FOR RELEASE
Friday
January 15, 2010

HUD TAKES ACTION TO SPEED RESALE OF FORECLOSED PROPERTIES TO NEW OWNERS
Measure to help bring stability to home values and accelerate sale of vacant properties

WASHINGTON – In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan today announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration commitment to addressing foreclosure. Just yesterday, Secretary Donovan announced $2 billion in Neighborhood Stabilization Program grants to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes.

“As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers,” said Donovan. “FHA has an unprecedented opportunity to fulfill its mission by helping many homebuyers find affordable housing while contributing to neighborhood stabilization.”

With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.

“This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed,” Donovan said.

In today’s market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

“FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties,” said FHA Commissioner David H. Stevens. “This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity.”

The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:

• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
• In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.
• The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Harrisburg-Carlisle, PA is First and Cape Coral-Fort Myers, FL is Last at -25.24.

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SEE FLIPPING ARTICLE

As a real estate investor it’s really important to know the facts.  It’s one thing to hear from someone who says “I hear this is where you can get the best deals” but it’s another to see where you can get the best deals. Investing is about the numbers and how markets are performing.  The Heat Map above shows you exactly the appreciation in each state in Qtr3 of 2009 vs. the same Qtr. in 2008.  It’s interesting to see that Nebraska has appreciated the best of all the states.  I would have never realized this unless I noticed this map.  In the Midwest you will notice more of  a “flatline” effect, less peaks and valleys which means you won’t see appreciation fluctuation as much as states in the West for example.  Above you can see that the states in the light blue have actually had positive appreciation compared to others.  So when you hear of someone saying “This is the state that has had a ton of appreciation” you can look here and see for yourself.

http://www.screencast.com/t/WyA7Zj7zf1En

Here are a few items Sarah covered:

*What market Rocks in Arizona.

*Why you want to invest in this specific market she lives and invests in.

*What ROI you should expect short term and long term for your investment in this market.

*Using multiple exit strategies

These are a few items she covered but you’ll want to watch the webinar to find our more!
http://www.screencast.com/t/WyA7Zj7zf1En

Contact me for Additional Details at 253-219-6440

Determining the value of the asset when used for reserves:
1. Stocks, bonds, and mutual funds: 70 percent of the value may be used as reserves (reduced from 100 percent).
2. Retirement accounts: 60 percent of the vested value may be used as reserves (reduced from70 percent).
3. In addition, stock options and non-vested restricted stock are no longer eligible for use as reserves.  As a reminder, the lender must verify the ownership of the accounts, and verify the borrower’s actual receipt of the funds realized from the sale or liquidation of the assets if needed to complete the transaction.
4. Verification of Employment:  Re-verify the employment within 10 days of closing to ensure the borrower is still employed and qualifies for the loan.  Cannot count overtime unless you have overtime for 2 years or more on the same job or same profession.

CREDIT DOCUMENTATION – reduced from 4 months to 3 months
5. Credit documents is reduced from 120 days to 90 days. Credit documents include credit reports and employment, income, and asset documentation. The age of the documents is measured from the date of the document to the date the note is signed.
Apply at www.goseejason.com

A year ago, before government interventions aimed at cutting borrowing costs to stimulate housing and the economy, the rate was 6.10%.

Freddie Mac started tracking 30-year mortgage rates weekly in 1971.

The 15-year average mortgage rate, which it started tracking in 1991, set a record low of 4.36% in the latest week. A year earlier, this rate was 5.78%.

“Low mortgage rates are helping to stabilize home sales,” Frank Nothaft, chief economist at Freddie Mac, said in a statement.

New-home sales in August rose to the highest annualized pace since September 2007, while unsold inventory fell to the lowest since February 1983, he said.

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1. Las Vegas, Nev.
Las Vegas-Paradise-Pahrump, Nev., Combined Statistical Area
Change: 24 percentage points
Homes with Price Reductions, 1/1/2009: 54%
Homes with Price Reductions, 9/11/2009: 30%
Moody’s Economy.com forecasts that five years from now, home prices in Las Vegas will have risen by 3.53%

2. Phoenix, Ariz.
Phoenix Lake-Cedar Ridge, CA Metropolitan Statistical Area
Change: 18 percentage points
Homes with Price Reductions, 1/1/2009: 58%
Homes with Price Reductions, 9/11/2009: 40%
Moody’s Economy.com forecasts that five years from now, home prices in Phoenix will have risen by 7.44%

3. San Diego, Calif.
San Diego-Carlsbad-San Marcos, Calif., Metropolitan Statistical Area
Change: 15 percentage points
Homes with Price Reductions, 1/1/2009: 45%
Homes with Price Reductions, 9/11/2009: 30%
Moody’s Economy.com forecasts that five years from now, home prices in San Diego will have risen by 25.41%

4. Miami, Fla.
Miami-Fort Lauderdale-Miami Beach, Fla. Metropolitan Statistical Area
Change : 12 percentage points
Homes with Price Reductions, 1/1/2009: 43%
Homes with Price Reductions, 9/11/2009: 31%
Moody’s Economy.com forecasts that five years from now, home prices in Miami will have dropped by -2.93%

5. Los Angeles, Calif.
Los Angeles-Long Beach-Riverside, Calif., Combined Statistical Area
Change: 10 percentage points
Homes with Price Reductions, 1/1/2009: 45%
Homes with Price Reductions, 9/11/2009: 35%
Moody’s Economy.com forecasts that five years from now, home prices in Los Angeles will have risen by 12.36%