Technorati Tags: Defaults, Foreclosures, Shadow Inventory

The 2400 member Mortgage Bankers Association recently sold it’s building for $41.3 milion to a company called CoStar.   This handsome 10 story building is located at 1331 L Street in Washington, D. C.    It’s prime location is just a 5 block walk over to the  White House. Costar will occupy 80% of the building after the MBA moves out.

No big deal until you look at what the MBA owes- $79 million to  a group of banks including PNC for the building they bought in 2007.   That’s nearly a $38 million dollar shortfall.   This bears emphasis-the Mortgage Bankers Association bought this building less than 3 years ago.   Now it can’t afford the payments so it did a short sale and must move out.   This is certainly an embarrassment for the MBA.   Especially president and CEO John Courson who has been critical of homeowners who walk away from from mortgages that are underwater.  He said people should worry about what their children would think.

It’s also must be an embarrassment for the financial who’s who on the MBA board of directors.  You would think experts from J P Morgan, Wells Fargo, and Key Corp should have known better.  But of course the board has members from the likes of Citigroup, Fannie Mae and Freddie Mac too.  Institutions who have punished the taxpayer with incompetence.

So is the Mortgage Banker Association also a Deadbeat Tenant?

If all this isn’t bad enough, the MBA is still in litigation with it’s former landlord Tishman Speyer Properties over $1 million in termination fees over space it rented previous to owning this property.  The MBA says it plans to pay the penalty but, “Timing” is an issue.  Timing?  The MBA moved over 2 years ago!

So what’s next for the MBA?  The MBA says it will remain at the L street building until June when it says it will rent other space.

So if you’re a DC landlord do you rent to the MBA deadbeats who failed to pay Tishman Speyer after 3 years?

So far this seems to be a non event for large media outlets like AP and Reuters.  However, a real estate new outlet (Real Estate Channel) ,  the Street.com, and a few other services have picked up this story.

Technorati Tags: Dead Beat Tenant, Short Sales

Home affordability has never been better.  This is especially true with the discounted prices on foreclosures and short sales. Down payment assistance, rehab loan money, and historically low interest rates make this a great time to buy a new home.  But how do you turn a run down foreclosure or short sale  house into your dream home?

Mary Alice Short of the Minnesota Real Estate Team and Elizabeth Vaughan of Cornerstone Mortgage have the answers.  Mary Alice knows short sales and Foreclosures inside and out.   She can tell you how to get your offer accepted.  Elizabeth knows all the programs available to help you fund the rehab and purchase of these distressed houses.  You will be able to ask questions and be well on your way to a game plan that will put you in the home you want.

While this is primarily aimed at First-Time home buyers,  even move up buyers will find lots of useful information.

Saturday, February 13th, 9-10:30AM; 436 Gateway Blvd, Burnsville, MN 55337.

Sign up here:

Technorati Tags: Bank owned, First Time Home buyer seminar, Foreclosures, Free Real Estate Seminar, Short Sale Seminar, Short Sales

Some of our talented Minnesota Real Estate Team members who also happen to be Certified Distressed Property Experts (CDPE) will be hosting two upcoming seminars.  One  in the northern suburb of Coon Rapids, and the other, south of the river in Burnsville.

1.) Thursday, February 18th from 6:30 to 8 pm at the Coon Rapids City Center-11155 Robinson Drive, Rob Reinke will host Short Sales: how to avoid Foreclosure.

2.) Thursday, March 4 from 6:30 to 8pm at Cornerstone Mortgage-435 Gateway Blvd, Burnsville, MN, Denae Frampton and Trent Johnson will host Short Sale Solutions.

If you or someone you know is struggling with a mortgage come and learn your options. Learn about the short sale process and how professional negotiating can save you from foreclosure. Our CDPE’s have extensive training and can go over all of your options.   Bring your questions, because these experts will take all the time  you need to help you choose your best alternative.   We are dedicated to helping solve this crises one homeowner at a time.

I have also set up a special informational site where you can download free reports regarding short sales and some of the myths and misconceptions.   This site is on my property information website FyiBob.com under the Short Sales explained tab.

For more information or to save a spot at one of the seminars use the contact form below.

Technorati Tags: Avoid Foreclosure, Short Sale Seminar, Short Sales

National Foreclosure Trend 2009

Here in Minnesota we see a slightly different trend.  As in the national graph we see a peak in July 2009.  Following this we see a 4 month down trend with a November spike.   Both Nationally and here in Minnesota the numbers continue to be extremely high.    But so far we are not seeing the huge spike predicted by conspiracy theory pundits who are saying a shadow inventory of bank owned properties will flood the market. Stay tuned for Part 3.

Minnesota Foreclosure Trend 2009

Technorati Tags: Bank owned, Foreclosure Trends, Foreclosures, Shadow Inventory

Here is a cut and paste right off the HomePath site:

The benefits include:

• Low down payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only)
• You may qualify even if your credit is less than perfect
• Available to both owner occupiers and investors
• Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer
• No mortgage insurance*
• No appraisal fees
• Also eligible for HomePath Renovation Mortgage (see details below)
• HomePath Mortgage financing is available from a variety of lenders – both local and national

Check out the local inventory on your own.  On the HomePath website you can find a property search feature along with financing information.  If you have any questions as to how to buy, finance, and fix up one of theses Fannie Mae homes give me call.

Technorati Tags: Fixer Upper Inventory, Foreclosures, Investment property, real estate finance

Foreclosure and Housing Price Trends

The Graph above shows the actual raw numbers of what’s going on for foreclosures and home prices nationally.

Shadow inventory refers to the inventory of homes in default that are not yet on the bank  for sale inventory.  Some of this shadow inventory has already gone through the foreclosure process but is not on the market for various reasons.  Depending on who you ask you might get a wide range of what’s going to happen with this inventory in 2010.  Some believe there will be a flood of defaulted houses coming on the market in 2010.   Others claim increased mortgage modifications,  short sales and other methods have already softened the blow.

There is no debate over the large number of defaults that are carrying over to 2010.  What the debate is all about is just how much affect this inventory will have on the housing market.   As the graph above suggests, the actual numbers say that foreclosures peaked in July.   Since that time the number of foreclosures have been slowly declining.   Related to that home prices have been pretty much flat for the last several months.

Personally, I’m skeptical that there will be any flood of foreclosures.  There is enough anecdotal evidence that Short sales and loan modifications are reducing these shadow numbers.  There still be lots of distressed property for sale.  I just don’t see any sudden flood on the horizon.

Technorati Tags: Defaults, Foreclosures, Shadow Inventory

Heres a link to video clip I ran across that explains the situation:

NAR Video

The HVCC created a sort of firewall between mortgage loan underwriting and those people who hire appraisers.  It’s supposed to help appraisers stay neutral and keep outside influence from gaming the system.    Obviously this is a noble idea.  So what went wrong?

First of all, first of all consider how this code came to be.  Andrew Cuomo,  New York State Attorney General and Fannie Mae came up with this agreement.   After numerous lawsuits Cuomo was able to basically right the code himself through legal intimidation.   The group at the center of the controversy, appraisers were completely left out of the code writing process.

Then in order to comply with the HVCC many mortgage companies decided that the best way to comply was to employ Appraisal Management Companies (AMC).   Even though lenders can hire appraisers themselves if they put appropriate safeguards in place, are choosing to work with appraisal management companies (AMCs) to select appraisers.   The law has been a financial windfall for these paper pushing AMC’s.    In the meantime many small appraisal firms have basically shut down.   AMC’s now are able to select appraisers based mostly on price and fast turnaround.   In some areas appraisers who were getting $350-$400 as independentt appraisers are being paid $175-$200.  AMCs still charge $350-$400, but they stuff as much as they can in their own pockets.  Competition among appraisers benefits the AMCs not the consumer.  A survey of National Association of Realtors members finds that, as a result of the increased use of AMCs, fees to appraisers are going down, appraisals are taking longer, and, perhaps most importantly, deals are falling through when appraisers are chosen who aren’t familiar with a market area.  The well intentioned HVCC is actually hurting the consumer.

Solutions

In the long run I expect that some sane legislation might get the HVCC revised.  We can all hope this happens soon. I’m not holding my breathe.   For my part, I feel it’s my job to help my buyers and sellers now.  I will inform my buyers and sellers of the potential problems in dealing with appraisals coming out of AMCs.   Buyers should be made aware that there are lenders who have taken the proper steps to deal with HVCC  without having to hire AMCs.

Technorati Tags: Andrew Cuomo, Appraisals, HVCC, real estate finance

So how bad is it?

Fact: About 30% 0f all homes in the U. S. are owned free and clear.

Fact: Of the 70% that do have a mortgage less than 4% are in default.

You can choose to see your self as a victim or as a fighter, or even an opportunist.  There are GREAT opportunities out there!  Millions of people are still working and succeeding every day.  People are working, paying their bills, eating in restaurants and buying everything imaginable.  Just today it was announced that retail sales for November exceeded expectations.  Home sales in the Twin Cities are up dramatically from a year ago.  Instead of dwelling on the negative headlines you can choose to focus on the opportunities around you.

Here’s the Good News

Homes are Affordable!

Fact: The housing affordability index is at the highest level it’s EVER been.

For the first quarter of 2009, the Housing Affordability Index hit172.5.  This means that a typical household earning themedian family income ($61,185) would have 172.5% of the income necessary to purchase a median-priced existing single-family home ($169,000) with a 20% down payment—
the highest level of housing affordability in history.

Your Buying power is up!

Fact: Financing rates are near historic lows.

These historically  low rates  along with tax credits and special finance programs makes this a great time to buy a home. Despite what you might read or hear on the nightly news, financing is available for qualified buyers.

It’s your choice to see this recession as a time to be a victim or  a fighter.

Technorati Tags: Buying Power, Dooms Day Media, Home affordability

Daunting, mysterious, scary — are these words that describe your feelings about buying your first home? Just say “no” to the negatives and “yes” to the positives!  Come learn about the buying process, from working with a loan officer to getting pre-approved and house-hunting with a Realtor, to getting your offer accepted and finally closing on YOUR first home!  Learn about the special first-time buyer programs that are available just for you. Many programs offer down-payment and closing cost assistance as well as lower-than-market interest rates.

Join Darcy McDonald of Cornerstone Mortgage and Steve Howe of The Minnesota Real Estate Team as they lay the groundwork for you to travel through the real estate transaction.  This seminar is set up to show you how to get off to a fast start, and prepare you for every step along the way until you reach the end of your journey — moving into your new home. They will also address today’s current marketplace, the extended tax credit and special loans to help you fix up those not-so-nice houses.  After attending this seminar your feelings about buying a home will be fun, exciting, and easy.  Feel free to bring your questions and get ready to become educated on buying your first home!

Call 952-240-5949

Technorati Tags: First Time Home buyer seminar