Many people are wary about getting back into the housing market. They are concerned about declining values and challenging mortgage requirements. Despite these negatives, it may be a great time to get back into residential real estate. In the past few months, we have seen an increase in the median price of homes in Tucson, however, a third of the homes sold here in 2011 were under $100,000. The affordability index has never been better! Interest rates have hit record lows according to a recent Freddie Mac’s weekly survey and it’s not quite as arduous to obtain a mortgage as you may have thought.
 
Will 2012 be The Road to Recovery?
 
Predictions are that there will be new foreclosures hitting the market in 2012.  The good news is delinquency rates are declining quite a bit. The bad news is these foreclosures continue to slow down the housing recovery. Interest rates should remain historically low for the first half of 2012 while housing prices will find their bottom. You can expect to see modest increase in prices of homes in the second half of 2012. Pent up demand for housing is increasing.  Rental properties and foreign investors are ready to soak up deals and refinance programs such as HARP (Home Affordable Refinance Program) will also help the housing market recover its equilibrium.
 
Wild cards:
 
Eurozone, Employment, Election Year!
 
Call me, David Wolsky, for any mortgage related questions. I can be reached at (520) 275-2536 or david@davidwolsky.com. 

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By Ryan J. Downey:

I made my last mortgage payment on November 1, 2009.

Bank Of America changed the locks on my house on September 29, 2011.

I realize that my results may not be typical and that every situation is unique. But I’d like to provide people in a similar spot with something that wasn’t readily available to me when I realized I had to walk away from my house: answers.

What happens when you walk away? Are you arrested? Are you shunned? Do your kids decide they hate you?

READ MORE

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Bank regulators and Congress are looking to make more changes to guidelines for conventional and FHA mortgages. Congress would like to privatize Fannie Mae and Freddie Mac. The timing of these changes is challenging, considering the struggling housing market and anemic economic recovery. Among the proposed changes being proposed are increasing the minimum down payment for conventional loans to 20%, setting higher income and credit qualifications and reducing the maximum loan limits. FHA proposals include increasing the minimum down payment to 5%. These changes will certainly eliminate potential buyers, causing the housing market to take a longer time to recover.

Short Sales Aren’t Alway Short!

In my mortgage practice, a large percentage of my deals are “short sales” or bank owned properties. Recently, I had a customer that offered to buy a home with a short sale. The listing agent set the sales price, the buyers agreed and  after several weeks, the bank declined the offer. The house will be foreclosed instead. It is likely that another buyer could buy this house on the steps of the courthouse for a lower price than the short sale offer than my customer had offered on the home. I guess the bank decided they could make more money foreclosing the property than accepting the short sale offer. Why else would they turn down a qualified buyer. In fact, he decided to pay cash for the house and the bank still turned him down. Another factor that makes short sales so tough to execute is junior liens. In other words, the current owner of the house has a first and second mortgage and both lien holders have to agree on the sale. This dynamic usually means the junior lien holder (second mortgage or HELOC), is taking a beating on the balances owed on their loans.

I had another interesting deal that closed a few weeks ago. The buyer was buying a short sale and it took months for the first and second lien holder to agree on the terms of the sale. Once it was finally approved, we put the loan in process. The listing agent requested that we close the loan within three weeks of the short sale approval. During those three weeks, we find out that Fannie Mae was going to auction off the house in a foreclosure acout a week before we were scheduled to close. We were able to stave of the foreclosure with a lot of persuasion from the REALTORs involved with the sale and the buyer was able to get the house. The first mortgage lender probably should not have approved the short sale if they knew the investor (Fannie Mae) had begun foreclosure proceeding.

Foreclosures are much easier to buy. The lenders are offering terms to sell the homes. For example, Fannie Mae (FNMA) has a program known as HomePath. They typically will offer 3.5% of the sales price as a concession to the buyer for a primary residence or a second home. The offer 2% for investors. The program does not require an appraisal and there is no mnortgage insurance required if you have a down payment below 20%. A million foreclosures are anticipated again this year. Half of the homes in Arizona have negative equity and home values continue to go south. Hang in there as time heals all wounds. The first quarter of 2011 has been robust for home sales in Tucson.

Tucson Is #4!

According to Inman News, Tucson is considered a top five best markets for investors thanks to the declining housing prices. Of the top ten, only two cities were out west (Tucson and Salt Lake City). The report looks at economic data, housing and demographics including the median price of homes, loan data and foreclosure sales.

If you have any questions about real estate in Arizona, contact David Wolsky at 520-275-2536 or david@davidwolsky.com.

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I watched tonight’s episode of 60 Minutes and the first story was called “The Next Housing Shock”.

The report detailed robo-signings of forged mortgage documents including interviews with people who were employed to sign 350 signatures each hour on falsified mortgage documents for loan servicers to foreclose homeowners. The Wall Street appetite for mortgage backed securities was insatiable. Mortgages were bundled and sold throughout the world to investors. There were good loans and bad loans in these bundles of loans. As the housing market started failing, hundreds of thousands of mortgages were  performing badly and the loan servicers initiated foreclosure proceedings. The problem is, you may make your payments to a mortgage company such as my former company, American Home Mortgage Servicing, but American Home Mortgage does not own the mortgage. Who does? The mortgages are owned by many different investors, however it is very difficult to unravel the web and ascertain who actually owns the loans! Phony documents were created to expedite the foreclosure proceedings and now there are thousands of lawsuits out there with all 50 state’s attorneys general involved to get this horrible mess cleaned up. Personally, I think the banks should take some of their record profits and TARP funds and be accountable. After all, the banks and Wall Street created this debacle and reaped the benefits when the cash was rolling in. It’s time for them to share the pain that American homeowners have been experiencing.

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If you are in the market for a new house this spring, check out www.homepath.com. Home Path are Fannie Mae REO properties all over the country. The deal just got better. Fannie Mae is offering a 3.5% incentive for buyers who purchase and close on a Fannie Mae owned home between January 28 and April 30, 2010. The credit can be used towards closing costs, the purchase of new Whirlpool appliances by Fannie Mae or a mix of closing costs and appliances, at the buyer’s discretion, up to the maximum 3.5%. Combine that with a $8000 tax credit for first time buyers or a $6500 for qualifying repeat buyers who have owned a home for five out of the last eight years.

There is also special financing available for Fannie Mae owned homes. The benefits include:

• Low down payments (3% for owner occupied and 10% for investment properties)
• Qualify with less than perfect credit
• Down payment (at least 3%) can be funded by your own saving, a gift or a qualified grant
• No mortgage insurance
• No appraisal fees

PHH Home Loans and Coldwell Banker Home Loans is an authorized Fannie Mae HomePath lender. Call David Wolsky at 520-275-2536 for more details! You can apply online on my website: http://davidwolsky.coldwellbankerhomeloans.com/

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