Our Real Estate Blog

Market Matters and Beyond the Headlines (9/25/2009)

September 25th, 2009 5:44 PM by Lehel Szucs

Obama bolsters program that insures home loans

To read the full story, please click here:

http://money.cnn.com/2009/09/18/news/economy/FHA_housing_trouble/index.htm?postversion=200909181

5

Uncle Sam bets the house on mortgages

To read the full story, please click here:

http://online.wsj.com/article/SB125322329116020929.html

A reckoning on option ARMs

To read the full story, please click here:

http://www.nytimes.com/2009/09/20/realestate/20mort.html?_r=1&ref=realestate

Feds plan to tinker with mortgage interest reporting

To read the full story, please click here:

http://www.latimes.com/classified/realestate/news/la-fi-lew20-2009sep20,0,1828223.story

Short sales spread across real estate market, leaving frustration in their wake

As more homeowners find themselves underwater -- owing more on their mortgage than their home is

currently worth -- and unable to make the monthly mortgage payments, many are turning to short sales,

which allow a homeowner to sell their home for less than owed on the mortgage. Short sales can be a winwin

situation for all parties, because they enable home buyers to purchase properties in desirable

neighborhoods and at favorable prices.

KEEP THIS IN MIND

Theoretically, short sales should be a win-win for the bank and the homeowner. Although the bank

does not receive the full amount owed on the mortgage, it also does not incur the costs of

foreclosure and/or eviction, if necessary. Many homeowners also prefer short sales because it is

less damaging to their credit scores than a foreclosure. However, many real estate experts say

that the majority of banks are reluctant to approve short sales, and often let properties go into

foreclosure, even when there are reasonable offers on the property. In addition to considering the

price, most lenders also take into consideration whether the homeowner can demonstrate financial

hardship. If the homeowner is capable of making payments, many lenders will try to work out a

loan modification, rather than a short sale.

Unlike foreclosed properties, which may be run-down and vacant for many months, short-sell

properties are likely to be better maintained, as most owners may still live in the home.

Short sales often are more time intensive than traditional transactions and often require additional

paperwork. Due to the large number of offers on short sales, many take as long as a few months

to receive approval. If information or required forms are missing or incomplete, the bank may set

the offer aside, which could delay the process and cause the property to go into foreclosure. To

expedite the process, sellers should work closely with their REALTOR® to provide all of the

necessary paperwork

Working with a REALTOR® who has experience with short sales can help both sellers and home

buyers during the transaction. A seasoned REALTOR® will be able to serve as the mediator

between the seller and the lender, and lead to a successful transaction.

It is important to remember that in a short sale, although the seller may be anxious about selling the

property and willing to accept any offer, it is ultimately up to the lender to determine if, and at what

price, the property can be sold. Home buyers should work closely with their REALTOR® to submit

realistic offers.

To read the full story, please click here:

http://www.chicagotribune.com/classified/realestate/chi-sun-short-sales-0920sep20,0,5529436.story

In Other News…

San Francisco Chronicle

U.S. home prices rise 0.3 percent in July

U.S. home prices rose slightly in July from a month earlier, according to a government index, further

evidence the housing market is stabilizing.

To read the full story, please click here:

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/09/22/financial/f072850D08.DTL&type=realestate

CNN Money

1.4 million Americans score $8,000 tax credit

More than 1.4 million Americans have already claimed the new tax credit for first-time home buyers,

according to a report from the Internal Revenue Service.

To read the full story, please click here:

http://money.cnn.com/2009/09/17/real_estate/homebuyer_tax_credit_claims_soaring/index.htm?postversion

=2009091815

The Wall Street Journal

Want the home buyer tax credit? Don’t shop for furniture

With the deadline on the first-time home buyer tax credit looming, plenty of buyers are under contract and

looking to close before Nov. 30. Excited to move into a new home, some of these first-timers start hitting the

stores shopping for new furniture, appliances, or curtains. Big mistake.

To read the full story, please click here:

http://blogs.wsj.com/developments/2009/09/18/want-the-home-buyer-tax-credit-dont-shop-for-furniture/

Los Angeles Times

Homeowners who “strategically default” on loans a growing problem

Research using a massive sample of 24 million individual credit files has found that homeowners with high

scores when they apply for a loan are 50% more likely to “strategically default”—abruptly and intentionally

pull the plug and abandon the mortgage—compared with lower-scoring borrowers.

To read the full story, please click here:

http://www.latimes.com/classified/realestate/news/la-fi-harney20-2009sep20,0,2560658.story

San Francisco Chronicle

$30 billion home loan time bomb set for 2010

Next year, many option ARM payments will begin to readjust, slamming borrowers with dramatically higher

monthly mortgage bills. Analysts say that could unleash the next big wave of foreclosures—and home-loan

data show that the risky loans were heavily used in the Bay Area.

To read the full story, please click here:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/09/20/MNOR19N2B1.DTL&type=realestate

Posted in:General
Posted by Lehel Szucs on September 25th, 2009 5:44 PM

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