The White House will announce today new steps to fight the foreclosure crisis. They may require lenders to temporarily slash or eliminate monthly mortgage payments for many borrowers who are unemployed.

Banks and other lenders would have to reduce the payments to no more than 31 percent of a borrower’s income, which would typically be the amount of unemployment insurance, for three to six months. In some cases lenders may allow a borrower to skip payments altogether.

Haven’t we been through this already with the loan modification programs of the past year? Less than 200,000 permanent loan modifications have been secured since the program was enacted.

The new wrinkle will be the administrations push to deal directly with the massive number of mortgages that are ‘underwater’. They could offer financial incentives for the first time to lenders to cut the loan balances of such distressed homeowners. Those who are still current on their mortgages could get the chance to refinance on better terms into loans backed by the FHA.

I do think this could help stop people from walking away just because it is underwater who can actually afford their house payment. However, as a general thought, it feels a lot like just one more government attempt to help boost numbers thru the remainder of the year so that we can get past the elections.

Lets be honest, government attempts to resolve the housing crisis have been a miserable failure. More importantly, it has strapped the tax payer with a debt level that has never been seen in this country’s history. That will have a much longer negative effect on the housing market than the false boost we have been given from the tax credit offered.  Despite billions of dollars in government incentives, home sales and new construction totals are sinking, not expanding. 

The truth, as hard is it may be to accept, is that this is a supply and demand issue. Until supply is worked thru, the housing market will not recover substantially. The foreclosure inventory has to be taken out of the system. New home builds will not recover until ‘cheap’ houses are not an option to purchase. Who in their right mind would pay $300,000 for a new house when they can buy a similar house with more square footage that is only a few years old for half of that total?

Existing house values rise as a direct result of new home construction. New housing construction has also proven to be a leading indicator for an overall economic recovery.

To me it is pretty simple, we fix the problem by expediting the foreclosure inventory thru the system as quickly as possible. Until that excess inventory is removed from the system, the housing market will not recover. HAMP and other government programs will just drag out the inevitable supply and demand issue.

I wrote an article last fall discussing my ideas on how to fix the problem. I’ve been in countless board room and conference call discussions with industry leaders about this very thing. I’m still convinced to this day that dealing with supply will ultimately resolve the demand issue, and event he economic problems we face.

Jason K Roberts

CEO

www.SellMyHouse.com

Bank Owned · Foreclosures · Home Prices · housing market · sell my house · sellmyhouse.com · short sale · stop foreclosure

NAR is reporting slipped 0.6 percent nationally to a seasonally adjusted annual rate of 5.02 million units in February from 5.05 million in January.

Highlights of the report:

• 7% higher than February 2009
• Weather affected closing schedules
• Housing inventory rose 9.5% to 3.59 million units or 8.6 months of supply
• 26% of transactions were cash purchases
• Distressed sales made up 35% of transactions
• Median house prices fell 1.8% to $165,100.
• First time homebuyers made up 42% of transactions.
• Northeast rose 2.4%
• Midwest rose 2.8%
• South retraced 1.1%
• West dropped 4.7%

Home sales surged on the back of a $8,000 tax credit for first-time buyers, but have faltered 3 months in a row. This raises worries that the housing market may be in for a rough few years once the tax credit ends and interest rates begin rising due to the government plan to stop buying mortgages on the secondary market at teh end of March. The overall debt load now on the government balance sheet will result in higher taxes dropping the disposable income consumers use to buy bigger houses or vacation properties.

This data shows that the people who need housing are buying it along with investors looking for great deals. Current homeowners have not been inspired to use the governments new $6500 tax credit to purchase another house. That may be a direct result of the fact that 25% of houses are now worth less than their mortgage balance, so they cant sell their houses.

www.SellMyHouse.com

Staff Writter

Home Prices · Pending Home Sales · sell my house · sellmyhouse.com

According to a recent AP report , HAMP (Home Affordable Modification Program) has revealled that your credit score will probably be lowered soon after you apply for help.

For borrowers who are making their payments on time but are on the verge of default, the Obama administration’s loan modification program can reduce their credit score as much as 100 points. That makes it harder to get a loan and can present a problem when applying for a new job.

Housing counselors say it’s unfair, especially because the news often comes as a surprise to homeowners.

“Why should people’s credit be hurt even worse when they’re trying to do the right thing?” said Eileen Anderson, senior vice president at Community Development Corp. of Long Island, a housing counseling group in New York.

And many homeowners are angry that a program designed to help carries such a penalty, said Kathy Conley, a housing counselor with GreenPath Inc., a nonprofit group in Farmington Hills, Mich.

“It’s a feeling of being duped,” she said.

The Treasury Department guidelines require that mortgage companies notify credit bureaus of the loan modification process.

Worse yet, we have heard multiple cases where homeowners are not getting their trial loan modifications made permanent. So not only are you struggling to stay current on your payment while taking a beating on your credit, there is no real way to know of the bank will actually allow you to continue on the new payment plan. Many times you are just paying a lower monthly payment over 40 years. Trust us, you arent paying less over time if this is the case.

www.SellMyHouse.com

Staff Writer

sell my house · sellmyhouse.com

I was reading this blog from Pete Goodman who was discussing yet one more of those things we just have to shake our heads out.

Basically, Bank of America explained to him that they were going to pull the sellers credit to see if they had stopped paying their other creditors before agreeing to a short sale. If they are current on their other bills then they will make them sign a promissary note or come out of pocket with more cash.

Are you kidding me? Have they completley given up on the idea of protecting their shareholders? How does punishing the seller, who already has been thru 3 kinds of death from the stress of losing their house to this point,  help them keep their losses down when the seller finally gets fed up with their antics, shuts off the heat and throws in the towell?

It is very hard to have simpathy for these large banks when we see every single day the outright garbage they put middle america thru. I guess they arent thankful that it was middle america that bailed them out when they almost went broke in the first place.

Unreal! Looking forward to the day we get interviewed about this whole thing on CNBC! Oh the stories we have to share huh!

www.sellmyhouse.com

Jason Roberts,CEO

housing market · Realtors · sell my house · sellmyhouse.com · stop foreclosure

How can we recommend a short sale property to a buyer who specifically wants to qualify for the tax credit? We have time to meet the criteria of signed contract date, but the closing date is completely out of our control. And that creates a real challenge for Realtors knowing that these short sales can take 6 months or longer to close.

Thoughts?

Home Prices · sell my house · sellmyhouse.com