October Real Estate Articles

OCTOBER REAL ESTATE ARTICLES

Foreigners’ sweetener: Buy house, get a visa WASHINGTON – Oct. 21, 2011 – Sens. Charles Schumer (D-N.Y.) and Mike Lee (R-Utah) have proposed a new type of resident visa for foreigners who spend at least $500,000 to purchase real estate in the United States. The proposal calls for at least $250,000 to be spent on a residence, while the other $250,000 could be invested in other real estate. However, the entire amount must be a cash investment. The provision, part of a larger package of immigration measures, would complement existing visa programs that permit foreigners to enter the country if they invest in new businesses that create jobs. Supporters believe the initiative would help absorb a glut of housing supply – especially in markets like Arizona and South Florida, where foreign buyers have represented a rising share of home buying activity. According to National Association of Realtors® (NAR) research, 5.5 percent of Miami homes sell to international buyers. International buyers snapped up $82 billion in U.S. residential property in the year ended in March, surging from $66 billion during the prior 12 months, reports NAR. Source: Wall Street Journal (10/20/11) P. A7; Timiraos, Nick © Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
Fed HARP program expanded, help more owners WASHINGTON – Oct. 24, 2011 – The Federal Housing Finance Agency (FHFA), with Fannie Mae and Freddie Mac, announced a series of changes to the Home Affordable Refinance Program (HARP). FHFA hopes to help more borrowers benefit from a program that refinances home mortgages. “We know that there are many homeowners who are eligible to refinance under HARP, and those are the borrowers we want to reach,” said FHFA Acting Director Edward J. DeMarco. “Building on the industry’s experience with HARP over the last two years, we have identified several changes that will make the program accessible to more borrowers with mortgages owned or guaranteed by (Fannie Mae and Freddie Mac). Our goal … is to create refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie Mac and bringing a measure of stability to housing markets.” HARP is the only refinance program that enables borrowers who owe more than their home is worth to take advantage of low interest rates and other refinancing benefits. The program is offered to borrowers whose loans were sold to Fannie Mae and Freddie Mac on or before May 31, 2009, with current loan-to-value (LTV) ratios above 80 percent. New program enhancements change several aspects of HARP including: • Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages, and lowering fees for other borrowers. • Removing the current 125 percent LTV ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac. • Waiving certain representations and warranties for lenders that make loans backed by Fannie Mae and Freddie Mac. • Eliminating a new property appraisal if there is a reliable AVM (automated valuation model) estimate provided by Fannie Mae or Freddie Mac. • Extending the end date for HARP until Dec. 31, 2013, for loans originally sold on or before May 31, 2009. Mortgage lenders should have more information about the HARP program changes by Nov. 15, 2011. Since participation isn’t mandatory, implementation schedules will vary. The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks. These government-sponsored enterprises provide more than $5.7 trillion in funding for the U.S. mortgage markets and financial institutions. © 2011 Florida Realtors® Preserving Home Ownership Tax Benefits Vital to Housing Market, Say Realtors® Washington, October 06, 2011The following is a statement by National Association of Realtors® President Ron Phipps. “Today, witnesses before the Senate Finance Committee were in complete agreement that now is not the time to make changes to the mortgage interest deduction. NAR is pleased that a range of witnesses testifying at the committee’s hearing on tax incentives for homeownership reinforced the message Realtors® have been delivering to Washington: do no harm. “As the leading advocate for housing and homeownership issues, NAR firmly believes that the mortgage interest deduction is vital to the stability of the American housing market and economy. “While progress has been made recently in bringing stability to the housing market, it is not recovering at the rate it should be and is far too fragile to sustain any tax increases. Congress must do no harm – raising taxes on America’s homeowners by changing the tax rules that apply to homeownership now or in the future will further stall the housing recovery and critically erode home values. “Owning a home is a long-standing and abiding fundamental American value because it benefits individuals and families, strengthens communities, and is integral to the nation’s economy. It is imperative that Congress preserve the mortgage interest deduction and that the nation’s 75 million home owners continue to receive this important tax benefit, which helps primarily middle- and lower income families. “NAR will remain vigilant in opposing any plan that modifies or excludes the deductibility of mortgage interest.” The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries. Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section.	Are banks getting better on short sales? CHICAGO – Oct. 21, 2011 – Are short sales getting easier? Some homeowners are reporting that banks are now not only more willing to consider a short sale, but are even offering incentives to complete a short sale. For example, a homeowner in Chicago says his lender approved his short sale and then gave him a $20,000 check after the deal was finalized for selling the home as a short sale instead of letting it sink into foreclosure. Lenders accepting a lower mortgage payoff from an underwater seller traditionally isn’t thought of an easy transaction to complete. Lenders weren’t so willing a few years ago. But as the number of Americans underwater on their mortgages grow, more lenders are reconsidering as they try to avoid the extra costs incurred to their bottom-lines that a foreclosure can cause. For 2011, short sales accounted for about 8 percent of total home sales, and rose 7 percent over 2010 totals, according to CoreLogic data. Short sales are up by 59 percent year-over-year in Illinois, 32 percent in Michigan, and 19 percent in Arizona alone, according to CoreLogic. “We’re starting to see that servicers and lenders are viewing short sales as a better alternative than they had in the past,” says Daren Blomquist, spokesman for RealtyTrac. “Some of that relates to the fact that it’s getting harder to foreclose. There are additional requirements in terms of paperwork and requirements that states and judges are imposing.” Short sales can still be complex and lengthy – they can take up to nine months to close and even after that, there’s no guarantee it’ll end successfully. “In general, it is a totally different type of transaction,” says Mike Cuevas, a real estate professional at Exit Realty in Chicago. “You’re not only selling a house, you’re negotiating debt.” Source: “Why it can Pay to try a Short Sale; Lenders may be Viewing Short Sales as a Better Alternative,” MarketWatch (Oct. 20, 2011) © Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688 Florida foreclosure mediation not working, needs changes TALLAHASSEE, Fla. – Oct. 24, 2011 – A statewide program established in 2009 requires mediation in residential foreclosure cases, but it doesn’t work and should be significantly changed, a Florida Supreme Court panel said Friday. The report also warns of another deluge of foreclosure cases. Following a series of conference calls and based on a review of public comments, a work group led by Second District Court of Appeal Judge William Palmer called on the state high court to eliminate the foreclosure mediation requirement. Chief Justice Charles Canady had asked the work group to conduct the study. The work group also said the chief justices in Florida’s 19 judicial circuits should be given more flexibility to modify the proceedings to meet their particular needs. The report says that the mediation process, established by 2009 Chief Justice Peggy Quince in response to a backlog of foreclosures, is not well known and apparently doesn’t provide the proper incentives to push borrowers and troubled mortgage holders to settle. As a result, it doesn’t solve the foreclosure backlog problem it was created to address. “There are now approximately 350,000 backlogged foreclosure cases in the circuit courts,” Palmer wrote. “… These cases will continue to languish if additional resources are not provided to the courts.” The work group said that the foreclosure process is working in some judicial circuits, and they should be allowed to continue their efforts. The work group urged the high court to make the process more attractive to the parties involved and remove a requirement that all cases must go through mediation. The group said improvements need to be made quickly because the problem is not going away. Florida had one of every nine U.S. foreclosure filings in third quarter 2011, according to RealtyTrac. The quarterly increase was prompted by a 24 percent increase in new default notices. “Circuit courts likely will face a new surge of cases in 2012, which will further exacerbate the backlog and further delay finality,” Palmer concluded in the report. The group said it did not have enough time to come up with specific remedies to the existing mediation program. Instead, it mapped out a series of issues that should be addressed by another group that has more time to review data from the fledgling program. “Florida’s economy will continue to be depressed as long as there are massive numbers of mortgages in default that have not been resolved by foreclosure,” Palmer said. Source: News Service of Florida, Michael Peltier
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Foreigners’ sweetener:
Buy house, get a visa

WASHINGTON – Oct. 21, 2011 – Sens. Charles Schumer (D-N.Y.) and Mike Lee (R-Utah) have proposed a new type of resident visa for foreigners who spend at least $500,000 to purchase real estate in the United States. The proposal calls for at least $250,000 to be spent on a residence, while the other $250,000 could be invested in other real estate. However, the entire amount must be a cash investment.

The provision, part of a larger package of immigration measures, would complement existing visa programs that permit foreigners to enter the country if they invest in new businesses that create jobs.

Supporters believe the initiative would help absorb a glut of housing supply – especially in markets like Arizona and South Florida, where foreign buyers have represented a rising share of home buying activity. According to National Association of Realtors® (NAR) research, 5.5 percent of Miami homes sell to international buyers.

International buyers snapped up $82 billion in U.S. residential property in the year ended in March, surging from $66 billion during the prior 12 months, reports NAR.

Source: Wall Street Journal (10/20/11) P. A7; Timiraos, Nick

home sales

Fed HARP program expanded,
help more owners

WASHINGTON – Oct. 24, 2011 – The Federal Housing Finance Agency (FHFA), with Fannie Mae and Freddie Mac, announced a series of changes to the Home Affordable Refinance Program (HARP). FHFA hopes to help more borrowers benefit from a program that refinances home mortgages.

“We know that there are many homeowners who are eligible to refinance under HARP, and those are the borrowers we want to reach,” said FHFA Acting Director Edward J. DeMarco. “Building on the industry’s experience with HARP over the last two years, we have identified several changes that will make the program accessible to more borrowers with mortgages owned or guaranteed by (Fannie Mae and Freddie Mac). Our goal … is to create refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie Mac and bringing a measure of stability to housing markets.”

HARP is the only refinance program that enables borrowers who owe more than their home is worth to take advantage of low interest rates and other refinancing benefits. The program is offered to borrowers whose loans were sold to Fannie Mae and Freddie Mac on or before May 31, 2009, with current loan-to-value (LTV) ratios above 80 percent.

New program enhancements change several aspects of HARP including:

• Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages, and lowering fees for other borrowers.

• Removing the current 125 percent LTV ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac.

• Waiving certain representations and warranties for lenders that make loans backed by Fannie Mae and Freddie Mac.

• Eliminating a new property appraisal if there is a reliable AVM (automated valuation model) estimate provided by Fannie Mae or Freddie Mac.

• Extending the end date for HARP until Dec. 31, 2013, for loans originally sold on or before May 31, 2009.

Mortgage lenders should have more information about the HARP program changes by Nov. 15, 2011. Since participation isn’t mandatory, implementation schedules will vary.

The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks. These government-sponsored enterprises provide more than $5.7 trillion in funding for the U.S. mortgage markets and financial institutions.

Preserving Home Ownership Tax Benefits Vital to Housing Market, Say Realtors®

Washington, October 06, 2011The following is a statement by National Association of Realtors® President Ron Phipps.

“Today, witnesses before the Senate Finance Committee were in complete agreement that now is not the time to make changes to the mortgage interest deduction. NAR is pleased that a range of witnesses testifying at the committee’s hearing on tax incentives for homeownership reinforced the message Realtors® have been delivering to Washington: do no harm.

“As the leading advocate for housing and homeownership issues, NAR firmly believes that the mortgage interest deduction is vital to the stability of the American housing market and economy.

“While progress has been made recently in bringing stability to the housing market, it is not recovering at the rate it should be and is far too fragile to sustain any tax increases. Congress must do no harm – raising taxes on America’s homeowners by changing the tax rules that apply to homeownership now or in the future will further stall the housing recovery and critically erode home values.

“Owning a home is a long-standing and abiding fundamental American value because it benefits individuals and families, strengthens communities, and is integral to the nation’s economy. It is imperative that Congress preserve the mortgage interest deduction and that the nation’s 75 million home owners continue to receive this important tax benefit, which helps primarily middle- and lower income families.

“NAR will remain vigilant in opposing any plan that modifies or excludes the deductibility of mortgage interest.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section.

Are banks getting better on short sales?

CHICAGO – Oct. 21, 2011 – Are short sales getting easier? Some homeowners are reporting that banks are now not only more willing to consider a short sale, but are even offering incentives to complete a short sale. For example, a homeowner in Chicago says his lender approved his short sale and then gave him a $20,000 check after the deal was finalized for selling the home as a short sale instead of letting it sink into foreclosure.

Lenders accepting a lower mortgage payoff from an underwater seller traditionally isn’t thought of an easy transaction to complete. Lenders weren’t so willing a few years ago. But as the number of Americans underwater on their mortgages grow, more lenders are reconsidering as they try to avoid the extra costs incurred to their bottom-lines that a foreclosure can cause.

For 2011, short sales accounted for about 8 percent of total home sales, and rose 7 percent over 2010 totals, according to CoreLogic data. Short sales are up by 59 percent year-over-year in Illinois, 32 percent in Michigan, and 19 percent in Arizona alone, according to CoreLogic.

“We’re starting to see that servicers and lenders are viewing short sales as a better alternative than they had in the past,” says Daren Blomquist, spokesman for RealtyTrac. “Some of that relates to the fact that it’s getting harder to foreclose. There are additional requirements in terms of paperwork and requirements that states and judges are imposing.”

Short sales can still be complex and lengthy – they can take up to nine months to close and even after that, there’s no guarantee it’ll end successfully. “In general, it is a totally different type of transaction,” says Mike Cuevas, a real estate professional at Exit Realty in Chicago. “You’re not only selling a house, you’re negotiating debt.”

Source: “Why it can Pay to try a Short Sale; Lenders may be Viewing Short Sales as a Better Alternative,” MarketWatch (Oct. 20, 2011)

Florida foreclosure mediation not working, needs changes

TALLAHASSEE, Fla. – Oct. 24, 2011 – A statewide program established in 2009 requires mediation in residential foreclosure cases, but it doesn’t work and should be significantly changed, a Florida Supreme Court panel said Friday. The report also warns of another deluge of foreclosure cases.

Following a series of conference calls and based on a review of public comments, a work group led by Second District Court of Appeal Judge William Palmer called on the state high court to eliminate the foreclosure mediation requirement. Chief Justice Charles Canady had asked the work group to conduct the study.

The work group also said the chief justices in Florida’s 19 judicial circuits should be given more flexibility to modify the proceedings to meet their particular needs.

The report says that the mediation process, established by 2009 Chief Justice Peggy Quince in response to a backlog of foreclosures, is not well known and apparently doesn’t provide the proper incentives to push borrowers and troubled mortgage holders to settle. As a result, it doesn’t solve the foreclosure backlog problem it was created to address.

“There are now approximately 350,000 backlogged foreclosure cases in the circuit courts,” Palmer wrote. “… These cases will continue to languish if additional resources are not provided to the courts.”

The work group said that the foreclosure process is working in some judicial circuits, and they should be allowed to continue their efforts. The work group urged the high court to make the process more attractive to the parties involved and remove a requirement that all cases must go through mediation.

The group said improvements need to be made quickly because the problem is not going away.

Florida had one of every nine U.S. foreclosure filings in third quarter 2011, according to RealtyTrac. The quarterly increase was prompted by a 24 percent increase in new default notices.

“Circuit courts likely will face a new surge of cases in 2012, which will further exacerbate the backlog and further delay finality,” Palmer concluded in the report.

The group said it did not have enough time to come up with specific remedies to the existing mediation program. Instead, it mapped out a series of issues that should be addressed by another group that has more time to review data from the fledgling program.

“Florida’s economy will continue to be depressed as long as there are massive numbers of mortgages in default that have not been resolved by foreclosure,” Palmer said.

Source: News Service of Florida, Michael Peltier

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