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Lots of bargains? Not so, Fla. homebuyers say
WEST PALM BEACH, Fla. – Feb. 12, 2010 – Think there are all kinds of crazy deals to be had in today’s real estate market?
That’s what 31-year-old Jason Bellak thought, too – a year ago. He’s been searching that long for something in the $150,000 price range in Palm Beach County. Short sale, condo, townhouse, foreclosure – he’s looked at them all, made offers on several, but is still living with his parents in Royal Palm Beach.
Despite a perception that three-bedroom, two-bath beauties with granite countertops and good schools can be yours for a song – or at least for 20 percent down – it’s not a market reality, say frustrated homebuyers and their Realtors.
Cash investors, sluggish banks and thorny financing are limiting the options for your average homebuyer, who, by the way, is sick of hearing, “It’s a buyers’ market.”
“I was like most people, thinking there were a lot of deals out there,” Bellak said. “But it quickly became apparent that it wasn’t going to be such an easy process.”
Competition is highest now in the $150,000 to $250,000 price range, said market analyst Jack McCabe of McCabe Research and Consulting in Deerfield Beach.
The median single-family home in Palm Beach County sold for $238,000 in January – 9 percent higher than in 2009, according to the Realtors Association of the Palm Beaches. Inventory in January was down to eight months, less than half of what it was in January 2009.
“Most people still think we’re in this terrible market, but the inventory tells a different story,” said Realtor Scott Smith, who has clients struggling to find homes in the Jupiter and Palm Beach Gardens area even though they’re willing to spend between $350,000 and $400,000.
Bellak can’t even recall the details of all the offers he’s made on homes in the past year. He bid on a three-bedroom townhouse in foreclosure but lost. He made an offer on a short sale condo – meeting the $141,000 asking price – waited three months, but then couldn’t get financing because the homeowners association had too many delinquent accounts.
In most cases, for a buyer to get a Federal Housing Administration-backed loan for a condominium, no more than 15 percent of the units can be more than 30 days past due on association fees.
Now Bellak has his heart set on a two-bedroom Jupiter townhouse.
“I think if this one doesn’t go through, I may hold off for now,” said Bellak, who has been working with Realtor Craig Fialkowski of Herman Group Real Estate in Palm Beach Gardens.
Realtors say part of the problem is that people hear the hype about the down market and expect to find a steal in a great neighborhood.
Last year, more than 500,000 Florida homes received some type of foreclosure notice, according to the Irvine, Calif.-based company RealtyTrac.
But while foreclosures are usually priced low, they’re not always good deals. They could be tagged with liens, have missing appliances or be in general disrepair.
“It’s not like everything just became half-price overnight with no repercussions,” said Realtor Shannon Brink of Re/Max Prestige Realty in downtown West Palm Beach. “Plus, many banks still sell homes off at auction or to capital investors, so not everything even hits the open market.”
Crystal Paul and her fiancé, Antonio Hester, both 25, have been working with Brink since December to find a home for about $150,000.
They’ve looked at a dozen or more properties and have made some offers. But they’ve lost out to investors with ready cash, which is more attractive to banks.
“You find a house you think you can live in, but then you lose it,” Paul said. “The cash investors have the upper hand and here we are just trying to get started.”
When a short sale off Military Trail popped up last week for $139,900, Paul and Hester made an offer that the homeowner accepted. But he owes more than $230,000 on the house, and in the end it’s up to the bank to OK the sale.
Brink said banks will sometimes set a low asking price on a short sale to attract buyers, but with no plans to actually settle for that price.
While short sales have traditionally taken months to settle, new federal guidelines that go into effect in April require banks to respond to short sale offers within 10 days.
More good news for buyers this year is the prediction of an increase in foreclosures that could further reduce prices.
G. Stacy Sirmans, a real estate professor at Florida State University, said the market hasn’t hit bottom and won’t for at least another year.
“It’s definitely a buyers’ market,” Sirmans said.
Copyright © 2010 The Palm Beach Post, Fla., Kimberly Miller. Distributed by McClatchy-Tribune Information Services.
Obama administration expands housing plan
WASHINGTON – May 15, 2009 – The Obama administration expanded its $50 billion mortgage aid program on Thursday, announcing new measures that would help homeowners avoid a foreclosure if they don’t qualify for other assistance.
The initiatives are intended to streamline the process of selling a home that is worth less than the mortgage, or transfer ownership of a home to the lender. Both options will still ding the homeowner’s credit score, but less than a foreclosure.
Since the program, called Making Home Affordable, was launched in March, Mortgage companies have made more than 55,000 offers to modify borrowers’ loans.
“We’re seeing a lot of progress in a very short period of time,” Treasury Secretary Timothy Geithner said.
Officials estimate up to 4 million borrowers will get their loans modified, but housing experts like Mark Zandi of Moody’s Economy.com expect the number will be less than half of that.
And while the number of success stories is growing, it pales compared with the rate of new foreclosures, and many housing counselors across the country are complaining that the program has been slow getting off the ground.
“Our experience at the ground level has been, so far, frustrating,” said Michael van Zalingen, director of homeownership at Neighborhood Housing Services of Chicago, a counseling group. Entry-level employees at mortgage companies, he said, are either steering borrowers away from the plan or are entirely unaware of it.
There are, of course, lucky homeowners like Daniel Iturriaga, 45, a warehouse worker from Compton, Calif. Working with a counselor from Springboard, a nonprofit counseling group, Iturriaga was able to get JPMorgan Chase & Co. and mortgage finance company Fannie Mae to modify his home loan.
He’s going from a monthly payment of about $2,300 to about $1,275. After a three-month trial period, it should be final in mid-June.
“It’s a long process, but I still have a little hope to stay in my home,” said Iturriaga, who bought his home for about $400,000 in 2005 and has seen houses on the same block sell for about half as much. “I’m pretty happy.”
Nevertheless, Guy Cecala, publisher of trade publication Inside Mortgage Finance, doesn’t expect to see large volumes of loan modifications before July or August. “The basic problem is that the program is very complicated and involved to set up,” Cecala said.
The government program requires numerous changes to how the mortgage industry does business. To get a loan modification, borrowers must provide proof of their income and send in a letter stating why they need help.
Since the program involves taxpayer dollars, the lending industry needs to make sure it sets up the program correctly, said Faith Schwartz, executive director of Hope Now, a mortgage industry group formed in response to the foreclosure crisis. “This is a very well-thought out plan,” she said. “People have to be a little bit patient.”
But Rose Inman is out of patience and out of time. Aurora Loan Services is set to foreclose on her home overlooking Seattle’s Puget Sound on Friday.
Inman, 58, has lost two jobs, one with a manufacturing company, the other with the City of Seattle. Since then, she’s been working as a human resources consultant, but making much less money.
Despite numerous calls, e-mails and letters, she says she’s only been able to have one phone conversation with a company representative.
“It’s like this huge, concrete thick wall that you cannot get through,” she said.
Last week, Aurora joined the Obama administration’s loan modification program. The Colorado-based company is in line for nearly $800 million in government incentives to modify borrowers’ home loans.
“We offer a wide range of foreclosure prevention options to our customers,” Deborah Munies, an Aurora spokesman, said in an e-mail, while declining to comment on Inman’s case. “In cases where the customer has the ability and willingness to make a reasonable monthly payment, we make every effort to avoid foreclosure. Foreclosure is pursued only when a variety of other workout options have not been successful.”
So far, 14 companies that serve about three quarters of the mortgage market have signed up and will be paid for each loan they modify.
The initiatives announced Thursday are aimed at ineligible homeowners. For borrowers who are unemployed or owe significantly more than their homes are worth, there are generally two options to avoid foreclosure.
The homeowner can sign the property title over to the lender in what is known as a deed in lieu of foreclosure. Or, with the lender’s permission, the homeowner can sell the property for less than the value of the loan a so-called “short sale.”
Mortgage companies would get up to $1,000 and borrowers would get up to $1,500 in relocation costs.
For months, real estate agents have complained that it’s difficult to get lenders to agree to a short sale, and the process takes so long that many deals fall apart.
“They do not have their institutions staffed properly, that’s the problem, “said Lisa Gregory, a real estate agent with Prudential California Realty in Del Mar, Calif. “I don’t think encouraging these processors with an extra $1,000 will help because they aren’t motivated,” she said, but added that “this certainly sounds better than nothing.”
Copyright © 2009 The Associated Press, Alan Zibel (AP Real Estate Writer). All rights reserved. This material may not be published, broadcast, rewritten or redistributed. AP Real Estate Reporter J.W. Elphinstone contributed to this report from New York.
Senate moves toward easing mortgage terms
WASHINGTON – May 7, 2009 – Trying to curb home foreclosures, the Senate voted on Wednesday to make it easier for homeowners with risky credit to switch to a lower-cost mortgage backed by the government.
The bill, passed 91-5, also would give banks a break by reducing fees they must pay for the government to insure deposits.
While both steps put taxpayer money on the line, lawmakers say the legislation is needed to prevent the economy from getting worse.
“Given the size and scope of the struggles too many Nevadans and Americans endure, it will take more time before housing normalizes again,” said Senate Majority Leader Harry Reid, D-Nev. “But with this bill, we are working to hasten that day so that no family will ever accept losing its home as the way it is.”
Also on Wednesday, Democratic leaders in the House and Senate hashed out a plan to establish a $5 million, independent commission that would investigate the cause of the financial crisis and chart a path forward.
The Senate bill would expand an existing $300 billion program called “Hope for Homeowners,” which encourages lenders to write down an individual’s mortgage if the homeowner agrees to pay an insurance premium. The program, which is set to expire in 2011, is intended to swap out a homeowner’s high-interest rate for a 30-year fixed loan backed by the Federal Housing Administration.
So far, the program has been a dud.
When it was established last year, Congress envisioned helping some 400,000 troubled homeowners. But because eligibility requirements were so strict, one borrower has completed the refinancing process and only 51 more are in the works, according to statistics released last week.
The program also has been stymied by high fees, complex regulations and a requirement that banks volunteering to participate absorb large losses. The Obama administration supports easing restrictions.
Republicans also have swung behind the latest proposal to expand the program using $2 billion from the $700 billion Wall Street bailout fund. Sen. Richard Shelby of Alabama, the top Republican on the Banking Committee, co-sponsored the bill with panel chairman Sen. Chris Dodd, D-Conn.
Still, some Republicans warned that increasing the burden of the government to insure risky mortgages – even if it saves people from foreclosure – could backfire. Sen. David Vitter, R-La., who called the Federal Housing Administration a potential “ticking time bomb,” proposed letting the administration suspend any programs that threaten its solvency.
His effort was defeated 36-56.
Another issue is whether Hope for Homeowners will be enough to keep people in their homes, considering other voluntary efforts haven’t worked that well. According to a report released last month by federal regulators, fewer than half of the loan modifications made by lenders at the end of last year reduced payments by more than 10 percent.
Without a guaranteed steep discount, homeowners are still considered at risk of defaulting.
Instead, the Senate bill focuses on expanding eligibility. For example, the program currently bans participants who intentionally defaulted on a mortgage or other substantial debt. The Senate bill would narrow that prohibition to defaults within the last five years.
The government also could waive the requirement that the home be an individual’s primary residence. And, the bill allows for the homeowner to pay lower insurance premiums associated with the modified loan.
The bill also would permanently increase the borrowing authority for the Federal Deposit Insurance Corporation from $30 billion to $100 billion. Increasing the FDIC’s credit would allow the agency to reduce large new premiums it has begun charging banks to insure deposits.
Lawmakers also want to soothe investor fears by keeping an increase in government insurance for bank deposits. Under the Senate bill, deposits up to $250,000 would be insured by the Federal Deposit Insurance Corporation through 2013.
The House in March had approved a similar version of the bill; the two chambers will have to work out their differences before a final bill is sent to the president to sign.
Housing Predictor – which monitors over 250 residential property markets nationwide – says Florida appears to be emerging from the realty slump before any other state, including California. The Sunshine State is seeing population growth, and single-family home and condominium sales have been on the rise for more than six months. Foreclosures and short sales presently account for approximately 67 percent of all sales and often are not included in real estate agents’ tallies. Additionally, banks in many Florida housing markets are cranking out more home loans, and sellers finance almost 20 percent of all sales.
‘Protecting Florida Homeowners’ roundtable discusses foreclosure prevention
TAMPA, Fla. – April 21, 2009 – Florida Chief Financial Officer Alex Sink brought together top Florida lenders and lawyers with the Florida Attorneys Saving Homes program yesterday in Tampa during a roundtable discussion focused on keeping more Floridians in their homes. As part of the ‘Protecting Florida’s Homeowners’ Roundtable discussion, top lenders and volunteer lawyers developed solutions for better communication and negotiation, as they work to ease some of the challenges facing Floridians who struggle to pay their mortgages and face the threat of foreclosure.
“As we are all aware, for a number of years Florida has been ground zero for the housing crisis faced by our country,” said CFO Sink. “That’s why I have worked to find avenues to provide real, tangible help to Floridians facing the threat of foreclosure. I hope today’s discussion serves as a foundation for increased cooperation between lawyers and lenders who want to keep more Floridians in their homes and more Floridians paying their mortgages on time.”
The roundtable gave lenders and pro bono lawyers the chance to discuss ways to improve communication and interaction. They also discussed how the new homeowner assistance plan from the Obama Administration affects their work moving forward.
Lenders represented at the roundtable included: Bank of America and Countrywide, IndyMac Bank, JP Morgan Chase and Washington Mutual, Saxon Mortgage Services, Wachovia and Wells Fargo, and SunTrust Bank.
CFO Sink plans to follow up on discussed action items, such as:
• Appointing a lender ombudsmen to facilitate and improve Florida Attorneys Saving Homes interactions with lenders.
• Identifying the key documents sought by lenders from homeowners to fast-track Florida Attorneys Saving Homes assistance.
• Setting timelines for resolutions, which would help both lender and lawyers manage time and expectations.
• Embracing the Making Home Affordable Plan to further assist customers with available federal assistance.
• Improving lawyer and lender expertise on issues related to foreclosure prevention.
• Stalling foreclosures during the negotiation process for Florida Attorneys Saving Homes clients committed to keeping their homes.
In 2007, CFO Sink reached out to the Florida Bar and asked that they provide assistance to struggling homeowners in the state, and the Florida Attorneys Saving Homes program was created. The program pairs pro bono attorneys with Florida homeowners who are behind on their mortgage payments, to help these homeowners try and find solutions with their lenders. Over 1,000 lawyers across the state have volunteered their time in response to CFO Sink’s call to launch this program.
In addition to the Florida Attorneys Saving Homes Program, CFO Sink has also launched the Florida Housing Help Initiative to assist homeowners facing foreclosure. The initiative partners with community organizations and elected officials to hold foreclosure workshops around the state, and nearly 1,000 families have already attended these events.
6 companies to get $9.9B under U.S. mortgage program
WASHINGTON – April 16, 2009 – The Obama administration on Wednesday named the first six companies participating in a $75 billion program designed to help millions of struggling homeowners avoid foreclosure.
The administration said the companies – including some of the mortgage industry’s biggest players – will receive a maximum of $9.9 billion in incentive payments, which are designed to encourage mortgage companies to lower borrowers’ monthly bills. The government expects to finish arrangements with other companies in the coming months.
Chase Home Finance, part of JPMorgan Chase & Co., will receive up to $3.6 billion, the largest amount among the six companies.
The other recipients are: Wells Fargo & Co., GMAC Mortgage Inc., Citigroup Inc.’s CitiMortgage unit, Select Portfolio Servicing and Saxon Mortgage Services Inc.
The program, unveiled on March 4, will offer struggling homeowners the chance to obtained modified loans with lower monthly payments. It’s being funded by $50 billion out of the government’s $700 billion financial rescue program. The remaining $25 billion will come from other government sources.
The refinancing plan is limited to borrowers who owe up to 5 percent more than their home’s current value. The administration has estimated the program could help 9 million struggling homeowners avoid foreclosure.
Housing and Urban Development Secretary Shaun Donovan said in an interview Wednesday that mortgage companies “weren’t waiting to sign the contracts to get going.” The banks, he said, “have already taken hundreds of thousands of applications for refinances and modifications.”
Still, many borrowers and consumer groups claim the modifications offered by the lending industry to date don’t do enough to help cash-strapped homeowners, despite more than a year of public prodding from regulators.
Fewer than half of loan modifications made at the end of last year actually reduced borrowers’ payments by more than 10 percent, data released last month show.
Questions remain about whether the lending industry has ramped up its staff and technology to handle an unprecedented wave of defaults and foreclosures.
Copyright © 2009 The Associated Press, Martin Crutsinger and Alan Zibel, AP Business Writers. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
At first blush, the rule seemed so unfair that it must have been a cruel hoax. First, you lose your house in a foreclosure—perhaps you fell behind in the payments after you lost your job, you got sick, or your husband or wife died. Then the law ordered the IRS to pile on the emotional and financial grief by charging you extra income tax.
Outlandish, perhaps. But, until foreclosures became the symbol of the national financial crisis in late 2007, that was the law. First, a look at the basic rule, then a review of the temporary fix that will benefit hundreds of thousands of taxpayers who find themselves in dire financial straits.
Under general tax law, if the bank forecloses and sells your home for less than the amount left on your mortgage—and forgives the excess debt—the amount forgiven is treated as taxable income to you. That’s right; as far as the income tax is concerned, money you don’t have to pay back is treated the same way as money paid to you: Taxable in your top bracket. The IRS even has a special form for reporting this “windfall”: the 1099-C. The C stands for cancellation of debt and the law says cancelled debt is taxable as income. (There are exceptions, which we’ll get into later.)
As a wave of foreclosures began sweeping across the nation in 2007—fueled by the risky loans, rising rates, and a slowing housing market—this arcane rule began to get more and more attention. So did other efforts by strapped homeowners—such as “short sales” or loan restructuring—that can also trigger 1099-Cs reporting taxable income. If a lender agrees to freeze an adjustable interest rate for a period of time rather than allow it to rise as called for in the mortgage, for example, the change can result in forgiven debt that would be taxable under the regular rules.
Congress steps in with relief
To protect homeowners from this double whammy, Congress has declared that when a taxpayer’s principal residence is involved, forgiven debt will not be treated as income. For now, this break applies only for 2007, 2008, and 2009. After that, the old rule is scheduled to come back into play. This is a big deal for affected taxpayers. There are limits, of course, and it is important to know what’s covered and what’s not.
This relief applies only to principal residences, that is, the home you live in. If a lender forgives debt after a foreclosure, short sale or loan restructuring for a vacation home or investment property, for example, the old rule still applies: The amount of debt canceled is considered taxable income to you (unless you qualify for one of the exceptions discussed later). Congress didn’t want to offer a helping hand to speculators who helped fuel the housing boom by buying properties in hopes of “flipping” them quickly for hefty profits.
No more than $2 million of forgiven debt can be excluded from income.
To be eligible for the break, the loan must be secured by your principal residence and the money must have been used to buy, build, or substantially improve the property. If part of the forgiven debt was a home equity loan used for other purposes, for example, that part would be considered taxable income.
The tax basis of the home is reduced by the amount of canceled debt excluded from income. The basis is the amount you compare to the selling price of the home to determine if you have a profit or loss. (And, for tax purposes, a foreclosure is treated the same as a sale.) If a loan restructuring results in cancellation of $25,000 of debt, for example, your basis would be reduced by $25,000… potentially increasing by up to $25,000 the amount of profit you realize when you later sell. (The basis reduction will usually have no tax impact, though, because most home sale profit is tax-free.)
While the new law offers important relief for strapped homeowners, it won’t prevent lenders who forgive debt from sending out 1099-C forms to taxpayers, with copies to the IRS. It will be up to you to know whether or not the discharged debt reported on the form is taxable or tax free.
The 1099-C must show the amount of debt forgiven and the fair market value of property given up through foreclosure. The IRS urges borrowers to check the form carefully and notify the lender immediately if any of the information shown on their form is incorrect. Pay particular attention to the amount of debt forgiven (Box 2) and the value listed for your home (Box 7).
How short sales work
Sometimes, rather than pursuing the costly and time-consuming process of foreclosure, a lender will allow a delinquent borrower to sell the house for less than the mortgage amount and turn the proceeds over to the bank as payment in full. Say you lost your job and can’t keep up payments on your home, you still owe $300,000 on your mortgage but the house value has dropped to $275,000. If the bank agrees to a short sale, you’d sell the place, pay the commission and other selling costs—let’s assume $15,000—and turn the remaining $260,000 over to the bank. The $40,000 gap between the payment and the amount due would show up on a 1099-C form. That’s right, even the $15,000 of selling expenses gets tossed in with the amount of forgiven debt.
Thanks to the new law, when the short sale in 2007, 2008 or 2009 involves a principal residence, the canceled debt is not considered taxable income.
Banks don’t always agree to a short sale—among other things, they look at the gap between the balance on the loan and the expected proceeds of the sale and the homeowner’s other assets. Basically, they weigh the cost of a short sale against the cost of foreclosing and selling the property themselves.
Dodging the tax bullet
Even if you’re not covered by the new tax-relief rule—say the house you lost was a vacation home rather than a principal residence—there’s a very important exception to the debt-relief-equals-taxable-income rule. Although lenders must send 1099-C forms reporting taxable income whenever canceled debt is $600 or more, the tax bill itself is forgiven if you are in bankruptcy or are insolvent.
Insolvency means your debts (including that mortgage) exceed the value of all your assets. You use IRS Form 982 to claim the exclusion.
CFO Sink to hold foreclosure summit
TALLAHASSEE, Fla. – April 9, 2009 – Florida Chief Financial Officer Alex Sink said Wednesday that she planned to convene a meeting of lawyers working pro bono on foreclosure cases and the 12 largest Florida lending firms. The meeting will be held in Tampa April 20.
Announcing the foreclosure summit Wednesday with attorneys from the Florida Attorneys Saving Homes program, Sink said the meeting would help remind Floridians about free legal assistance and allow lawyers to pick the brains of lenders about loan repayment problems that don’t require eviction. According to Sink, the pro bono lawyers have already received 25,000 calls about foreclosures, but their efforts have been hamstrung by varied processes from lenders, a problem the CFO said could be easier to solve by bringing the largest firms together.
“The purpose of our meeting is to find out how we can be more efficient and effective so our volunteer attorneys don’t get frustrated and say ‘I don’t have time for this,’” Sink said.
Representatives from Bank of America, Citibank, Countrywide, IndyMac Bank, JP Morgan, Litton Loan Servicing, Wells Fargo, Saxon Mortgage Services, Suntrust, Wachovia and Washington Mutual will be invited to attend the summit, Sink’s office said.
In 2007, CFO Sink asked the Florida Bar to provide assistance to struggling homeowners in the state, leading to the creation of the Florida Attorneys Saving Homes program. The program pairs pro bono attorneys with Florida homeowners who are behind on their mortgage payments. Over 1,000 lawyers across the state have volunteered their time in response to CFO Sink’s call to launch this program.
In addition to the Florida Attorneys Saving Homes Program, CFO Sink also launched the Florida Housing Help Initiative to assist homeowners facing foreclosure. The initiative partners with community organizations and elected officials to hold foreclosure workshops around the state.
For more information on CFO Sink’s Florida Housing Help Initiative or the Florida Attorneys Saving Homes program, visit www.MyFloridaCFO.com. Details, including venue information and time of the April 20 roundtable, will be announced soon.
MANATEE COUNTY, Fla. – April 3, 2009 – Area real-estate professionals are hoping Fannie Mae continues a limited pilot program aimed at facilitating short sales, especially as local foreclosure filings continue to hit record highs.
Since its January launch, the program has prevented at least a handful of homes in 11 Florida counties – including Manatee and Sarasota – from falling into foreclosure by making it easier to sell them for less than their outstanding mortgages.
The project initially was scheduled to last three months, but officials with a regional listing service said Wednesday they’re hoping to persuade Fannie Mae to extend it.
“We’re very excited about the project, and we’d like to see it continue,” said John Weeden, marketing manager for the Mid-Florida Regional Multiple Listing Service, which is collaborating on the pilot program and is scheduled to update Fannie Mae on its progress next week.
About 300 Florida homes are in the program, which streamlines the short sale process by getting all necessary approvals and property research done beforehand. A short sale is one in which the lender – Fannie Mae for homes in the pilot program – agrees to accept less than what is owed on the home to avoid the costs of foreclosure.
Weeden said he did not know how many short sales have closed through the program, which applies only to homes with Fannie Mae mortgages.
Quicksilver Real Estate Group Inc., a Tampa firm with an office in Bradenton, has closed three and has two others pending, broker/owner Linn Wyllie said. Those sales have come together in a matter of weeks as opposed to the several months or longer that a typical short sale can take, he said.
“It’s huge for the industry,” Wyllie said of the pilot program’s time savings.
Fannie Mae, officially known as the Federal National Mortgage Association, also launched a similar program in the Phoenix area.
The program didn’t prevent lenders from maintaining their record pace of foreclosure filings in Manatee, however. Lenders filed 608 foreclosure suits in Manatee County Circuit Court in March, the highest monthly total ever, court records show.
There have been 1,653 foreclosure actions filed through the first three months of 2008, up 33 percent from the 1,241 filed during the same period a year earlier. At that pace, last year’s record of 5,592 foreclosure filings will be broken in September.
For the third straight month, more primary homes than seasonal, vacation and rental homes fell into foreclosure: 54 percent were homesteaded, while 46 percent were not. That’s largely the result of mounting job losses and indicates foreclosures likely will remain high as the county’s unemployment rate worsens, experts said.
Copyright © 2009 The Bradenton Herald, Fla., Duane Marsteller. Distributed by McClatchy-Tribune Information Services.
Six reasons why it’s still a good time to buy
NEW YORK – March 31, 2009 – The housing market is looking healthier. Here are six reasons why now is the time to jump into the market.
1. Uncle Sam is willing to help. First-time buyers (defined as anyone who hasn’t owned a home in the last three years) are entitled to a maximum $8,000 tax credit; interest rates are at record lows; and the Federal Reserve is doing its best to make mortgage loans available.
2. People have to live somewhere. About 800,000 new households are formed each year in this country, ensuring that the housing market will tighten, even if the economy doesn’t soar.
3. Borrowers leverage their investment. If you put $10,000 into the stock market and it earns 10 percent, you’ve earned $1,000. If you put $10,000 down on a home and its values increases 10 percent, you’ve made $10,000.
4. When prices come back up, you’ll have instant equity. In parts of the country where foreclosures have driven down prices, better times will mean the price of the home you buy will rise rapidly.
5. Mortgage costs stay the same. If you get a fixed-rate mortgage, the monthly payment stays the same – while everything else, including rent, goes upward.
6. You own it. There is something comforting in the notion that your home is your own. You can paint it any color you want, let the dog run in the back yard and hang a swing for the kids in the front.
Want to learn more about the home buyer tax credit? You can sign up for NAR’s upcoming Webinar, “Build Your Business Using the Improved Home Buyer Tax Credit” set for April 28. For more information click here.
Source: The Wall Street Journal, June Fletcher (03/27/2009)