Though foreclosure statistics show that a large number of homes are still working their way through the system before they hit the real estate market, there is good news for homeowners facing foreclosure right now. Banks are willing to work with you on a loan modificaiton or short sale to avoid a foreclosure completely. However, if a homeowner has negative equity–as many in California do–there won’t be much help out there from your bank.

Allan Glass blogs about both the good and bad foreclosure news today:

“The good news in all of this is the apparent willingness banks are showing to attempt to work out foreclosure problems via loan modifications, or short sales.  If homeowners can’t find a solution to stay in their homes they may find an opportunity to minimize damage to their credit by avoiding a foreclosure via these means.  I would also expect that banks are preparing for bulk releases of residential assets, either defaulted loans or foreclosed assets in the coming months as prices continue to show signs of stabilizing, spreads between bank expectations and investor valuations decrease, and confidence is regained. The brown spot on the banana is the growing backlog of problem assets.  As the summer buying season winds down and banks look to right their balance sheets at year’s end, we could see increases in supply and dramatic decreases in demand.  for those of you who skipped economics 101, this is bad for value.”

Glass explains that, according to Foreclosureradar.com, more than 72 percent of foreclosure sales last month were actually delayed either through the lender directly, or due to a direct request from the borrower and lender. Additionally, he writes that a small percentage–10 percent– of foreclosure sales were put off due to filing bankruptcy, which is a more traditional tactic when a borrower is trying to postpone a foreclosure. These statistics are positive for homeowners, who may be exploring options if they are potentially facing a foreclosure.

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The line for homeowners in need of refinancing continues to get longer. As mortgage rates adjust and home values fall,  homeowners are trying to find alternatives to losing their home. Those that are able to beat the odds and modify their loan feel like they have just been through a frustrating ordeal that they thought would never end. But when it is over, the payoff is well worth the effort with reduced payments and new-found security.

Emily Lopez continues her loan modification story with some final words of wisdom:

“It has been a while since I posted any update to my story, but I felt I should write today as I am winding down (I hope) to a final conclusion. Last week I received a packet in the mail from CitiMortgage. Inside were yet another set of documents for my loan modification. What made me the happiest is that it is finally in the context I requested. This is not a modification program put in place by the Obama Administration a.k.a Home Owners Assistance Program, which is only a 90-day fix, but an actual loan modification that will remain permanent until I sell my home. My payments have been reduced by 30 percent and it has been extended out for 40 years. That is all I wanted and six months later, it is what sits in front of me ready to sign and deliver.”

Lopez’s persistence can be an example for all homeowners who are working towards a loan modification. Even though she feels she has learned a valuable lesson about how strong she can be if needed, the whole ordeal has been nothing short of a nightmare. Lopez advises all who are going through the same process to not give up!

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In today’s tough market, even well-priced homes are staying listed for months. Desperate sellers continue to lower prices, but with no success. Even with affordability at an all-time high, buyers are hesitant due to the instability of the overall economy. For those who are willing to buy, getting approved for a loan can be another roadblock to overcome. It’s times like these where inventive and highly-risky options are ready to be considered.

Jonathan Osman explains why owner financing can be a win-win situation:

“Essentially, in owner financing, you, the seller, are acting as the bank for the buyer. They qualify based on your criteria, pay you a mortgage every month, and they own the house. Much like the bank, if they are late on a mortgage payment, you can foreclose based on the terms of the mortgage and when they sell it, they will pay you the balance. While it is risky and isn’t for everyone, it can be extremely profitable and an excellent source of income through the interest paid on the loan. Most people never consider why a bank would ever consider lending money to someone who couldn’t pay it back. However, all one needs to do is to pull up an amortization chart to realize the profit involved in mortgages.  or an example, take a $200,000 mortgage at a 5.5 percent interest rate. In the first year, the buyer has paid the seller $10,932.72 in interest and only $2694.20 in principal.”

Prospective buyers are not qualifying for loans for a variety of reasons, most of which are the result of the recent tightening of the lending guidelines. If a seller needs to sell a property and is not risk averse, owner financing may be a way for the both properties to come out ahead.

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Mortgage interest rates rose for the the third time in just four weeks. The rise should set off alarm bells for prospective buyers still unsure about entering the market. While home values are not expected to gain much ground in the near future, mortgage rates are much more volatile and will probably continue this incremental climb. Economists have attributed the rise in rates to positive economic news. As the rebound continues, the historically low rates are also sure to rise.

Ki Gray gives his take on changing mortgage interest rates:

“What is interesting is that the current (small) upward movement in mortgage rates might be the beginning of the rise that many in the financial industry have predicted. If the economy continues to rebound this could be the beginning of mortgage rates steadily moving up to 10 percent or higher. This is of course dependent on the continued movement of the U.S. economy out of the current recession. While the government has made some statements about curbing inflation, it seems more concerned with making sure the U.S. exits the recession. Of the  four major indexes, three moved up this week. The 30-year note rose from 5.22 to 5.29, the 15-year mortgage rose from 4.63 to 4.68 and the 5-year ARM rose from 4.73 to 4.75. The 1-year ARM fell from 4.78 to 4.72.”

The potential for buyers to get a good deal in Real Estate will exist as long as values stay low. But to get unprecedented savings, buyers will have to act fast. Not only are interest rates set to rise, but the $8,000 tax credit from the Fed is set to expire this coming December.

Click through to read Ki Gray’s full post.

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Mortgage interest rates rose for the the third time in just four weeks. The rise should set off alarm bells for prospective buyers still unsure about entering the market. While home values are not expected to gain much ground in the near future, mortgage rates are much more volatile and will probably continue this incremental climb. Economists have attributed the rise in rates to positive economic news. As the rebound continues, the historically low rates are also sure to rise.

Ki Gray gives his take on changing mortgage interest rates:

“What is interesting is that the current (small) upward movement in mortgage rates might be the beginning of the rise that many in the financial industry have predicted. If the economy continues to rebound this could be the beginning of mortgage rates steadily moving up to 10 percent or higher. This is of course dependent on the continued movement of the U.S. economy out of the current recession. While the government has made some statements about curbing inflation, it seems more concerned with making sure the U.S. exits the recession. Of the  four major indexes, three moved up this week. The 30-year note rose from 5.22 to 5.29, the 15-year mortgage rose from 4.63 to 4.68 and the 5-year ARM rose from 4.73 to 4.75. The 1-year ARM fell from 4.78 to 4.72.”

The potential for buyers to get a good deal in Real Estate will exist as long as values stay low. But to get unprecedented savings, buyers will have to act fast. Not only are interest rates set to rise, but the $8,000 tax credit from the Fed is set to expire this coming December.

Click through to read Ki Gray’s full post.

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Finding ways to save money is on everybody’s mind right now. Consumers are wary about spending at a time when economic growth has slowed to a halt. For buyers looking for a home, using a REALTOR® who can help navigate the short sale or foreclosure process is saving them money in the long run. Some sellers, however, try to sell on their own, hoping to save money on the commission. Does this strategy really pay off?

Lee Dworshak wonders if homeowners can really handle a for sale by owner (FSBO):

“FSBOs tell us the biggest problem they have is their homes suffer from a lack of exposure. Most of them paid several hundred dollars for a weekend classified ad in the daily paper. They also bought a “For Sale By Owner” yard sign. But unless the market was sizzling, few got any buyers through the door. Why? The fact is, most legitimate buyers work with real estate agents! And real estate agents research the Multiple Listings Service to find homes for the buyers. Unless you are using a real estate agent, you’re not in the Multiple Listing Service. This exposure alone is worth a lot of money. The other problem FSBOs have is the buyers who are not working with real estate agents are usually not the serious buyers. People who are ready to buy use agents because they don’t have to pay their agent a fee, and agents have the resources buyers need to get good homes at good prices. Unfortunately, most of the buyers that are left over are merely ‘tire kickers’ and ‘low-ballers.’”

The value a Realtor brings to a sale is commonly undervalued untill a homeowner tries to market, negotiate, and draw up papework by themselves. While it is understandable a seller would want to save money, it’s likely they will realize that by trying to save money in the short term, they have had to invest countless hours learning how to navigate a complicated process on their own.

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First-time buyers purchasing in desirable areas are choosing the low-maintenance lifestyle of condominiums. Condos let a buyer make a well-priced investment, while getting to take advantage of shared amenities like pools and gym rooms. In major cities where condo owners only use their condos for vacation or temporary business use, they can rent out the space to visitors. This arrangement is called a condotel– being one part condo, one part full service hotel. However, getting financing on a property like this can be tricky due to the uncommon usage.

Jeffrey Gilliam explains more about condotels:

“So what makes a condo-tel? Actually, any number of things. I have heard many times that a project is not a condo-tel because it doesn’t have an on-site rental desk. While an on-site rental desk would classify a project as a condo-tel the absence of one does not make it immune. (1) If they have a website that advertises rentals, it is a condo-tel. (2) If an owner is required to rent per the bylaws, it is a condo-tel. (3) If it has daily maid service, it is a condo-tel. So if a project doesn’t have any of these things, then it is okay with Fannie and Freddie and is fixed-rate financing available? Not necessarily. There is another classification we use for condominiums and this is the term ‘warrantable.’ Warrantable refers to whether it can be warranted as sellable to Fannie or Freddie meaning it meets their criteria for an acceptable condominium project. So what makes a condominium ‘non-warrantable’?”

A condotel is a perfect way for a condo owner to leverage the management of their property to bring in income when they are away. With all of the amenities luxury condos are being built with, they make the perfect location for a temporary stay. As Gilliam points out, the issues surrounding these properties make financing difficult. While there are banks willing to take the risk of financing a condotel, they are doing it with a slight premium to a 30-year fixed-rate mortgage.

Click through to read Jeffrey Gilliam’s full post.

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First-time buyers purchasing in desirable areas are choosing the low-maintenance lifestyle of condominiums. Condos let a buyer make a well-priced investment, while getting to take advantage of shared amenities like pools and gym rooms. In major cities where condo owners only use their condos for vacation or temporary business use, they can rent out the space to visitors. This arrangement is called a condotel– being one part condo, one part full service hotel. However, getting financing on a property like this can be tricky due to the uncommon usage.

Jeffrey Gilliam explains more about condotels:

“So what makes a condo-tel? Actually, any number of things. I have heard many times that a project is not a condo-tel because it doesn’t have an on-site rental desk. While an on-site rental desk would classify a project as a condo-tel the absence of one does not make it immune. (1) If they have a website that advertises rentals, it is a condo-tel. (2) If an owner is required to rent per the bylaws, it is a condo-tel. (3) If it has daily maid service, it is a condo-tel. So if a project doesn’t have any of these things, then it is okay with Fannie and Freddie and is fixed-rate financing available? Not necessarily. There is another classification we use for condominiums and this is the term ‘warrantable.’ Warrantable refers to whether it can be warranted as sellable to Fannie or Freddie meaning it meets their criteria for an acceptable condominium project. So what makes a condominium ‘non-warrantable’?”

A condotel is a perfect way for a condo owner to leverage the management of their property to bring in income when they are away. With all of the amenities luxury condos are being built with, they make the perfect location for a temporary stay. As Gilliam points out, the issues surrounding these properties make financing difficult. While there are banks willing to take the risk of financing a condotel, they are doing it with a slight premium to a 30-year fixed-rate mortgage.

Click through to read Jeffrey Gilliam’s full post.

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Despite signs of stabilization in the past months, the foreclosure numbers for July remind everyone that the housing market, and the economy as a whole, is still in recovery. The rise in foreclosures is not an anomaly. In fact, many analysat predicted July would see a rush of foreclosure listings as the government’s moratorium on foreclosures ended. While the moratorium undoubtedly helped some families who were in line for loan modifications, it only prolonged the inevitable for others. As in months past, the states with the highest foreclosures were California, Florida, and Nevada.

 Bob Phillips explains more about the concentration of foreclosures:

“Foreclosure tracker RealtyTrac reports that the number of foreclosures nationwide rose 7 percent on a month-to-month basis last month. However, three states dominated the foreclosure list, tallying more foreclosures between them than the rest of the country combined. California : 30.0 percent, Florida : 15.7 percent, and Arizona : 5.4 percent. On a per household basis, the states ranked 2, 3 and 4. Only Nevada’s foreclosure rate was higher. Now, we point out these statistics for two reasons. The first is to remind you that foreclosures can be highly local. For all of the foreclosure-related stories that run in the papers and on TV, defaults make a much larger impact on home values in some areas versus others. And, second — foreclosures can represent a terrific buying opportunity. Not every foreclosed home is in pristine condition, but there is a plethora of affordable housing out there, suitable for first-time buyer, move-up buyers and investors, too.”

Foreclosures continue to offer great opportunities in desirable areas that were once out of reach for first-time buyers. As long as lenders can keep up with loan applications and banks can process the REO sales, it is likely the increase in inventory will be only a temporary hurdle towards recovery.

Click through to read Bob Philips full blog.

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Despite signs of stabilization in the past months, the foreclosure numbers for July remind everyone that the housing market, and perhaps the economy as a whole, are still in recovering. The rise in foreclosures is not an anomaly. In fact, many analysat predicted July would see a rush of foreclosure listings as the government’s moratorium on foreclosures ended. While the moratorium undoubtedly helped some families who were in line for loan modifications, it only prolonged the inevitable for others. As in months past, the states with the highest foreclosures were California, Florida, and Nevada.

Bob Phillips explains more about the concentration of foreclosures:

“Foreclosure tracker RealtyTrac reports that the number of foreclosures nationwide rose 7 percent on a month-to-month basis last month. However, three states dominated the foreclosure list, tallying more foreclosures between them than the rest of the country combined. California : 30.0 percent, Florida : 15.7 percent, and Arizona : 5.4 percent. On a per household basis, the states ranked 2, 3 and 4. Only Nevada’s foreclosure rate was higher. Now, we point out these statistics for two reasons. The first is to remind you that foreclosures can be highly local. For all of the foreclosure-related stories that run in the papers and on TV, defaults make a much larger impact on home values in some areas versus others. And, second — foreclosures can represent a terrific buying opportunity. Not every foreclosed home is in pristine condition, but there is a plethora of affordable housing out there, suitable for first-time buyer, move-up buyers and investors, too.”

Foreclosures continue to offer great opportunities in desirable areas that were once out of reach for first-time buyers. As long as lenders can keep up with loan applications and banks can process the REO sales, it is likely the increase in inventory will be only a temporary hurdle towards recovery.

Click through to read Bob Philips full blog.

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