Loan Modification-Foreclosure

The administration is at it again, Treasury granting almost unlimited credit access to FannieMae and FreddieMac, presumably because they have demonstrated an uncanny ability to mismanage the assets under their management. While this is bad news for taxpayers, since this credit line is directly added to the national debt, for those in trouble with their mortgage, this money will likely be used to fund a new program to help forestall foreclosures. Called the Home Affordable Foreclosure Alternative Program, (HAFA), it's scheduled to become effective April 5, 2010, although some lenders may implement it earlier. If you are troubled in any way with your mortgage you should read this article, linked here.
We're in the process of putting together a small booklet dealing with mortgage issues which should be available soon. We intend to SELL the booklet for about $10, little enough to learn something as important as handling the trauma of default and the threat of foreclosure. Too many sites offer services for some pretty hefty fees, walking away from foreclosure, loan modification, etc., and we thought it would be good for people to have an informational booklet to help them make informed decisions, absent the pressure of someone trying to sell something.
We'll try to keep the buyers updated as events change. We're not even printed yet and already the site liked above has been added and the news was just released 12/01/2009.
Anyway. 2009 is winding to a close and we have an administration and Congress seemingly determined to bankrupt the economy. We hear the expression "spending like a drunken sailor", usually quickly followed by someone noting that the sailor is at least spending his own money. The tone deaf among the politicians are likely to be among the unemployed soon, and even though unemployment figures are high, another 500 or so won't hurt anything. Wouldn't it be nice if even failing to throw the rascals out we could find some way to keep them home for six months or so?
Real estate is still in the tank, foreclosures are high and going higher, and too many of recorded existing home sales are comprised of distress sales. Interest rates are low, loans are tough to get, almost 95% of loans are government guarantee programs, and that is not going to change anytime soon. Banks can borrow for almost 0% interest and can loan to the government for 2-3% risk free. Why would they take on risky real estate mortgages? Well that's pretty easy to answer.
Even if your mortgage is not a problem you'll likely find the above link entertaining. This will have an impact on the value of your home, and on your taxes.
Very best wishes for a successful and healthy new year.
As usual, thanks for visiting.

Foreclosures-Glenn-Butte-Tehama

Every little bit of positive news receives gushing comments from the media, "home prices advance .3%", "unemployment applications decline by 35,000", etc., and that's all to the good, but like a magician distracting with one hand while the other is busy with the actual ''trick", this news distracts from the activities of Washington and Wall Street in the background. Taxes are going up, every conceivable excuse is being advanced for this fact, and no one remembers the solemn promises not to allow this to happen, but all of us common sense folks have known all along that the monster debt of health care, cap and trade, stimulus, bail-outs and so on were going to require some repayment strategy, and printing more money is not a viable option. Meanwhile the hedge fun folks have found a new way to cash in again on the toxic debt they created in the mortgage markets. They are buying up bad mortgage debt for 40 cents on the dollar, taking advantage of FHA and other programs to re-write some portion of the mortgages to make them acceptable, and selling them to the government. Anything they sell over 40% is instant profit, and the taxpayer is on the hook for the new product, and the loose standards of FHA are a sure indicator of future problems. The twin vices of arrogance and greed driving Washington and Wall Street are almost unstoppable, and certainly will remain so while the bulk of us accept such actions as purchasing Louisiana for $300,000,000 in exchange for a health care reform vote as appropriate political behavior.
Foreclosures in Glenn, Butte, and Tehama counties now number 485, notices of default and scheduled auctions total 1530. That is a significant number of distressed families. Nationally over 25% of home owners are "underwater" (owe more than the home value), and millions are delinquent 30 days or more, but not yet in default. So long as Washington continues to increase debt, increase taxes, and fails to take responsible action for job creation the situation will only worsen. Small business is the job creation engine of our economy, yet every move of Washington is punitive for small business. For all business for that matter.
For those facing mortgage problems, call us for answers. If we can help, we will, and if not we'll point you to where help is available. We really are all in this together. For those "underwater" go here for an excellent article written by Brent T. White, a law professor at the University of Arizona. When the site comes up click "Download" then"SSRN"
As usual,
Thanks for visiting

Mortgage Upside Down?

As brokers we're seriously constrained in our ability to offer advice or suggestions as to how to handle burdensome mortgage payments, a mortgage balance exceeding the home value, the appropriateness of a "short sale" or "deed in lieu". Not because we don't know the answers, but because we don't want to wind up in court and lose our license for "practising law without a license". So! Our mission is to offer as much help as possible in all areas of real estate; sales, purchase, finance, and general guidance, removing as much fear as possible and saving as much money as possible for our friends and clients. That's why our web site is so rich in information, Free credit reports, home valuation data bases, MLS listings, mortgage information. For the growing problem of people being "underwater" in their mortgages we have added a link to an article written by Brent T. White, a law professor at the University of Arizona. You will find it exhaustive in detail and certainly adequate to allow you some intelligent decision making. We believe that information and knowledge provide power. You're entitled. The link is HERE
Just click "Download" and then "SSRN"
Hope this is helpful to you.
As usual,
thanks for visiting

Foreclosures and interest rates

Foreclosure rates continue to climb, interest rates continue to remain low. For the few people with some money and the security of a good job this represents opportunity, although with some level of caution since housing prices continue to decline also. What to do? If you buy something there is the risk that the "something", whether stock, real estate, or anything else will decline in value. If you don't buy anything there is the absolute certainty that the value of your dollars is going to shrink. Helps explain the rise in gold prices. Each little bit of news that seems to offer some reassurance is touted as a return to normalcy, by government types and financial gurus alike, but until the administration and the Congress reverse their policies of increasing debt burden and the tax load on business, nothing is going to improve. Until government gets out of the way of free market forces nothing is going to improve. No sane businessman is going to invest his money in expansion or the hiring of people unless and until there is some certainty the government is not going to intrude further on their activities.
In the home mortgage market, the holders of mortgage paper are faced with the uncertainty of future government actions and so don't know for sure whether to keep loans on their books as under-performing, or foreclose for a certain loss. The bad loans made during the ridiculous sub-prime fiasco are being joined by a whole bunch of new underwriting errors through the auspices of FHA mistakes, and because of the economic downturn and unemployment increases, an increasing number of "A" paper loans are also going sour.
On the subject of FHA, even after the disaster of " no money down" financing for people with damaged credit pushed by FannieMae and FreddieMac (Frank and Dodd), along comes the FHA offering home loans to people with FICO scores in the 500's with as little as 3% down, and with some "wiggle room" even for the 3%. The last two years have produced enough bad loans that the delinquency rate is approximately 25% already, and surely with more and worse to come. This sort of government tampering with market forces creates another level of uncertainty as to the value of homes. How many more homes are going to come on the market under distress circumstances? How do you know how to value your home? How do you know how to value a potential purchase? Until some sanity arrives in Washington we are all like a feather in the wind. Debt in the trillions already and an insatiable appetite for more. Health care reform, cap and trade, bail-outs, stimulus, and who knows what else. No centrally planned economy has ever been successful, and never will be. The lessons that should have been learned from the past have already been forgotten, or worse still, ignored. It would be easier to train a chimpanzee to sing opera than to teach a politician the fundamentals of business. When people with zero experience run for public office we should ignore them, not elect them. How's that "hope and change" working out for you? The "change" is killing me, and I "hope" it stops soon.
As usual,
Thanks for visiting.

Banks, Bucks, and Bungling

Here we are with 115 banks closed down by FDIC. Kind of shakes your faith in the intelligence and integrity of people we had come to regard as caretakers of our deposits. CIT which benefited from a substantial infusion of taxpayer cash by their friends in government are now poised to file bankruptcy which promises to cost the said taxpayers over two BILLION dollars. The same friends in government who are currently pointing to the "success" of the stimulus in creating and/or saving jobs in the face of figures that dispute their claims and a jobless rate that continues to climb and pure number of unemployed that continues to rise. We can be sure that the bad news is going to continue so long as the concept of spending our way out of the economic mess with borrowed dollars continues. Only job growth will solve our problems, only a reduction in taxes on the job providers will permit job growth. Moving in the opposite direction the administration and congress are pushing hard to increase the tax burden and the debt with an ill-conceived health care overhaul, to "transform" a system which is the envy of the world. To be sure some reform is needed, but incremental and targeted, not radical and authoritarian. Competition across state lines by the approximately 1300 insurance companies would drop rates significantly. Tort reform would reduce the costs of defensive medicine. A THOROUGH attack on fraud in existing government programs by vendors, (FREE SCOOTERS), providers, (hospitals, etc.) Texas runs a tight ship and provides a model that works. Massachusetts and Tennessee provide models that don't, as do England, Canada, and other socialized schemes.
Free markets made us the greatest society in the history of man. Kind of silly to abandon a winning strategy to satisfy the power hunger and egos of a bunch of incompetents who have never run so much as a news stand.

As usual
Thanks for visiting

Real Estate/Mortgages/Politics

Home values are up, or down, depending on what paper you read, or what government purpose needs to be served. Money is more/less available for financing with the same caveat. The administration in Washington/Sacramento/(your city here), is the finest the world has ever seen or headed for absolute disaster. For most of us, the pulse that we keep our fingers on, and most pay attention to, is our own. For most of us that pulse is weak and at best erratic, and therefor troubling. Those we elected to provide leadership would apparently have trouble organizing a one car parade, and couldn't track an elephant in two feet of snow, and yet they persist. For the careful planner viewing the probable outcome of our mounting national debt, a study of the Chinese language might provide some gainful employment in the near future. Next best might be a study of survival skills in the wild.
Enough with that. For those with credit still intact we can provide financing in this tightening market at very desirable rates and terms. Tougher than it used to be for sure, but possible. Commercial financing, largely reported as dead, is readily available, and none to soon for those with balloon payments coming up in 2010. Agricultural financing, both real property and receivable financing is available. For those who want to convert a stock portfolio to useful cash, at very low interest rates, we have a solution. And for those for whom a loan modification may be the only salvation, we can provide no up-front fee assistance. Our work is significantly more difficult now than in the past, but the rewards of successful completion, the psychological rewards that is, are also greater. Home sales are slow and prices are driven by the foreclosure and distress sale markets so it's not a good time to be looking for a generous buyer. For the buyer it's a good time if there is some intent to keep the home for a substantial period. There are some good bargains out there, but no way to know if the bargain may be better in the future. Personal circumstances must drive the decision process. Advice from someone who believes they're able to read the market is less than worthless. About on a par with buying a tip sheet on the horse races. We hope you'll let us help with your decision process or your financial needs.

As usual,
thanks for visiting

Foreclosure update

Just in case anyone thinks the situation is improving, here are some of the facts. In Butte, Glenn and Tehama Counties there are currently 436 foreclosed properties. Thee are 1541 properties with default notices filed, including those with auction dates set. That's a lot of personal tragedy, a lot of economic disruption, and certainly a tremendous influence on housing prices. The government continues to intervene by bailing out banks, shoring up mortgage debtors, tinkering with interest, and generally slowing down the process of returning the markets to normalcy. What should have been a short surgical failure for those institutions and individuals that gambled and lost has become instead a drawn out affair while the world waits to see which of the culprits will be rewarded by the power players, and which "allowed to fail". The economy, and all of us, can only twist in the wind for just so long. Despite the occasional blip in housing prices, or the report of a slight decline month over month in foreclosures, the trend for values is down and the trend for foreclosures is up. We must deal with it and hope that some sanity will appear in Washington, an unlikely prospect with this administration and Congress.
If there is a bright spot it is for the prudent and still employed among us who are in a position to take advantage of the very low interest rates available. There are a large number of adjustable mortgages due for reset in the near future and this is a great opportunity to get into a fixed rate program. When the lid is removed the expectation is that rates will move up fairly sharply, and while not a certainty, it would be silly to bet against it. For buyers intending to keep their home for a substantial period it's probably a pretty good time to consider buying. There are some attractive bargains out there, and even though prices will possibly decline further, the attractive interest rates are not likely to be repeated any time soon. My crystal ball is imperfect, but those are my thoughts.
Naturally we'd like to be the agent to help in any of the above activities, buying, financing, refinancing.
As usual
Thanks for visiting.