN ZIBEL, AP Real Estate Writer

More than half of potential homebuyers say they're still not prepared to jump into the market, and fear of losing their jobs is the No. 1 reason, a new poll shows.

With unemployment at a 26-year-high and rising, nearly 53 percent of consumers who said they were planning to buy a home in the future cautioned they're not ready to take such a large financial step right now, according to the survey released Thursday by Realtor.com.

Nearly a third of potential homebuyers surveyed cited concern about their jobs as the main reason they would shy away from the housing market. Worries about selling their current home are stopping 16 percent of the prospective buyers surveyed, while just under 8 percent said they fear home prices will keep falling.

Americans recognize there are great deals to be had in the housing market, but many are in too much of a financial pinch at the moment to even think about buying.

Among those consumers who are interested in buying, the survey found, some believe that prices aren't going to fall further and others are looking to take advantage of government incentives designed to kick-start sales.

Nearly one in five potential buyers said they were interested in a deeply discounted foreclosed home, while nearly 15 percent said they want to receive a new $8,000 tax credit for first-time buyers or other state incentives. More than 15 percent said they don't expect prices will fall further, but many are still taking their time.

While foreclosures dominate the housing market in parts of the country, two thirds of those surveyed said they'd be unlikely to buy a foreclosed property, primarily due to concerns about the often-slow process of closing the deal and the potentially high cost of repairs.

To many buyers, purchasing a foreclosure "feels a lot more complex" than other transactions, said Errol Samuelson, president of Realtor.com, an online real estate listing service.

The poll also found that Americans generally are skeptical about President Barack Obama's plan to alleviate the foreclosure crisis by giving the lending industry $50 billion in incentives to lower borrowers' monthly payments. Only 28 percent of those surveyed said the plan is working, compared with 41 percent who said it isn't and 27 percent who didn't know.

The survey was conducted June 19-21 by research firm GfK and involved phone interviews with 1,004 randomly chosen adults. It had a margin of error of plus or minus 3 percentage points.

Commercial Real Estate continues to Slide (taken from the Tribune)

The Valley’s commercial real estate market continued its downward spiral last quarter with higher vacancy rates in the office, retail and industrial sectors, according to commercial brokerage CB Richard Ellis.

The office vacancy rate rose for the eighth consecutive quarter, ending the second quarter at 23.7 percent, 90 basis points higher than last quarter and 500 basis points higher than one year ago. New office occupancy was a negative 253,029 square feet, with more than half of the Valley’s 25 submarkets reporting in the red. The Southeast Valley, however, experienced the strongest new occupancy, at 94,392 square feet.

The retail vacancy rate rose for the ninth consecutive quarter, ending the second quarter at 10.5 percent, fueled by cutbacks in consumer and business spending. New retail occupancy was a negative 174,276 square feet.

As for industrial space, that sector ended the quarter with a 15.2 percent vacancy rate. All but five of the Valley’s 28 industrial submarkets reported negative new occupancy in the second quarter.

Written by Edward Gately

Could be a problem --- what do you think?

Harney: Will tough mortgage rules hurt real estate recovery?

By Kenneth Harney - Washington Post

WASHINGTON - Real estate may be showing signs of a turnaround in many local markets but the nation's largest mortgage players continue to ratchet up their underwriting rules, making home purchases more difficult for some buyers.

Mortgage giant Fannie Mae, for example, issued a laundry list of tougher policies June 8 that could directly affect thousands of buyers in the coming months, especially those involved in job-related transfers.

Reversing a long-standing policy, Fannie no longer will permit mortgage applicants to count the income of so-called "trailing spouses" toward the household income needed to qualify for a loan. A trailing spouse is one who joins his or her spouse or partner in a job-related move, but who has yet to obtain employment in the new location.

If the main breadwinner's income isn't sufficient to handle the mortgage, the loan application will be rejected; only when the trailing spouse has documented income in the new location will it be counted.

Brian Faith, a spokesman for Fannie Mae, said "given the current economic and job market instability, the company has opted to discontinue consideration of trailing secondary wage-earner income in the interest of safer underwriting, since this income would only be anticipated and undocumented."

Jan Hatfield-Goldman, a vice president for Worldwide ERC, the international trade association representing the employee relocation industry, said Fannie's decision "makes the current challenging relocation environment even more so. Some transfers will either have to qualify on the basis of one income" - forcing couples to "buy less house than they wanted" - or "they may be required to rent for an extended period of time until the spouse or couple is re-employed. If a couple must wait to purchase a new home until the spouse can find a new job, it could well cause some to reconsider" whether they want to make the job shift at all.

Worldwide ERC estimates that about 800,000 households in the United States move in a typical year because of job transfers.

Freddie Mac, which with Fannie Mae accounts for 70 percent-plus of all new mortgage volume, still counts trailing spouse or co-borrower income for loan applications, but under strict guidelines:

The amount of the trailing co-borrower income cannot exceed 33 percent of the total qualifying income for the mortgage application.

That any income cannot be from self-employment.

The trailing spouse must have been continuously employed in the same occupation for at least two years preceding the relocation.

And the co-borrower must provide a statement of intent to find employment in the new location. The loan officer or lender must also analyze that local employment market and verify that there are adequate opportunities and earnings potential for the co-borrower.

As part of its June 8 tightening of underwriting rules, Fannie Mae also announced that it plans to discount the values of all borrowers' stock, bond, mutual fund and retirement fund holdings that are claimed toward the applicants' financial reserves needed to qualify for a mortgage. While Fannie previously counted 100 percent of the claimed or documented value of stocks, bonds and mutual funds toward reserves, under its revised policy it will discount them by 30 percent.

HOA's are cracking down on non-paying residents.

Neighbors are forcing neighbors into foreclosure

By Paul J. Weber - Associated Press

IRVING, Texas - Thousands of Americans who have generally kept up with their mortgages are still in danger of losing their homes because they made a fateful trade-off in this shaky economy - they let their homeowner association dues slide.

Many homeowners are learning to their surprise that condo and neighborhood associations that oversee security patrols, mow lawns, plant flowers and clean the community swimming pool may have the right to foreclose when dues aren't paid. That right is often written into the purchase agreement signed by the homeowner.

Among those who have been threatened with foreclosure is Lacey Pilat, who lost her job catering lavish corporate parties and nearly lost her two-story house in this Dallas suburb.

"Basically, our landscaper was foreclosing on the house," said Steve Pilat, her husband. "That's the way we looked at it."

These foreclosure actions do not necessarily pit neighbor against neighbor. Many homeowner associations have turned the job of collecting member dues over to outside management companies. And to them, it's strictly business, not personal.

Homeowner association boards and their management companies defend the practice, saying maintaining the neighborhood preserves everyone's property values.

"We have compassion for those folks. At the same time, we feel for the rest of the homeowners who are paying their dues," said Andrew Schlegel, executive vice president for Merit Property Management, which manages more than 140,000 California homes in community associations.

In California, associations can foreclose only after 12 months of missed fees or $1,800 in back dues.

"No one wants to do this," Schlegel said. "It's only coming up when people are completely obstinate about it."

In fact, most people end up saving their homes. Homeowner association boards - particularly those that have lost many of their dues-paying members to the housing collapse and the slumping economy - often work with down-on-their-luck neighbors to come up with some sort of compromise. That's what happened with the Pilats.

Gauging the number of foreclosures nationwide by homeowner association is difficult. But in Texas, foreclosure attempts initiated by homeowner associations in 19 counties are up 30 percent from two years ago, according to Dallas-based Foreclosure Listing Services.

In the San Antonio area alone, foreclosure actions by homeowner associations jumped to 170 in April from 21 in April 2008, according to RexReport.com.

In Florida, attorney Bob Tankel, who represents hundreds of homeowner and condo associations, said he has increased his staff from three to 16 in the past 18 months to handle a mounting caseload of 3,500 open collections. About one-fifth of those cases have reached foreclosure, he said.

In California, Schlegel said more than 6 percent of the homes that his company manages are in some stage of delinquency with regard to membership dues, up from around 1 percent in previous years.

More than 59 million people live in more than 300,000 association-governed communities nationwide, according to the Community Associations Institute, the nation's largest group for homeowners and condo boards.

Great information about life after short sales and foreclosures

Thanks for the great information, Steve Lines...

If you have experienced a foreclosure, short sale and/or bankruptcy, you are probably in the process of re-establishing your credit and planning for your future.  You may have asked, can I buy a house again in Arizona and how long will I have to wait to do so?  Conventional guidelines do not have a very positive answer.  Fannie Mae now dictates that the minimum waiting period after a foreclosure is five years.  Further, for anyone wishing to purchase a home after five years and up to seven years following a foreclosure, the minimum down payment on a primary residence is 10 percent and the minimum credit score is 680.  For a short sale, there is a two year waiting period with Fannie Mae. Finally, the waiting period after a bankruptcy discharge or dismissal date is four years except in cases of extenuating circumstances.  However, Arizona FHA home loans are much more accommodating and should be considered as part of your plan to return to home ownership.  

The following FHA guidelines answer the question:  How long is the waiting period to qualify for an Arizona FHA mortgage after foreclosure, short sale or bankruptcy.

Foreclosure: FHA states that the minimum waiting period is three years for a borrower whose house has been foreclosed or who has given a deed-in-lieu of foreclosure. If the foreclosure was the result of a documented extenuating circumstances that were beyond the control of the borrower and the borrower has reestablished good credit since the foreclosure the three year waiting period may be waived. Extenuating circumstances include serious illness or death of a wage earner.

If the previous foreclosure was not a FHA-insured mortgage, the three year period will typically begin on the date of the sheriff / trustee sale.  If the previous foreclosure was a FHA-insured mortgage, it will be reported on HUD’s Credit Alert Interactive Voice Response System (CAIVRS). CAIVRS is a Federal government-wide repository of information on those individuals with delinquent or defaulted Federal debt and on those for whom a payment of an insurance claim has occurred. In these cases, the three year exclusion period starts from the date that the claim was paid corresponding to the previous foreclosure. That date will need to be obtained from HUD. 

Short Sale: FHA does not currently have a policy regarding the time required to reestablish credit and obtain a new FHA loan after a short sale. However, the borrower must be able to qualify using standard FHA guidelines including the fact that they typically can not have any late payments on their mortgage for the previous 12 months.

Although this is the official FHA policy, many of the individual banks and lenders who are funding FHA loans have implemented their own policies regarding the waiting period after a short sale. I have seen a typical range between two and four years.  We anticipate that FHA will issue a written policy regarding short sales in the near future. 

Another area of potential concern is that even if you were able to successfully short sale your home, it is possible that the lender still reported the transaction as a foreclosure on your credit report.   Check with your lender if you have experienced a short sale to verify his or her company’s policies. 

Chapter 7 Bankruptcy:  FHA requires that the minimum waiting time is typically no less than two years from the discharge date. In addition, the borrower must have reestablished good credit or chosen to not incur new credit obligations.  If the borrower can show that the bankruptcy was caused by extenuating circumstances beyond the borrower’s control and that he or she has since demonstrated a documented ability to manage his or her financial affairs, the waiting period can be reduced to one year.  Again, extenuating circumstances include serious illness or death of a wage earner.

Chapter 13 Bankruptcy: FHA states that a Chapter 13 does not disqualify a borrower from obtaining FHA financing as long as the borrower can show that at least one year of the pay-out period has elapsed under the plan and that all of the required payments (and mortgage payments when applicable) have been made on time. Also, the borrower must receive permission from the court to enter into the mortgage transaction.

If you have questions or comments, please contact me or feel free to visit my FHA Loan website www.bestFHAlender.com.  Steve Lines, FHA Mortgage Specialist, email: slines@amerifirstloan.com

Help report foreclosure problems in your neighborhood.

FBI cracks down on foreclosed-home strippers

by Peter Corbett - The Arizona Republic

Despite efforts to stop them, former owners of foreclosed homes are stripping and plundering the houses and frustrating hard-working neighbors who watch helplessly as property values fall.

Northeast Valley resident Stacey Huscher was stunned when a former neighbor brought in a crane earlier this month to remove a hot tub from the backyard of his foreclosed home.

"It's making the whole real-estate nightmare even worse," she said of home strippers.

A task force led by the FBI has targeted distressed-property owners who rip out cabinets or lighting and plumbing fixtures to sell as the banks foreclose on their homes. Five people have been arrested by the FBI Mortgage Fraud Task Force. But the problem appears to be widespread, and law enforcement is limited in its jurisdiction.

Huscher and other northeast Valley residents say they have reported the apparent thefts to police, but no action was taken.

Scottsdale resident George Day said he and neighbors reported apparent home-stripping thefts in April from a home in McCormick Ranch.

Scottsdale police spokesman David Pubins said officers responded and took no action because they determined that the homeowner still had title to the home.

"When a homeowner is still shown as having possession of (their) home and they choose to remove items that diminish the home's value, the bank that will take possession in the future can choose to deal with it as a civil matter," Pubins said.

"If there is proof that the bank owns the home on a particular date and the previous homeowner returns to remove fixtures after that date, it rises to the level of a criminal nature."

Julie Halferty, supervisor of the FBI Mortgage Task Force, said that home-stripping thefts can be reported to the FBI at 602-279-5511 or to px_cashback@ic.fbi.gov.

More info. on the changes in the Obama plan to save Homeowners...

The original program was designed to help, homeowners to be eligible for loan adjustments or refinancing if they meet a slew of criteria including being a loan owned by Fannie Mae or Freddie Mac, being a conforming loan limit and being a primary residence, among other things.

 

However, even if you meet all those qualifications, mortgage help is not assured. The homeowners may still not be able to afford reduced monthly mortgage payments of 31% of income. And to protect the investors who own the mortgage, the value of a modified loan still has to be greater than the value of what would be recovered in foreclosure.

 

In these cases, lenders first consider a short sale, a deal in which the home is sold for less than the mortgage balance, and loan servicers may forgive the difference.

 

If that is unsuccessful, the final step is a "deed in lieu of foreclosure," when borrowers voluntarily forfeit the deed and the debt may be erased.
Under the new initiatives, for short sales and deeds in lieu, borrowers will get up to $1,500 to assist with relocation expenses. Treasury will also pay the servicers $1,000 to complete a short sale or deed in lieu.
A deed in lieu might also be better for the banks. Banks acquire the properties back from delinquent borrowers faster and more easily, saving them legal, financial and other costs associated with going through the entire foreclosure process.

 

Not every deed in lieu involves "cash for keys," but motivated lenders will often pay borrowers something, typically about $1,000, to vacate by a fixed date and to not vandalize the homes or strip it of fixtures.
The borrowers who may benefit most from this program are the ones who would still not be able to repay their mortgages under any reasonable workouts.

 

These would include delinquent borrowers who are way underwater, owing much more on their mortgages than their homes are worth, people who have lost their jobs with little hope of finding another and ones who have gone through a divorce or another life-changing event.

 

In those cases, they may be better off cutting their housing expenses by switching to a rental and the cash-for-keys is one more good reason to do so.
However, the deed in lieu may not be simple. If there's a second mortgage, the lender will not allow a deed in lieu unless they get the full cooperation of the holder of the second mortgage.

 

To help solve that issue, Treasury will also make incentive payments to second mortgage holders, up to $1,000, if they give up all claims.

(article written by Strategic Mortgage)

Where do you stand on this debate?

Tax credit ineligible for down payment

by J. Craig Anderson - The Arizona Republic

Federal officials on Monday reversed an earlier decision to allow first-time home buyers to use an $8,000 tax credit to borrow the down payment on a home.

A week earlier, U.S. Department of Housing and Urban Development Secretary Shaun Donovan had told the National Association of Home Builders that HUD would let banks and local governments offer short-term "bridge loans" to cover the down payment for first-time buyers eligible for the tax credit. The loans would have been available to applicants for federally insured mortgages such as Federal Housing Administration loans.

Lenders, home builders and real- estate agents had reacted favorably to the bridge-loan proposal, saying it would open up the housing market to more first-time buyers. However, not everyone was in favor of using the tax credit as collateral on a down-payment loan.

"That tax credit should be savings, not debt," said Patricia Garcia-Duarte, executive director of Neighborhood Housing Services in Phoenix.

Garcia-Duarte said the proposal too closely resembled a now-illegal practice known as seller-funded down-payment assistance, which allowed a home's seller to "gift" the down payment to a specific buyer through a non-profit organization.

Phoenix loan originator Dean Wegner was among the housing-industry professionals who had expressed enthusiasm about the bridge-loan plan.

Wegner said the program would have boosted local home sales, but he added that the bridge loans likely would have come with a high interest rate.

The loans also could have created income-tax issues, according to the IRS officials who shot down HUD's plan.

Still, Wegner remains optimistic that the government will seek other means to circumvent the FHA's required 3.5 percent down payment.

"They will probably come out with a zero-down FHA loan starting January 1, once the $8,000 goes away," he said.

This small change may just help... really still up to the banks.

Obama signs mortgage bill into law

by Philip Elliot - Associated Press

WASHINGTON - President Barack Obama said homeowners facing foreclosure would have a second chance under a measure he signed into law on Wednesday, but he added consumers still must live within their means.

The law encourages banks to spare homeowners from foreclosure and cracks down on lenders who take advantage of them. The bill passed Congress earlier this week and Obama bypassed a promised five-day waiting period to make it law.

"There are Americans desperate to find a job or unable to make ends meet, despite work in multiple jobs, Americans who pay their bills on time but can't keep their heads above water," Obama said in the White House's East Room.

"Americans living in fear that they're one illness or one accident away from losing their home, hardworking Americans who did all the right things, met all of their responsibilities, yet still find the American dream slipping out of reach."

The law - officially called the Helping Families Save Their Homes Act - expands an existing $300 billion program that encourages lenders to adjust a mortgage if the homeowner agrees to pay an insurance premium. The program, set to expire in 2011, would swap out a homeowner's high-interest rate for a 30-year fixed loan backed by the Federal Housing Administration.

Because of strict eligibility requirements, only about 50 homeowners are refinancing through the program compared to the 400,000 people it was estimated to help.

"Too many administrative and technical hurdles made it very difficult to navigate, and most borrowers didn't even bother to try," Obama said. "And this bill removes those hurdles, getting folks into sustainable and affordable mortgages and, more importantly, keeping them in their homes."

The lending industry helped scuttle a tougher measure that would have forced lenders to reduce the monthly payments of owners in bankruptcy.

Obama also blamed greed among lenders and irresponsibility among borrowers for part of the financial crisis that has led to 1.3 million jobs lost since February.

"Now, much of what caused this crisis was an era of recklessness, where short-term gains were too often prized over long-term prosperity," Obama said. "And too often in our nation's capital, we said the right words, we patted ourselves on the back, but ultimately failed to do what we were actually sent here to do - and that is to stand up to the special interests and stand up for the American people."

The bill also extends through 2013 an increase in deposit insurance by the FDIC from $100,000 to $250,000.

Good news, if you want to pursue a short sale...

Feds get behind short sales
by Inman_News

The Obama administration will encourage troubled borrowers who don't qualify for loan modifications or can't keep up payments on a modified loan to pursue a short sale or deed their property to their lender in order to avoid foreclosure.

While the main thrust of the administration's Making Home Affordable initiative remains loan modifications and refinancings, the program is being updated to provide incentives for borrowers and loan servicers to engage in short sales and deeds-in-lieu of foreclosure.