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  Housing Problem Solvers Company

800-915-2683

1201 West Peachtree Street, Ste. 2300,

 Atlanta, GA,30309

Housing Problem Solvers

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Buyers Get Extended Offer Period on REOs

Posted on January 2, 2014 at 5:28 PM Comments comments (307)
Mortgage giants Fannie Mae and Freddie Mac announced an extension of their “first look” programs, granting buyers seeking a primary residence a full 20 days to submit offers on REO properties ahead of investor competition. 
Previously, the First Look period was 15 days long. Freddie Mac’s program operates under HomeSteps First Look initiative and Fannie Mae’s version operates under the HomePath system. The expanded 20-day program took effect for HomeStep listings on or after Dec. 17. Fannie Mae’s First Look HomePath program is effective for properties listed on or after Jan. 2, 2014. 
The programs are designed to promote owner-occupancy in communities, which the mortgage giants believe contributes to neighborhood stabilization. Some second home purchases are also eligible for HomeSteps First Look program. However, purchases of investments or rental properties are not eligible. 
“This is especially important for buyers competing for opportunities in markets where home inventories are shrinking,” says Chris Bowden, senior vice president of HomeSteps. “Expanding the HomeSteps First Look Initiative underscores our commitment to managing HomeSteps' REO inventory in a way that's good for taxpayers, homebuyers, neighborhoods, and Freddie Mac."
Freddie Mac and Fannie Mae offer a 30-day bidding window for buyers in Nevada, a state that has one of the highest foreclosure rates in the country. 

Real Estate Crystal Ball: Economists Predict Job Growth will be Deciding Factor in 2014 Housing Market

Posted on December 31, 2013 at 7:57 AM Comments comments (217)
The National Association of Realtors (NAR) is feeling good about the jobs market in 2014, and that means good news for housing. According to NAR chief economist Lawrence Yun, “2 million or more jobs will be created in 2014.” This surge will create a demand for existing homes and create a leap in homebuilding activity. Moody’s Analytics analyst, Celia Chen, said that this original surge will likely be the key to a full economic recovery – assuming it happens – since a rise in homebuilding will “spark even more jobs from construction workers to manufacturers and bring about a greater demand for housing overall.” Although housing demand is likely to rise in 2014 according to these economists, the housing price recovery is likely to slow in the coming year, said both Lawrence and Chen. Most analysts predict that housing prices will rise over the course of 2014 by about five percent, compared to this year’s 11 percent[1].
Of course, a great deal of this theoretical continued recovery hinges on the actual creation of those 2 million jobs. Most business economists surveyed by the National Association of Business Economists (NABE) are feeling just as sunny as Yun, responding that they predict that the economy will add about 200,000 jobs a month in the coming year (2.4 million total if that estimate holds). They also predict wage increases of about 2.4 percent for hourly-wage-earners in 2014, compared to a 1.8 percent increase in 2013. “Lower unemployment [will] put pressure on employers to spend more to recruit and keep the best workers,” said the NABE[2]. Although consumer spending will likely remain modest in accord with modest wage gains, a gradual rise should, said the economists, “help keep the U.S. on a slow but steady path of recovery.” Ultimately, all of this should contribute, if predictions hold, to a similarly slow but steady housing recovery.
Of course, interest rate changes could change everything in 2014 if the Federal Reserve actually starts a serious taper of the existing economic stimulus program that currently involves spending billions of dollars a month on Treasuries and keeping mortgage interest rates artificially low[3]. Given that most would-be homebuyers in today’s market consider five percent interest prohibitively high when it comes to making a home purchase using a conventional mortgage, even a small rise in interest rates could hurt the recovery. Yun predicted that rising interest rates in 2014 could slow the recovery but were unlikely to derail it despite “going above five percent by the second half of 2014.”
Finally, with distressed housing finally beginning to work its way through the market, the 2014 housing sector will have some real potential for lasting growth, said RealtyTrac vice president Daren Blomquist. He believes that “2014 will likely be the year we transition back to normal. He predicted that by the end of 2014, foreclosure filings will be down to about 85,000 a month nationwide. In 2005, there were an average of 73,750 foreclosure filings a month[4]. This past November, there were 113,454 foreclosure filings on U.S. properties, a 37-percent decrease year-over-year[5].

More “Fancy Foreclosures” Entering the System

Posted on December 14, 2013 at 5:35 PM Comments comments (306)
Huge, beautiful homes are a great asset to those who own and live in them, but when tough times hit they are hard to maintain. Although many luxury home owners held on through the housing crisis and kept their mortgages afloat, now an increasing number of luxury homes are going into foreclosure at an increasingly rapid rate. Although overall U.S. foreclosure activity is down 23 percent year-over-year, foreclosure activity on homes $5 million and up is up 61 percent year-over-year, reported RealtyTrac this month[1].
Of course, this dramatic jump in foreclosure activity affects a far smaller volume of homes than the overall declining number. There are about 200 homes in the U.S. worth more than $5 million that are in foreclosure, compared to 1.2 million total properties presently somewhere in the foreclosure system. However, noted RealtyTrac, “each of these high-value homes represents a much bigger potential loss for the foreclosing lender compared to a median-priced home.” Analysts say that early numbers indicating that these homes were not in foreclosure were likely misleading since lenders probably opted not to begin the foreclosure process on high-dollar homes until they were relatively certain that they could “weather these big-ticket losses.” Laffey Fine Home International CEO Emmett Laffey explained: “Any foreclosure properties in this type of ultra-luxury market usually get purchased very quickly since there is one thing all super-rich buyers want – an outstanding deal on a real estate transaction.” Laffey noted that in today’s market, an ultra-high-end foreclosure usually “comes with several million more dollars of built-in value.”
California and Florida alone account for more than 60 percent of all high-end foreclosure activity so far in 2013. Many analysts speculate that a large number of these homeowners in foreclosure have entered this position deliberately as part of a strategic plan to exit a property no longer worth what is owed on it[2]. While this may be troubling to lenders, their willingness to begin the foreclosure process actually is a good sign for the housing market since it likely indicates that they believe they will be able to recoup their losses on these luxury homes. About a year ago, HousingPredictor published the results of a poll that indicated nearly half of all homeowners would consider walking away from their mortgages if real estate prices continued to slide downward[3]. With high-end home values taking such a beating in many states, it could be the case that these homeowners either have let their mortgages go too long to catch them up or simply do not have the confidence that the banks have that the homes will sell for adequate profit. “Back in 2008, people were very emotion, very scared, in disbelief of denial,” said one analyst, adding that “now they are simply fed up” and may feel “very relieved” after making the decision to default. These sentiments are likely magnified in high-end homes in many cases because of the huge monthly payment commitments and an even higher likelihood that the homeowner considered the home an investment as well as a place to live.
Does this trend in high-end foreclosures surprise you? Have you walked away from any of your loans?

Housing Market Heats Up in Warmer Climates

Posted on December 14, 2013 at 4:50 PM Comments comments (352)
Because of tight inventory, states in the West and South are expected to see home prices jump by 4 to 8 percent over the next 12 months, according to the latest data from the REALTORS® Confidence Index Survey.
The highest price growth in the next year is expected in California, Nevada, Arizona, Texas, Utah, Florida, Louisiana, Georgia and South Carolina, according to the survey of about 3,000 REALTORS®.
Nationally, prices are expected to increase by about 4 percent in the next 12 months, according to the data gathered in November.
A few states in colder climes are also expected to see larger price jumps as the housing markets are expected to warm up in places such as North Dakota, Minnesota, Michigan and Massachusetts.
The recent confidence index survey is the latest evidence that the U.S. housing market is in a completely different position than at this time in 2012. This fall saw solid price increases, steady inventory and strong demand, according to realtor.com® monthly data.

Real Estate Scam of the Day: Lawyer Promises Foreclosure Assistance, Keeps Mortgage Payments for Himself

Posted on December 10, 2013 at 4:02 PM Comments comments (220)
After charging homeowners thousands of dollars in upfront fees for help avoiding their foreclosures, a Chicago lawyer is accused of taking those fees and thousands more in mortgage payments from struggling homeowners for his personal use and not helping them avoid foreclosure at all. Philip Igoe allegedly offered to help his victims stall their foreclosures or avoid them all together by filing for bankruptcy protections or loan modifications. Part of the process is alleged to have involved the homeowners sending Igoe their monthly mortgage payments with the understanding that he would forward that money to the banks with which he was purportedly working. Igoe is accused of never sending the money on at all, however, and instead keeping it for himself. Postal inspectors say that 15 homeowners were caught in the scam and lost thousands of dollars[1].
Igoe is accused of working with his wife, who is also an attorney, to bring the homeowners into the scheme and then later to cover up the tracks pointing to the Igoes as the culprits behind the foreclosures. According to the indictment filed in Chicago, Igoe “solicited clients who were facing foreclosures” and then “collected funds from clients promising to make payments for mortgages or Chapter 13 bankruptcy plans.” He then used “all or most of the funds for his own benefit,” the indictment continues, adding that Igoe “concealed important events in bankruptcy cases from clients, provided false reasons for the dismissal of bankruptcy cases, and then filed additional bankruptcy plans and charged additional fees.” Igoe’s wife is accused of lying under oath at bankruptcy proceedings and filing false documents regarding credit counseling taken by clients[2].
Between the two of them, the Igoes face charges of mail fraud, bankruptcy fraud, obstruction of justice, and perjury. One family lost their home after turning to Igoe for help after the main breadwinner fell delinquent after being in a coma after a work-related injury. Another individual turned to him for help keeping a home she inherited, but none of the money she allegedly sent to Igoe ever made it to her mortgage company. “I don’t know what he did,” she said, reporting that she paid Igoe on three separate occasions. “He scammed me not once but three times,” she added.
If you are approached by an individual offering foreclosure rescue services, check out their record and ask for reviews. Also, remember that most states prohibit the collection of upfront fees for foreclosure assistance or loan modification assistance, and always check with your mortgage company to verify that your loan is being paid if you are not paying directly. How do you think that the Igoes, if guilty, should pay for their crimes? Do you think that foreclosure rescue and loan modification assistance programs should be allowed to charge fees before performing their services?

Borrower Indicted for Falsifying Assets in 2007

Posted on November 21, 2013 at 1:35 PM Comments comments (80)
If you lied, fudged, or blurred the truth on your mortgage loan application during the boom years of easy, easy credit, then Alberto Solaroli’s recent indictment may have you concerned. Solaroli was recently indicted on charges that he borrowed “on false pretenses” from OneBanc in April 2007. He claimed to be the owner of energy patents that placed his net worth around $170 million and also claimed additional assets in excess of a million dollars. Solaroli used these purported assets to obtain a loan for $1.5 million from One Bank & Trust[1]. He used to money to finance a $900,000 payment to Porche Motorsport and never made a single payment on the loan; One Bank sued him in 2008 and obtained a civil judgment for the entire bulk of the loan. He was sued for bank fraud this year.
Solaroli is a Canadian citizen and was approved for the loan on the sole basis of a sworn financial statement[2]. Some sources have suggested that Solaroli’s indictment may be related to the indictment of Daniel Sweet, former vice president and controller at One Bank, on 30 counts of bank fraud and 30 counts of money laundering.
Of course, most borrowers who obtained stated-income loans did not borrow more than $1 million, but if Solaroli could be indicted for his borrowing on false pretenses, does it concern you that other, “smaller-time” borrowers could be next?

Mortgage Rates Fall to Four-Month Lows

Posted on October 26, 2013 at 12:10 AM Comments comments (317)
Fixed mortgage rates dropped to their lowest levels since this summer, giving a lift this week to the housing recovery. "Mortgage rates slid this week as the partial government shutdown led to market speculation that the Federal Reserve will not alter its bond purchases this year,” says Frank Nothaft, Freddie Mac’s chief economist. Mortgage rates have been dropping since September when the Federal Reserve decided to delay tapering its $85-billion per month bond purchasing program, which has been keeping rates low. Freddie Mac reports the following national averages with mortgage rates for the week ending Oct. 24: 
  • 30-year fixed-rate mortgages: averaged 4.13 percent, with an average 0.8 point, dropping from last week’s 4.28 percent average. That’s the lowest average for the 30-year fixed-rate mortgage since June 20. Last year at this time, 30-year rates averaged 3.41 percent. 
  • 15-year fixed-rate mortgages: averaged 3.24 percent, with an average 0.6 point, falling from last week’s 3.33 percent average. Last year at this time, 15-year rates averaged 2.72 percent. 
  • 5-year hybrid adjustable-rate mortgages: averaged 3 percent, with an average 0.4 point, falling from last week’s 3.07 percent average. A year ago, 5-year ARMs averaged 2.75 percent. 
  • 1-year ARMs: averaged 2.60 percent, with an average 0.5 point, dropping from last week’s 2.63 percent average. A year ago, 1-year ARMs averaged 2.59 percent. 

Fannie Mae, Freddie Mac to go after more strategic defaulters

Posted on October 15, 2013 at 10:44 PM Comments comments (68)
The Federal Housing Finance Agency is pushing Fannie and Freddie to chase down borrowers who can make home loan payments but choose not to.

Anyone thinking of skating on mortgages owned by eitherFannie Mae or Freddie Mac may want to think again. As a result of new government reports, the two companies say they are going to do a better job of going after so-called strategic defaulters.Fannie and Freddie can pursue judgments against borrowers who walk away from their loans even though they have the ability to make their payments. That's called a strategic default, and many borrowers are taking that step — typically throwing in the towel because their homes are no longer worth as much as they owe.But when their homes are sold at foreclosure and the proceeds are not enough to cover their outstanding loan balances, it creates a deficiency for which many defaulters either don't realize they are liable or don't care.To date, the two government-sponsored enterprises, which are now highly profitable after five years of running in the red, haven't done a particularly good job at pursuing deficiency judgments, according to scathing reports from the Office of the Inspector General at the Federal Housing Finance Agency.But the FHFA says it is going to make the GSEs clean up their acts. And that should serve as fair warning to those who can pay but fail to do so.As the inspector general's office says time and again in the reports, chasing down strategic defaulters can not only cut the enterprises' losses on bad loans but can also "serve as a deterrent to those who would chose to strategically default on their mortgage obligations."Going after strategic defaulters is big money. According to the report by the inspector general's office criticizing Freddie Mac's lax practices, the company has left billions on the table.The report found that Freddie Mac, which has received some $71 billion in taxpayer assistance since it was taken into conservatorship by the FHFA in September 2008, did not refer nearly 58,000 foreclosures with estimated deficiencies of some $4.6 billion for collection by its vendors.Of course, only a percentage of that amount might have been recoverable because some borrowers are simply tapped out. But because the bad loans weren't even considered for recovery, Freddie Mac "eliminated any possibility" for collecting what is owed, the report said.Now extrapolate that to Freddie Mac's entire holdings and you can see we're talking some really big money here. As of December, the big secondary mortgage market company had nearly 50,000 foreclosures still on its books, carrying a value of some $4.3 billion. And as of March 31, it held 364,000 mortgages that were 60 days or more delinquent and were, therefore, likely foreclosure candidates.Fannie Mae's portfolio of troubled assets is much larger. At the end of last year, it owned more than 105,000 foreclosed properties valued at $9.5 billion and carried a "substantial" shadow inventory of 576,000 seriously delinquent mortgages that were 90 days late or more and likely to end up in foreclosure.It does a better job than the smaller Freddie Mac, according to the inspector general's office. But in a separate report, Fannie Mae earned a slap on the wrist for not taking any action on nearly 30,000 accounts because statutes of limitation had expired or were about to. For the same reason, the report says, it failed to pursue deficiencies of some 15,000 accounts that already had been reviewed for collection by its vendors.Several factors influence the decision to pursue deficiency recoveries. But most important, state laws dictate timelines for filing claims. Some states do not allow deficiency judgments at all, but they are fair game in more than 30 states and the District of Columbia. But 10 have short windows — only 30 to 180 days in which collections are allowed.But not going after defaulters where it is permissible to do so not only reduces the chances of recovering potentially billions, the reports point out, it "incentivizes" other borrowers to walk away from mortgages they can afford to pay.The new inspector general reports are a follow-up to one issued a year ago that called the FHFA, the agency that oversees Fannie and Freddie, on the carpet for failing to provide enough guidance about effectively pursuing and collecting deficiency judgments wherever and whenever possible.In September, in response to a draft of these latest reports, the agency set down requirements for both enterprises to maintain formal policies and procedures for managing their deficiency collection processes, establish a set of controls to monitor their collection vendors and comply with state laws in an effort to preserve their ability to pursue collections.And by the first of the year, the FHFA said it will begin to more closely monitor the effectiveness of Fannie Mae and Freddie Mac's deficiency judgment processes. That's government-speak for "We'll be watching you from now on, so you'd better get your collection house in order."

U.S. apartment vacancy rate falls, rents rise

Posted on October 5, 2013 at 11:24 PM Comments comments (500)
Oct 1 (Reuters) - Finding an apartment to rent got even harder in the third quarter, as the U.S. apartment vacancy rate fell to its lowest level in more than a decade, according to an industry report released on Tuesday.The national apartment vacancy rate fell 0.1 percentage point to 4.2 percent in the third quarter from the second quarter, according to a preliminary report by real estate research firm Reis Inc.It was the lowest vacancy rate since the third quarter of 2001 when it was 3.9 percent. Some 47 out of 79 markets that Reis tracks posted vacancy decreases.Despite the decline in the vacancy rate, a weak job market and stagnant wages have prevented a commensurate rise in rents, Reis said.While the average U.S. effective rent in the third quarter grew by 1 percent sequentially, and 3 percent year-over-year, the increase in rent was less than what would have been expected in such a tight market, Reis said.Effective rent is the rent landlords receive after months of free rent and other perks."Demand has been so strong to push vacancy rates to such a low level, yet we haven't seen rent growth of the magnitude we would normally expect," Reis Senior Economist Ryan Severino said.With such a low vacancy rate, effective rent would have been expected to grow by about 4 percent to 5 percent year-over-year but was stymied by lack of job and income growth, Severino said."If median household income is growing at somewhere about 2 percent a year, give or take, once you back out inflation how much money is left for increased spending on rent? Not a lot," he said.Net absorption, the number of apartments rented over those that are unoccupied, reached 40,392, the most so far this year and 54 percent higher than a year earlier.New construction that is expected to come on line next year may fuel a rise in the vacancy rate and could slow the increase in rental rates, Severino said.Over the past five years, the apartment sector has been the beneficiary of the U.S. housing bust, the economic recovery, high mortgage requirements, and a constrained supply of new apartments.Those factors have pushed down the vacancy rate and allowed apartment owners, such as Equity ResidentialEssex Property Trust Inc and AvalonBay Communities Inc to raise rents.Rising mortgage rates in the third quarter also dampened homeownership, forcing people to rent longer.The 4.2 percent average vacancy rate in the third quarter was down from 4.3 percent in the prior quarter and from 8 percent in late 2009.At 2 percent, New Haven, Connecticut had the lowest vacancy. Memphis, Tennessee had the highest vacancy rate, at 8.2 percent.The average asking rent rose 0.9 percent in the third quarter to $1,121.16 per month. The average effective rent was $1,073.29.San Francisco and San Jose, U.S. capitals of the technology industry, saw the highest effective rent increase, both up 2.2 percent to $2,043.02 per month for San Francisco and $1,685.72 for San Jose.New York remained the most expensive place to rent in the United States with an average effective rent of $3,049.37 per month, up 0.9 percent. The cheapest was Wichita, Kansas, at $528.95 per month, up 0.8 percent.
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10 Hottest Rental Markets

Posted on October 3, 2013 at 11:58 PM Comments comments (251)
Realtor.com® recently released a list of the top rental markets in the country, based on the most-searched markets at its site the last month. Among the top 10 markets:
1. Las Vegas
Median rent: $1,100. 

2.Austin, Texas
Median rent: $1,450

3. Charlotte, N.C.
Median rent: $1,195

4. San Antonio, Texas
Median rent: $1,100

5. Orlando, Fla.
Median rent: $1,195

6. Raleigh, N.C.
Median rent: $1,095

7. Chicago
Median rent: $1,550

8. Los Angeles
Median rent: $2,650

9. Atlanta
Median rent: $1,353

10. Houston
Median rent: $1,355