StreetInsider.com - Schiff: Look Out Below! Home Prices to Fall Additional 20%

A ‘Happy New Year’ news story from Peter Schiff…one of the earliest predictors of the ‘pop’ of the housing bubble.

December 30, 2010 10:50 AM EST

According to Peter Schiff, the recent drop in home prices  is unnerving, but there is still another 20% drop to go before we reach a historical trend line. (emphasis mine)

Schiff notes that some economists anticipate a further correction, but most don't believe that the vicious correction of 2007 and 2008 could return. To counter, Schiff notes that many underestimate how distorted the market had become.

From the start of 1998 through the middle of 2006, arguably at the peak of the market, the Case-Shiller 10-City Index rose an astounding 173% at 19.2% per year. Schiff notes that we now know that the gains had little to do with fundamentals and more to do with "distortionary government policies that mandated  loans to marginal borrowers, and set off a national mania for real-estate wealth and a torrent of temporarily easy credit."

One of the co-founders of the Case-Shiller index, Robert Shiller, contends that home prices, from 1900 - 2000, followed a more muted 3.35% average growth rate, which included the Great Depression, post-war eras, and the boom of the 90's.

So, Schiff notes that in 1998, the Case-Shiller index was at 82.7. Following the 3.35% average annual price increase predicted by Shiller lands us at a point of 126.7 in October 2010. However, the Case-Shiller Index came in at 159.0, suggesting an additional 20.3% decline in the index to get it back to more normalized levels.

Schiff continues that no one is making a case that fundamentals have gained traction, and most point to government intervention as an artificial stop to the free fall. Programs like "the home buyer's tax credit, record low mortgage rates, government mortgage-assistance programs, and the increased presence of Fannie Mae, Freddie Mac and the Federal Housing Administration in the mortgage-buying business" have put the kibosh on falling prices for now.

But, contends Schiff, with "bloated inventories, 9.8% unemployment (and much higher REAL unemployment), a dysfunctional mortgage industry and shattered illusions of real-estate riches, does it makes sense that prices should simply fall back to the trend line?" He argues that they will overshoot to the downside.

So what's the outcome? A major market correction in the next year.
Schiff thinks not, rather that there may be potential for an additional 10% dip below the 100-year trendline in the next five years, especially if mortgage rates continue upwards to more historical rates of 6% or more. He notes that that would put the index at 114.02, or about 28.3% below where were at now. Even a 5% dip would put the index at 120.36, about 24.3% below current levels.

Concluding, Schiff comments that, "In trying to maintain artificial prices, government policies are keeping new buyers from entering the market, exposing taxpayers to untold trillions in liabilities and delaying a real recovery. We should recognize this reality and not pin our hopes on a return to price normalcy that never was that normal to begin with."

 

A little Christmas gift for my Smith Farm blog readers

I have put together a report...a quick read...with many interesting stories and details regarding the origins of contemporary Christmas Traditions. Click on the image and read or download the entire booklet if you like. Feel free to pass it along to others too!

Has anybody seen my $3.3 Trillion

Now, you and I might lose track of where we spent that $20 bill we had in our pocket...but Mr. Bernake can't seem to remember where he spent (our) $3.3 TRILLION! Courtesy of my friends, Brian and Frank, at Think Big, Work Small

A Thanksgiving greeting

Finally...one of the big guys admits what I've been telling people for years!

Thanks to the NotoriousROB blog for the heads-up on this video. Keep in mind while you watch this that this is a Keller Williams agent recruiting video...



And this is why I opened a small, personalized office long ago...I realized that it was me, my wife and our like-minded agents that our clients were hiring...not some company logo.

 I don't think many realty companies, large or small, make ANY promise to the consumer other than vague platitudes "we are the biggest/we sell the most etc., nothing like "we hire only the most highly skilled/we fire the bad agents...you know what I mean. And the ones that do make consumer based promises often do absolutely nothing to actually KEEP AND ENFORCE that promise, from recruiting, to rules, to marketing, to service standards.

But it is refreshing to finally see one of the big guys admit what the consumer already knows: It is the AGENTS, not the company.

All of the big franchises say that they have the best agents...etc, etc. But if you've ever gone on an interview as a real estate agent, you would know that there is never a competency test, ethics test or any kind of test for that matter. As a matter of fact, it is usually a 'reverse' interview...with the agent deciding whom THEY want to go work for. It's almost: If you have a license, you have a job.

There's no free lunch...

I have started to see this being promoted recently by mail and on the radio.

"If we don't sell your house in ___days...WE'LL BUY IT!"

Sounds great...especially in this market. Worth checking out? That's what the agent is hoping you'll think. Get their phone to ring...but they'll most likely never discuss the details over the phone..."much to complicated and need to see your home to see if it qualifies"...get the foot in the door.  But there is NEVER a free lunch; there is always a cost associated.

But, particularly in this type of market, it would be "good business" if the agent NEVER bought any homes, or if they did, that they were purchased at such a drastic discount that the seller could do better selling the home themselves. 

I have gone to several seminars where they promoted this (tactic/gimmick) and it starts out sounding something like this:
" Mr./Mrs. homeowner, a big dilemma when making your move is deciding whether to buy 1st or sell 1st. Either way is risky as you could end up with 2 homes (or no home). Our unique/innovative/etc., Guaranteed Sale Program solves this dilemma...you get our personal guarantee that if we don't sell your home in 90/120/180 days, we will buy it at a price acceptable to you. Now, WE take all the risk from you and you can immediately place a confident offer on another home".

The hidden details usually follow some or all of these general guidelines:

• Must purchase one of the agents listings...or at least buy a 'full commission' home with them
• Seller must still pay a full commission on the 'guaranteed' sale
• Quite often an 'upfront' fee or guaranteed sale program fee of anywhere from $295 to fees in the thousands
• "Agreed upon" price well below appraisal/market value...could be as low as the 80% range, then subtract commissions, fees, closing costs etc.
• Original list price 5% below comparables
• Seller is REQUIRED to continually lower the asking price during the 90 day (or whatever the guarantee period is)...for example: 100%  for 1st 30 days, 90% day 30-60, 80% day 60-90, at which point they have reached their 'guarantee' point (but minus a full commission, etc.)
• Sign the listing agreement first...then the guaranteed purchase details come later
• May be a maximum allowable program price
• Restrictions on home condition
• Use the language "I'll buy it for 'list' price", but fail to say that the 'list' price is the 80% ENDING list price

If they'll buy it for the full price that they agree to list it for...then that's putting their money where their dog and pony show is.

Think about these few points:

• With as difficult as it is to get a mortgage now, COULD your agent actually perform on their guarantee? Ask to speak with their mortgage lender...do your due diligence as with any other buyer.
• If they don't need a mortgage and have a few $million sitting around to buy homes that don't sell in 90 days, why are they a real estate agent?
• Are they "flipping" the purchase option to an investor? Are they going to list the home for the investor once they buy it?
• Can they assign the guaranteed sale price (as in a wholesaler)?

Good, solid, cutting-edge marketing, a detailed understanding of the local and national economic factors affecting home values, subdivision level market knowledge, ability to analyze trends...trust and mutual respect...THIS is what is needed today.


Thanks for reading

I hate to say I told you so...especially for this.

"GET READY FOR THE GREAT MERS WHITEWASH BILL"

"Wall Street money is pouring into the coffers of those who are receptive (i.e., almost everyone in Congress). The legislation is already being drafted under the interstate commerce clause to ratify MERS and everything it did retroactively. It appears that the Obama administration is ready to pardon all the securitization deviants by signing this bill into law. This information is corroborated by several people who are in sensitive positions — persons who would be the first to know such proposals. Fortunately, there are some people in Washington who have a conscience and do not want to see this happen."

John Carney, CNBC--"When Congress comes back into session next week, it may consider measures intended to bolster the legal status of a controversial bank owned electronic mortgage registration system that contains three out of every five mortgages in the country.

The system is known as MERS, the acronym for a private company called Mortgage Electronic Registry Systems. Set up by banks in the 1997, MERS is a system for tracking ownership of home loans as they move from mortgage originator through the financial pipeline to the trusts set up when mortgage securities are sold.

The system has come under scrutiny by critics who charge MERS with facilitating slipshod practices. Recently, lawyers have filed lawsuits claiming that banks owe states billions of dollars for mortgage recording fees they avoided by using MERS...

Now it appears that Congress may attempt to prevent any MERS' meltdown from occurring. MERS is owned by all the biggest banks, and they certainly do not want it to be sunk by huge fines...And be subject to court challenges on mortgage ownership by foreclosure defense attorneys.

Investors in mortgage-backed securities also do not want to see the value of their bonds sink because of doubts about the ownership of the underlying mortgages.

Remember, this is the SAME Congress that "almost" passed the "Notarization Act" by voice vote and it reached Obama's desk. We will never know who voted for it, as a voice vote is not recorded, and it flew threw BOTH House and Senate.

So it looks like the stage may be set for Congress to pass a bill that would limit MERS exposure on the recording fee issue and perhaps retroactively legitimize mortgage transfers conducted through MERS private database...."

Just look at my post of 10/26 on my Winston Trails blog at www.WinstonTrails.info ...this is EXACTLY what I feared would happen. Too big to fail also means too big to have to comply with the laws I guess. When was the last time you broke the law and then had legislation passed on your behalf?  I don't want to turn this into a politcal blog...but...

That one heck of a 5 o’clock shadow

Standard & Poor’s, known as a leader of financial market intelligence, has revised estimates for when we can expect this much-talked-about shadow inventory to clear up. S&P now estimates that it will take 41 months—or nearly three and a half years—to get through and sell off all that shadow inventory lurking in the national real estate market background.

This number is up drastically from it’s assessment a year ago when it estimated it would take 33 months to complete this process…(That’s 25% longer than their last estimate and these guys are the “leader in financial market intelligence”?) S&P’s report states that the growth in the nation’s shadow inventory is affecting the housing market in three ways.

First, low liquidation rates are artificially skewing the visible supply of these distressed properties on the market. Second, this ever-growing inventory is having a negative affect on existing home prices. And finally, home prices will only begin to stabilize once this shadow inventory backlogged is cleared out.

Check out our video tip blog...lots of helpful info

Just click on the image above

Foreclosures Gone Wild...the trilogy.

Rather than repeat the entirety of all three recent posts that attempt to explain this recent foreclosure mess/fraud...here are the links to the actual posts over on my Winston Trails blog.

Foreclosures Gone Wild 1

Foreclosures Gone Wild 2

Foreclosures Gone Wild 3

Finally, Jon Stewart clearly explains this mortgage foreclosure mess...

Be forewarned...this IS a Jon Stewart video...make sure no one easily offended is watching over your shoulder!

U.S. Home Prices Face 3-Year Drop as Inventory Surge Looms - Bloomberg

The slide in U.S. home prices may have another three years to go as sellers add as many as 12 million more properties to the market…

“Whether it’s the sidelined, shadow or current inventory, the issue is there’s more supply than demand,” said Oliver Chang, a U.S. housing strategist with Morgan Stanley in San Francisco. “Once you reach a bottom, it will take three or four years for prices to begin to rise 1 or 2 percent a year.”…

Fannie Mae Forecast

Fannie Mae, the largest U.S. mortgage finance company, today lowered its forecast for home sales this year, projecting a 7 percent decline from 2009. A drop in demand after the April 30 tax credit expiration “suggests weakening home prices” in the third quarter, according to Fannie Mae…

8 Million

Douglas Duncan, chief economist for Washington-based Fannie Mae, said in a Bloomberg Radio interview last week that 7 million U.S. homes are vacant or in the foreclosure process. Morgan Stanley’s Chang said the number of bank-owned and foreclosure-bound homes that have yet to hit the market is closer to 8 million…

In addition to the as many as 8 million properties vacant or in foreclosure, owners of another 3.8 million homes -- 5 percent of U.S. households -- said they are “very likely” to put their properties on the market within six months if there is improvement, according to a survey</a> by Seattle-based Zillow.

“This has the potential to create a sawtooth pattern along the bottom,” Stan Humphries, Zillow’s chief economist, said in a telephone interview. “Homes begin to sell and a few sidelined sellers rush into the marketplace and flood the marketplace.” …

The Obama administration’s effort to help mortgage holders, HAMP, is another source of future inventory as owners with new loan terms re- default, Ritholtz said. About half of the modifications done in 2009 were behind in payments by the first quarter of 2010, according to the Treasury Department…

 

Read the full article by clicking the link below…(if you dare)

U.S. Home Prices Face 3-Year Drop as Inventory Surge Looms - Bloomberg

WHY IS THE BANK FORECLOSING IF I AM DOING A SHORT SALE (OR LOAN MODIFICATION)?

A local attorney who counsels many of our clients, Richard Zaretsky, has just posted this excellent article on his blog. It answers the very common, but perplexing question posed above.

Do We All Have A Common Goal?  Do all short sellers cooperate with the short sale process?  The answer is a resounding NO.  The short seller is typically living in the house "for free" and is not all that interested in moving out and paying rent.  Therefore, short sellers are notoriously delay oriented. Banks believe this to be a fact.

I Want To Stay!  Loan Modification borrowers are in a somewhat different boat.  They don't have any plan to move out of the house as they want to modify the loan to something more affordable.

They Want WHAT!?!@?  Short Sellers and Loan Modification borrowers have something in common - they have to accept the lender's terms of the short sale or loan modification or face loss of the home through foreclosure.  The alternative of the loss of the house in foreclosure is usually not an desirable option.  The lender can never be sure that (a) the buyer in a short sale is not going to walk away from the sale at the last minute, (b) the seller will accept the demands the lender conditions the short sale approval upon, or (c) the borrower will accept the loan modification terms offered by the lender (if any are offered at all).

Hurry Up and Wait?  So knowing or believing all the above, if you were the lender and you knew that from start to finish the mortgage foreclosure process was going to take 300 to 700 days and the short sale or modification may or may not end up successful, would you wait 3 or 5 months for a short sale contract or for the borrower to submit complete loan modification information - BEFORE you started the clock on the foreclosure process?  OF COURSE NOT!  Therefore, even if you have a good faith intention to proceed with a short sale or loan modification, the lender will NOT stop a pending suit or delay filing an otherwise ripe suit for foreclosure.  The result is one hand of the lender pursues solutions with the borrower and the other hand of the lender pursues solutions against the borrower - all at the same time.

Remind Me To Stop Before I Drive Off the Cliff!   Even the HAFA and HAMP programs have guidelines for participating lenders that state that the lender will not have to stop the foreclosure process - but only that if a borrower is accepted into the processing of under HAFA or HAMP, the lender will not actually have the foreclosure sale!  But they can go all the way to getting a foreclosure sale date set!

So if you are trying a short sale or modification, don't be surprised when the Sheriff rings your doorbell at 6 a.m. with a subpoena and summons and complaint for foreclosure even though the nice people at the bank are helping you in your "solution".  If you are 90 days or more late (typically), you should expect that visit and introduction to your foreclosure complaint very very soon.  And once you get served BE SURE TO IMMEDIATELY CONTACT YOUR ATTORNEY TO DISCUSS THE FORECLOSURE AND WHAT SHOULD BE DONE ABOUT IT.

Read Richards entire article here: WHY IS THE BANK FORECLOSING IF I AM DOING A SHORT SALE (OR LOAN MODIFICATION)?

Freddie Mac estimates home sales to fall another 23% in 3Q

Below are a few of today’s housing industry headlines:

1. Freddie Mac expects 4 million new and existing home sales in the third quarter, a possible 20.7% decline from last year and 23% drop from the previous quarter.
2. Kondaur (distressed note buyer) chief executive Jon Daurio joined Moody's Investors Service analysts saying he expects prices to fall another 20%…Daurio said he expects the drop to occur over the next three years.

You can read the article here: Freddie Mac estimates home sales to fall another 23% in 3Q « HousingWire

Thinking about pursuing a loan modification? In the middle of a loan modification negotiation? Read this...

Working on the inside of this industry, it is easy to see through the smoke and mirrors being used by the TBTF (too big too fail) lenders when it comes to "extend and pretend". They will do what is in THEIR best interests regardless of public statements to the contrary.

I have seen too many borrowers taken advantage of when attempting to negotiate a forebearance or loan mod without professional and legal assistance. The banks are no better than low-life debt collectors that will say anything to get some more money out of someone. But now, people have had enough and it is getting some national press...consumers are suing the banks for not following through on loan mod committments.

Read the full article from today's USA today HERE

If you have ANY questions regarding your loan, please give me a call. I promise that if I don't know the answer or solution right away, I will find out or point you in the direction of the person who does know. My direct line is 561-602-1258.

Thanks for reading

FDLE Florida Sexual Offenders Search

You can search for sexual predators by zip code via the link below:

FDLE Florida Sexual Offenders and Predators - Offender Search

Schools by subdivision for the 2010-2011 school year, Palm Beach County

Buried DEEEP within the Palm Beach County School Board website was this gem of a useful document: The Elementary, Middle and High Schools assigned by Subdivision.

Anyone with school-age children considering a move to/within Palm Beach County will find this tremendously useful...just click on the photo and download the PDF

Some recent headlines to cheer you up

Robert Shiller Says Double Dip Imminent
...those looking to sell houses are advised not to listen to the interview, as the co-creator of the Case-Shiller Home Price Index also added that he is worried housing prices could decline for another five years. He noted that Japan saw land prices decline for 15 consecutive years up to 2006.

Non-Current, REO Mortgages Reach 7.3m in March: LPS
More than 7.3m mortgages in the US are non-current or in REO status through March 2010, according to the Lender Processing Services (LPS) Mortgage Monitor report.

Nearly 1m More Mortgages Go From Current to Delinquent: LPS
Thursday, August 26th, 2010, 5:10 pm
Almost 900,000 loans that were current at the beginning of the year are at least 60 days delinquent or in foreclosure as of July, according to the July 2010 month-end report released by Lender Processing Services'(LPS). How long these loans are staying in the foreclosure process is stretching out as well. The average number of days a loan spends delinquent before it is finally forecloses reached 469 days in July, about a year and three months. In July of last year, the average was 351, more than three months shorter.

The total amount of loans in the foreclosure inventory passed 2 million in July, a 3.5% increase from a year ago, and 2.1% more than the previous month. The amount of foreclosures making it to REO status is picking up after diving earlier in the year. LPS reported nearly 100,000 REO properties in July.

GSE Foreclosure Starts Start Coming Faster in 2010
The level of foreclosures starts in mortgages owned by Fannie Mae and Freddie Mac, the government sponsored enterprises (GSE), is at its highest point ever in 2010 as the rate of new foreclosures continues to increase.

REO levels in July reach second highest point ever: RealtyTracIn July, 92,858 properties went back to the banks as REO, the second highest monthly total since RealtyTrac, an online foreclosure marketplace, began tracking them in April 2005.

My point in posting these headlines...We've got a ways to go. The TV 'experts' continue to trivialize every negative report on housing in an effort to keep the DOW above the magic 10,000. Having no job or a tenuous job status does not translate into a desire to buy a home (or to keep paying on a home that is upside-down). If you are thinking of selling...do it now; if not, you need to be in for the long haul. If you are thinking of buying, you, too, need to be in it for the long haul.

As you have probably ascertained if you have read even a small number of my posts, I am not your typical "toe-the NAR-propaganda-line" agent. If you are a homeowner and want to have an honest discussion about the current market...call me. If you are thinking about buying now, also, lets talk and see if that is the best decision for your circumstances.

My direct line is 561-602-1258. If I don't pick up, please leave me a message.

As always...thanks for reading.
Steve

Experts and news outlets surprised: Home sales plunge!

But if you read this blog…YOU shouldn’t have been surprised at all. I have been counseling my sellers for many months now…you want to be the NEXT home to sell!

Here are some snippets from some of today's press releases:

1) Sales of previously occupied homes plunged last month to the lowest level in 15 years, despite the lowest mortgage rates in decades and bargain prices in many areas.

July's sales fell by more than 27 percent to a seasonally adjusted annual rate of 3.83 million, the National Association of Realtors said Tuesday. It was the largest monthly drop on records dating back to 1968, and sharp declines were recorded in all regions of the country.

2) With home sales plunging to their lowest level in 15 years, economists warn that a double-dip in housing prices is just around the corner, threatening to further slow the overall recovery.

Existing home sales sank 27.2% in July, twice as much as analysts expected, to a seasonally adjusted annual rate of 3.83 million units. Much of that drop is attributed to the end of the $8,000 homebuyer tax credit. Sales of single-family homes, which account for a bulk of the transactions, are at the lowest level since May 1995.

Inventory has also continued to climb, rising 2.5% to 3.98 million existing homes for sale. That represents a 12.5-month supply at the current sales pace, the highest since October 1982 when it stood at 13.8 months. A six-month of supply is considered normal.

Chart of existing home sales…watch out for that falling knife!

"....Purchases of existing homes plunged 27.2 percent to a 3.83 million...Estimates in the Bloomberg survey of 74 economists ranged from 3.96 million to 5.3 million..." Good job experts

Still want to listen to the ‘experts’?

If you are even thinking that you may want/need to sell anytime in the near and not-so-near future…please give me a call so we can have a lively discussion regarding my recommendations. My direct line is 561-602-1258

Thanks for reading,

Steve

Are you a renter living in a property that is in foreclosure? This is a must read!

Here’s the gist: The Tenanct Act is a federal law that gives renters living in a house that gets foreclosed on 90 days before they can be evicted. If there is a bona fide, arms-length lease, AND THE LEASE WAS IN PLACE PRIOR TO THE FORECLOSURE ACTION BEING FILED, the lender or investor, or its servicer intermediary, cannot evict until the lease is expired or the renter breaks the lease.

To educate renters about the law, the Ombudsman for the Office of the Comptroller of the Currency (OCC), released a brief PSA on YouTube explaining the basics. Check it out below: (you can tell it is a govt. produced product...they spelled YOUR as 'yor'  : )



Effective May 20th, tenants with a “bona fide” lease that was entered into before notice of foreclosure can remain in a foreclosed home until the end of their lease, unless the bank sells the property to someone who intends to make it his/her primary residence. If the new owner intends to occupy the home, they are still required to give 90-days notice to the tenant prior to eviction. If the tenant does not have a lease (month-to-month) or current state law allows the lease to be terminated at will, there is still a 90-day notice requirement prior to eviction. Notice must be provided by the “immediate successor in interest” which, in most cases, would be the bank or the new owner.

A “bona fide” lease is defined in the law as one that:

(1) the mortgagor or the child, spouse, or parent of the mortgagor under the contract is not the tenant;

(2) the lease or tenancy was the result of an arms-length transaction; and

(3) the lease or tenancy requires the receipt of rent that is not substantially less than fair market rent for the property or the unit's rent is reduced or subsidized due to a Federal, State, or local subsidy.
 
Click HERE to read the actual legislation.
 
As always, give me a call if you have any questions or comments regarding anything we blog about.
561-602-1258
 
Steve

Foreclosure report for Smith Farm as of 8/4/10

Lots of homes in foreclosure in Smith Farm...and lots more to come.

Now, just because I report them as "foreclosures" does not mean that they are owned by the bank and are for sale for pennies on the dollar....at least not yet. What it means is that these homes have a Lis Pendens filed on them. From Nolo Law Dictionary: Lis Pendens: Latin for "a suit pending." A written notice that a lawsuit has been filed concerning real estate, involving either the title to the property or a claimed ownership interest in it.

There are currently 110 Smith Farm homes reported to be in foreclosure as of today. A few of the ones on this list have already been taken back by the bank at the courthouse sale. Below I will report them by street, alphabetically.

• Ambleside - 4
• Ashburn - 5
• Boxleaf - 1
• Branchwood - 13
• Columbia - 5
• Copperfield - 2
• Downwinds - 2
• Great Oak - 4
• Greenville - 8
• Kingsley - 8
• Marbletree - 7
• Oak Bluff - 7
• Oak Grove - 14 (!)
• Prestwick - 1
• Ridgefield - 3
• Rockport - 8
• Sally Lynn - 3
• Squirewood - 4
• Stonehurst - 4
• Waterdance - 3
• Waverly - 4

If you are 1 of these 110 homes, or if you may be on this list next month...PLEASE call me today so you can learn what options you have and which is the best one for your particular situation. Don't ignore the issue...it won't just go away, and "letting the bank take it" is most likely the worst option you have. Here is my direct line: 561-602-1258

A new property we are marketing...

If you'd like to see how we can use this marketing method, along with our other cutting edge marketing to get your home sold for top dollar, call me today...561-602-1258.

Inflation? Deflation?

Every day, from cable news to the local paper, we are told that inflation is coming...then the next expert says we are in a deflationary spiral...what does it all mean and whom do we believe?

It would seem that everyone is right...here is the best and easiest to explain/understand definition/comparison-contrast of inflation and deflation:

I've seen some quotes equating to deflation as the things you own, and inflation as the things you need. Close, but the real explanation is more like this:

Prices declines are occuring in goods/services sectors backed by debt resulting from contracting credit...things that you would normally use a loan/credit to buy (deflation). Price increases are occurring in goods/services sectors acquired with money resulting from increasing money supply (inflation), (things like food, utilities, gas for the car, etc ).

Ben can print money 'til the cows come home, showering every citizen with $10k, $100k, $1m per year/quarter/month. All that will happen is a direct escalation in prices of assets not backed by debt. Price increases for items backed by debt will not resume/recur until there is an underlying organic demand for credit and a corresponding easing in credit terms (inflation). That is, the so-called final (ie private) demand.

And there you have it...

HAFA explained

What is HAFA?
The Home Affordable Foreclosure Alternatives (HAFA) Program is a government-sponsored initiative led by the US Treasury Department, administered by Fannie Mae with Freddie Mac as compliance agents, and executed by participating lenders to help homeowners avoid foreclosure, specifically through short sales or deeds-in-lieu.

Who can participate in the HAFA program?
The participating servicers must assess a borrower for HAFA if they request to short sale or deed in lieu under the terms of HAFA.  They must also consider a homeowner for HAFA within 30 days of not qualifying for a HAMP (Home Affordable Modification Program) modification, having not successfully completed a HAMP trial period, or having missed at least 2 consecutive payments on a HAMP modification. If a homeowner had asked the servicer to allow them to short sell under the terms of HAFA, the servicer is required to first offer them a loan modification or retention program first.

Can sellers trying to do a HAFA short sale also be asking for a HAMP modification?
The two cannot be done at the same time. It is a requirement of HAFA that a homeowner is not participating in a HAMP program.

Does the homeowner have to live in the property to be considered for HAFA?
“The property is the borrower’s principal residence, except that the property can be vacant up to 90 days prior to the date of the Short Sale Agreement (SSA), Alternative Request for Approval of Short Sale (Alternative (RASS) or DIL Agreement if the borrower provides documentation that the borrower was required to relocate at least 100 miles from the property to accept new employment or was transferred by the current employer and there is no evidence indicating that the borrower has purchased a one- to four-unit property 90 days prior to the date of the SSA, Alternative RASS or DIL Agreement.” [From the Supplemental Directive 09-09]

What loans are not eligible for HAFA short sales?
Fannie Mae, Freddie Mac, FHA, or VA

What lenders are participating in HAFA?
As a rule, lenders already participating in the Home Affordable Modification Program (HAMP) are participating in HAFA. For a full list of servicers participating in HAMP, visit Making Home Affordable Participating Servicers List.

When does HAFA expire?
HAFA is set to expire December 31, 2012. Like other government initiatives, if the program is successful, it may be extended.

I heard that Approvals only take 10 days.  Is that so?
This is a misconception and a truth.  HAFA speeds up the short sale process by putting in distinct timelines.  One such time-line is servicer response to a completed application no later than 10 days after submission. The longest amount of time you should expect a HAFA short sale to take is 5 months.  At the servicer’s discretion, the program can be extended up to 12 months. 

Do HAFA short sales require an agent list the property?
YES.  All HAFA short sales must be listed by an agent.

How is HAFA different from a regular short sale? There are quite a few issues that differentiate a HAFA short sale from a non-HAFA short sale, including: 1) set timelines, 2) pre-approved selling prices, 3) payments to the sellers upon completion...

Do the seller’s get an incentive? YES.  HAFA will provide sellers up to $3000 for Relocation Assistance if they complete the HAFA short sale or deed in lieu process. Only one payment per household is given.

Who completes the Short Sale Agreement ?
This form is completed in cooperation with the listing agent so that the servicer knows that the agent agrees to the HAFA program terms and conditions.

Are their tax and credit consequences from a HAFA short sale or deed-in-lieu?
The difference between the remaining amount of principal owed and the amount that the servicer receives from the sale must be reported to the Internal Revenue Service (IRS) on Form 1099C.  It will be reported as debt forgiveness that could be taxed as income. The $3,000 Borrower Relocation Assistance could also be taxable.  Sellers need to be aware of the income tax consequences and/or derogatory impact on credit that may come with a short sale or deed-in-lieu.  Sellers should always consult a tax accountant, the IRS and appropriate legal counsel to determine potential liabilities and to explore other options.

CLICK ON THE HAFA BUTTON BELOW TO SEE IF YOU ARE ELIGIBLE TO PARTICIPATE IN THE HAFA PROGRAM

This blog is designed to provide information in regards to the subject matter covered.  The Jackson Realty Group Inc, any of its founders, employees, contributors, staff, and affiliates are not to be held liable for information shared.  Readers are encouraged to verify all information posted and use at their own risk.

Mortgage applications at a 13 year low...so why is that important?

The Mortgage Bankers Association reported that demand for loans to purchase U.S. homes sunk to a 13-year low last week, and refinancing demand also slid despite near record-low mortgage rates. Requests for loans to buy homes dropped 3.1 percent in the week ended July 9, after adjusting for the Independence Day holiday, to the lowest level since December 1996, the Mortgage Bankers Assn. said....Rock-bottom borrowing costs are helping borrowers with pristine credit to buy and those who still have equity in their homes to refinance.

Take a look at this statistic and chart below: The refinance share of mortgage activity remained constant at 78.7 percent of total applications…so, at a 13 year low number, only 21% of the mortgage applications were for new purchases! On an unadjusted basis, the volume of purchase applications is 43% lower than the same week last year!



If even at sub-5% rates buyers are not interested, what’s going to happen to buying interest if (when) rates go up?

• Unemployed people do not buy homes.
• People who have had their hours or salary reduced 20-30% do not buy homes.
• People with a credit score of 599 or less (25% of the population) do not qualify to buy a home.
• People who lost 30% of their home equity can not sell their existing home to buy a new one.

Where I see the most activity (and a lot of multiple offer situations) is in the sub $150k range…where you can buy and have payments less than a comparable rental. Maybe this is what will happen going forward in all price ranges…activity and competition will greatly increase when the home price/mortgage rate equation delivers monthly payments at or close to what it would cost to rent a comparable home. And, it does not, necessarily have to come from lower prices or lower interest rates….if rental rates increase, that will be the ‘flip side’ of the equation. Rising rental rates, in my humble opinion, are quite possible given the scary statistic of sub 599 credit score Americans. Going forward I can see many, many more people throwing in the “credit score towel”…we will have a decade of renters (and this could raise rental rates)…income reduction, job loss, foreclosures, bankruptcy…some times up to ten years to clear/restore your credit without taking affirmative credit restoration steps.

If you’d like to discuss how this all affects your plans to sell or buy, please give me a call on my direct line at 561-602-1258.

Thanks for reading,
Steve Jackson

A 4th of July gift for you...

How about starting a 4th of July family tradition that doesn't include eating meat cooked outdoors or lighting fireworks?

Below I have given you 4 links to 4 very important documents.

Why not get the family/friends together and read and discuss what is actually behind this holiday. Certainly not all 4 at once...but maybe read the short Declaration of Independence before everyone starts dinner?

1. The Declaration of Independence
2. Constitution
3. Bill of Rights
4. Amendments to the Constitution

Enjoy the holiday...and be safe!

Steve Jackson

Disastrous home sales report - July 1, 2010

The experts expected home sales to drop once the homebuyer tax credit lapsed at the end of April, but the depth of the decrease was shocking (only to the “experts”).

According to the National Association of Realtors (NAR), pending home sales fell a whopping 30% in May. Their index, which measures signed sales contracts but not closed sales, plunged to 77.6 from 110.9 in April. It's even off 15.9% from a year ago when the nation was barely emerging from the recession.

The pending home sales report is a disaster," said Mike Larson, a real estate analyst for Weiss Research. "Sales fell off a cliff after the tax credit expired. It's the biggest monthly decline ever and the index is at its lowest level since NAR began tracking it in 2001."

(As expected)…Lawrence Yun, NAR's chief economist, downplayed the damage a bit. According to him, customers rushed into deals to claim the credit, borrowing from May sales. Once the economic recovery comes into full swing, housing markets will heat up. "If jobs come back as expected, the pace of home sales should pick up later this year," said Yun, "and reach a sustainable level of activity given very favorable affordability conditions."

The question is when -- or if -- the job market will ever bounce back.

"We're not creating jobs," said Larson. "The housing problems now are being driven by broad economic problems."

Disastrous home sales report - Jul. 1, 2010

Senate Passes Homebuyer Tax Credit Extension « HousingWire

Wednesday, June 30th, 2010, 11:34 pm

Yesterday, the House pushed through a three month closing extension of the homebuyer tax credit.

Tonight, the Senate unanimously approved the bill — leaving the President to ratify the provision by signing it into law, as early as tomorrow morning.

"I thank my colleagues for joining me to pass this important extension and giving homebuyers in Nevada and around the country the opportunity to purchase their first home," said Sen Harry Reid (D-NV), in a statement following the bill's passage.

"In addition to helping thousands of families experience the American dream, this successful and popular program provides a much needed boost to Nevada's housing market and economy."

The deadline for the tax credit was midnight tonight but only if the mortgage went through, so with Obama's signature, it would have been possible that no contracts currently under offer — but unable to close — would fall through the cracks with the extended deadline.

The Senate approved provision will give buyers until Sept. 30 to complete their purchases and qualify for tax credits of up to $8,000.

If the President signs the bill into law tomorrow, it is unclear if the provision will apply retroactively to deals that close on Thursday, July 1.

Senate Passes Homebuyer Tax Credit Extension « HousingWire

Strategic Defaults UP – Loan Modifications Down

C-Span is a wonderful thing.  Just listen or watch - The House Oversight and Government Reform Committee hearings yesterday brought in some interesting statements from CEO's and Presidents of Bank of America, JP Morgan/Chase and others.

As I reported in my article WALK AWAY FROM THE PROPERTY - STRATEGIC MORTGAGE DEFAULTS GROW TO 26%, that figure is now updated by the University of Chicago and Northwestern University researchers for the previous figures - a year later the strategic default rate is up another 10%!

Why is this happening?  Industry leaders blame the government programs.  The HAMP program has 800 specific requirements for the borrower  - 800 !!!  No wonder it takes 4 to 6 months for a person to go from trial modification to permanent modification.  Numbers for successful conversions under HAMP is running about 10% of trial modifications.

What makes a borrower ineligible for HAMP or other (proprietary) modification programs of the lender?  Testimony today said that government regulations of easy credit made the banks make loans to people that could not afford the mortgages they got - and this is now the end result - these borrowers still do not qualify even for a modification!  A big reason for rejection - trial mod recipients don't pay the reduced payments or don't provide necessary documents.

Modification requirements always now require real, as opposed to "stated", income revelations.  Many borrowers don't give the required information on their "real" income to qualify for the modification.  Why?   Testimony suggested being afraid of the IRS, or being intimidated because of perhaps false documents in the beginning, are other reasons.

I loved the comments from  Rep Elijah Cummings - his staff sent documents on behalf of constituents to a lender and those documents got "lost" - several times!  And he had proof that payments were made to the lender and the lender failed to acknowledge the payment even when the Congressman's staff showed the lender the cancelled check.

When asked what is the solution - lenders said there needs to be a "dignified transition".  What is THAT?  A "dignified transition" is making homeowners into renters! " Not all homeowners should be owning a home".  Well, I cannot disagree with that, but it just does not sit well.  So they suggest that short sales be the "dignified solution".

Maybe Washington is listening and even feeling the pain.  Keep watching and tell your Washington representatives what you think needs to be done.

Copyright 2010 Richard P. Zaretsky, Esq.

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make.  This article is for information purposes and is not specific advice to any one reader

 

The 'experts' wrong?...what a shock!

May existing home sales plunged far below expectations, coming in at an annualized -2.2% rate, compared to consensus expectation of +6.0%...This is the second worst monthly drop in history, and shows just how very wrong economists are, and how they will all have to revise their outlooks lower...

Also, in the 1st quarter of this year, 96% of originations were backed by one of the GSE's (Fannie/Freddie). i.e. there is still no viable mortgage securitization market outside of the government.

Animal House, Belushi and Housing?

Seems like John Belushi's classic quote from Animal House: "Over, did you say over, nothing is over until we decide it is!" is the mantra for a few high profile real estate, mortgage and financial industry execs. Below are some excerpts from very recent interviews and reports:

• Stan Humphries, chief economist of Zillow: “Most consumers tend to be overly optimistic about what the future holds,”..."the housing recession is not over, prices are continuing to fall"..."We think the bottom is going to be a long and flat affair"...“Foreclosures are increasing and we will reach a peak in foreclosures later this year. These foreclosure rates won’t recede quickly. They’ll stay high.” ...referencing the recently expired tax credits, he said “We will see payback in July and August,”..."as long as unemployment is extremely high (8 percent to 10 percent, or higher), and large numbers of homeowners (23.3 percent) are underwater (almost 49% of all mortgage holders in Florida), foreclosures will stay high. Also, there are as many as 7 to 8 million housing units in the “shadow inventory,” many of which will turn into foreclosures as well... there are also 5.3 million “sideline sellers” just waiting to jump into the market and list their properties..."If you really want to know when the housing market will return to normal, the real estate experts and economics at my conference are talking about 2013 – or longer".

• This from the 'always optimistic' National Association of Realtors: Twice as many homes were added to the market as were sold in April, according to the National Association of Realtors...the housing inventory is back to where it was in 2009, which is lousy news for home price appreciation.

• Michael Fratantoni, the Mortgage Bankers Association’s vice president of research and economics: "Overall mortgage application volume, which includes loans for purchases and refinancings, dropped by 12.2 percent during the week ending June 4, compared with the previous week...“Purchase applications are now 35 percent below their level of four weeks ago, as homebuyers have not returned to the market following the expiration of the homebuyer tax credit at the end of April".

• James J. Saccacio, CEO of RealtyTrac:  "The numbers in May continued and confirmed the trends we noticed in April: overall foreclosure activity leveling off while lenders work through the backlog of distressed properties that have built up over the past 20 months. Defaults and scheduled auctions combined increased by 28 percent from 2007 to 2008 and another 32 percent from 2008 to 2009 — creating a build-up of delayed bank repossessions. Lenders appear to be ramping up the pace of completing those forestalled foreclosures even while the inflow of delinquencies into the foreclosure process has slowed.” This is precisely the event that CNBC's Diana Olick was warning about a month ago. Housing is about to take fresh new turn lower.

• Michael Pento, Chief Economist for Delta Global Advisors: "We need to sell assets, and we need to allow the deleveraging process to consummate. We are going in a wrong direction and that's the double dip recession is virtually assured. 2008 taught us very clearly that decoupling is a dodo bird's philosophy. The US is headed down. You'll see home starts, permits, sales plummet in the next few months, that's going to add more supply to the housing market..."

Sorry for the gloom and doom. But my job here is to educate my readers and present the information that may not be getting to them in the newspapers or on cable. I try to help my clients and readers make the best housing-related decisions based upon ALL of the pertinent data...

As always...thanks for reading.

Steve Jackson

Last 30 days of sales in Smith Farm

There were four sales recorded in the past 30 days...here are the details:

The sales prices ranged from $210k to $310k

1. 7451 Sally Lynn was listed for $399k and sold as a short sale for $310k. The home was aprox 3300 sq ft under air, on a lake, in a cul-de-sac, with a pool...5 bedrooms, 3.5 baths, 2 car garage
2. 7526 Oak Grove, a 738 model,  was listed at $284k (originally $299k) and sold at $274k. No lake/pool...not a short sale or foreclosure
3. 6546 Stonehurst, a 1609 model, was listed at $259k and sold at $254k. No lake/pool...not a short sale or foreclosure.
4. 7642 Oak Grove, a 739 model, was listed at $220k (originally $250k), and sold at $210k. Lakefront...Short sale

FYI: the above properties were not necessarily listed or sold by us...we're just keeping everyone up to date on the community market activity.

What is everyone searching for?

Recently there has been a ton of good news being reported in the real estate segment. Resale home sales were up huge...new home sales were up big too...every talking head is predicting the end of the housing slump. Not so fast. I have done some research regarding some little publicized web traffic statistics, and that tells us..The Rest Of The Story!

The company, Hitwise, a web-traffic analysis company, recently published the following trend chart:

What this chart reveals is that year-over-year visits to websites in the Real Estate category are down 22% for April 2010...that is 11 consecutive months of traffic decline for visits to Real Estate For Sale sites! It is painfuly obvious that buyer interest is declining. Now, lets look at another Hitwise chart:

The above chart from Hitwise reports that visits to “Home and Apt Rental” websites are up 45% in April 2010 year-over-year, and that represents the tenth consecutive month of increases!

Finally, Hitwise reports: “The most popular term ranked by the overall share of search clicks is ‘apartments for rent’, which has increased 162% for the 4 weeks ending May 8, 2010 when compared to the same time period 2 years ago.” For the Home and Apt Rental websites, visits have increased year-over-year for the past 10 months. 

Now, every real estate agent will tell you that 90% or more of all homebuyers use the Internet during the home purchase process... So, a 22% decline for traffic to real estate sites, combined with 45% increase for rentals suggests that the market demand for housing sales might be a whole lot softer, and headed in a different direction, than widely reported economic data indicates.

People will choose to rent for 2 main reasons...they can't buy a home or they don't want to buy a home.
A large number of people today who CAN'T buy fall into a two categories: 1) No job/job or income instability, 2) credit issues. Hopefully, the job situation will improve consistently going forward, but the number of people with credit issues will most likely continue to rise. Think about the statistic in this following chart: (look at the very left bar in the graph)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The state with the greatest percentage of people at least 30 days late on their mortgage is...FLORIDA! Over 1 out of every 4 people with a mortgage is 30 or more days behind.
 
It is common knowledge that missing mortgage payments will deliver a pretty significant hit to ones credit score. And with the abject failure of the Govt. HAMP (loan modification) program, it is a fairly safe bet that a large number of people currently behind on their mortgage will end up eventually either losing their home in a foreclosure action or successfully completing a short sale (the much better alternative). In either case, these folks will not be purchasing a homeduring the next 2 years, or more. These are ones who can't buy a home.
 
Then you have large segment who still believe that it is not a good time to buy..they are renters by choice, and their numbers are growing daily.
 
Now, I personally know that many investors are plowing money into the real estate market, although they are very selective and are making decisions that factor in NO appreciation for 5 or more years. And, there are still buyers out there. They are balancing the historically low interest rates, low home prices and reduced competition against the chance that home values will decline further. But most of my buyers today have a long enough time horizon to give them the confidence that the combo of interest rate and home prices makes it a good time to buy.
 
Any homeowners reading this who are considering moving in the next 24 months or so should seriously consider getting your home on the market sooner, rather than later. Sell, get you money in the bank now, and rent for a while if you need to. It may be a bit inconvenient, but it appears that this may be the smartest move.

Foreclosures in Smith Farm, Lake Worth

As of today, there are 102 Smith Farm homes in some stage of foreclosure. (On April 1st there were 94)

Alphabetically, by street, here are the numbers:

• Ambleside-3
• Ashburn-5
• Boxleaf-1
• Branchwood-10
• Columbia-6
• Copperfield-3
• Downwinds-2
• Great Oak-4
• Greenville-7
• Kingsley-6
• Marbletree-6
• Oak Bluff-4
• Oak Grove-14
• Prestwick-1
• Ridgefield-3
• Rockport-8
• Sally Lyn-4
• Squirewood-3
• Stonehurst-4
• Waterdance-3
• Waverly-4

Falling home prices raise fears of new bottom - Yahoo! News

 

Tax credits and historically low mortgage rates have failed to lift home prices so far this year. Prices fell 0.5 percent in March from February, according to the Standard & Poor's/Case-Shiller 20-city index released Tuesday .

The co-creator of the Case-Shiller index, who predicted in 2005 that the housing bubble would burst, is raising concerns that the worst may be ahead. That fear is shared by other economists who point to weak job growth, tight credit and many more foreclosures ahead.

"I'm worried still about the risk of a double-dip," economist Robert Shiller said in an interview.

The month-to-month drop from February to March marked the sixth straight decline. Prices in 13 of the cities fell. Only six metro areas recorded price gains. One, Boston, came in flat.

In the first quarter of 2010, U.S. home prices fell 3.2 percent compared with the fourth quarter.

Falling home prices raise fears of new bottom - Yahoo! News

Short Sale Myths

Short Sale Myths De-Bunked


RISMEDIA, May 13, 2010—With short sales making up almost 35% of home sales in March and the country with a national foreclosure problem, I Short Sale, Inc., one of the largest short sale firms in the U.S., sets the record straight on common short sale myths.

1. You must be default on your mortgage to negotiate a short sale. Short sales are not a function of default status on a mortgage. They are the result of the bank mitigating a potential default situation that, in the long run, will cost more money to the investors. We have completed many short sales in instances when the borrower was not in a default situation.

2. Listing my home as a short sale is embarrassing. Anytime we get ourselves into a tough financial situation it can cause some embarrassing feelings. It is important to remember that those feelings will not help us get back onto stable financial ground. We need to overcome our feelings and do what is right to protect our financial futures.

3. Buyers aren't interested in short sale properties. Short Sale properties are often times available at a competitive price to other properties on the market. In many cases, short sale properties are very well cared for and have not had to endure the deferred maintenance of a REO property. Short Sale properties are in great demand in the marketplace.

4. There's not enough time to negotiate a short sale before foreclosure. A good negotiator takes into account the timeline affiliated with a foreclosure. There is always a chance that a short sale can be negotiated. However, the only way to know for sure is to try.

5. The bank would rather foreclose than complete a short sale. Banks do not want to foreclose on property. It is expensive and carries a high level of liability once the bank owns that property as an REO. Wherever possible, banks are seeking other loss mitigation options before foreclosure.

6. Short sales are impossible and never get approved. Short sales are complicated, but not impossible. We negotiate short sale approvals every day.

Smith Farm market activity report...last 90 days of sold properties

Looking at the properties that have sold within a subdivision in the previous 90 days is a big factor in arriving at a valuation that an appraiser may report back to a lender. Generally, appraisers will try to find enough "comparable" (not identical) sales going back only 90 days. If there are not enough, they will continue to go back further.

I have seen instances that, for whatever reason, where appraisers have passed over recent sales and used older sales in their valuations...and it has resulted in an "appraisal review" being called for and usually ends with a lowered appraisal.

Below are all the reported sales in the last 90 days:

1. 3 BR. 2.5 bath, 1 car - 1737 sq ft. - (model 719) - Rockport - $175,000 - (bank owned)
2. 3/2/2 - 1600 sq ft. - Oak Grove - (model 745) - $198,000
3. 3/2/2 - 2166 sq ft - Copperfield - (model 1141) - $206,000 - (short sale)
4. 3/2.5/2 - 1821 sq ft - Rockport - (model 722) - $206,250
5. 4/2.5/2 - 2050 sq ft - Columbia - $217,000 - (bank owned)
6. 3/2.5/2 - 1821 sq ft - Rockport - (model 722) - $218,000
7. 3/2.5/2 - 1821 sq ft - Rockport - (model 722) - $220,000 - (bank owned)
8. 4/3/2 - 3017 sq ft - Copperfield - (model 1139) - $227,000 - (short sale)
9. 3/2.5/2 - 2694 sq ft - Pool - Columbia - (model 718) - $229,000 - (short sale)
10. 3/2/2 - 2166 sq ft - Copperfield - (model 1141) - $245,000
11. 5/2.5/2 - 3638 sq ft - Great Oak - $315,000 - (bank owned)

Smith Farm homes currently under contract

There are currently 13 Smith Farm homes "under contract"

The asking prices range from $189,000 to $399,000.

7 of the 13 are marketed as Short Sales.

2 of the 13 are bank-owned sales.

Days on market range from a low of 17 to a high of 468.

Smith Farm homes currently on the market

19 homes currently on the market, ranging from $185,000 to $499,000. If you remove the 'outlier' home at $499k, the next highest asking price is $340,000.

9 are being marketed as Short Sales

4 are bank-owned properties

CBS The Early Show...Rebecca Jarvis; Selecting a real estate agent

Yesterday, Rebecca Jarvis on CBS The Early show did a piece on how to avoid the common mistakes in selling real estate...her #1 mistake: Picking a bad agent

But, through lack of research or lack of expeirence she failed to give any concrete advice on how to judge if you are picking a good agent or a bad agent. The best advice is be diligent and careful when hiring an agent...you won't know you hired the wrong one until it is too late.

Personally, I have seen sellers select an agent because (in their own words) "they send me postcards all the time". Others have selected neighbors, friends, church associates etc. as their agent with no other qualifying criteria.

A recent development is the "mega agent" who advertises under their name but actually has less experienced "team members" handle just about all aspects of a transaction, all the time selling the client on how this is good for them. The "mega agent" doesn't meet with the client, doesn't write or negotiate the contracts, doesn't interact with the buyers agent and may not ever speak with the client...they are involved in the clients transaction in name only.

While this is just my opinion and there may be no way to prove this, I would argue that the best agents occupy the "80th to 90th percentile" of a Bell Curve of relative real estate production. I say this because my years in the business have led me to believe that the absolute "top" agents in terms of total # of homes sold tend to be focused primarily on SALES and SELF-PROMOTION and most of the actual work is delegated to other individuals, while the agents just below that tend to be more client-centric and personally involved in the clients transaction.

It's time to get a CLUE

HAFA...all the benefits of a regular short sale...hafa the headaches!

Monday, April 5th, was the 1st day, officially, of the new government sponsored intiative, HAFA: Home Affordable Foreclosure Alternatives. HAFA was introduced to simplify and streamline the short sale process and to provide incentives for the homeowner, loan servicer and lender/investor.

We have already received specialized, in depth training on this new program and will briefly summarize the features and benefits below:

Qualifying Factors

• Must be HAMP eligible
• Principal residence only (must be living there, with 1 allowable exception)
• 1st lien mortgage originated prior to 2009
• Mortgage balance less than $729,750
• Mortgage payment exceeds 31% of monthly gross income
• NOT a Fannie Mae or Freddie Mac backed loan

Here are the Fannie and Freddie loan look-up tools:

Fannie Mae Loan Lookup

Freddie Mac Loan Lookup

How is the HAFA program different or better than what is being done now?
The main problem, for both sellers and buyers, with traditional short sales was that they took too long and the process was wholly unpredictable. It was always difficult to keep buyers interested in, and committed to, the process. The HAFA program was designed to speed up and standardize the short sale process and give incentives for each short sale completed. During a non-HAFA short sale, there is no government incentive for banks to help you. Also, a VERY important benefit to homeowners is the requirement that participating lenders release you of any further libility for the deficiency amount!

What are the incentives?

• As a qualifying homeowner, you would be entitled to a $3000 "relocation" incentive payment at the time of closing and funding of your short sale.
• Servicers participating in the program will receive $1,500 for a completed short sale
• Investors (lenders) can receive up to $2,000 for payments made to junior lienholders
• Junior lienholders can receive up to $6000

Do I have to hire a real estate professional for a HAFA short sale?

Yes, but it won't cost you anything. Under HAFA, our fee will be deducted from the sale proceeds and paid by the lender. It is a requirement of a HAFA short sale that you work with a real estate professional throughout the HAFA short sale process. The Jackson Realty Group is now the areas HAFA specialists, having received the most up-to-date training available on the HAFA program.

Also, any time there is a new program announced, there are people who set up scams based upon the publics ignorance of the details, and the HAFA program will be no different. Other than an attorney you may hire to assist with a pending foreclosure or associated issue, beware of anyone requesting "up front fees" to assist you in processing a HAFA short sale. MakingHomeAffordable.gov (MHA) provides the following guidelines:

• Beware of anyone who asks you to pay a fee in exchange for counseling service or modification of a delinquent loan.

• Scam artists often target homeowners who are struggling to meet their mortgage commitment or anxious to sell their homes.

• Beware of people who pressure you to sign papers immediately, or who try to convince you that they can "save" your home if you sign paperwork or transfer over the deed to your house.

• Never make a mortgage payment to anyone other than your mortgage company without their approval.

• Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.

If you would like to meet with me to discuss if you may qualify for this program and to review the process as well as your options, please call me at 561-602-1258 or CLICK HERE and send me an email with your contact information.