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Do you have a Freddie or a Fannie?

Fannie and Freddie (GSE's), as well as each non-GSE lender have their own rules and guidelines regarding if and how they will proceed with a short sale.

If you are “upside-down” on your home and want to start exploring your options, one of the first things you’ll need to do is to check if you have a GSE loan.

I have provided 2 links below to help you out.
Freddie: https://ww3.freddiemac.com/corporate/
Fannie: http://www.fanniemae.com/loanlookup/

If you’d like to discuss your situation and possible options confidentially, please call me on my direct line at 561-602-1258.

If you’re upside-down, don’t wait…find out who has your loan…then call me.

Thanks for reading…Steve

Foreclosure Backlog Stands at Thirty Times Monthly Foreclosure Sales Volume

The ‘shadow’ market is not in the shadows any more…it’s becoming plainly visible…and the numbers are staggering. According to a report released recently by Lender Processing Services, “foreclosure inventory levels are at 30 times monthly foreclosure sales volume.” As a result of this massive backlog, we can expect more downward pressure on home values. The statistics on the homes not yet owned by the banks but are currently IN the foreclosure process are also staggering, with LPS reporting that the average loan currently in foreclosure has been delinquent for 537 days, and 30 percent of loans in foreclosure have not made payments in more than two years.

In part, due to slower processing times on foreclosures, it is unlikely that this backlog will disperse any time soon. In fact, although total  loan delinquency has fallen nearly two percentage points over last year and foreclosure starts are down 14 percent from last year(partly due to the robosigning fiasco)…with the “non-current inventory” logging in at nearly 7 million, the backlog is likely here to stay.

Many analysts have been predicting that 2011 will be the beginning of a recovery for many sectors of the real estate market…but sadly, I are not on that bandwagon for us here in South Florida. Too much distressed inventory to work through…too many sellers that are NOT upside-down waiting for any evidence of stabilization to put their homes up for sale. Economics 101: Supply and Demand. There’s still an imbalance and will be for the foreseeable future. With this foreclosure backlog that we’ve been talking about for a looong time, we are quite pessimistic about the direction of local home prices.

And, what of the talk of the tightening of lending standards even further. Making 30% down the norm…increasing FHA down payments…interest rates going up…eliminating the mortgage interest tax deduction…does anyone really believe that these will HELP the housing market?

I, too, am a homeowner here in Palm Beach County…I’d love to be able to march in step with all of the so-called analysts/experts and say that the sun is getting ready to shine on our home values once again…but none of the evidence points to that.

However, there are still occasions where it makes sense for someone to buy; up to a certain price-point, thanks to low interest rates and 3.5% down-payment loans, it is less expensive to buy than to rent. And for buyers with a long enough time horizon there are some crazy good deals out there. Also, right now is a great time for investors as the cash-on-cash return is excellent for a big segment of the under $150k market. But when we, at The Jackson Realty Group, work with a buyer…we have them convince US (not the other way around) that now is the right time for them to buy. It’s not right for everyone right now. As a matter of fact, I find myself often recommending that renting is the best option for many clients who thought that they wanted to buy…but that’s what we do…we counsel and consult, we’re not salespeople trying to overcome objections!

For sellers (or those thinking about selling) we are saying “you want to be the NEXT home to sell”…in a market expected to continue its decline, it is expensive to wait.

If you’d like to discuss with me what your best options are at this point, either as a buyer or a seller, please call me on my direct line at 561-602-1258.

 

Thanks for reading,

Steve Jackson

Thinking of just “walking away” from your house?

DON’T DO IT!

A recent study estimates that 36% of Americans think walking away is a viable option when they owe more on their home than what it is worth. But few are aware of the severe financial consequences of these actions, and even fewer know the options available to avoid these consequences.

If you are at the crossroads of deciding whether or not to walk away (or “strategically default,”) you will find that there is nothing strategic about foreclosure, especially when there are options that can help you to avoid it.

Destroying your credit is NOT “Strategic”! Walking away from your mortgage can be incredibly dangerous and damaging to your financial future.

In a “strategic default,” homeowners simply choose to walk away from their mortgages—in other words, move out, stop paying and just “”let the bank take it”. Generally, this is done when a homeowner owes more on the home than it’s worth or is “underwater.” Most homeowners do not understand that walking away will expose them to foreclosure, which carries credit issues, current and future employment challenges, issues with security clearances, and the potential for non-stop debt collections.

In a Florida foreclosure, generally, the bank gets the home back at a courthouse auction…actually held as an online auction here in Palm Beach County. At some point in the future, the bank will re-sell the foreclosed property. The difference between what the bank finally ‘nets’ after the sale and what you owed (penalties/interest/legal fees/taxes/hoa fees, etc. added) is the deficiency. The bank can then get a judgment for this amount and attempt to collect, either directly, by giving it to the collection arm of the bank or, they sell it to a collection agency. And these collections efforts can haunt you for 20 years!

One of the first things we strongly recommend to anyone we speak with who is faced with a foreclosure action by their lender is for them to contact an expert foreclosure defense attorney…Be forewarned: Many Lenders have persuaded borrowers to represent themselves when facing foreclosure. Remember, the Lender’s first priority is collecting payments, not to gain a full understanding of your financial hardship. Don’t wait too long to seek help. Foreclosure Defense results are often best achieved with borrowers who seek help as soon as there is a problem.

Also, you don’t have to abandon your home…Borrowers need to understand that they are the legal titleholder to the home until a Judge declares otherwise. Although the Lender may hold a Mortgage Note, this does not mean that they can tell you to leave your home when you miss mortgage payments. Do not take the word of your Lender; seek counsel to advise you of your rights to remain in the property while searching for alternatives to foreclosure.

What about bankruptcy? Although bankruptcy can be a valuable tool when faced with an immediate sale of the property, it will rarely save your home from foreclosure. Many times, bankruptcy should be used as a last resort and only in combination with other large debts (i.e. immense credit card debt).

Do Not Ignore paperwork sent to you by the bank…Upon missing payments, most Lenders will send various documents and require a response. Many times these documents are discarded or there is no response. Save everything your lender has mailed or delivered to you and bring it to your attorney.

A foreclosure will be seen on your credit report for years…it will most likely impact you when trying to rent a home, trying to buy (or lease) anything on credit, applying for jobs, applying for various security clearances, and more! 

You have options…one of the best ones right now is a Short Sale. This is where the lender agrees to let you sell the home for less than the amount owed.

We have recently been utilizing a little-known strategy that can: 1) speed up the process, 2) relieve the seller of deficiencies, 3) is FREE to the seller, 4) Get the seller a $3000 ‘relocation’ payment from the lender! You can click right HERE to see if you may qualify to work with us using this strategy.

Now, remember, I am NOT an attorney and this article is NOT intended to be legal advice…for that, please contact a competent legal professional.

But if you’d like to discuss your situation, see how we can help you out of a jam, and see how we’ve helped many, many people in your same predicament…call me on my private line right now: 561-602-1258

And thanks for reading my blog!

Steve Jackson

Foreclosures in Lake Charleston, Lake Worth Fl.

Below is the most recent report from public records regarding all of the homes in some stage of foreclosure in Lake Charleston. As of March 28th, 2011 there were 191  Lake Charleston homes with a Lis Pendens filed on them

Now, that doesn't mean that these 191 are owned by the bank...

Here's the list, by street, alphabetically:

• Anadale-4
• Ansley-1
• Anson-1
• Ashley Shores-9
• Audrey-3
• Belmont-1
• Big Pine Key-3
• Briar Cliff-4
• Bristol Bay-4
• Brunson-3
• Burgess-13
• Catalina-6
• Cedar Hurst-2
• Charleston Point-3
• Coral Reef-4
• Crawl Key-1
• Davit-5
• Duncrest-2
• Edisto-8
• Forestay-2
• Geneva Lakes-1
• Heathley-2
• Highsmith-3
• Hoffy-3
• Key Largo-1
• La Rose-2
• Ladson-3
• Lake Placid-1
• Lakewood Cove-9
• Lauden-1
• Long Key-4
• Michigan Isle-7
• Nautique-1
• Nolting-1
• Oakboro-8
• Oakshire-1
• Pierpont-2
• Pigeon Key-1
• Prescott-6
• Red Reef-4
• Rockbridge-3
• Santee-5
• Shell Ridge-4
• Springfield Lake-9
• Sugarloaf Key-3
• Taylorwood-2
• Thornlee-10
• Tillman-2
• Torch Key-3
• Trenton-2
• Trescott-1
• Wentworth-1
• Wescott-4
• Winder-1

If you are reading this and you are 1 of the 191 listed above...one of the 48% who is upside-down on their mortgage or 1 of the 24% who is at least 30 days behing on your mortgage: Please-do not ignore your situation...call me today on my private line at 561-602-1258. Know what your options really are before you run out of options.

We have been employing a little-know and seldom-used program that may be able to get you out from under, relieve you of a deficiency, cost you nothing AND get you $3000 in your pocket when we are done.
Call me...or go HERE.

Nearly 20% of Florida homes are vacant - Mar. 18, 2011

 

NEW YORK (CNNMoney) -- On Thursday, the Census Bureau revealed that 18% -- or 1.6 million -- of the Sunshine State's homes are sitting vacant. That's a rise of more than 63% over the past 10 years.

Having this amount of oversupply on the market will keep home prices depressed and slow any recovery.

The vacancy problem is more dire in Florida than in any other bubble market: In California, only 8% of units were vacant, while Nevada, the state with the nation's highest foreclosure rate, had about 14% sitting empty. Arizona had a vacancy rate of about 16%.

In Florida, the worst-hit county is Collier -- home of Naples -- with a whopping 32% of homes empty. In Sarasota County, 23% of the housing stock sits vacant, while Lee County (Cape Coral) has a 30% vacancy rate. PALM BEACH COUNTY has a vacancy rate of about 18%!

The housing recovery will take years, perhaps many years, to complete, according to Ingo Winzer, a housing market analyst and founder of Local Market Monitor.

Not helping is the the fact that the state's rate of population growth slowed in the second half of the last decade to just 5.7%. Still, the 2000s saw the state population grow overall by nearly 18%, the Census Bureau reported. I

 

"It will take about eight years just to put the vacancy numbers back into the single digits," said DeKaser.

The inventory overhang has sent home prices plunging. The median price for homes sold in January was just $122,000, according to the Florida Association of Realtors. That was down 7% from 12 months earlier and less than half the price at the peak of the market.

Winzer thinks prices in Florida will drop even more, another 5% in 2011 and 3% in 2012. "Even after that, they're not going to rebound, they'll just sit on the bottom," he said.

Celia Chen, a housing market analyst for Moody's Analytics, is also downbeat in her forecasts for Florida. Not only will prices fall another 11%, she said, but the bottom won't hit until mid-2012, about a year later than the nation as a whole. Some metro areas won't get back to their pre-recession peaks until long after the present owners are old and gray.

She doesn't expect Naples, for example, to come all the way back until the late 2030s. Other Florida metro areas with a 20-year wait or longer include Punta Gorda, Palm Bay and North Port.

"If you're buying in Florida for retirement," said Winzer, "maybe you buy next year when prices will be near the bottom. If you're buying for investment -- don't."

90 Day Guaranteed Sale Program? There’s NO free lunch!

Once again, I have started to see this being promoted by mail and on the radio.

"If we don't sell your house in 90 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 the client pitch 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 the same as you would 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? Then why don't they get the investor to buy it from you...without the middle-man ans with you getting the higher price?
• Can they assign the guaranteed sale price (as in a wholesaler)? Again...you're losing out.

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...not a worn-out gimic. Thanks for reading

Large housing inventories to be sold at deep discounts in 2011…and other stories

 

From recent HousingWire news and other sources: (all italics mine)

Foreclosure filings and completed foreclosures will reach record levels this year, after lenders exhaust alternatives such as mortgage modifications (which have been hugely unsuccessful)…Analysts expect increased losses to residential mortgage-backed securities, as a result, because large inventories of foreclosed homes will be sold at deep discounts…

DBRS projects delinquency trends to continue climbing this year, as negative home equity persists, home prices remain down, unemployment stays high, and many borrowers have trouble refinancing due to tightened underwriting standards.

Analysts said the number of REO properties could double over the next 12 months to 4 million from 2 million, and it will take at least one to two years to sell those homes, further hindering recovery.

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Interesting research from PEW Local Trends that goes into great detail about Strategic Defaults..

What will be surprising to many is the dramatic increase in the number of homeowners willing to walk away from their underwater home. Just 3 years ago when we started reporting on this phenomena similar studies were done that resulted in fewer than 10% of those surveyed deemed strategic defaulting as ‘acceptable’. Now, that number is approaching 40%…

What this will mean going forward is that homes that are not even on the banks radar for potential default/foreclosure will be going back to the bank in record numbers, increasing the already lofty numbers of expected bank-owned properties.

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The mortgage interest tax deduction is being lead to the gallows for a little meeting with the guillotine…better known as the Obama Administration.

The National Association of Realtors is the lone voice in the blood thirsty crowd calling for the tax deduction to live on…

Here are the two sides of the argument:
The Off With Its Head…end the deduction argument: Why should non homeowners owners subsidize homeowners? Why are we punishing people for renting? Why create system that motivates people to buy more home than they otherwise would have? Why should the government incentive people taking on a mortgage thus, debt. (Sounds noble, does it not?….).

The ‘Let it live’ crowd’s argument: Owners are more stable, move less..invest more in communities. Owners spend more on home improvements and the like..thus, putting more money back into their communities.

I can tell you this for certain…regardless if you are red or blue…if the mortgage interest tax deduction, that will be quite a few nails in the housing coffin.

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Looming changes for Fannie and Freddie. The White House outlined last Friday its plans to begin shrinking their support of both of the government sponsored entities (GSEs) Fannie Mae and Freddie Mac. While the process could take several years, the effects will be felt in coming months.

Everything about obtaining a mortgage loan is about to change. Vastly fewer people will have the financial ability to obtain a loan.

It seems that the current administration is attempting to move us away from a homeownership society to a generation of renters…however, if the tax benefits of owning a primary residence are removed, do you think that the tax benefits of investor-owned properties will be left intact? If there are greatly reduced incentives (or even restrictive penalties i.e.. rent control) for investors, whom do you think will own all of the properties that people will need to rent?…It will be local/state or federal agencies that become the new landlords…watch out for this!

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I post these stories and opinions not to alarm but to inform…there is so much ‘spin’ out there from the various interest groups that it is hard to know which way is up or down.

For certain individuals and investors, in very specific circumstances…now is a great time to buy. Conversely, with what I think is going to be happening in the next few years to the housing market, now is also a good time to sell…it is hard to see, but will be clear in retrospect.

Lake Charleston Sellers write us a letter