Foreclosed Home Owners may get “Second Chance”

The Federal Housing Administration is giving some former home owners another shot at home ownership. The FHA sent a letter to mortgage lenders stating that it would offer mortgage insurance to borrowers who once filed for bankruptcy, or who lost their homes through foreclosure or short sale during the recession.

Still, potential borrowers must show they can meet all other FHA requirements and that they are no longer financially constrained. Borrowers also will have to undergo housing counseling and FHA is requiring lenders to verify that at least a year has passed since the foreclosure or “economic event” that caused the foreclosure or bankruptcy.

“FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage,” according to the letter FHA sent to lenders.

Source: “FHA offers mortgage backing to the once bankrupt,” HousingWire (8/16/2013)

Survey: Americans’ Attitudes Shift About Housing!

Americans are increasingly more optimistic about the direction of the housing market, according to a monthly survey of more than 1,000 Americans conducted by Fannie Mae. 

The majority of those surveyed expect home prices to rise 1.6 percent in the next year. Also, about 18 percent of those surveyed say now is a good time to sell, which is the highest percentage since the survey was initiated. 

“Consumer attitudes toward the housing market remain modestly positive, despite signs of increased concern over the direction of the economy,” says Doug Duncan, chief economist at Fannie Mae. “While the latest results showed a pickup in the share of consumers expecting mortgage rates to rise, reflecting the uptrend of long-term interest rates since mid-July, that may soon change.”

About 40 percent of those surveyed expect mortgage rates to rise in the next year. 

While the majority were upbeat about housing, they are increasingly pessimistic about the direction of the economy. Sixty percent of those surveyed say they think the economy is heading in the wrong direction. What are your thoughts about this survey?

Source: “Fannie Mae: Housing Market Attitudes Improve Despite Increased Concern About Economy,” Dow Jones (Sept. 10, 2012)

Short Sales Rise, Banks “View it as Better Option”

Banks are more willing to agree to a sale at a lower cost than a home owner’s mortgage balance in order to avoid having the property fall into foreclosure, which can be more costly for a lender. We think the new California law regarding short sales will encourage home owners to consider this option.

Hopefully this trend will likely “show up in more local markets in 2012 as lenders recognize short sales as a better option for many of their non-performing loans,” said RealtyTrac CEO Brandon Moore. Please provide your comments.

Meanwhile, during the fourth quarter, 24 percent of homes sold — nearly one in four — were in some stage of foreclosure, either already bank-owned or already winding through the process, RealtyTrac reports. The number is slightly down compared to a year prior when foreclosures accounted for 26 percent of all home sales, RealtyTrac reports. 

However, Moore says he expects foreclosure sales to rise this year, “particularly pre-foreclosure sales, as lenders start to more aggressively dispose of distressed assets held up by the mortgage servicing gridlock over the past 18 months.”

Source: “Foreclosures Made Up One in Four Home Sales,” CNNMoney (March 1, 2012)

Underwater Sellers, what are your Options? Cash to Short Sell? Cash for Keys? Foreclosure?

We get these questions and would like to share our thoughts about this dilemma.  Some home owners who are underwater may not know their alternatives.

The “Cash for Keys” is a program that banks do for some home owners. The “new twist” you’ll be hearing more about is “Cash to Short Sale”. Lenders are figuring out that if there is anything they can do to make a deal happen, they need to do it. This apparently is what is starting to take place with people that are trying to “short sale” their homes. Instead of “Cash for Keys” to homeowners that lose their homes to foreclosure. This was not offered to home owners who were trying to short sale their home. Often the banks would basically give them a certain time to complete the short sale until they foreclosed.

Now because of tight lending practices, new buyers would take so long to qualify, it is often “too little, too late” to close escrow before foreclosure.  When that happens it seems everybody loses. The lenders lost a willing & able buyer and the seller because, now, not only did they lose their home to a foreclosure, but also because a foreclosure was now on their credit report instead of a short sale. (It may be better to have a short sale than a foreclosure on a credit report?) Plus, the buyer may or may not wait until the home came back on the market at a later date.

Other information at: or

Former Home Owners may get a “Second Chance”

Here is our  update information to share with you! Are you now starting to ask: When can we buy again? Were you foreclosed on or did a short sale due to circumstances like a job loss or illness? The wait may not be as long as they were once told! 

Many banks have guidelines that prevent them from issuing loans to people with a foreclosure or short sale in their credit history in some cases for as much as seven years. That also doesn’t factor in the damage foreclosures and short sales can do to a person’s credit score, and the work former home owners’ will need to do to repair it so they’ll have a better chance at qualifying for financing again in the future. Please contact a local lender that knows the new regulations and is recommended by your Realtor!  

The wait-time varies among lenders and government entities. For example, the Federal Housing Administration says former home owners with a foreclosure must wait three years before they can qualify, while Fannie Mae and Freddie Mac require a seven-year wait following a foreclosure. So clearify this with those helping you.  

As for short sales, sometimes these waits can be waived or drastically cut, depending on the borrower’s situation. FHA requires a three-year wait following a short sale, but it may waive that wait if the short sale was due to a job loss. 

Also, for borrowers who can come up with a higher down payment on their next home purchase, they may also not have as long to wait. For example, Fannie Mae will reduce the wait from seven years to two years for borrowers who come with a down payment of 20 percent or more. 

Source: “Lost Home to Foreclosure but Ready to Buy Again? Prepare to Wait in Lender ‘Penalty Box,’” Associated Press (Feb. 22, 2012)

Are better days ahead for Commercial Real Estate?

A new report by Real Capital Analytics shows the number of distressed commercial properties is plateauing and expected to continue to do so in the new year. Distressed properties — which include commercial properties that are in default, foreclosure, or repossessed by lenders — had totaled $171.6 billion in October 2011, a decrease from topping off at $191.5 billion in March 2010, according to Real Capital Analytics.

The real test of commercial propertiesis likely to be seen in 2012 and 2013, when about $300 billion in loans comes due each year,” according to a recent article in the Washington Post. 

At $41.9 billion, the office sector continues to have the largest number of distressed commercial properties. But that number has been steadily declining — about 11.8 percent less than its peak reached in October 2010. 

 More information at source: “Amount of Distressed Real Estate Could be on Way Down,” Washington Post (Dec. 26, 2011)

More news about “Commercial and Income Properties” from the El Dorado, Placer, Amador or Sacramento Counties of California regions at: or

Economy Ends Year on more “Upbeat Note”

Economic growth, an improving job picture, greater consumer spending, and slight improvements in the housing market are all recent indicators that 2011 is ending on a much brighter note, Fannie Mae reports in its fourth-quarter report. 

“It’s important to recognize that we’re ending 2011 on a stronger note than we’ve seen throughout the year,” Fannie Mae Chief Economist Doug Duncan said in a statement. “Unfortunately, however, our 2012 outlook is not as rosy as our forecast for the fourth quarter of 2011.”

Fannie Mae’s Economics & Mortgage Market Analysis Group predicts that despite recent improvements, the housing market will remain “subdued next year — a reflection of the winter season, an expected slowdown in economic activity, and a potential increase in distressed sales.” The nation’s fiscal problems as well as the European debt crisis are also expected to threaten the nation’s economic recovery in 2012.

Source: Fannie Mae

We hope your activity has picked up like ours has here in the Sierra Foothills regions of Placerville, El Dorado County, California.

Home Owners to Lawmakers Survey: “Do More to Help Housing”

The government isn’t doing enough to help home owners at risk of default, foreclosure, and underwater on their homes, a majority of Americans say in the Home Horizons 2012 study, a survey conducted by Yahoo! Real Estate of 1,500 current and aspiring home owners. 

Fifty-one percent of home owners say the government needs to pass more legislation to help home owners who are at risk of losing their house. About two-thirds of Americans surveyed say the government needs to offer more assistance like low-cost loans to help home owners more.

Four out of five adults polled say the 2012 presidential election will have a small or large influence on the housing market, with 43 percent predicting it will have a large impact. However, one-third of those surveyed doubt either party — Republican or Democrat — will have either a positive or negative impact on the real estate market.

“A large-scale government policy that’s going to fix all of this — no one has seen such a thing,” Stan Humphries, chief Yahoo! Study, told Yahoo! Real Estate.

Source: “Yahoo! Study: Home Owners Want Political Action,” Yahoo! Real Estate (Dec. 12, 2011)

Other information from El Dorado, Placer, Amador or Sacramento Counties of California at: or

Investors See Bigger Profits from Rising Rents

Rental demand and prices continue to soar, and investors are cashing in. Rents are rising at a 5.17 percent annual rate — up from last year’s 4.72 percent rate. If rents continue to grow at their current pace, they won’t be too far behind the record-high reached in 2000 of 6.18 percent, according to Axiometrics Inc.

The rental market has added about 1.4 million new renters this year, some of whom were former home owners who faced foreclosure or a short sale. Renters are increasingly showing an appetite for single-family homes owned by investors. As Realtors in the Placerville, California region we believe both renters and investors benefit.

As such, the number of investors in the market is growing. Investors make up anywhere between 20 and 40 percent of monthly existing home sales, according to home-sale data. With home prices and interest rates low, more aspiring investors are jumping in. Nearly 60 percent of investors in a recent survey by considered themselves newcomers to real estate investing. 

“This is a long-term investment,” says Greg Rand, CEO of OwnAmerica. “Rents are a steady return on your investment through the years, leaving you with an attractive asset when prices improve. And they will. The best profits in real estate accrue to long-term investors who take a long-term view.”

Source: “Rising Rents Improve Investors’ Return,” RISMedia (Oct. 20, 2011)