Changes to HAFA:

- Short sale answers must come within 30 days
- Servicers are no longer required to verify a borrower’s financial information
- Servicers are no longer required to determine if the debt-to-income exceeds 31%
- Second lien holders no longer must accept 6% of the unpaid balance.

The goal of these changes is to expedite short sales, which is good news for home owners, realtors, investors and ultimately the banks.

As always, www.sellmyhouse.com will stay on top of the results for our Realtor and investor networks.

The www.SellMyhouse.com Team

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

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While not unexpected, the unceasing declines in home values signal that we’re in for a long, bleak winter of continued troubles for the housing market. The length and depth of the current housing recession is rivaling the Great Depression’s real estate downturn, and, with encouraging signs fading, will easily eclipse it in the coming months.

Humphries also said the number of foreclosures reached a new all-time high and that the number of homeowners under water on their loan has now reached 23% – a high this year. Humphries is not optimistic:

The high percentage of homeowners in negative equity continues to be troubling, in that it represents a huge number of people who are not only more vulnerable to foreclosure, but who are essentially trapped in their current homes and are prevented from selling and buying a new home. This has profound implications for future demand and will be a millstone around the neck of the housing market.

The housing market is playing out almost exactly as I’ve expected in recent years. This still remains a simple supply and demand story. The overhang of inventory is crushing meager demand and the mortgage mess isn’t helping matters as shadow inventory is pushed further into the future. If you thought the housing crisis in the USA was behind us you might want to think again. Housing was the domino that set the credit crisis in motion in 2007 and it could pose a very serious risk in 2011.

Source: Zillow

However, the real scary issue is relayed in a recent Charlie Rose interview with housing expert Robert Shiller:

Charlie Rose: You’ve said that 90% of the housing market is supported by the government.
Robert Shiller: Well, it’s 80% or 90%. Really almost the whole market now is government. And we know this can’t last.

Rose: And that means prices are being artificially inflated?
Shiller: It seems to. Government support is especially prominent in sales of existing homes, which shot up to over 6 million on an annual rate in November 2009, the month that the home buyer tax credit initially was supposed to expire.

Fannie Mae has reported the rate of serious delinquencies (90 Days overdue) for conventional loans in its single-family guarantee business jolted to to 5.52% in January from 5.38% in December. This is a 100% increase since January 2009. But look at the chart below and explain to me how we are anywhere near an end to this housing crisis!

It is our stance that we still have some real issues to work thru before we can claim “an end to the housing crisis”.

Jason Roberts

Founder & CEO

www.SellMyHouse.com

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

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

24% of houses with a mortgage are now underwater, over 11 million in total. Another 2.3 million are within 5% of a negative equity position.

Highlights of the report:

“Negative equity continues to be concentrated in five states: Nevada , which had the highest percentage negative equity with 70 percent of all of its mortgaged properties underwater, followed by Arizona (51 percent), Florida (48 percent), Michigan (39 percent) and California (35 percent).

We can use our houses as piggy banks when the market it dropping. www.SellMyHouse.com has seen estimates that predict houses could drop another 15% from current levels….or 50% from 2006 valuations.

Hope not but time will tell.

www.SellMyHouse.com Staff Writer