Call Joshua Groesbeck to schedule you private showing today! 208-353-7131 or josh@homeswithjosh.com

http://www.msnbc.msn.com/id/21134540/vp/45020283#45020283

December 31, 2012 Mortgage Debt Relief Act comes to an end

http://www.irs.gov/individuals/article/0,,id=179414,00.html

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http://realtormag.realtor.org/daily-news/2011/09/23/15-cities-where-listing-prices-are-rebounding

HAFA was launched in April 2010 to provide an incentive to servicers and investors for pursuing short sales and deeds-in-lieu of foreclosure. The program was designed for homeowners who fell out of the Treasury’s Home Affordable Modification Program and was touted as a new standard for short sales.

But both HAFA and HAMP have struggled. The Treasury has spent only $4.3 million through HAFA, inducing roughly 661 short sales since the program launched, according to the Congressional Oversight Panel, the Troubled Asset Relief Program watchdog.

With such low numbers, the Treasury has eliminated rules that have constricted eligibility for HAFA. Among them, servicers are no longer required to verify a borrower’s financial information or determine if the borrower’s total monthly mortgage payment exceeds a 31% debt-to-income ratio. Servicers still must obtain a signed hardship affidavit.

“While this requirement has set the standard for mortgage affordability under HAMP, it is not as important for homeowners ready to transition out of their home,” a Treasury official said. “Eliminating this requirement further streamlines the process for homeowners applying to the program.”

In order to get more second-lien investors to clear short sales, the Treasury changed how servicers pay out to these holders. Before, the second-lien investor had to agree to accept 6% of the unpaid principle balance owed to them, up to $6,000. But the new guidelines eliminate that 6% rule. Now, servicers on behalf of the investors determine the amount or percentage of the unpaid principal balance of the second lien to be paid to each holder.

However, the cap still remains at $6,000.

The Treasury also directed servicers to grant borrowers who request consideration for HAFA the same timeline as those who are approached by the bank. Now, all borrowers must receive a short sale agreement no later than 30 days after request.

The Treasury said it will begin reporting official HAFA numbers in the first quarter of 2011.

Banks are agreeing to more short sale transactions, and short sales are taking less time to sell, which is helping to clear large inventories of distressed properties more efficiently, says James J. Saccacio, RealtyTrac CEO, in releasing new housing data this week.

“This is a glimmer of hope that lenders are getting more realistic,” Rick Sharga, senior vice president of RealtyTrac, told Bloomberg News. “It’s a win for borrowers who avoid foreclosure, buyers who get a house in better condition and banks that lose less money, which is also a win for taxpayers.”

During the second quarter, the number of homes nearing foreclosure accounted for 12 percent of total home sales, with banks agreeing to more transactions at prices below the outstanding mortgage balance, RealtyTrac reported in releasing its second quarter data this week.

What’s more, pre-foreclosure homes took an average of 245 days to sell after receiving the initial foreclosure notice–that’s down from 256 days in the first quarter, RealtyTrac reports.

Sales of homes in the foreclosure process or short sales sold on average for a 21 percent discount–or an average sales price of $192,129–compared to the sales price of non-distressed homes.

Source: “Home Short Sales Increase as Banks ‘More Realistic’ on Market,” Bloomberg News (Aug. 24, 2011)

If you or someone you know is needing help with their distressed home please contact Josh Groesbeck 208-353-7131 or www.homeswithjosh.com

http://kcmblog.com/2011/06/22/are-short-sales-getting-easier/

Interest Rates Are Increasing

Interest rates have increased almost 3/4 of a point in the last six months. Most experts expect rates to continue to increase through the year. Interest rates along with price determine the overall cost of a home. Even with prices softening, if interest rates rise, it may be less expensive to buy now rather than wait.
The 30-Year Mortgage May Disappear

There has been much debate regarding government’s role in providing support for homeownership. There are several experts who believe If Fannie Mae and Freddie Mac’s roles are eliminated, or even limited, it may be the end to the 30-year mortgage. This concern is addressed in MSN Real Estate’s Is it curtains for the 30-year mortgage?
QRM Requirements Could Be Much More Stringent

Here are proposed changes to the requirements for a ‘qualified residential mortgage’:

* Certain mortgage types would be eliminated
* You would need to put a minimum of 20% down
* You would need a minimum 690 FICO score
* The ratios of income to both the mortgage payment and overall debt would become much more conservative (28% and 36%)

There would be loans available to purchasers who don’t qualify under the new rules. However, they will probably be more expensive to the buyer (both in rate and costs).
Rents Are Expected to Increase

The supply of available rentals is decreasing and the demand is increasing. That will lead to an increase in rental costs throughout the year. The Wall Street Journal this week quoted a report by Reis, Inc:

“Expect vacancies to continue declining, and rents rising through the rest of 2011 at an even faster pace.”

Bottom Line

You may be waiting on the sidelines to see if prices will continue to depreciate before you purchase a home. The mortgage expense is a major piece in the overall financial picture of homeownership. Make sure you consider it when timing your decision.

Let’s say you were going to take out a $200,000 30-year-fixed-rate mortgage in November of 2010. At that time, interest rates were 4.17% (as per Freddie Mac). Your principle and interest payment would have come to $974.54. According to the most recent report from Case Shiller house prices fell 3.9% in the 4th quarter of 2010. The most recent report from the Federal Housing Finance Agency shows a 0.8% fall in prices. Let’s use the larger percentage decrease: 3.9%.

For the sake of keeping the math simple, we will now say you can get the same house with a $192,000 mortgage (4% discount from November price). Interest rates are now 4.95% (as per Freddie Mac).

Your principle and interest payment would now be $1,024.84.

By waiting to pay less for the PRICE of the house, the COST increased over $50 a month. That adds up to more than $600 a year and over $18,000 over the life of the loan.

For more information please visit www.homeswitjosh.com or call Josh Groesbeck direct 208-353-7131 or josh@homeswithjosh.com

To view this and all properties available in our local treasure valley market go to visit HomeswithJosh.com

If you are trying to save your home from Foreclosure please call Joshua for free consultation!