Last week Diana Olick of CNBC interviewed an investor who buys foreclosed properties and rents them out long-term for solid returns. He claims that’s the only way to right the housing market — get long-term investors to eat up the excess inventory. The biggest roadblock, however, is credit. Fannie Mae and Freddie Mac both limit the number of investor mortgages.

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Multiple sources now tell me that the Administration, specifically over at the Department of Housing and Urban Development, is considering ways to get more investors into the housing market, possibly with the help of Fannie and Freddie. HUD would not confirm that, but Fannie Mae’s chief economist Doug Duncan said it is definitely on the table both at HUD and at Fannie.

“We’re certainly exploring the opportunities to expand that,” said Duncan in an interview, cautioning, “the data in our own portfolio show that when you get to a certain number, like ten is the number we’ve chosen, if there’s any default issue, all the loans go bad at the same time, so at the present time we have two mandates, one is to help provide liquidity and help with funding, but the second is to protect taxpayers as well.”

No question that any such program would have to require investors to have significant skin in the game, that is, large down payments on all properties, and perhaps a designated capital reserve level to protect against losses. Underwriting would have to be stringent, unlike what went on in the heyday of the housing boom.

Part of the problem is that the Administration doesn’t want to spend any more money on housing, and it is particularly politically unpalatable to offer financial assistance to investors, who are widely blamed for causing the housing crisis in the first place. But we’re talking about a different kind of investor here. There is an awful lot of hedge fund capital just sitting on the sidelines, if and only if the banks would let them on the field.

With home prices falling yet again, a collective $1.7 trillion of collective home equity lost in 2010, according to Zillow.com, and mortgage rates rising, more potential home buyers are being priced out of the housing market. 23 percent of borrowers are now underwater on their mortgages, which means they can’t sell to move up. Inventories are still far above a healthy level, and the shadow inventory of foreclosed properties will only add pressure to prices. I’m sure the Administration is well aware of all that, which is why officials are putting ever more pressure on Fannie and Freddie to write down mortgage principal.

“The Administration believes strongly that the FHA short refi [which involves principal write-down] is a viable option to deal with borrowers with negative equity, and outright refusal to implement a program which could have economic value to the institutions bearing the risk, we think is shortsighted,” FHA commissioner David Stevens told me.

Whether it’s principal write-down or investor incentives, it is becoming ever more abundantly clear that the housing market is not going to right itself on its own without considerably more pain.

The www.SellMyHouse.com Team

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At www.SellMyHouse.com our goal is to stay one step ahead of the market on behalf of our buyers, sellers, and investors. We continue to add new video content to Youtube from our www.AmericasBestRehabs.com and www.TheDealMagnet.com websites to discuss new strategies to utilize in today’s market.

Jason, Scott, and Todd want to hear from you as to your thoughts, goals, and strategies for 2011. Here’s our weekly update on all things relavent to real estate.

Home values lose $1.7 trillion in 2010 – CNNMoney has a story today about the dollar loss in real estate value for 2010. As just about everyone in real estate knows, the homebuyer tax credit propped up the first half of 2010, but really just served to pull most people who would have purchased later in the year, into the first half. Distressed home sellers continue to make up a huge portion of the real estate market – do you have a plan to resolve this problem or to target these properties for purchase?  Need to stop foreclosure? 

Want to learn how or where to buy cheap houses?
Strategic Planning - Speaking of planning, it’s easy to get caught up in the day to day, but as the year ends, have you reviewed (or started!) your strategic plan? I’ve found that creating a strategic plan for the year and then reviewing it monthly and weekly has had a huge positive impact on our business, especially during turbulent times. One of the simplest, easy to use tools for this is Verne Harnish’s One Page Strategic Plan.

2011 Outlook – Next year will continue to be turbulent for real estate. From the thousands of “motivated” home sellers contacting us each month, we continue to see a very high number of foreclosures on the horizon. Because most sellers contact us before they are behind in their payments or in foreclosure, it gives us a 6-8 month outlook on the national housing market. Companies that figure out how to work with current real estate market conditions should thrive next year! Those that “hunker down” waiting for the market to “come back” may be gone in 12 months. What is your strategy?

The www.SellMyHouse.com Team

PS. Make sure you Follow Us On Facebook and our weekly Radio Show!

SellMyHouse.com Radio Network

Youtube

FaceBook

Twitter

TheDealMagnet

atlanta · birmingham · cashflow · cheap houses · chicago · contract for deed · fannie mae · Foreclosures · Freddie Mac · ft lauderdale · guru · Home Prices · housing market · jacksonville · jason roberts · Lead Generation · lease option · miami · nashville · orlando · owner finance houses · owner financing · palm coast · Pending Home Sales · real esate expert · Realtor Partners · REO · sell my home · sell my house · st louis · stop foreclosure · tampa · tax sales · todd snipes · we buy houses

New inventory will be hitting the market which is good news for investors but bad news for traditional home sellers. www.SellMyHouse.com believes it will likely drive prices down further in an already depressed market. However for investors at www.TheDealMagnet.com and www.AmericasBestRehabs.com, christmas may come a little early this year.

Fannie Mae and Freddie Mac have begun telling real-estate agents nationwide to resume sales of foreclosed properties that had been suspended after document-handling problems surfaced over the past two months.

Fannie said Friday it had lifted a moratorium on foreclosed-property sales following a review of the affected properties it has acquired and after consulting with its government regulator, the Federal Housing Finance Agency. It was unclear how quickly sales would resume because loan servicers are still completing their reviews of paperwork.

“Our decision was motivated by several factors including the protection of buyers with title insurance, the negative impact lingering foreclosed properties has on neighborhoods and the cost burden that is placed on taxpayers when [bank-owned] sales are suspended,” said a Fannie Mae spokeswoman.

Fannie and Freddie owned nearly 240,000 properties at the end of September, valued at nearly $24 billion. Difficulty selling those homes could lead to higher carrying costs for the mortgage titans. Delays also could prompt buyers that had been under contract to lower their asking prices or to walk away from deals.

In September, Fannie and Freddie were forced to suspend sales of certain properties amid reports that documents used to process foreclosures weren’t being properly submitted by companies that handle loan servicing and their attorneys.

A memo Fannie sent to real-estate agents on Wednesday directed agents to “proceed with scheduling and holding the closings” of sales of Fannie Mae-owned homes and to work with appropriate personnel “if a title issue arises with respect to the potential defect of an affidavit used in the underlying foreclosure.”

Freddie’s memo told agents to “resume all normal sales activity.”

The mortgage-finance giants were taken over by the government two years ago and have cost taxpayers $134 billion so far. In August, Fannie told mortgage servicers that they would face fines if foreclosures became unreasonably prolonged in a bid to avoid costly delays.

Fannie said it would resume sales for properties with loans that had been serviced by units of Ally Financial Inc., Bank of America Corp., PNC Financial Services Group Inc., J.P. Morgan Chase & Co., OneWest Bank and Sovereign Bank.

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Foreclosures

RealtyTrac has just reported that even though the volume of foreclosed homes plunged by 25% from Q2 to Q3 and 31% from Q2 of 2009, the discount on foreclosed homes has hit a five year high, as interest in even ultra bargain properties has collapsed following the expiration of the homebuyer tax credit, and confirming yesterday’s bad Case Shiller (remember that one?) number. Per RealtyTrac: “foreclosure homes accounted for 25 percent of all U.S. residential sales in the third quarter of 2010 and that the average sales price of properties that sold while in some stage of foreclosure was more than 32 percent below the average sales price of properties not in the foreclosure process — up from a 26 percent discount in the previous quarter and a 29 percent discount in the third quarter of 2009.” Yet despite the major price drop, buying interest has evaporated as nobody there is no longer any purchasing power left in the lower and middle sections of the housing market: “a total of 188,748 U.S. properties in some stage of foreclosure — default, scheduled for auction or bank-owned (REO) — sold to third parties in the third quarter, a decrease of 25 percent from the previous quarter and a decrease of nearly 31 percent from the third quarter of 2009. The average sales price of properties in some stage of foreclosure was $169,523, down 2.46 percent from the previous quarter and down 0.44 percent from the third quarter of 2009.” And while the average price of non-foreclosed homes posted a slight uptick in Q3, the volume drop was even worse: “The average sales price of properties not in foreclosure was $249,721, up 6.42 percent from the previous quarter and up 4.36 percent from the third quarter of 2009. Sales volume of non-foreclosure properties decreased 29 percent from the previous quarter and nearly 31 percent from the third quarter of 2009.”

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The owners behind the real estate website www.SellMyHouse.com announce the launch of the new investor website www.AmericasBestRehabs.com. The website is geared toward investors seeking discounted property listings.

This is the website that will be utilized to show investment properties to their national network of over 50,000 investors. The website will market REO, preforeclosure, wholesale, and rehab properties to investors seeking cheap houses.

Since 1995, the organization’s built by Jason Roberts and Scott Surgener have developed a reputation as one of the most trusted and respected real estate organizations in the business. Over the years, we have expanded into a national company and are considered to be one of the foremost experts in the real estate investment community, investing primarily in distressed foreclosure properties while helping our clients stop foreclosure via short sale or quick sales via our investor network.

As one of the first investment companies to control the process from lead generation to resale, the owners have spoken in front of several investment and Realtor groups all over the Country. Jason Roberts, CEO of Merida Marketing Co Inc says, “The launch of the new website will help to expand our network to all corners of the country. This gives us a platform to advertise the wholesale deals that come thru our network.”

“Many new investors get caught up in the late night infomercials and seminars being offered by gurus right now. Our job is to seperate fact from fiction and put them on the right path to make sure they have the tools needed to make money as an investor,” partner Todd Snipes explains , from www.TheDealMagnet.com.

The website can also be accessed thru their main client website www.SellMyHouse.com via the Wholesale Properties tab on the left navigation menu.

The company makes it’s money from a Buyer’s Premium which is added to the offer price. The website is operated by JKR & Associates Inc., the group’s licensed Real Estate corporation in Illinois.

Investors can get started by creating an account to list their wholesale houses by visiting www.AmericasBestRehabs.com.

The group also operates the SellMyHouse.com Radio Network which discusses everything real estate related with guests from around the Country.

More information can be found by visiting www.SellMyHouse.com, www.AmericasBestRehabs.com, and www.TheDealMagnet.com.

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