Archive for June, 2009

Citi Halts Applications

by Justin Miller on June 24, 2009 in General News with No comments

That’s right, for about 8 days.  I received the communication on Monday evening and it sure didn’t mention the reasons for it that are stated below.

“Citigroup Inc. has halted mortgage applications at a unit that accounted for half the company’s residential loans last year after a review found that some appraisals and income-verification documents were missing, Bloomberg reported Wednesday. The report cited a Citi letter to clients saying the division ceased taking new loans on Tuesday and will restart in early July. Citi will use the period to change procedures and fix the omissions, Bloomberg reported.”

http://www.marketwatch.com/story/citi-unit-suspends-mortgage-applications-report?siteid=rss 

Some Homeowners Beg For Foreclosure

by Justin Miller on June 24, 2009 in Bailout, Foreclosure, General News with No comments

Unfortunately this is the reality of the current housing crisis.  But at the same time, if there is a huge backlog why don’t the banks hire more people especially during times of high unemployment?  Also, the banks are turning these foreclosures over to the same real estate agents and title companies who can’t keep up with the volume of deals coming across their desk.   There are many people in the real estate world that are starving and are good at what they do.  The banks need to start spreading their foreclosures to others.  I heard a story of one law firm in South Florida that has 32,000 foreclosures from Wells Fargo that they haven’t even touched.  I can’t even imagine 320 foreclosures to work on. 

“A growing number of American homeowners are falling into financial limbo: They’re badly behind on payments, but their banks have not yet foreclosed.  “I have even begged them for a foreclosure,” delinquent mortgage-holder Charlotte Jensen said. When she realized she couldn’t save her Glen Allen home last year, she filed for bankruptcy, packed up her family and moved out. Nearly a year later, Bank of America has yet to take back the home.”

http://www.msnbc.msn.com/id/31516049/ns/business-washington_post/ 

Condominiums And Barney Frank

by Justin Miller on June 24, 2009 in Conventional Loans, FHA Loans, General News with 1 Comment

Barney Frank is trying to get Fannie Mae and Freddie Mac to be more lenient on condos.  And although this article brings up the fact that he is the same person who may have contributed to the housing meltdown (along with many others) I feel as though he is right on this one.  The current guidelines are so strict right now on condos that it is causing prices to drop even more than they should have.  That is because if you cannot get financing in a condo project the only way to buy a unit in the building is cash at blow out prices, way below market value.  We are especially feeling this in Broward and Miami-Dade Counties. 

“Back when the housing mania was taking off, Massachusetts Congressman Barney Frank famously said he wanted Fannie Mae and Freddie Mac to “roll the dice” in the name of affordable housing. That didn’t turn out so well, but Mr. Frank has since only accumulated more power. And now he is returning to the scene of the calamity — with your money. He and New York Representative Anthony Weiner have sent a letter to the heads of Fannie and Freddie exhorting them to lower lending standards for condo buyers.

You read that right. After two years of telling us how lax lending standards drove up the market and led to loans that should never have been made, Mr. Frank wants Fannie and Freddie to take more risk in condo developments with high percentages of unsold units, high delinquency rates or high concentrations of ownership within the development.”

http://online.wsj.com/article/SB124580784452945093.html 

Appraisals Holding Up Home Sales

by Justin Miller on June 23, 2009 in Appraised Values, Conventional Loans, FHA Loans, Guideline Changes with 1 Comment

As I have mentioned before the new appraisal process is creating chaos.  Luckily I am with bank in a depreciating market here in South Florida and we have our own list of appraisers that we have had relationships with.  Others aren’t as luck since they have to order through the Appraisal Management Companies which I have been told the banks have an ownership interest in 80% of these companies.  Again, this is what I am told so take it with a grain of salt however it is probably accurate. 

“In the past month, we have suddenly been bombarded with many stories of, at the last moment, transactions falling apart because appraisals are coming in unrealistically low,” said National Association of Realtors Chief Economist Lawrence Yun. “As a result it opens up a new round of negotiations between a buyer and a seller or in many cases the buyer just steps away.”

http://www.cnbc.com/id/31509964

Neighborhood Stabilization Program

by Justin Miller on June 23, 2009 in Bailout, Foreclosure, General News with No comments

I want to get excited when I read this article however it seems everything that the government comes out with never seems to do what it is supposed to do.

“The feds made nearly $6 billion available for the Neighborhood Stabilization Program, which is designed is to combat blight by diminishing the number of foreclosed homes on the market. The NSP was designed to help deal with all the properties in foreclosure around the nation,” said Antonio Reilly, executive director of the Wisconsin Housing and Economic Development Authority (WHEDA), which will administrate the program in several counties in the state.”

http://money.cnn.com/2009/06/23/real_estate/money_for_foreclosures/index.htm?section=money_realestate

A Housing Prediction

by Justin Miller on June 22, 2009 in General News with No comments

This is a very interesting article. 

 

“There will be 5 million more echo boomers than there were boomers when they first started swelling housing markets,” said Eric Belsky, executive director of the Joint Center.

As a result, household growth during the next 10 years should range between 12.5 million and 14.8 million, according to the report. All those new households mean demand for many new housing units.

“This is a powerful, powerful underpinning of future demand,” said Belsky.

http://money.cnn.com/2009/06/21/real_estate/Harvard_state_of_housing/index.htm?section=money_realestate 

Real Estate Vultures Are Out

by Justin Miller on June 22, 2009 in Commercial Real Estate, Conventional Loans, FHA Loans, Foreclosure, General News, Jumbo Mortgages with No comments

We are seeing this here in South Florida.  Some homes have had up to 40 offers on a home.  There are bidding wars going on with foreclosed homes.  There is no low balling anymore and good luck getting a seller to pay for closing costs.  At least we have the $8,000 tax credit to help those cash strapped borrowers. 

http://money.cnn.com/2009/06/19/real_estate/reits_bargains_commercial_properties.fortune/index.htm?section=money_realestate

Interest Rate Update

by Justin Miller on June 19, 2009 in Conventional Loans, FHA Loans, Interest Rates, Jumbo Mortgages, Refinance with No comments

This is a great article and although no one knows what rates will do exactly I feel they are on the right track.  The most important part is this:

“Get started on paperwork. Once you’ve found the mortgage professional you’d like to work with, get started on the necessary paperwork, said Dan Green, loan officer with Mobium Mortgage in Cincinnati and author of TheMortgageReports.com. Rates move regularly, and if paperwork has been started your file can be processed more quickly when rates hit a low. When you start the application process, your credit score will be pulled and you’ll need to submit support documentation including W-2 forms and pay stubs. You might be asked for updated documents nearer to closing. “

http://www.marketwatch.com/story/get-ready-to-pounce-on-lower-mortgage-rates?siteid=rss 

Buying A Condo

by Justin Miller on June 18, 2009 in Conventional Loans, FHA Loans, General News with No comments

This article hits it right on the nose about buying a condo especially here in South Florida. 

 

“Potential condominium buyers are facing a tough choice right now: new or used?

There are deals to be had on new condos, as developers heavily discount units to move inventory. But getting a mortgage is tough. Fannie Mae and Freddie Mac, the government-controlled mortgage companies, have put in place even tighter guidelines for making condo mortgages. That’s leading some developers to seek FHA approval for their buildings, as Wednesday’s WSJ story explains.

Used condos have their own financing issues. As some condo owners fall behind on mortgage payments, they’re also missing payments for condo association dues, which pushes more buildings to make up that debt by passing hefty special assessments on residents. Fannie Mae doesn’t purchase mortgages in buildings where more than 15% of owners are 30 days or more late on paying their condo dues. That means some owners can’t refinance or sell their units because their neighbors aren’t paying.”

http://blogs.wsj.com/developments/2009/06/18/anyone-want-to-buy-a-condo-anyone/ 

Condo’s Take On Lenders

by Justin Miller on June 18, 2009 in Conventional Loans, General News with No comments

This should come as no surprise but condo Boards are going after past due condo dues. 

“As more condominium owners default on home loans, the amount of unpaid dues owed to condo associations is piling up. To collect the arrears, some condo boards have begun foreclosures on units already seized by banks.  Banks that hold or service mortgages on which homeowners have defaulted don’t owe condo dues until the bank takes title of a property. In Florida, where judges must rule on foreclosures, it can take 18 months or longer from the time a homeowner stops making mortgage payments.”

http://online.wsj.com/article/SB124528355409825583.html 

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