Foreclosure freeze coming for the holidays

NEW YORK (CNNMoney.com) -- Several of the big mortgage players are playing Santa Claus again this year, saying they will not evict borrowers in default during the two weeks surrounding Christmas.

Freddie Mac (FMCC) and Fannie Mae (FNMA), the two government-controlled mortgage giants, are freezing all foreclosure evictions on mortgage loans they own or back from Dec. 20 through Jan.3.

Evictions mark the end of the foreclosure process. After the home is sold at foreclosure auction -- or banks take possession of the home -- owners must leave the property or face eviction notices.

"If the property is occupied, our foreclosure attorneys will suspend the eviction to provide a greater measure of certainty to families during the holidays," said Anthony Renzi, executive vice president of single family portfolio management at Freddie Mac. Rest of the Article

California Foreclosure Report

Preforeclosure inventories dropped 11.8 percent in October from the prior month, largely thanks to a 16.8 percent drop in Notice of Default filings. Foreclosure suspensions led to a 29.9 percent decline in foreclosure sales that went Back to Bank (REO), and a 26.4 percent decline in those Sold to 3rd Parties. Despite the significant decline in new Bank Owned (REO) properties, Bank Owned (REO) inventories actually rose, as REO resales continued to slow. 


View all California stats by state, county, city or ZIP 

September 2010 Foreclosure Report for California

The number of foreclosures Sold to 3rd parties, typically investors, declined 15.6 percent in September. Most foreclosure investors flip the properties they purchase after taking care of title, occupancy and repairs. This process is taking 44.5 percent longer than it did a year ago, up from 95 days to 137. The number of foreclosure sales that went back to the bank was up 4.9 percent, while the total inventory of Bank Owned (REO) properties increased by 5.3 percent as REO resales slowed. Notice of Trustee Sale filinges declined 17.2 percent while Notice of Default filings were essentially flat with a decrease of 1.9 percent.  Read more

Foreclosure Freeze: Better for You or the Banks?

While defaulters living for free may be helping to stimulate the economy with money they can spend on things other than their mortgage, most of the rest of us will feel the pain as the foreclosure freeze delays the healing process for the housing market. Yet some think a delay in foreclosures might not be bad for the banks.

In fact columnist, Peter G. Miller, thinks this delay in foreclosures we've seen so far over the past year or so could have "prevented the financial system appearing significantly worse." He thinks the "national fudging process" of the banks may be able to go on a bit longer as the banks wait "until property values increase for real." Right now the banks are carrying many of these foreclosed properties at a higher value than they are worth today. Once they sell them off, they'll have to report the true value of the assets they are holding.   Read More

Permanent HAMP Mod Conversions Down 27%

The administration released new data on the Home Affordable Modification Program (HAMP) Wednesday. Just over 33,000 homeowners received a permanent HAMP mod in August.

That’s 27 percent below the number of permanent conversions the month before. So far, about 468,000 permanent modifications have been granted to distressed homeowners under the federal program....

Rest of article

New Foreclosure Filings Up in California for Fourth Straight Month

Source: DSnews.com By: Carrie Bay

California’s notice of default filings, the first step in the state’s foreclosure process, rose for the fourth successive month in August, jumping another 16.6 percent, according to the locally based tracking firm ForeclosureRadar.

The company’s latest data on the Golden State also show that fewer distressed homeowners are finding foreclosure relief. Foreclosure cancellations dropped 11.2 percent in August, while more homes were lost. ForeclosureRadar says there were a total of 17,841 foreclosure sales in California last month, up 15.6 percent compared to July.
The state’s REO inventory increased by about 4,000 properties during the one-month timeframe and now stands at an estimated 108,000 repossessed homes that have not yet been resold, according to ForeclosureRadar’s report.

New foreclosure filings in California are down 16.03 percent from last year, but the pipeline is becoming increasingly clogged. ForeclosureRadar reports that there are currently 155,000 homes in the state in a pre-foreclosure status, another 123,000 properties scheduled for trustee sales, and the time-to-foreclose has lengthened to an average of 287 days.

Starting this month, ForeclosureRadar has also expanded its coverage to include data on Arizona, Nevada, Oregon, and Washington, with drill-down capabilities to the state,country, city, and ZIP code levels on its Web site. The company has been tracking foreclosure activity in these additional states for over a year now to capture historical data and provide details on market trends as part of their inaugural reports.

In Arizona, ForeclosureRadar found that notices of trustee sale dropped 12.2 percent in August after climbing 28.8 percent the month prior. Banks took back more properties at auction than they resold in August leading to a continued climb in the state’s REO, up 4.79 percent from the previous month and a 60.48 percent increase year-over-year.

Among the highlights from the Nevada report, is that after seeing an increase in the average opening bid at auction in July, opening bids in August dropped by 4.6 percent. Foreclosure sales to third parties increased by 26.6 percent, and lenders took a record 324 days from the filing of a default notice to completion of the foreclosures sold at auction last month.

Oregon’s number of properties scheduled for foreclosure sale rose by 17.1 percent in August, as the number of new notices of trustee sale significantly outpaced the number of foreclosures that were cancelled or sold. Overall, notice of trustee sale filings in the state rose by 9.3 percent during the month, and notices of default were up 10.7 percent.

In Washington, foreclosure activity decreased across the board, with notices of trustee sale down 15.8 percent, completed foreclosure sales down 10.8 percent, and foreclosure cancellations down 21.8 percent. Despite these declines, the number of properties scheduled for foreclosure sale rose by 2.7 percent and bank-owned inventories increased 9.4 percent.

“Real estate markets are local, not national, and like other real estate trends, foreclosure trends vary a great deal by location,” said Sean O’Toole, CEO and founder of ForeclosureRadar. “We are excited to be able to bring timely, accurate, in-depth and location specific foreclosure data to the Arizona, California, Nevada, Oregon, and Washington markets.”

Fannie Mae to Sell Foreclosed Homes With Subprime Lending Terms

Source: Lita Epstein Housing Watch

Thought those great low down-payment deals were gone? Think again. If you're willing to buy a home foreclosed by Fannie Mae through the new HomePath program, you may be able to purchase one with as little as 3 percent down. Even better, that 3 percent can be a gift from a family member or other third party, or a loan from a nonprofit, or a state or local government.

Sound a lot like those subprime loans that started this housing mess?

The terms are similar, but the big difference now is that to qualify for those favorable terms in the HomePath program, you must choose one of Fannie Mae's foreclosed homes, and you must buy it "as is."

Here are the terms you can expect:

• Low down-payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only).
• You may qualify even if your credit is less than perfect, as low as 660, when most lenders want a minimum of 700.
• You can qualify as an investor or owner-occupant.
• Down payment must be at least 3 percent for an owner-occupant, but it must be funded by your own savings or by a gift, a grant or a loan from an employer, a nonprofit organization, or a state or local government. Investors must come up with 10 percent down.
• No appraisal is required.
• No mortgage insurance is required, but the terms of the loan may not be as favorable. You need to look at the options with your lender.

To get these very favorable terms, you'll need to buy the home "as is." But if you find the perfect home and it needs some renovation, you'll be able to quality for the HomePath Renovation Mortgage. This type of mortgage will fund both the purchase of the home and some light renovation.

If you are applying for renovation money, you may need to get an appraisal.

Also, to make it easier for first-time buyers or buyers without much cash to get in on these deals, "seller contributions" will be allowed in amounts as high as 6 percent of the purchase price, which means that your need for down-payment money could be greatly reduced. Maximum loan amounts could be as large as $729,750 in the highest-cost areas, $625,500 in others, and $417,000 in the rest of the U.S.

You can find listings of available homes at the HomePath website. Once you find a home you'd like to see, you'll find a link to an agent who can show you the home. If you want to determine what you can afford before getting started on a home search, contact a HUD counselor who can help you set up a budget and figure out what you can afford.

You may also want to talk with a potential lender and get pre-approved for financing. This may allow you to jump to the top of the pile -- if more than one person puts in a bid for the house -- because the seller knows you can qualify for the loan. It also gives you an idea of what price range you should seek out when looking at potential home purchases. To get a pre-approval letter, a lender will need to gather information about your job, assets, income and debts. Then he or she will determine how much financing you're qualified to receive.

If you want to take advantage of some great foreclosure deals out there, this may be the perfect way to get started.

Lita Epstein has written more than 25 books including "The 250 Questions Everyone Should Ask About Buying Foreclosures."

Homebuyer Tax Credit: Another on the Way?

By Stefanos Chen Aug 30th 2010 @ 4:35PM
Filed Under: News, Economy


Could this month's dreadful home sales numbers prompt the feds to offer another homebuyer tax credit? Mum's the word on Capitol Hill, but HUD Secretary Shaun Donovan would not rule out the option during an interview Sunday on CNN. Existing-home sales sank 27.2 percent in July, and sales of new homes dropped to their lowest point since 1963. The dreary sales figures arrive on the heels of the end of the up-to-$8,000 first-time homebuyer tax credit, which expired at the end of April. July was to be the first month in which home sales would reflect consumer confidence after the deadline. While most analysts anticipated a drop in sales after the tax credit, Donovan admitted that the decline was worse than expected. "It's too early to say whether the tax credit will be revived," he said, but he added that the government would do "everything [it] can" to stabilize the housing market. What Donovan would confirm, however, is the creation of two new programs: an FHA refinancing effort to help underwater homeowners and an "emergency home loan program" for unemployed borrowers facing foreclosure.



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Search Bank Repos, Auctions and PreForeclosures

Was your loan mod denied?

Fannie Mae Places Ban on 'Appraisal Cutting'

Source: DSNews.com By: Carrie Bay

Fannie Mae is implementing a new policy this week regarding home appraisals. Effective Wednesday, September 1, lenders that sell loans to the GSE will be prohibited from making changes to appraisers’ valuations – a practice that has become more widespread and is commonly referred to as “appraisal cutting.”
Fannie Mae says through recent post-purchase reviews of loan files, cases were identified where the lender had reduced the opinion of market value in the appraisal report based upon underwriter judgment, automated valuation models, or other methodology. The practice has prompted the GSE to place a ban on so-called appraisal cutting.

In an updated policy guide, Fannie says the lender is responsible for ensuring that appraisal reports are complete and that any changes to the report are made by the appraiser who originally completed the assessment.

If the lender has concerns with any aspect of the appraisal that result in questions about the reliability of the opinion of market value, Fannie Mae is directing the lender to first attempt to resolve its concerns with the appraiser directly by identifying the deficiencies found and providing justification for requesting correction of the deficiencies the lender believes make the report unreliable.

If the lender is unable to resolve its concerns with the appraiser, the lender must obtain a second appraisal prior to making a final underwriting decision on the loan.
“Any request for a change in the opinion of market value must be based on material and substantive issues and must not be made solely on the basis that the opinion of market value as indicated in the appraisal report does not support the proposed loan amount,” according to Fannie’s new policy.

The GSE adds, “Lenders must pay particular attention and institute extra due diligence for those loans in which the appraised value is believed to be excessive or where the value of the property has experienced significant appreciation in a short time period since the prior sale.”

Fannie also states that lenders must only use appraisers who “have the requisite knowledge to perform a professional quality appraisal for the specific geographical location and particular property types.”

The Uniform Standards of Professional Appraisal Practice (USPAP) allows an appraiser who does not have such knowledge and experience to accept an appraisal assignment by providing procedures with which the appraiser can complete the assignment, but Fannie Mae says it does not allow the USPAP flexibility.

In a “new policy guide”: issued in late June, the GSE also outlined a number of other requirements surrounding appraisals, including situations in which an appraiser should choose to use either a foreclosure sale or a short sale as a comparable property, and excessive sales concessions which can artificially inflate the sales price of a property.



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Search Bank Repos, Auctions and PreForeclosures

Was your loan mod denied?

30-Year Fixed-Rate Mortgages Hit New Low

Source: Housingwatch
By Stefanos Chen

Just when it seems like the bottom's dropped out, the average rate of 30-year fixed-rate mortgages has slipped again. According to Freddie Mac's Primary Mortgage Market Survey, 30-year fixed rate mortgages averaged a rate of 4.42 percent, down from 4.44 percent last week. It marks the ninth straight week in which the rate has met or set a new record low, said Freddie Mac's Deputy Chief Economist, Amy Crews Cutts. At this point last year, the average was 5.12 percent. Fifteen-year fixed-rate mortgages also hit a milestone, bottoming out at a record-low 3.90 percent, down from last week when it averaged 3.92 percent. Just one year ago, the average rate was 4.56 percent. Cutts cites the end of the homebuyer tax-credit as a continued impediment to home sales. Will we see a drop in 30-year fixed-rate mortgages for a 10th week in a row? It may be more surprising if we don't.





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Search Bank Repos, Auctions and PreForeclosures

Was your loan mod denied?

July 2010 California Foreclosure Report

Read the latest from the California foreclosure report: Download Here

Highlights from this report:

• Notices of Trustee Sale fell 18.91% back down to expected levels after a 22% spike last month
• Cancellations drop 13.75%, a reversal of last months trend, but remain up 75.10% year over year
• Pre-Foreclosure inventory was down 20.18% from June, indicating that lenders may be noticing sales more quickly
• Discounting on the courthouse steps continues to climb since the beginning of the year, up approximately 5% since January to 21.6%
• Time-to-Foreclosure was down month over month by 3.42% to 226 days
• Time-to-Resell fell slightly for 3rd Party investors to 164 days, a 3.53% decline month over month.

Source: http://www.foreclosuretruth.com/blog/sean/author/mark/

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I want to stay in my home

Stay in Your HomeIf you are facing financial difficulties—whether they are short or long term—start exploring your options today.


Even if you haven’t yet missed a mortgage payment, but are worried you might fall behind soon, now’s the time to take action. You may be eligible to refinance or modify your mortgage loan, lowering your payment and making it more affordable. Or, if you’ve missed payments and find yourself buried under late fees and past-due amounts, you may qualify for a temporary (or permanent) solution to help you get your finances back on track and avoid foreclosure.


Here’s an overview of possible options to help you stay in your home and avoid foreclosure:

• Refinance
• Repayment Plan
• Forbearance
• Modification
• Deed-for-lease

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June Foreclosure Report

Properties that are in the preforeclosure stage.

Los Angeles County

June 2010 5,153

May 2010 4,760

Inland Empire (SB and RVSD County)

June 2010 4,899

May 2010 4,276

Foreclosure filings where up in June after two months of decline

On somebody else’s advice, many homeowners not able to pay their monthly mortgage payments apply for the loan modification process, but they are discouraged when they come to know that they are in the middle of a confusion which they have to solve with their loan lenders. Forms, evaluations, paperwork, proofs, applications, qualifications and others may seem to frustrate many borrowers, but the process is quite easy if understood correctly.

More than 50% of the mortgage borrowers are not able to qualify for the loan modification due to recession, high unemployment rates and other monthly credits such as car loan and credit card bills.

If you are worried about foreclosure or worried about some one that you know is going through difficult times and want to stop foreclosure.  Please visit www.ModificationDenied.com

Ugly Real Estate Listing Photos: How to Avoid Them

Internet real estate listings are full of photos of homes for sale, allowing buyers to spend hours looking at pictures. With such a large selection, you'd think that real estate agents would think twice before allowing poorly photographed homes to appear in their listings. But still, there are plenty of ugly listing photos out there.

A home described as a "charming opportunity" doesn't look so charming, lawns need to be mowed, and cameras need to be focused. A website in Seattle keeps track of such detrimental listings, and the photos should be enough to turn a potential buyer away. Even multimillion-dollar homes aren't immune.

But good photos can help a home sell fast, San Francisco photographer Herman Bustamante told HousingWatch. He photographs real estate and has seen $1 million homes sell within a week with professionally taken photos in the listing.

Too many real estate agents will take listing photos themselves to try to save some money, but it will cost them in the long run, Bustamante says.

The most common mistake is to use a point-and-shoot camera with a flash on the top, which can make the picture look flat and one-dimensional, he says. The cameras aren't as wide, so an entire room can't be shown.

Here are some other tips for getting the best real estate listing photos:

Clean up. 
Mowing the lawn and cleaning up the front yard sounds like basic advice, but too often this isn't done on homes being put up for sale. First impressions count, and the front of the house is where the first impression starts. If the front yard is a mess, then move in close to cut the mess out if you can. Also, clean up the inside of the home, and if the home is still occupied, move everything out of a room before photographing it.

"Basically you need to get everything out of there," says Bustamante.

Get a good exterior shot.
This is the equivalent of curb appeal, according to the Journal story, and could prevent users from clicking further. Take it about 10 or 20 feet above street level and put away anything else that can distract from the picture -- car, garbage cans, "for sale" sign.

Scott Vlha, owner of Doorstop Photography, told HousingWatch that more experienced photographers might try adding foreground elements, such as tree branches or flowers, if the front yard has more "curb appeal."

Getting out of the car is necessary, believe it or not, even for busy photographers with a list of houses that they need to get to. "Just getting out of your car instead of shooting out a window can really help," Vlha says. "Foreground elements such as fences, ugly curbsides, etcetera, can really detract from the selling points of the home."

Stage it.
Home staging, especially on empty homes, can help give buyers an idea of what the home would look like with the best furniture available. Move your outdated furniture out, get good lighting, open the drapes and use a wide-angle lens.

Inside photo tips.
Vlha recommends using available light because it's much softer and appealing than a straight strobe light, which can wash out subtle textures in wood, flooring, and cabinets. You might benefit from having a tripod and using that to aid you in low-light situations, in which a longer exposure is needed in order to use available light.

Watch the weather and the sun.
The time of day that you photograph the house can be very important, especially if you are shooting into the sun, says Vlha. This makes the photo very "flat" with no contrast and the appeal of the home is compromised. A professional photographer can make your home look great in the sun or rain, although too much of either may not be a good thing. If you're selling your ski house in the winter, try to get an exterior shot in the snow. But if it's still for sale in the spring, take an updated shot in the sun.

Try a few angles, not just straight-on.
Sometimes moving just a few feet from the center of the home can really show off the expanse of the property as well as create a more interesting photo to look at.

No pets.
Keep your pets, or any signs of them, out of listing photos since they can be associated with bad smells, allergens and patchy yards. "The worst one is when people leave cat food dishes on the counters," said Linda Monforton, virtual tour photographer for Coldwell Banker Select in Tulsa.

Aaron Crowe is a freelance journalist in the San Francisco Bay Area.

Source: HousingWatch

Case-Shiller: Tax Credit Pre-Expiration Rush Boosts Prices in May

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). The Case-Shiller data is generally considered to be the most reliable measure of overall home price changes for a region, since they only consider repeat sales of homes when calculating their index, instead of looking at all the homes that sold in a given month.

For the full source data behind this post, hit the S&P/Case-Shiller website (requires free registration). For a more detailed explanation of how the Case-Shiller Home Price Index is calculated, check out their methodology pdf. Also remember that the data released on the last Tuesday of a given month is for the period two months prior (i.e. – May data is released in July).

Read More...

Obama Considering Making It Harder to Buy a Home

Obama Considering Making It Harder to Buy a Home

Source: Housing Watch


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“No Limit For Hope”

No Limit Texas Holdem’ Charity Poker Tournament for Hope House Inc.

Sunday, September 19th, 2010 @ Spin Lounge

1:00 pm – 6:00 pm

Hello:


One of the greatest gifts in life you can give is helping people that are less fortunate than yourself. Hope House is a non-profit organization that has been helping people for over forty-five years. Founded in 1963, Hope House provides quality residential services for children and adults with physical and intellectual disabilities in Los Angeles County.


Hope House’s mission is to provide a home-like environment where developmentally disabled children can receive comprehensive therapeutic services, as well as loving and tender care in an enriched, home-like setting, enabling each child to reach his or her fullest potential. Hope House is a home, located in a residential neighborhood where children with disabilities can maximize their potential for independent living and become visible and active members of the community where they live and attend school.


As a local business owner we are asking for a financial donation to become an event sponsor of this worthy cause.


Event Sponsorship Opportunities:

Ace Sponsor: $500 donation, logo banner placement, final table sponsor and
two entries to the tournament.

King Sponsor: $300 donation, logo banner placement and one entry to the
tournament.

Queen Sponsor: $200 donation and logo banner placement.
Jack Sponsor: private donation

The sponsor fee is tax deductible for businesses as an advertising expense. All proceeds will go to Hope House For The Multiple-Handicapped, Inc. (Federal Tax ID # 95-2287909).



Sincerely,



Rick Gonzales                                  Ismael M. Muniz                            Jamie Ruiz
Spin Lounge                                     Endeavor Real Estate                    Hope House, Inc.
Organizer                                         Organizer                                       Organizer

**Please make checks payable to Hope House For The Multiple-Handicapped, Inc. and send them to Spin Lounge c/o Hope House 6532 Greenleaf Ave, Whittier, Ca 90601.

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Senate Approves Homebuyer Tax Credit Extension: What's Next?

It's almost official: The Senate approved a three-month extension on the homebuyer tax credit for buyers in escrow late last night. The House voted in favor of it 409 to 5 on June 29. The Senate vote was unanimous.

Now the bill must be signed by President Obama, which may happen as soon as today.

But will the extension cover those buyers unlucky enough to fall between the deadline and ratification?


The chances are good. The homebuyer tax creditwas extended through September by the House on Tuesday, just one day shy of the June 30 deadline. On Wednesday evening, the Senate unanimously approved the bill, giving homebuyers with pending purchases until the end of September to qualify for the credit. Clearly Congress has made its passage a priority.

The only problem is, even if the president signs the bill today, it remains unclear as to whether or not the extension will function retroactively, thereby including those buyers who could not close between midnight on June 30 and the eventual signing.

Source:

By Stefanos Chen Jul 1st 2010 @ 10:47AM

Housing Watch

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Fannie Mae to Charge Strategic Defaulters, for Everything

by Jon Prior 
4:20 PM June 25, 2010

Source: Housing Wire

Fannie Mae is sifting through borrower data to determine who is strategically defaulting and who is not after announcing more efforts this week to crack down on those who walk away from their homes. And if the GSE determines someone strategically defaulted, then they say they will hold the borrower accountable for all associated costs of getting the house back on the market, in areas that lawfully allow deficiency judgments.


Often when a home forecloses, Fannie Mae brokers and contractors discover vandalism and missing appliances and fixtures when they ready the home for resale, the GSE said. The cost of making those repairs and replacements will be included in the determination of the deficiency amount, the spokesperson said, in addition to the difference in the mortgage balance and the proceeds from the foreclosure sale.
Those who Fannie Mae and its servicers deem strategically defaulted will not be able to secure a Fannie Mae-backed mortgage for seven years after the foreclosure and could face legal action in order for the company to recoup mortgage debt.


Fannie will base its assessment of who is and who isn’t walking away from their home on income verification, information on the borrower’s credit report, and borrower documentation related to the disposition of prior mortgage loans, a spokesperson for Fannie said.


When a borrower applies again for a Fannie Mae-backed mortgage, he or she would have to produce evidence of hardship or extenuating circumstances to get the loan.


“Borrowers who worked with their servicers to address delinquency and/or avoid foreclosure, will be viewed more favorably than those who do not,” the spokesperson said.


According to the announcement this week, Fannie is instructing its servicers to monitor delinquent loans on the verge of foreclosure and recommend cases where the company can pursue deficiency judgments.

Walking Away From Your Mortgage: 3 Reasons It's a Bad Idea

If all the stories in recent months about walking away from your mortgage are to be believed, the practice of not paying this once-sacred obligation has become, if not quite acceptable, then at least understandable. Whether a person is underwater on his or her mortgage, is unemployed, or both, when you listen to the reasons why they decide to give the house to the bank, it actually starts to make sense.

But the costs aren't always apparent.

If you paid $250,000 at the top of the market three years ago, with a 5 percent down payment on a home that is now worth $150,000, why would you continue paying a mortgage that is more than the home is worth? Why not walk away, find a nice rental, and wait out the downturn while you do everything you can to repair your credit rating?

"We've seen an increase in the number of people contacting us about it," said Jon Maddux, CEO of YouWalkAway.com. His company, for a fee, counsels people on how to implement a strategic default (a voluntarily walk-away) from their mortgage. "People have tried other options -- whether it was a loan modification, a short sale -- and it didn't work. This is the next phase."

Still, says Maddox, "We know it's not for everyone. We prefer they try other options if they can before simply walking away. There's more strategy to it than just not paying the mortgage and waiting for the bank to foreclose."

Indeed, there are several reasons, say experts, to continue paying your mortgage. The consequences, they say, can go beyond the ignominy of not honoring your obligations and the hit to your wallet.

1. It Hurts Your Credit Rating

There is the not-so-small matter of your credit score. Your credit score affects a multitude of things, from the interest rate on your credit cards to how big a down payment you will need on a home. While some people take comfort in the fact that once they are free of mortgage debt, they will be able to pay all their bills and clean up their credit score, it doesn't quite work that way. Once you default on a loan, especially one that you could have continued to pay, "it could be well over seven or eight years before [you] are able to obtain a mortgage to buy a home again," Jay Brinkmann, chief economist for the Mortgage Bankers Association told CNNMoney.com.

Even if a lender decides to take a chance on someone who has walked away from a previous mortgage, larger down payments and higher interest rates might be necessary to qualify.

2. You Are in Danger of a Deficiency Judgment

While homeowners who walk away might assume that they are in the clear once the bank sells their home, they could be mistaken. In some states, lenders can sue you for the difference between what you owe on the loan and what the bank sold the home for. This is known as a deficiency judgment.

"If you live in a recourse state, then the lender can sue," said Maddux. "In some states, they can take up to five years to sue. That's a scary thing, although we've seen very few deficiency judgments." In Florida, which is a recourse state with a lot of homes underwater, lawyers are actively pursuing those who have walked away from loans simply because they were underwater.

3. You Might Be Hit With a Big Tax Bill

Even if you have successfully negotiated a strategic default, you might need to pay taxes on the amount you did not pay back to the lender.

The IRS' FAQ on Home Foreclosure and Debt Cancellation states that "if you borrow money from a commercial lender and the lender later cancels or forgives the debt, you may have to include the cancelled amount in income for tax purposes."

While bankruptcy, insolvency and non-recourse loans are not taxable, there are instances in which you will owe taxes on an unpaid mortgage. If you refinanced your mortgage, and used some of that money for something other than home improvements -- whether it was for college tuition, paying off credit cards, or a second home -- you can be taxed on that money.

The bottom line is that walking away from a mortgage "is not something to take lightly," says Maddux. "One of the worst things a person can do is put the key in the mailbox and move out," he says. "If you are struggling to stay in your house: get legal advice, get professional advice. It's better for everyone if you stay and work something out."

By Patricia Orsini

Housing Watch

Senate OKs new tax credit closing deadline

The Senate has amended a bill to give homebuyers who were under contract on a home purchase by April 30 an additional three months to close their escrow and claim the federal homebuyer tax credit.

The current deadline requires buyers to close by June 30 to get the $8,000 tax credit for first-time homebuyers.  Existing homeowners buying a new primary residence are eligible for a $6,500 credit.

The proposal would not have a significant impact on future home sales as the extension would be only for home buyers who already had a contract in hand by April 30.

Lawmakers Consider Home Tax Credit Extension

First time home buyers looking to collect the $8,000 federal income tax credit might still get some time to close on their purchases if a senate amendment unveiled Thursday makes it into law.

Currently as it stands, home buyers must have signed contracts by April 30th and close by June 30th.  The closing deadline, could be pushed back to September 30th.

Lawmakers are not scheduled to vote on the bill until next week at the earliest.


"By extending the transaction deadline, we can ensure that everyone taking advantage of this credit can complete the purchase of their new home" Senate Majority Leader Harry Reid.

Close by June 30th to Claim the Federal Tax Credit

Source:Redfin

If you’re closing on your home this June, you may be eligible for the federal home buyer tax credit.

June 30^th is the closing deadline for this tax credit, so there will be a lot of people trying to close on their homes. That means some serious volume at your local lender, with underwriters who are struggling to keep up with all the loan approvals.

Long story short: there might be some unlucky home buyers who try to close in time for the tax credit, but end up slipping into July. You don’t want to be one of those people.

We put together a list of tips for our clients who are trying to close in time to qualify for the tax credit. Here’s what we came up with:

1. Have all of your mortgage approval documentation ready. Put them in an easy-to-transfer electronic format, such as PDF. Keep these files ready on your desktop, a zip drive, or uploaded to an email account.  This documentation includes: pay stubs, W9s, tax returns, bank statements, employment letters, stock positions, ID, and any other information required by your lender.
2. Make sure your bank has ordered and processed your appraisal. Also, be sure that your loan file is in process with underwriting.  An appraisal can take anywhere from a few days to over a week and no loan is ready to close until it has been approved by your lender.
3. Contact your loan officer daily. Be a “squeaky wheel” to get your loan closed. The squeaky wheel gets the grease, and in this case the grease happens to be worth several thousand dollars.
4. Keep your agent in the loop. It’s your agent’s job to keep the process moving and to look out for your best interests. If your agent is napping on the job, nag them. Nicely. But nag them.
5. Move your money around now, and do not take out any new lines of credit.  No new loans, no new cars, no new credit cards, and no new major purchases. New credit = changes to your credit score. Changes to your credit score = your lender’s underwriter starting all over again. The underwriter starting all over again = bad.
6. Schedule your closing as soon as possible. You won’t be able to schedule closing until you get the final underwriter approval from your lender. Your lender should tell your agent as soon as this happens, but don’t take any chances — call your agent to make sure the info went through. Once you have underwriting approval on your loan, work to get your closing date set as early as possible. You want to have at least a two-day buffer before June 30^th, but a week is even better.
7. Perform your final walk through at least 2-3 days before closing. Make sure everything that was supposed to be fixed post-inspection was actually fixed. Also, make sure no new damage popped up in the meantime. This is especially critical with FHA loans, which can be rejected unless the FHA’s standards of livability are met. For example, we’ve had clients who needed to paint a set of stairs or replace rotted wood before their FHA loans were approved. Not the sort of thing you want to be doing on June 29^th.
8. Stay calm and collected. With a little planning, attention to detail, and teamwork with your agent, you should have no problem closing in time to claim the tax credit.

For Sale: 2BR/1BA Condo in Whittier, CA, $175,00

2BR/1BA Condo 

offered at $175,000

Year Built 

1972 

Sq Footage 

880 

Bedrooms

2 

Bathrooms 

1 full, 0 partial 

Floors 

2 

Lot Size 

1,917 sqft 

DESCRIPTION

Great condo in the city of Whittier. This home features 2 bedrooms and 2 bathrooms. Two story, hardwood, community pool and spa. 1 parking available in the carport. Completely renovated!!!!! Brand new kitchen, bathrooms, moldings, and paint throughout.

562.945.0317

www.endeavorRE.com

The Lion and the Gazelle

Every morning in Africa, a gazelle wakes up. It know it must run faster than the fastest lion or it will be killed. Every morning a lion also wakes up. It knows it must outrun the slowest gazelle or it will starve to death. It does not matter where you are a lion or a gazelle. When the sun comes up, you had better be running.

Every morning an Endeavor agent wakes up and starts running, running to bring YOU results.

Endeavor Real Estate

562.945.0317

info@endeavorRE.com

www.endeavorRE.com

Great News for Buyers with a Short Sale! New Eligibility Rules Announced From Fannie Mae!

There's great news from Fannie Mae for home buyers who have experienced a short sale or deed in lieu of foreclosure. To help the housing market's continued stability, Fannie Mae is changing the "waiting period" (i.e. the amount of time that must elapse after the preforeclosure or short sale event) before home buyers can qualify for a loan.

Several factors will impact these changes, including the required down payment or loan to value (LTV) for the transaction and whether extenuating circumstances contributed to the individual's financial hardship (e.g. a job loss). The following chart highlights the new rules:

Preforeclosure Event	Current Waiting Period Requirements	New Waiting Period Requirements (1)
Deed-in-Lieu of Foreclosure	4 years Additional requirements apply after 4 years up to 7 years	2 years – 80% maximum LTV ratios
Preforeclosure Sale	2 years	4 years – 90% maximum LTV ratios
Short Sale	No policy currently exists specific to short sales	7 years – LTV ratios per the Eligibility Matrix
Exceptions to Waiting Period for Extenuating Circumstances
Preforeclosure Event	Current Waiting Period Requirements	New Waiting Period Requirements (1)
Deed-in-Lieu of Foreclosure	2 years  Additional requirements apply after 2 years up to 7 years	2 years – 90% maximum LTV ratios
Preforeclosure Sale	No exceptions are permitted to the 2-year waiting period
Short Sale	No policy currently exists specific to short sales

(1)The maximum LTV ratios permitted are the lesser of the LTV ratios in this table or the maximum LTV ratios for the transaction per the Eligibility Matrix.
Note that the terms 'short sale' and "preforeclosure sale' are both referenced in Fannie Mae’s announcement and have the same meaning – the sale of a property in lieu of a foreclosure, resulting in a payoff of less than the total amount owed, which was pre-approved by the servicer.

The bottom line:  Buyers who have experienced a short sale or deed in lieu of foreclosure may be eligible for financing sooner than previously expected…especially if they have 20% to put down.

Read the full announcement from  Fannie Mae.

For Sale: 4BR/2BA Duplex in El Monte, CA, $399,000

2 Units

4BR/2 Bath 

This 1,523 square foot single family home has 4 bedrooms and 2.0 bathrooms. It is located at 2245 Bryce Rd El Monte, California. The nearest schools are Maxson Elementary School, Charles T. Kranz Intermediate and Mountain View High School.

$399,000