New Buyer Incentive -- Up to 3.5% Buyer Assistance on HomePath Properties
Fannie Mae wants to help more buyers afford to purchase their new home. That's why they are offering up to 3.5% in closing cost assistance for HomePath® properties beginning June 14 through October 31, 2011.
- Initial offers must be submitted on/after June 14.
- Buyers must be owner occupants (i.e., the home will be their primary residence).
- Buyers are required to sign an Owner Occupant Certification Rider to the Purchase Addendum with all initial offer submissions.
- Sale must close on/before October 31.
- Other restrictions apply. For more information about the offer, including the terms and conditions, visit the Special Offers tab on HomePath.com.
1 in 4 sales is a foreclosure
Discounts average more than 28%
By Inman News
February 23, 2011
Foreclosure sales accounted for 26 percent of U.S. home sales in 2010, with those properties selling for more than 28 percent less, on average, than homes not in the foreclosure process, data aggregator RealtyTrac said in its latest report.
A total of 831,574 U.S. residential properties either owned by banks or in some stage of foreclosure sold to third parties in 2010, a decrease of 31 percent from 2009 and a decrease of nearly 14 percent from 2008, RealtyTrac said.
Homes in foreclosure accounted for a larger percentage of sales in 2009 -- 29 percent -- but their share of total sales was up from 23 percent in 2008.
While controversy over loan servicers' handling of foreclosure paperwork put a dent in fourth quarter foreclosure sales, the impact of the so-called robo-signing controversy seemed to be waining in the final month of the year.
RealtyTrac recorded a total of 149,303 foreclosure sales in the fourth quarter, down 22 percent from the previous quarter and down 45 percent from the same period a year ago. That decline was in spite of a 21 percent monthly uptick in foreclosure sales volume in December.
"The catch-22 for 2011 is that while accelerating foreclosure sales will help clear the oversupply of distressed properties and return balance to the market in the long run, in the short term a high percentage of foreclosure sales will continue to weigh down home prices," said RealtyTrac CEO James Saccacio in a statement.
A total of 512,886 bank-owned (REO) properties sold to third parties in 2010 at an average discount of 36 percent, up from an average discount of 33 percent in 2009.
Another 318,688 pre-foreclosure properties -- homes in default or scheduled for auction -- sold to third parties in 2010 at an average discount of 15 percent, down from an average discount of nearly 17 percent in 2009.
Indicators Suggest More Housing Weakness
This could be a once-in-a-generation opportunity for real estate investment!
A new report from the Federal Housing Financing Agency indicated that home prices were flat in September compared to August.
Some analysts saw this and other factors as a sign that home prices are likely to fall again.
Predicting a new 10 percent decline, John Silvia, chief economist at Wells Fargo, said, “There is no clear, easy way out for housing. Contrary to my hopes, housing prices and the housing market in general will weaken again.”
Meanwhile, the Federal Reserve continues to predict that unemployment will remain above 9 percent through 2010. Minutes of its most recent meeting show that Fed officials are unwilling to raise the overnight federal funds rate from its current level of zero for fear of pushing up mortgage rates and adding to the malaise.
Source: The New York Times, David Streitfeld, Edmund L. Andrews and Javier C. Hernandez (11/24/2009)
Homebuyer Credit Gets New Life
Key lawmakers in the Senate have tentatively agreed to extend the existing $8,000 tax credit for first-time home buyers and also offer a new $6,500 credit for existing homeowners who have lived in their current residence for a consecutive five-year period in the past eight years.
Home buyers must be under contract by April 30, 2010, and close before July 1. House Democrats have expressed concern about the cost of the tax credit for the government, and allegations of abuse have resulted in an IRS probe of the program.
Source: Wall Street Journal, Corey Boles and John D. McKinnon (10/29/09)
Tax Credit Can Be Used on Closing Costs
FHA-approved lenders received the go-ahead to develop bridge-loan products that enable first-time buyers to use the benefits of the federal tax credit upfront, according to eagerly awaited guidance from the U.S. Department of Housing and Urban Development on so-called home buyer tax credit loans that was released Friday, May 29, 2009.
Under the guidance, FHA-approved lenders can develop bridge loans that home buyers can use to help cover their closing costs, buy down their interest rate, or put down more than the minimum 3.5 percent.
Thus, buyers applying for FHA-backed financing with an FHA-approved lender that offers a bridge-loan program can get a bridge loan to bring down the upfront costs of buying a home significantly but would still have to come up with the minimum 3.5 percent downpayment.
The first-time homebuyer tax credit was enacted last year--and improved upon earlier this year--to help encourage households to enter the housing market while interest rates are low and affordability is high. The credit is worth up to $8,000 and is available to households that haven't owned a home in at least three years. The credit does not have to be repaid, and is fully reimbursable, so households can get their credit returned to them in the form of a payment.
If you have any questions, please do not hesitate to contact me via e-mail: firstname.lastname@example.org or by phone: 773. 653. 6442
Washington, D.C., United States (AHN) - The Obama administration on Friday announced new incentives to help struggling homeowners refinance their mortgages with lower payments to avoid foreclosure.
The foreclosure avoid program would provide banks with incentives to reduce the principal on underwater mortgages, or loans that are greater than the value of the homes they finance.
In addition, unemployed homeowners could qualify for three to six months of lower mortgage payments while they look for jobs.
The Obama administration’s new incentives require lending institutions to reduce monthly mortgage payments for unemployed workers to 31 percent of the homeowner’s current income for as much as six months.
After the temporary period, homeowners whose monthly payments exceed 31 percent of their gross monthly income could qualify for permanently modified loans.
Homeowners are eligible if they live in the homes they purchased, took out their mortgages before Jan. 1, 2009 and have loan balances less than $729,750.
The new program also would allow more homeowners to do a “short” sale, which involves selling their homes for less than their loan balances. They also could transfer ownership of their homes to avoid foreclosure, which is called “deed in lieu of foreclosure.”
Bankers say the Home Affordable Modification Program has failed to meet its goals because few lending institutions will reduce monthly payments on at-risk loans unless they have financial incentives.
Instead, they modify loan repayment rates. However, many of the borrowers then default on the modified loans.
They say the Obama administration’s incentives announced Friday could give them a better reason to reduce the balances on at-risk loans.
30-YEAR RATES NEAR RECORD BREAKING LEVELS
A 30-year fixed-rate mortgage (FRM) averaged 4.83 percent with an average 0.7 point for the week ending November 19, 2009, down from last week when it averaged 4.91 percent, according to Freddie Mac's Primary Mortgage Market Survey® (PMMS®). Last year at this time, the 30-year FRM averaged 6.04 percent.
The 15-year FRM this week averaged 4.32 percent with an average 0.6 point, down from last week when it averaged 4.36 percent. A year ago at this time, the 15-year FRM averaged 5.73 percent. Real Trends, #1158, November 24, 2009.