Daily Real Estate NewsFebruary 18, 2009
After President Obama signed the $787 billion economic stimulus plan into law Tuesday, he said now the focus needs to be on stopping the spread of foreclosures and falling home values.
"We must ... do everything we can to help responsible home owners stay in their homes," Obama said.
The challenge, say those who have been studying the problem, is to lower the amount of money borrowers must pay every month.
More than half of mortgage modifications have left borrowers with the same or higher loan payments because lenders tack on past-due principal, interest, taxes and insurance, which drives the total owed higher, according to an analysis by Alan M. White, a professor at Valparaiso University School of Law. The study looked at more than 23,000 modifications. At the same time, White says, lenders have been unwilling to reduce principal even for borrowers owing vastly more than their homes are worth.
As a result, 49 percent of borrowers redefaulted within six months after receiving a modification that increased their principal and interest payments by 10 percent to 20 percent, according to ratings company Fitch.
The re-default rate was 21 percent for borrowers who saw their payments fall by 20 percent or more.
Source: The Wall Street Journal, Ruth Simon (02/18/2009)
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Friday, February 27, 2009
Tuesday, February 17, 2009
Fannie, Freddie to suspend foreclosure sales
South Florida Business Journal, Monday, February 16, 2009
Fannie Mae and Freddie Mac has joined the growing list of institutions agreeing to suspend foreclosures.
The two said they will suspend all foreclosure sales involving occupied single-family and two- to four-unit properties through March 6.
The suspension will give loan servicers more time to help troubled borrowers find an alternative to foreclosure.
The housing giants, which were seized by the government last fall, had said they would suspend evictions and foreclosure sales between Nov. 26 and Jan. 9, a decision affecting thousands of proposed sales.
The latest suspension does not apply to vacant properties in foreclosure.
McLean, Va.-based Freddie Mac (NYSE: FRE) and Washington, D.C.-based Fannie Mae (NYSE: FNM) own or guarantee almost half of the country's mortgages.FNM) own or guarantee almost half of the country's mortgages.
Freddie Mac said it gives lenders servicing its mortgages broad authority to provide forbearance to borrowers who are not yet delinquent. In addition, lenders can provide permanent rate reductions, mortgage term extensions, forbearance of principal or other modifications to borrowers who are already delinquent.
Fannie Mae and Freddie Mac has joined the growing list of institutions agreeing to suspend foreclosures.
The two said they will suspend all foreclosure sales involving occupied single-family and two- to four-unit properties through March 6.
The suspension will give loan servicers more time to help troubled borrowers find an alternative to foreclosure.
The housing giants, which were seized by the government last fall, had said they would suspend evictions and foreclosure sales between Nov. 26 and Jan. 9, a decision affecting thousands of proposed sales.
The latest suspension does not apply to vacant properties in foreclosure.
McLean, Va.-based Freddie Mac (NYSE: FRE) and Washington, D.C.-based Fannie Mae (NYSE: FNM) own or guarantee almost half of the country's mortgages.FNM) own or guarantee almost half of the country's mortgages.
Freddie Mac said it gives lenders servicing its mortgages broad authority to provide forbearance to borrowers who are not yet delinquent. In addition, lenders can provide permanent rate reductions, mortgage term extensions, forbearance of principal or other modifications to borrowers who are already delinquent.
Tuesday, February 3, 2009
Pending Home Sales Show Healthy Gain
The forward-looking index, based on contracts signed, rose 6.3 percent in December. Big gains in the South and Midwest offset modest declines elsewhere, according to the latest NAR report.
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How to Find Money to Invest in Real Estate
Talk to local, rather than national, banks first. They're more likely to understand your business. Detailed documentation of the project's income potential, as well as the time, money and sweat equity you've already put in, are essential.
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Obama Promises More Low-Cost Mortgages
President Barack Obama on Saturday said reducing mortgage costs would be a key part of his plan to improve the economy.
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