April 5th, 2010
As of today, the short sale process is streamlined. However, it remains to be seen how seamless the changeover will be for lenders.
The Home Affordable Foreclosure Alternatives (HAFA) program provides the following incentives.
- $3,000 to borrowers for relocation assistance
- $1,500 to servicers for administrative and processing costs
- Up to $2,000 to investors who allow up to $6,000 in short sale proceeds to be distributed to subordinate lien holders
HAFA also provides a big protection for participating sellers: “Requires borrowers to be fully released from future liability for the first mortgage debt and, if the subordinate lien holders receives an incentive under HAFA, those debt as well (no cash contribution, promissory note, or deficiency judgment is allowed).”
The National Association of Realtors reports that borrowers will have to meet certain criteria to qualify for this program.
- “Principal residence. The property may be vacant up to 90 days before the date of the Short Sale Agreement (SAA), Alternative Request for Approval of Short Sale, or DIL (deed in lieu of foreclosure) but only if the borrower documents they were required to relocate at least 100 miles from their home for purposes of employment and they have not purchased another property in the 90 day period.”
- “First lien originated before 2009″
- “Mortgage delinquent or default is reasonably foreseeable”
- “Unpaid principal balance no more than $729,750 (higher limits for two- to four-unit dwellings)”
- “Borrower’s total monthly payment exceeds 31% of gross income”
HAFA’s goal is to prevent underwater properties from going into foreclosure.
The National Association of Realtors (NAR) produced the following materials for consumers.
The US Treasury Department also released its own guidelines for the program.
DHW asks: Do you think HAFA will successfully streamline the short sale process?
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Posted in HAFA, Home Affordable Foreclosure Alternatives, short sale, treasury, underwater, webinar | 1 Comment »
March 11th, 2010
Florida governor Charlie Crist instructed the Interim Emergency Management Director to write a letter to FEMA Regional Administrator Philip May requesting federal assistance for state residents affected by toxic drywall.
In the letter, Crist asks FEMA to “conduct a preliminary damage assessment related to the issue caused by the degradation of Chinese drywall used in homebuilding in Florida.” The Florida Office of Insurance Regulation said damage caused by Chinese drywall is not covered by homeowners insurance.
The Drywall Victims Insurance Protection Act of 2009 has yet to make its way through congress.
The letter to FEMA can be viewed here.
DHW asks: Have you or anyone you know been affected by Chinese drywall?
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Posted in chinese drywall, crist, drywall victims insurance protection act, fema, florida, homeowners, insurance, toxic drywall | 1 Comment »
March 11th, 2010
Real estate data tracking firm, RealtyTrac, reported foreclosures fell for a second straight month in February.
The numbers
February foreclosure filings of 308,524 reflect a decrease of 2 percent from January. However, this is still a 6 percent year-over-year increase.
“The 6 percent year-over-year increase we saw in February was the smallest annual increase we’ve seen since January 2006, when we began calculating year-over-year increases, but it still marked the 50th consecutive month of year-over-year increases in foreclosure activity,” said James J. Saccacio, CEO of RealtyTrac.
Some fear the recent decrease in foreclosures is a false-positive. With the Treasury’s HAMP coming under fire for its low success rate in modifying mortgages for at-risk homeowners, many fear foreclosures will eventually find their second wind.
DHW asks: Do you think foreclosures will continue to decline?
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Posted in HAMP, foreclosure, foreclosures | No Comments »
March 10th, 2010
The Huffington Post reports Real Housewives of New York rivals Kelly Bensimon and Ramona Singer are bringing their feud to the Hamptons real estate market as the two try to rent out their homes.
DHW asks: Do you really care?
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Posted in hamptons, hamptons real estate market, home, house, new york, new york market, real housewives | 1 Comment »
March 8th, 2010
A great article published in the New York Times taps into the American psyche when it comes to homeownership. The author, Robert J. Shiller (one half of the super Swedish rock group Case/Shiller), provides a brief history behind the creation of The Federal Housing Administration (FHA) and Fannie Mae in the 1930’s. Mr. Shiller notes these institutions were created to prop up the housing market and thus stimulate employment. (One-third of the unemployed during The Great Depression were identified with the building trade.)
Mr. Shiller questions the financial soundness of having the taxpayer continue to finance (or at least insure) the American Dream. He feels the driving force behind this call to action is Americans’ belief that homeownership means the preservation of certain liberties. While few can argue with this observation, the article leaves out another important side of the story.
Prior to the advent of FHA, Americans were losing a home to foreclosure at a rate of 1,000 a day. At the time, it was not uncommon for homeowners to have multiple mortgages (each with short terms and high rates). Sound familiar? FHA mortgages were created to cure this ailment by allowing at-risk homeowners to refinance these high cost loans with low, fixed rate mortgages. The program was later expanded to help homebuyers finance their purchases. What FHA brought to the table for the first time was an amortized mortgage. Overtime, this instrument helped Americans build equity in their homes as well as build their personal wealth.
While Mr. Shiller is right to question the risk of supporting these institutions, it’s also important to look at the wealth building opportunities these lending programs have provided to disadvantaged populations. Rather than reinventing the wheel to get us out of The Great Housing Depression, we’d be wise to revisit history and learn what we can from the FHA.
DHW asks: What do you think?
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Posted in FHA, Housing, case-shiller, fannie mae, homeowners, robert shiller, shiller | 1 Comment »
March 7th, 2010
Long live the barter system. A man offered to trade his cherished baseball card collection on craigslist for a San Diego home to share with his fiancee. His collection is thought to be worth $500,000. Hm, where did I put that Reggie Jackson rookie card?
DHW asks: Would you trade a prized possession for a house?
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March 3rd, 2010
Homebuyers have 58 days to obtain a written, binding contract to qualify for the housing tax credits. First-time buyers and buyers who have not owned a primary residence for the past 3 years qualify for an $8,000 tax credit (or 10% percent of the sales price, whichever is less) so long as they are under contract by April 30, 2010 and close on the home by July 1, 2010. Homebuyers who have owned a primary residence consecutively for 5 of the previous 8 years qualify for a $6,500 tax credit. The home being purchased in either scenario must be a primary residence.
Income limits are very generous for those who buy between now until April 30, 2010:
- $125,000 – single (Additional $20,000 phase out)
- $225,000 – married (Additional $20,000 phase out)
While the $8,000 tax credit is getting a lot of use, Realtors are seeing very few existing homeowners taking advantage of the $6,500 tax credit.
The housing tax credits were extended under the H.R. 3548 Worker Homeownership and Business Assistance Act of 2009
DHW asks: Will you take advantage of the housing tax credits?
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Posted in $6500, $8000, H.R. 3548 Worker Homeownership and Business Assistance Act of 2009, Housing, housing tax credit, housing tax credits, realtors, tax credit extension | 1 Comment »
March 3rd, 2010
Recent regulatory changes to RESPA are focused on creating a more transparent experience for homebuyers and borrowers.
The upside:
- Borrowers are able to compare actual closing costs with fees originally quoted on the lender’s good faith estimate (GFE)
- Lenders are required to provide more accurate GFEs or be forced to reimburse borrowers for certain costs that exceed the original quote by more than 10 percent (see page 28 of RESPA handbook for more explanation)
The downside:
- Lenders are taking longer to process a loan, thus extending the time needed to close a real estate transaction by a few days
Prior to these changes, most real estate closings could be preformed within one hour. However, lenders are not the only folks needing more time to deal with the new regulations. Real estate attorneys and title agents are taking more time to explain new closing documents.
In today’s environment, trying to fit a real estate closing in one hour is like trying to fit a square peg in a round hole. There is widespread bellyaching from all sides involved that closings are being rushed in an effort to move on to the next one. To avoid adding more stress into the mix, real estate attorneys and buyers would be wise to allow two hours for closing escrow. An attorney’s focus should be on the closing at hand and not the next party waiting to close.
DHW asks: Do you think real estate attorneys and title agents should allow more time for closings?
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Posted in Real Estate, respa, respa booklet, respa changes | 1 Comment »
February 28th, 2010
Following through on a promise made last year to fight housing discrimination based on sexual orientation and gender, HUD is seeking help from gay communities in Chicago, New York and San Francisco. The U.S. Housing and Urban Development Department is attempting to formulate a study that can identify housing discrimination based on sexual orientation and is looking for ideas in U.S. cities with the largest gay populations. This kind of study will be more complex than trying to identify discrimination based on color or race, something the department routinely tests.
DHW asks: Have you been discriminated against because of your sexual orientation or gender?
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Posted in Fair Housing Act, Gays, HUD, Housing, Lesbians, sexual orientation | No Comments »