Archives for August 2012

VIDEO: Housing ‘Short Sales’ Could Get a Boost With New Plan

Homeowners could soon have an easier time selling their homes for less than what they owe on their mortgages, under new guidelines from a federal housing regulator and mortgage-finance giants Fannie Mae and Freddie Mac.

The Federal Housing Finance Agency on Tuesday announced measures to make “short sales” of underwater homes easier for homeowners, including extending help to people who have financial difficulties but haven’t missed mortgage payments.

Homeowners whose property values have fallen could have an easier time selling the home for less than the outstanding mortgage amount under changes to be announced by a federal housing regulator.

In a short sale, holders of first and second mortgages, such as home-equity loans, must sign off on the deal because they are accepting less than the outstanding mortgage balance. While short sales help borrowers avoid foreclosure and are thus thought to be in the broad interest of the lending industry and the economy, real-estate agents and home sellers have long complained that they are lengthy and difficult to complete.

Short sales typically sell for a 10% discount to ordinary homes, compared with a 30% discount for foreclosures, said Sam Khater, deputy chief economist at real estate data firm CoreLogic Inc.

One part of the plan is for Fannie and Freddie to place a $6,000 cap on the amount of money holders of second mortgages can receive when the sale is completed, as a way to prevent the mortgage holders from haggling over their slice of the home-sale proceeds. Those second-lien holders would still be able to reject the sales if they saw fit.

Guy Cecala, publisher of Inside Mortgage Finance, a trade publication, said $6,000 may not be enough for many holders of second mortgages, who hold out on approving short sales because they don’t have the right to foreclose on properties and are seeking ways to get paid. “It isn’t a lot to offer,” he said.

The changes only affect underwater mortgages guaranteed by Fannie and Freddie, which back the bulk of U.S. home loans. The FHFA has the authority, as regulator for Fannie and Freddie, to force changes on the lending industry.

The housing regulator didn’t estimate how many people would now qualify for short sales, but about 4.6 million borrowers with loans backed by Fannie or Freddie are underwater, with 80% of those homeowners having missed no mortgage payments.

If more short sales are approved, banks could be forced to record losses on home-equity debt. The biggest holders of second mortgages in the U.S. are Bank of America Corp., Wells Fargo, J.P. Morgan Chase and Citigroup Inc. Representatives of all four banks declined to comment.

Mortgage holders have always needed to ensure that a short-sale agreement is legitimate and competitive, as there have been problems with fraudulent sales.

After seeing her income reduced and running up credit-card debt, Suzanne Gott, a 63-year-old in Mansfield, Mass., listed her home for a short sale in June, asking for $149,000 even though she owes $200,000 on the property. This week, she accepted an all-cash offer of $135,000. “I’m hoping that it’s over as soon as possible,” she said.

The rules go into effect Nov. 1 and also allow homeowners with missed mortgage payments and serious financial problems to submit fewer documents to be approved for a short sale. Homeowners will receive speedier approval if they are experiencing a financial hardship such as a lost job, divorce, death in the family or job relocation.

Earlier this year, the housing regulator set out formal timelines for short sales, saying that mortgage lenders would have to respond to a short-sale offer within 30 days of receiving it.

Short sales have been growing as a percentage of home sales. They made up 8.8% of home sales in May, up from 7.6% a year earlier and 6.5% in 2010, according to CoreLogic Inc.

SOURCE: Wall Street Journal

VIDEO: Why Buffett Is Betting Big On Housing

What does Warren Buffett see that no one else does? He just made an outsize bid on ResCap loans, the latest example of his bet that the housing market represents a great investment opportunity.

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Supreme Court Rules MERS Cannot Foreclose On Homeowners

The Washington Supreme Court ruled unanimously today that the mortgage industry’s controversial document-recording system lacked authority to start out-of-court foreclosures and might have violated state consumer protection laws.

The state’s highest court ruled that lenders could not foreclose on homeowners in the name of the Mortgage Electronic Registration Systems Inc. It found that MERS did not meet Washington’s  definition of a beneficiary and could not foreclose on behalf of a lender that holds the mortgage note.

“Simply put, if MERS does not hold the note, it is not a lawful beneficiary,” the court wrote in an opinion written by Justice Tom Chambers and released today.

The Oregon Supreme Court also is considering whether MERS can be a beneficiary under Oregon law, said Rick Fernandez, an attorney in Lake Oswego whose cases are before the court.

In July, the Oregon Court of Appeals ruled that lenders could not use MERS to skirt state law requiring that all mortgage sales be recorded in county offices before launching out-of-court foreclosures.

Washington’s court today also found that MERS’s involvement in robo-signing mortgage documents, among other behaviors, appeared to violate Washington’s Consumer Protection Act. But consumers must try such claims on a case-by-case basis, the court said

MERS was created by the mortgage industry to bundle and sell loans to investors without having to record every assignment with county clerks. It is involved in most mortgages across the country, but does not take payments from borrowers or negotiate on behalf of lenders.

MERS spokeswoman Janis Smith noted that Thursday’s decision applies only to non-judicial foreclosures done outside a courtroom, the process lenders typically use. MERS voluntarily changed its rules in July 2011 to stop foreclosures in its name, she said.

Melissa Huelsman, a Seattle attorney, represented homeowner Kristin Bain in one of the cases against the court. Bain had sued Metropolitan Mortgage Group, Indymac Bank, Fidelity National Title and MERS.

Huelsman said the ruling cleared the path for homeowners to recover damages and attorneys fees from lenders found to have wrongfully foreclosed. She called the decision a victory for the rule of law.

“Too often we’ve seen courts twisting themselves into knots to get to a decision that’s inconsistent with the statute,” Huelsman said.

… if MERS never ‘held the promissory note’ then it is not a ‘lawful beneficiary

Attorneys said they were still evaluating how the decision impacts existing cases and already completed foreclosures.

“I would guess that lenders will approach out-of-court foreclosures involving MERS much more cautiously,” Fernandez said.

Washington Attorney General Rob McKenna and the National Consumer Law Center had submitted briefs supporting the cases of Bain and homeowner Kevin Selkowitz. The Washington Bankers Association had supported MERS.

In its ruling, the court noted the confusion MERS had caused distressed homeowners who were trying to identify and negotiate modifications with the true owner of their mortgage.

“While not before us, we note that this is the nub of this and similar litigation and has caused great concern about possible errors in foreclosures, misrepresentation, and fraud,” the opinion said.

“Under the MERS system, questions of authority and accountability arise, and determining who has authority to negotiate loan modifications and who is accountable for misrepresentation and fraud becomes extraordinarily difficult.”

It called the debate over whether MERS could foreclose without owning the mortgage as “a simple question” under Washington law: “… if MERS never ‘held the promissory note’ then it is not a ‘lawful beneficiary.'”

The court cited previous federal court rulings in Washington in favor of MERS as “not well taken.”

The cjustices declined to evaluate the legal impact of their ruling, as U.S. District Court Judge John C. Coughenour asked them to last year when he sought their opinion.

Under the state’s Consumer Protection Act, MERS’s characterization of itself on deeds of trust as a beneficiary could be considered an unlawful deceptive practice, the court said.

“The fact that MERS claims to be a beneficiary, when under a plain reading of the statute it was not, presumptively meets the deception element of a CPA action,” the court said.

So could MERS’s participation in robo-signing mortgage documents, the court said.

“MERS’s officers often issue assignments without verifying the underlying information, which has resulted in incorrect or fraudulent transfers,” the court said. “Actions like those could well be the basis of a meritorious CPA claim.”

The court also said MERS could not show that it acted as an agent for parties who owned Bain and Selkowitz’s loans, which are often sold repeatedly to other investors. MERS also failed to identify the parties that control and are accountable for its actions, the court said.

MERS spokesman Jason Lobo said it will be able to show a trial court which lenders it represented in those cases.

SOURCE: The Oregonian

ALERT: Huge Price Drop – Now $110,000

This immaculate rambler is loaded with features as the current owners have upgraded many, many items including new energy efficient vinyl windows, sliding glass door, cabinets, range, dishwasher, microwave, sink, toilet, heaters, ceiling fans, blinds, paint, deck, fencing, studio/workshop/shed and more. Great location, affordable price.

4 Strong Reasons to Buy a Home Now

“It’s hard to argue against buying a house now, assuming you can get a loan”

writes John Waggoner, a columnist with USA Today.  Sure, Waggoner says that getting a credit check for approval of a mortgage can be a “only slightly less intrusive than a CIA background check,” but for those who are able to qualify, a lot of analysts say that now can be a good time to purchase a home.

1. The price is right.

The median single-family home price hit its lowest in more than a decade when it reached $154,600 in January, according to the National Association of REALTORS®. That was the lowest since October 2001. During the height of the housing market in July 2006, the median home price for a single-family home was $230,900.

2. It’s cheaper to buy than rent.

In nearly every major metro market, it is cheaper to buy a home than rent. Rents have been on the rise the last few years and are predicted to continue to rise. Meanwhile, home affordability is at record highs, which means that buying a home is more within reach to the median income family.

3. Inventories of for-sale homes are shrinking.

Ned Davis Research estimates that excess inventories of homes to be eliminated by the end of next year. “When excess supply dries up, people start building more new houses, which has the virtuous effect of reducing the unemployment rate and increasing the economy generally,” according to the USA Today article.

4. Mortgage rates are at record lows.

Mortgage rates have hovered near record lows for weeks, which has helped pushing housing affordability higher. For example, the average 30-year fixed-rate mortgage, which is the most popular among home buyers, is 3.59 percent, according to Freddie Mac—just above its record low set on July 26 of 3.49 percent average. “It’s conceivable that at some point in the next 30 years, your interest rate would be less than the rate of inflation,” writes Waggoner for USA Today.

SOURCE: USA Today

Free iPad Classes Offered By Library

The Community Library in Ketchum is hosting an Advanced iPad Class on Wednesday, August 22, at 2 p.m.

The class will be taught by Library Resident Expert Technology Coach Paul Zimmerman and Reference Librarian Buffy McDonald. Attendees should bring their own iPads.

The advanced class will cover how to set up and use email on the iPad, how to take and email pictures, how to use the photo gallery, and how to use face time for video chats.

While you’re learning – Check out our new “Location Based GPS Sun Valley Real Estate Search” App: Click Here For Link

A basic iPad class will be held on August 29 at 2 p.m. for those interested in learning tablet computing from square one. The basic class will offer a lesson on the iPad’s hardware—where the microphone, camera, on-off switch, etc. are located—a tutorial on the hand gestures that control the device, an overview on how to open and use apps and a 101 on how to surf the web.

Admission is free, though registration is required since space is limited.

To register, contact McDonald at 726.3493 x 110 or bmcdonald@thecommunitylibrary.org

 

Rising Home Prices Put a Dent in Housing Affordability

While housing bargains can still be found, home buyers are increasingly finding that home prices are on the rise in many markets. As such, housing affordability is being pushed lower, according to the second quarter Housing Opportunity Index by the National Association of Home Builders/Wells Fargo. Still, by historical standards, housing affordability remains high.

According to the latest index, 73.8 percent of all new and existing homes sold in the second quarter were affordable to families who earn the national median income of $65,000. A record high in housing affordability was reached in the first quarter, in which 77.5 percent of homes were affordable to median-income earners.

The index showed that 92 percent of the metros included in the index saw their median home prices rise in the second quarter compared to the first quarter.

“While interest rates and overall housing affordability remain very favorable on a historic basis, the decline in the latest HOI is a positive development because it is another signal that the housing recovery is starting to take root, and it lends needed confidence to prospective buyers and sellers who have been reluctant to move forward in the current marketplace,” says NAHB Chairman Barry Rutenberg.

Most / Least Affordable Markets

Overall, the top five most affordable housing markets for the second quarter were:

  1. Youngstown-Warren-Boardsman, Ohio, Pa. (where 93.4% of the homes sold were affordable to the area’s median-income earners)
  2. Dayton, Ohio
  3. Buffalo-Niagara Falls, N.Y.
  4. Indianapolis-Carmel, Ind.
  5. Modesto, Calif.

On the other hand, the least affordable major housing markets in the second quarter were:

  1. New York- White Plains-Wayne, N.Y.-N.J. (29.4% of the homes sold there were affordable to the area’s median income family earners)
  2. San Francisco-San Mateo-Redwood City, Calif.
  3. Bridgeport-Stamford-Norwalk, Conn.
  4. Santa Ana-Anaheim-Irvine, Calif.
  5. Los Angeles-Long Beach-Glendale, Calif.

SOURCE: National Association of Home Builders

Special Fare: SEATTLE to SUN VALLEY from $69

Los Angeles to Sun Valley From $109
September 3, 2012 – September 17, 2012

Get out and explore more this September with these great fares. Purchase by August 20, 2012.

Head to Sun Valley on Alaska Airlines with fares from $69 each way* Travel September 3 – September 16, 2012.

Stay at Sun Valley Resort and recieve a $100 gift card with your boarding pass.

Book your flight now before it is too late!

*Additional restrictions apply

Sale runs thru August 20th.

Book on-line at Alaska Airlines

Alaska Airlines summer schedule

Added Value Exclusive To Alaska Air Passengers – Summer 2012

  • A free Gondola ride on Bald Mountain any one day of your stay. (Good from June 23 to September 9 + bonus weekend September 15/16)
  • Free Access to the 18-hole Sawtooths Putting Course, Sun Valley Resort Driving Range and practice facility for one day.
  • Fifty percent off general admission bleacher seating for one of Sun Valley’s spectacular Saturday night ice shows. (July 4 to September 1)

To receive redeemable vouchers, present your Alaska Air boarding pass at the Sun Valley Recreation Center located in the Sun Valley Village.

 

Fixed Mortgage Rates Move Up for Second Consecutive Week

Freddie Mac’s weekly survey of the mortgage market showed fixed rates increasing after stronger-than-expected employment reports.

“The economy added 163,000 jobs in July, well above the market consensus forecast of 100,000, and the largest increase since February,” Freddie Mac Chief Economist Frank Nothaft says. “In addition, the number of announced corporate layoffs fell 45 percent in July compared to last July and was the third time this year that announced layoffs were less than the same month in 2011 according to The Challenger Report. This suggests further net gains in employment are likely in the near future.”

Here’s a roundup of rates this week:

  • 30-year fixed rates: averaged 3.59 percent with an average 0.6 point for the week ending August 9, 2012, up from last week when it averaged 3.55 percent. Last year at this time, the 30-year FRM averaged 4.32 percent.
  • 15-year fixed rates: averaged 2.84 percent with an average 0.6 point, up from last week when it averaged 2.83 percent.A year ago at this time, the 15-year FRM averaged 3.50 percent.
  • 5-year ARMs: averaged 2.77 percent this week with an average 0.6 point, up from last week when it averaged 2.75 percent. A year ago, the 5-year ARM averaged 3.13 percent.

SOURCE: Freddie Mac