The Real Estate Adviser - North Eastern PA & SC

Underwater mortgages cause defaults - not unemployment

Admin — Sat, 28 Nov 2009 01:41:16 +0000

According to the Congressional Oversight Committee (COP), unemployment is presently driving a fifth wave of foreclosures, but analysts at Amherst Securities say that negative equity is far more predictive of home loan defaults than unemployment. The question is critical, because the policy response depends on the answer: if coming defaults are caused by unemployment, then the relevant response would be to subsidize mortgage payments, says Laurie Goodman, head analyst on the team. On the other hand, if negative equity triggers defaults, then principal reduction must receive a higher priority.

Goodman presents two pieces of evidence to make her point. The first is a matter of timing: default transition rates picked up long before unemployment; and the second a matrix of transition rates. The latter led to three conclusions: One, even in the lowest unemployment column, high debt to asset ratios are associated with markedly higher default transition rates. Two, when borrowers have positive equity, unemployment plays a negligible role. Three, unemployment does impact borrowers with substantial negative equity, but far less than does high debt to asset ratios. Carrying the analysis a step further, Amherst broke the data into owner-occupied and non-owner-occupied (investor and second home) categories. The same patterns emerged. Even for owner-occupied houses, unemployment only has a large impact where debt to asset ratios > 120%. For borrowers with very negative equity, unemployment is a catalyst that can kick defaults up, but it’s not a cause.

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Dealing with Junior Liens & Second Mortgages

Admin — Sun, 15 Nov 2009 07:21:52 +0000

One of the major myths surrounding short sales is that a property with a junior lien or second mortgage is simply off-limits. While many investors or agents that deal in large numbers of short sale properties may move beyond the headache and hassle associated with junior liens and second mortgages, they represent prime purchasing opportunities for those with more time than money on their hands.
Learn how to generate major profit potentials and avoid common pitfalls by recognizing the major motivations required to address junior liens and second mortgages.

Fact #1 – Junior liens and second mortgages often get wiped out entirely during an estate auction, bankruptcy or other related actions. This is a critical issue to keep in mind when approaching a lender that holds a junior lien or second mortgage on a potential short sale property. While the primary mortgage holder or lender will understandably desire to recuperate as much of the original mortgage as possible, they have the upper hand by essentially controlling the underlying asset. Should the property go to bid, the lender is first in line for satisfaction. All other junior lien holders must hope and pray there is enough left over to cover their loan. As you might suspect, lower sales prices often leave junior lien holders with nothing….and more open to negotiation for low pay-offs than you might suspect. It’s not uncommon to offer a fraction of the cost of the original note in order to secure a timely acceptance letter.

Fact #2 – It’s often worth a little to gain a lot. While it is entirely possible to have a junior lien totally wiped clean, it’s often worth the time and effort to offer a $1,000 or some other reasonable amount (depending upon the total cost of the lien) in order to secure a timely acceptance and negotiation.

Fact #3 – Other alternatives exist! A second mortgage or lien holder that refuses to negotiate a low pay-off might be willing to remove the lien from the property and attach it to the homeowners name as an unsecured note. This should be clearly explained to the seller since it will result in a debt even after the home has sold. However, sellers with relatively reasonable second mortgages as well as those that desire to minimize debt in order to restructure may find this a highly agreeable option. If worst comes to worst, the seller is now left with an unsecured debt which is subject to normal bankruptcy laws.

Fact #4 – One offer isn’t always enough. Don’t be afraid to counter-offer or reduce your initial offer as new information come in. It may delay the process and isn’t always desirable but as the date draws closer or other information becomes apparent, junior liens are at increased risk for walking away with absolutely nothing. Don’t be surprised to find they are willing to accept an offer originally rejected just a few weeks before.

Fact #5 – Second mortgages are not easy to deal with but they are “do-able”…third and fourth mortgages are often downright simple. Remember, the lower they are on the totem pole the less likely they are to see anything from the property. Make this clear and present your case effectively in order to save time and money. Many will settle for little to nothing (literally) if you understand how to effectively present your case and the calculations. Not sure where to start? Sign-up for more information or sit in on one of the video seminars to learn how you can start profiting from short sale properties.

What’s Better - Short Sales or Tax Certificates? Late night

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Will the Homebuyer credit be extended?

Admin — Thu, 29 Oct 2009 22:12:29 +0000

Senate Democrats are close to compromising on a provision that would extend the first-time homebuyer tax credit, according to Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.. In fact, the Senate will extend the $8000 tax credit for first-time homebuyers until April 2010, with a separate $6,500 credit for second home purchases. Legislation creating the extension could be included in a bill that will extend unemployment benefits and could go to debate as early as this week, according to numerous media reports. What we don’t yet know are the terms of the extension.

Some reports indicate the extension would run through June 2010 and expanded to include all homebuyers, not just first-time purchasers, and others that would extend the full credit to first-time buyers until April 1, with $2,000 reductions every quarter until it dissolved at the end of 2010. The National Association of Realtors (NAR) and National Association of Home Builders (NAHB), along with the Mortgage Bankers Association (MBA) continue to lobby federal officials to extend the credit. According to the latest Department of Housing and Urban Development (HUD) and Census Bureau data, the rate of new home sales declined 3.6% in September, and some have speculated the impending expiration of the credit is contributing to the decline.

First Time Home Buyer Tax Credit, Falling Prices, And Government Lending Programs By Elaine
IRS gives Homebuyer Tax Credit to aliens and minors Ok, we kne
Mortgage applications rise but concerns remain According

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IRS gives Homebuyer Tax Credit to aliens and minors

Admin — Fri, 23 Oct 2009 17:01:23 +0000

Ok, we knew it would happen, right? We all love the tax credit – if only the government didn’t have to be the one administering it. The Treasury Inspector General for Tax Administration (TIGTA) believes the Internal Revenue Service (IRS) may have paid out millions of dollars in first-time homebuyer tax credits to individuals not eligible to receive the $8,000 credit. Nearly $4 million of incorrectly paid credits were due to both alleged fraud and filing errors on claims by 580 taxpayers less than 18 years old. The youngest of these was 4 years old, TIGTA head J. Russell George said in prepared testimony to the House Ways and Means Oversight subcommittee. TIGTA also found 3,200 taxpayers with Individual Taxpayer Identification Numbers (ITIN) claiming the credits. ITINs are used to track income tax for resident aliens, in lieu of a social security number, and it’s possible that as much as $20.8 million in tax credits was paid to resident aliens ineligible for the credit. As of August 22, 2009, more than 1.4 million taxpayers claimed the tax credit for homes purchased in 2008 and 2009, representing total foregone tax revenue of about $10 billion, according to estimates presented by Government Accountability Office (GAO) director of strategic issues James White.

First Time Home Buyer Tax Credit, Falling Prices, And Government Lending Programs By Elaine
Will the Homebuyer credit be extended? Senate Dem

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Obama programs hurting recovery, helping banks

Admin — Tue, 06 Oct 2009 13:32:51 +0000

Blackrock Inc. Chairman Laurence Fink claims that Obama administration programs to help homeowners stave off foreclosure may hinder the recovery of the mortgage market while benefiting banks that own second loans on the properties. Fink said policies introduced this year to reduce foreclosures are flawed because they don’t require home-equity loans to be wiped out before the mortgage is modified. Instead, in a break with the intentions of contracts, he says the second loan’s terms may also be revised, spreading the financial loss among lenders. Fink is the highest-profile investor to call attention to potential conflicts when banks that service mortgages handle loan modifications. One concern is that many servicers, which handle billing and collection for mortgage owners, also hold home-equity loans that would lose all value in a foreclosure. JPMorgan Chase & Co, Bank of America Corp, Wells Fargo & Co and Citigroup Inc, the four largest servicers, own almost $450 billion
of home-equity loans, according to Laurie Goodman, an analyst at Amherst Securities Group in New York.

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Home sales to rise?

Admin — Thu, 24 Sep 2009 15:16:35 +0000

According to projections from residential mortgage insurance and credit enhancement product provider The PMI Group (PMI), national homes sales are expected to rise 10% year-over-year basis during the Q409, but the sharp drop in sales earlier in 2009 will keep yearly sales on par with ‘08 levels. The report projects that the oversupply of housing inventory will drop median housing prices 12.5% by the end of 2009, but that a boost in the second half of 2010 not only stabilize prices but increase sales of existing homes by 9.4% and new home sales by 21.6%. PMI anticipates that Federal Reserve policies will remain constant and short-term interest rates should remain close to current levels, although long-term rates will “edge upward” next year. According to the report, “ultimately, both long- and short-term rates will rise substantially once the Fed begins to tighten in earnest – with the yield curve beginning to flatten at that time.” The report also projects a 33% increase over last year in mortgage originations by the end of 2009. As purchase mortgages decrease 6.1%, there will be a projected increase in the share refinance mortgages to 66% of all mortgages originated in the year, but that will shift in 2010. PMI projects that origination will decline by 22%, but purchase activity will take a 15% greater share of the market, and the refinance share will drop to 50%.

Will the mortgage rate rise hit loan demand? A survey r
Mortgage applications rise but concerns remain According
First Time Home Buyer Tax Credit, Falling Prices, And Government Lending Programs By Elaine

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FDIC details mortgage payment reductions

Admin — Fri, 18 Sep 2009 16:47:30 +0000

Yesterday I mentioned an “urging” by the Federal Deposit Insurance Corporation (FDIC) directed at its loss-share partner institutions to consider temporary mortgage payment reductions for unemployed borrowers. A spokesman for the FDIC offered further clarification: “Servicers may provide the borrower with at least six months of payment relief…The term [of] forbearance may vary based on the borrower’s circumstance.” The program reaches out to both the unemployed and the underemployed, and applies to borrowers who suffer a reduction in household income due to decreased hours, loss of job, or a qualifying pay cut. Acquirers of failed insured institutions who agree to a loss-share arrangement must abide by the FDIC Mortgage Loan Modification program for any assets purchased from the failed bank.

The program provides loan modifications by reducing the borrower’s monthly housing debt to income ration (DTI ratio) to no more than 31%. “The FDIC has a loss share monitoring program responsible for surveillance and compliance monitoring of the assets covered in the shared-loss agreement,” the spokesperson said. “In this oversight capacity the FDIC will review loss share servicers forbearance policies and ensure compliance with the shared-loss agreement.”

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Modified mortgages still defaulting

Admin — Thu, 17 Sep 2009 17:06:40 +0000

Tens of thousands of homeowners who were hoping for lower payments are discovering that lenders roll late fees, back taxes or other costs into the principal, sometimes turning a difficult payment into an impossible one. That’s one reason many reworked mortgages are sliding back into default. Monthly payments, on loans modified from Jan. 1, 2008, through March 31, 2009, increased on 27% and were left unchanged on an additional 27.5% according to a recent report by banking regulators. Many modified mortgages fall delinquent — 25% to 40%, depending on the type of mortgage. It’s too early to know if this pattern will continue under the Obama administration’s $75 billion initiative to get lenders to reduce monthly payments for homeowners struggling to make their mortgages.

A total of 360,165 mortgage modifications are now in a three-month trial period under the government’s plan announced in March. But the initiative focuses on reducing interest rates rather than cutting principal. “Payments have [either] gone up [or] the payment relief can last for the first few years and then go up (again),” says Alan White, assistant professor of law at the Valparaiso University School of Law in Valparaiso, Ind.

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Real Estate and Homes - Pocono Communities

Admin — Fri, 11 Sep 2009 15:35:48 +0000

By David Kovaleski

The Poconos of North East Pennsylvania present a fantastic opportunity for home buyers. Whether you’re real estate needs are for full time residence or for a vacation home the area delivers.

The Pocono Mountains bring some of the most sought after recreational and amenity based living in the east. These Communities offer plenty of activities to keep even the most energetic of people busy. These activities include events such as: boating, skiing, indoor/outdoor pools, lakes, beaches and more. Most have gated entrances and security patrols to ensure a very safe environment for family living and family fun. Of course more traditional living situations are abundant as well if communities aren’t your thing. Pocono real estate opportunities are at an all time high.

Being that a large part of the Pocono home market is secondary and vacation homes it creates a very strong market with a lot of variety and choices, which is both good for REALTORS and consumers alike. Since second homes are more for vacation and fun rather then a necessity REALTORS get to enjoy the higher resale rate of the second home market. And consumer benefit by having a great deal of variety of homes to choose from which also helps keep the average market price down.

With the natural beauty, a rural feel and over 150 lakes our area is the first choice for people from our adjoining states for a vacation get away. Our friends from New York and New Jersey and others states have come to appreciate the lower than average market price on homes in the Pocono area of Pennsylvania. With commutes of only 1 to 3 hours the area offers a great place to escape from the hustle and bustle of city life.

As you can see The region of Pennsylvania offers tremendous variety in real estate homes starting at around $100,000 for the cozy A-frame cabin to upwards of $1,000,000 for the fabulous ultra modern lake front. The Poconos have something for everyone, quality day to day living, a fantastic second home market with many recreational and amenity based lake communities and so many area attractions. So if you ever feel the need to get away or just need a change of scenery, be sure to visit the Poconos.

Pocono Real Estate http://www.poconohomesource.com

Hideout Real Estate http://www.poconohomesource.com/hideout.html

Lake Wallenpaupack Real Estate http://www.poconohomesource.com/lakewallenpaupack.html

Article Source: http://EzineArticles.com/?expert=David_Kovaleski
http://EzineArticles.com/?Real-Estate-and-Homes—Pocono-Communities&id=682977

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Cool Online & Mobile Real Estate Tools

Admin — Fri, 11 Sep 2009 15:10:32 +0000

If you just can’t get enough of cool online applications then you will love today’s selection. Get ready to bookmark or save these to your favorite list because they are as useful as they are trendy….not to mention each can save you time or money while you are off building your short sale empire.

Google Foreclosure Finder

Use it anytime, anywhere plus it’s free and oh so simple to use. Just go to the main Google maps search engine page (www.Google.com/maps) then type in your desired zip code or city into the search bar. Use the drop down to indicate the search is for “real estate” then click on “foreclosure” to filter the results. Not only will you have a list of foreclosures, photographs and a map to each property but it’s possible to take a virtual tour of the neighborhood for many areas.

Zillow iPhone Real Estate Search App

Zillow is on the go with this new iPhone real estate search that allows users to tap into the Zillow.com database of nearly 90 million listings throughout the nation. Combine with a GPS enabled iPhone, the Zillow data makes easy work of finding previously elusive information like tax data, former sales and nearby listings while on the go. Better yet, get notified when new results come in, filter by bedrooms/bath etc or email it all to a friend. Try it for yourself by visiting http://www.zillow.com/iphone/.

Mint.com Money Minder

Voted a Top Pick by Money Magazine, Kiplingers, and other leading journals. Finance on the Go. Manage your money minus the headache with the help of mint.com. Each and every day your transactions and balance is automatically downloaded and updated while creating graphs, balance, net worth and much more. It’s a great way to keep track of all those business related expenditures.

Obopay

Pay instantly by cell phone without the need to worry about lost wallets, credit cards or other inconveniences. Send or receive funds by signing up at obopay.com. Keep a contract on hand and put an earnest money deposit straight into their hands to leave a lasting impression!

What’s the Walk Score?

Find out how walkable a property is before buying by visiting www.walkscore.com and typing in any address. It will instantly show you what is nearby and provide a walkable rating…great for going green and highlighting amenities.

A Simple Measure

Sick and tired of running to the hardware store only to realize you forgot a measurement? Tired or re-measuring the same old window only to misplace the scrap of paper? Leave it all behind thanks to A Simple Measure (www.asimplemeasure.com). Measure once and store it forever. Access the information anytime via cell or online. Includes more than mere measurements, faucets, fixtures and much more will all be available anytime, anywhere.

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