Many mortgage modifications push payments .... higher

Tens of thousands of financially strapped homeowners who have asked lenders to lower their mortgage payments are instead winding up with higher monthly payments and larger debts on their homes. http://www.usatoday.com/money/economy/housing/2009-09-14-mortgage-modifications-not-helping_N.htm

Realtors® Urge Congress to Act Now to Extend Homebuyer Tax Credit

The National Association of Realtors® is calling upon its 1.2 million members to urge Congress to extend the successful homebuyer tax credit into next year.

Since its inception earlier this year, the $8,000 first-time homebuyer tax credit has brought 1.2 million new buyers into the market—350,000 of whom would not have purchased a home without the credit, according to NAR. The credit is due to expire November 30.

“Now is the time for Congress to keep this recovery going by extending the tax credit through 2010 and making it available to more homebuyers. We have all seen how the credit has been a spur to bring homebuyers into the market, and have seen the beginnings of a real recovery in the housing market. Housing has always led this nation out of economic downturns, and can do so again,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth.

Realtors®, the leading advocates for homeownership and housing issues, will be writing to their Senators and Representatives to tell them of the successes with the tax credit thus far and to press them to extend and expand it now.

McMillan added that the market has improved, but it has not yet fully corrected itself. “The credit needs to be available for an additional period of time in order to sustain the progress that’s been made so we can continue to see our markets fully recover. Uncertainty about the future of the credit will dampen consumer demand. The only way we can assure that the progress we've made can continue is to extend the credit and to do that now,” he said.

As the current deadline for the credit looms, potential homebuyers need to complete a contract, satisfy any contingencies, secure financing and go to closing by November 30. In today’s market, NAR estimates that it generally is taking between 45 and 60 days from contract to closing.
“That means potential homebuyers who qualify must act now, and so must Congress,” McMillan said.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
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Homebuyers Paid $7,039 Less!!!

Buyers in the Driver's Seat: U.S. Homebuyers Paid $7,039 Less Than Listing Price in July
Florida Markets Make Up 14 of Top 25 Markets Where Buyers Can Negotiate, According to July Zillow® Real Estate Market Reports

SEATTLE, Sept. 10 /PRNewswire/ -- Amid continued falling home prices, U.S. homebuyers are negotiating even more discounts at the bargaining table, according to July's Zillow Real Estate Market Reports. Buyers paid 3.3 percent, or a nearly $7,039, less than the last listing price on homes for sale(1) during the month of July. That is down slightly from 3.5 percent, or $7,630, in June, and substantially down from 4.6 percent ($10,260) in January.

(Logo: http://www.newscom.com/cgi-bin/prnh/20060503/ZILLOWLOGO)

Meanwhile, 22.8 percent of all homes listed for sale on Zillow had at least one listing price reduction(2) as of Sept. 1, 2009. The median U.S. price reduction(3) was 6.5 percent off the original listing price. Homes listed for sale on Zillow during August were listed for a median 96 days(4), up from 91 in July.

Florida homebuyers had the most negotiating power in July, with buyers in the Vero Beach metropolitan statistical area (MSA) paying 10.2 percent, or a median $23,500, less than the last listing price. Buyers in the Sarasota MSA paid 8.2 percent less than list price. The Naples, Daytona Beach, Miami-Fort Lauderdale, Panama City, Punta Gorda, Melbourne, Ocala, Tampa, Jacksonville, Port St. Lucie, Gainesville and Lakeland MSAs also ranked, in that order, in the top 25 markets for negotiation.

There was less or no room for negotiation in some California markets that have been hard-hit by foreclosures. In the El Centro MSA, buyers paid 1.8 percent, or a median of $2,150, more than the listing price. In seven California markets -- Sacramento, Merced, Modesto, Riverside, Stockton, Yuba City and Fresno -- asking price and sale price were the same
(5)."The strong summer selling season in 2009 has led to a decreasing difference between the last listing price and final sale price, but most buyers are still getting some additional discount at selling time," said Zillow Chief Economist Dr. Stan Humphries. "We expected list-to-sale price ratios to fall as the sales volume picked up during the summer, and the California markets are showing strong declines in the discount off the last listing price, relative to levels at the start of the year. This is fueled both by increased sales and high proportion of foreclosures re-sales, which are already priced relatively low.

"The fact that many Florida markets are still showing comparatively higher differences between the last listing price and final sale price suggests that inventory levels are still relatively high, keeping considerable downward pressure on prices and encouraging buyers to seek large discounts off the listing price. Overall, buyers are finding favorable conditions for negotiating prices, and now can be a good time to buy, provided homebuyers are financially prepared with healthy down payments and intend to stay in their home for a minimum of five to seven years."
Top 25 Markets for Negotiating Discounts (ranked by percent difference from last list price to final sale)
Zillow
Median % Median $ Home
Difference Difference Value
from from % of Index Median
Last List For Sale Year- Days
List Price Price Listings Median % Over- Listed
Metropolitan to Final to Final with Price of Price Year on
Statistical Sale Sale Reductions Reduction Change Zillow
Area (1) (1) (2) (6) (4)
United States 3.3% $7,039 22.8% 6.5% -9.9% 96
Vero Beach,
Fla. 10.2% $23,500 17.5% 9.1% -11.6% 106
Sarasota, Fla. 8.2% $20,392 19.9% 8.3% -17.5% 96
Atlantic City,
N.J. 8% $23,082 21.4% 6.9% -7.4% 94
Naples, Fla. 7.8% $27,233 21.1% 9.8% -21.2% 100
Daytona Beach,
Fla. 7.5% $14,246 23.8% 9.2% -22.3% 129
Miami-
Ft. Lauderdale,
Fla. 7.5% $18,658 18.7% 11.4% -20.7% 109
Panama City,
Fla. 7.1% $17,617 19.8% 9.8% -10.3% 135
Punta Gorda,
Fla. 7% $11,677 16% 10.5% -14.3% 145
Melbourne, Fla. 6.6% $11,839 20.9% 8.5% -18.3% 125
Detroit, Mich. 6.5% $7,777 29.1% 10.7% -24% 69
Ocala, Fla. 6.4% $8,960 21.2% 10.5% -12.2% 74
Springfield,
Ohio 6.4% $6,231 21.8% 8% -1.8% 101
Prescott, Ariz. 6.4% $15,919 28.6% 8.7% -19.3% 120
Morristown,
Tenn. 6.3% $11,233 18.9% 6.3% -15.9% 143
Toledo, Ohio 6.1% $7,315 24.8% 7.7% -7.1% 109
Tampa, Fla. 6.1% $10,948 22.8% 9% -19.8% 106
Jacksonville,
Fla. 6% $12,313 29% 7.9% -13% 111
Stamford,
Conn. 5.9% $32,099 26.5% 5.8% -10.4% 110
Port St. Lucie,
Fla. 5.7% $10,289 19.5% 10% -24.5% 124
Grand Rapids, Mich. 5.6% $6,879 24% 8% -10.8% 101
Chicago, Ill. 5.5% $13,453 29.4% 6% -13% 108
Gainesville,
Fla. 5.5% $9,868 22.1% 6.7% -8.7% 130
Lakeland, Fla. 5.5% $8,757 17.3% 9.4% -23.4% 111
New York, N.Y. 5.4% $21,785 25% 5.9% -9.7% 110
Cleveland,
Ohio 5.4% $7,424 25.4% 6.7% -5.3% 86

The full national report for 161 MSAs, in its new, interactive format, is available at www.zillow.com/local-info, or by emailing press@zillow.com. Additionally, in most areas data is available at the state, metro, county, city, ZIP and neighborhood level.
About Zillow.com®

Zillow.com is an online real estate marketplace where homeowners, buyers, sellers, real estate agents and mortgage professionals find and share vital information about homes and mortgages, for free. Launched in early 2006 with Zestimate® home values and data on millions of U.S. homes, Zillow has since added homes for sale, a directory of real estate and lending professionals, Zillow Advice and Zillow Mortgage Marketplace. One of the most-visited U.S. real estate Web sites, with more than eight million unique visitors per month, Zillow's goal is to help people become smarter about real estate in every stage of the home ownership process -- home buying, selling, remodeling and financing. The company is headquartered in Seattle and has raised $87 million in funding.

Zillow.com, Zillow and Zestimate are registered trademarks of Zillow, Inc.
List-to-sale price ratio is the median between the most previous list price and the final sale price of the home for all Zillow listings in a given geography. Foreclosed homes are included if they were listed as for-sale on Zillow prior to the foreclosure. The dollar amount is the median price of all listings on Zillow during a month multiplied by the inverse of the list-to-sale price ratio (sale-to-list price ratio). List-to-sale price ratio is calculated for July.

Listings with price reduction are the percent of for-sale listings on Zillow that, during August, had a reduced listing price compared with the maximum listing price of the preceding three months.

The median percent of price reduction measures the median amount of all price reductions in the listing price of for-sale homes that had a reduced price during August, compared with the maximum list price in the last three months.
"Days listed on Zillow" is measured as the median number of days for-sale homes are listed. To be included in this data point, a home must have been listed for sale on Zillow for at least one day during the reporting period (August).
"Same" means +/-1%.

The Zillow Home Value Index is the median estimated value (Zestimate) of all homes in an area. This measures the change of the Zillow Home Value Index from July 2008 to July 2009.

New normal for home sales: Buyers have the power!!!!

The American dream of homeownership is still attainable. Buyers just have to deal with a new set of realities.

A year after the collapse of the housing market triggered the financial meltdown, lenders are demanding more money up front, high credit scores and proof of income. Paperwork must be in perfect order. Patience and persistence are required. And don't even bother asking about a subprime mortgage.

It's a vastly different set of rules from earlier this decade, when home prices soared and mortgages were easy to come by.
In some ways, it's a return to the standards that emerged as the World War II generation bought its first homes in the suburbs: Buy what you can afford. Stick to a 30-year, fixed-rate mortgage. View your home as a place to live, not as a piggy bank.

For people trying to sell their homes, the standards are different, too: Be patient and maybe even lower your asking price, because the balance of power has swung strongly to buyers.
Housing bubbles have happened before and, experts warn, could happen again. Already, home sales and prices are rising slowly, helped by tax breaks for first-time homebuyers. But real estate agents, mortgage brokers, economists and homebuyers across the country say they've noticed a shift in attitudes that they expect will last for years.

NEW REALITY: Selling your house
Real estate agent Scott Patterson hits the gas and weaves his black Mercedes-Benz across three lanes of Interstate 95 near Plantation, Fla., holding his iPhone with one hand and the steering wheel with the other.

He is rushing to meet with potential buyers of a condo with an ocean view. When he arrives, he turns on lights and opens doors in the four-bedroom place. The prospective buyers, a couple from Venezuela, walk around, ask a few questions — and leave.
Business may be up in South Florida, but the power has shifted to the buyer. And price is the key. "If you're not getting showings, you're overpriced," says Patterson, an agent with Esslinger Wooten Maxwell Realtors Inc.

The record number of foreclosed homes on the market gives buyers even more leverage. "They can afford to wait," says David Baran, a broker with Prudential Preferred Properties in Chicago.
Michael Davies and Nicole Anzia of Washington, D.C., got caught in their first bidding war when they bought their two-bedroom condo in 2003. The seller fielded eight bids within five days of listing. The couple waived an inspection to clinch the deal and paid $372,000.

That was tame compared with what happened when they sold the condo two years later. They listed the property on a Thursday for $479,000 and held two open houses. More than 100 people showed up, and 11 bids were waiting for them by Tuesday. The final price: $605,000. The buyer waived the inspection, too.

When they tried to sell their home this May, things were different. They listed the house at the purchase price and received just one bid. The negotiation process took longer, and they sold at a $21,000 loss. The buyer demanded an inspection.
"We don't feel like we went from boom to bust," Davies says. "We felt like we went from boom to reality."

NEW REALITY: Getting a mortgage

Jim Sahnger, a mortgage broker in Jupiter, Fla., still chuckles over one borrower three years ago who landed a mortgage with no down payment and two foreclosures and a bankruptcy in his past.

Now, lenders pore over bank statements, tax returns and job histories. The average mortgage application today starts three times thicker than what it was at the start of the housing boom, and often gets thicker as the process drags on.

Sometimes all the extra documentation still isn't enough. Sahnger recently had a customer with a good job and a 20 percent down payment who couldn't get a mortgage because the lender said there were too many delinquent mortgages in the neighborhood.
"Now, they want to know everything about the buyer," Sahnger says. "It's a true and full underwriting process on every particular loan."

— sometimes more. And it is virtually impossible to get subprime mortgages, which were written for people with poor credit histories and helped cause the meltdown when the interest rates jumped and borrowers defaulted. In 2005, one in every five mortgages was considered subprime. This year, it's less than 1 percent.

Another category of risky loans, Alt-A mortgages, which required little or no documentation of the borrower's financial health, have plunged to $3 billion this year from $400 billion in 2005.
NEW REALITY: Closing the deal
Mike Delano thought everything was in order. He was set to buy a $785,000 home in Washington, D.C., until he learned his lender now required a 20 percent down payment instead of 10 percent.

Unlike in years past, there was no wiggle room. He had to raise the extra money from his family. "It was a nightmare," he says.
It's not uncommon nowadays for closings to take 60 days. One big reason: Appraisers have become more strict — or, some would say, more accurate.

During the boom years, agents and brokers often pressured appraisers to "hit the number" that the buyer and seller had agreed on so the deal would close and everyone could collect fees.
Under new industry rules, mortgage brokers are barred from ordering appraisals themselves. Instead, lenders order appraisals in-house or hire independent firms.
Some real estate agents and homebuilders say the rules are causing delays in closing sales, or undermining sales because appraisals are coming in too low.
NEW REALITY: The future

Nearly everyone in the real estate industry agrees on this much: Another dramatic boom-bust cycle isn't likely soon. Albert Saiz, assistant real estate professor at the University of Pennsylvania's Wharton School, expects that new regulations and a different consumer mindset will help real estate return to a more traditional cycle.
There will be some ups and downs, Saiz said, but in the long run, prices should move higher. "In the end, the United States is still growing," he says. "We're going to need more housing."
Pava Leyrer, president of Heritage National Mortgage in Michigan, notes that the majority of people are still paying their debts. She's confident the market will rebound once the unemployment rate begins to fall.

"I really can't imagine we would go back to the same situation because it took an exact wrong mix of everything for that to occur," she says. "If it ever did happen, I'll be long dead."

Obama admin: foreclosure prevention effort on track!!!!

WASHINGTON (Reuters) – The number of troubled U.S. homeowners benefiting from loan modification efforts under an Obama administration plan increased by about one-third last month, a senior official said.

In testimony prepared for delivery at a congressional hearing on Wednesday, Federal Housing Administration Commissioner Dave Stevens said about 360,000 borrowers had seen their monthly payments lowered under the plan.

A month ago the U.S. Treasury Department had put that figure at about 230,000.
In all, mortgage servicers had extended more than 571,000 loan modification offers to date, up from about 400,000 reported through July, Stevens said.

The new figures put the program to combat rising U.S. home foreclosures on track to meet the administration's goal of modifying more than half a million delinquent mortgages by November 1, Stevens said.

Staunching the record number of home foreclosures is seen as a key to an economic recovery.
Administration officials have been frustrated by how few mortgages have been modified under the plan first announced in February.

They used a report on modification in early August, the first in a planned series of monthly reports, to put pressure on mortgage servicers to step up their efforts to help homeowners.
Under the government's Home Affordable Modification Program (HAMP), mortgage companies get $1,000 for each loan modification completed and additional cash for three years as long as the borrower stays current.

In the prepared testimony, Stevens said the administration was conducting a "high level review" of the housing rescue effort and was also exploring "programmatic options" to ensure signs of stabilization in the housing market are maintained.

Stevens warns of increasing evidence of "material and growing" challenges in the multifamily mortgage sector that could have negative consequences for tenants.

Mortgage Bankers Association data show that first-quarter 2009 delinquency rates among securities backed by multifamily mortgages rose dramatically from the year-ago quarter, Stevens said.

Mortgage Rates Fall, Boost Sales!!!!!

Interest rates on home mortgages dropped this week, with the 30-year fixed-rate mortgage averaging 5.08%, according to Freddie Mac's weekly survey of conforming mortgages.
The 30-year fixed-rate mortgage averaged 5.14% last week and 6.35% a year ago. Fifteen-year fixed-rate mortgages also dropped, averaging 4.54% for the week ending Sept. 3, down from 4.58% last week. The mortgage averaged 5.9% a year ago.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.59%, down from 4.67% last week and 5.97% a year ago. And one-year Treasury-indexed ARMs averaged 4.62%, down from 4.69% last week and from 5.15% a year ago.

"Bond yields pushed mortgage rates slightly lower this week," said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement. "Low mortgage rates are helping to keep housing very affordable."

Seven of the top eight most affordable months, as measured by the National Association of Realtors' Housing Affordability Index, have taken place during 2009, he said. The NAR's index dates back to 1971.

"As a result, pending sales of existing homes rose for the sixth month in a row in July, a trend unseen since the NAR began reporting data in 2001. Moreover, July's sales were the strongest since June 2007," Mr. Nothaft said.

The NAR's pending-home-sales index rose 3.2% for the month and came in 12% higher than July 2008, the Washington-based trade group reported on Monday.
In a separate release Wednesday, the Mortgage Bankers Association reported that mortgage applications were down a seasonally adjusted 2.2% for the week of Aug. 28 compared with the prior week.

CIC Looks to Pile Cash Into U.S. Real Estate

China's $300 billion sovereign-wealth fund is eyeing big investments in distressed U.S. real estate, according to people familiar with the matter. To finance some of the deals, China may rely on an old trading partner: the U.S. government.
In recent weeks, officials from China Investment Corp. have held talks with U.S. private-equity fund managers, including BlackRock Inc., Invesco Ltd. and Lone Star Funds, about potential investments in beaten-down property assets, namely mortgage securities backed by office buildings, hotels, strip malls and other commercial property. CIC also is considering buying ownership interests in buildings, according to the people with knowledge