Real Estate News
August 10,2010
Bend Oregon
Oregon
Biggest home price increase projected in 2014: Bend metro
Forecast 4-year price increase: 33.6 percent
Current median price: $144,533*
Prices to reach trough in: 2011 Q1
Median family income: $58,200
Population: 158,630
The area around Bend area, in central Oregon's high desert by the Cascade Mountains, has the second-highest four-year growth forecast, 33.6 percent, after Bremerton-Silverdale, Wash. Bend draws home buyers and visitors with its wealth of outdoor recreational opportunities, but its prices have dropped about 40 percent since hitting a peak in late 2006. Fiserv and Moody's Economy.com now expect a rapid recovery starting next year. Greg Broderick, a real estate broker in Bend, says prices have overcorrected and buyers are seeing good value in the market. Homes priced the low hundred-thousand-dollar range “are being snapped up at a furious pace,” he says. Still, the area must deal with a higher-than-average unemployment rate, which the BLS says was 13.4 percent in June.
Why do we need Reverse Mortgages
August 31, 2009
Why do we need Reverse Mortgages ? I just found out, we need them for the couple I met about two months ago when I received a call from a lady that had just spent the last week studying all the information she could about Reverse Mortgages. It was like “Cash Cab” she would ask the questions and I would give her hopefully the correct answer which I was rewarded with knowledge credits. This couple asked all the right questions and really needed some help, they said they did not have gas money until the beginning of the month and would very much like to make an appointment to meet with me but could not until after they received their monthly check in about two weeks. I needed some time to compose myself as talking with them helped me realize that they didn’t have any excess funds to treat themselves to a burger and fries , something I took for granted.
Why do we need Reverse Mortgages? This couple as it turns out lived on a fixed income (Social Security) that was less than $1,000 per month and had a house payment in excess of $650…….and they were current on their payments. Like any of us I didn’t want them to have to wait or spend their gas on coming to me and made an appointment to visit them, it was a great day for me when I met them as they truly didn’t think there was a light at the end of their tunnel and they were hoping I would be that light. Little did they know they were my light in my tunnel, In today’s challenging market we all look forward to a new loan but this wasn’t just a new loan it was an experience, it felt like finding a waded up $100 bill in my favorite jeans but even better.
Why do we need Reverse Mortgages?, Yesterday was a GREAT DAY, they signed their doc’s on their Reverse Mortgage and next month they will get to keep their Social Security check and get an additional check from their Reverse Mortgage……Today they called to thank me for what I get paid to do and said yesterday on their way home they stopped for a burger and fries, but like I said this was not a new loan it was an experience, I look forward in taking them up on sharing a beer with them someday soon, I look forward to seeing them one of these days having a burger and fries, I look forward knowing that every month for the next 15 years they will be getting a direct deposit into their account. Dear Mr. and Mrs. P, thank you for helping me and I really look forward to the beer and burgers.
Why do we need Reverse Mortgages? I hope you find the answer to this as I have.
Standing Up for Reverse Mortgages & Honest Lenders
REVERSE MORTGAGES BEND Oregon
by DAN PENA Bend, Oregon
Reference CBN article Abuses Appear in Reverse Mortgage Market.
I have been a lender in Central Oregon for the last 20 years. I have worked with many borrowers over that time period from first time buyers to multimillion dollar buyers. I am older than most lenders now and have experienced just about everything,
I was not a subprime lender, but I know many borrowers who purchased more than what they could afford using subprime loans. Just as in anything you can find the bad apples, even in the publication business. I pride myself on being a good apple and have been the lender to some Central Oregonians for a Reverse Mortgage.
I agree with the article (in a recent Cascade Business News), there probably are some crooks out there but I want to stand up for the honest lender and the Reverse Mortgage product. What would you do if your only income was $1,000 a month from social security, you have owned your home for 12 years but little by little you can no longer earn supplemental income and your home is in need of repairs……you have no family members that can help you, you are only able to get a little assistance from help resources, you want to stay living in your home and even though you didn’t want to you tried to sell it last year and all you got were insulting offers? You probably can’t go to the bank and get a second mortgage just for repairing your home, BECAUSE SORRY YOU DON’T QUALIFY!
I was able to help that couple but only after meeting with them four or five times to make sure there were no other alternatives, they also were required to meet with a HUD Counselor before I could do anything that would cost them a penny. They had been paying $625 per month for their house payment and these people were current with their mortgage when I met them.
They struggled monthly and had very little money left after the 15th of the month. I am proud to have been their lender but I am more proud of them and how hard they worked to survive. They didn’t buy a house to flip with no money down, they didn’t refinance every two years and get cash out, they bought a home that they wanted to live in and enjoy the rest of their lives. This couple didn’t want to call me but they did, and they did get a Reverse Mortgage as that is what saved them and now they can live in their home for the rest of their lives.
Yes the loan was expensive but not because of the lenders fees, it has more to do with the fees FHA charged. I look forward to getting a call monthly from this couple and if I don’t hear from them I call them, yes I got paid for doing the loan (about $1,400) but that was nothing compared to the satisfaction I got from helping this couple.
I agree not all lenders are good lenders but I want to stand up for the ones that are good.
Dan Pena is a senior loan consultant and can be reached at 541-977-7944.
Best to buy before new FHA guidelines take effect
By Octavio Nuiry
Starting in early summer, the Federal Housing Administration is tightening lending standards in an effort to bolster its dwindling reserves. The new lending standards will make it tougher for some prospective buyers to purchase a home by requiring a higher down payment than the typical 3.5 percent for some borrowers, higher insurance premiums and reduced seller concessions.
Securing FHA-insured mortgages are attractive to borrowers because down payments are only 3.5 percent. Most conventional loans now require 20 percent down, keeping many creditworthy borrowers on the sidelines.
New Guidelines
The new rules — which are temporary and take effect this summer — come after more than a year of stringent standards from lenders. Among them:
- Better Credit Score — New borrowers will have to have a minimum credit score of 580 to qualify for a 3.5 percent down payment. Previously, there was no minimum score. Those with lower scores will have to make at least a 10 percent down payment. The average credit score of FHA-insured borrowers is 693.
- Higher Insurance Premiums — Buyers who get an FHA-insured loan will soon have to pay a higher initial insurance premium. The new premium will be 2.25 percent of the value of total loan amount, up from 1.75 percent now. A $100,000 mortgage would require a payment of $2,250, or $500 more. But buyers can roll the added cost into the loan amount.
- Reduction in Seller Concessions — Starting this summer, sellers will not be able to offer as much help to buyers to pay their closing costs. The maximum amount of assistance will drop to 3 percent of the value of the property, from the current 6 percent.
FHA removes anti-flipping rule
Another FHA rule change could help foreclosure-plagued markets like Las Vegas, Phoenix, Miami, Detroit and Los Angeles, making it easier for investors to “flip” houses to buyers who use FHA-insured loans.
Effective Feb. 1, the federal government will waive for one year an FHA anti-flipping rule that prohibits insuring a mortgage on a home owned by the seller for less than 90 days.
The new rule lets investors buy today and re-sell as quickly as possible. The move is to allow REO homes purchased by investors to resell as quickly as possible, helping stabilize real estate prices and revitalize neighborhoods after the U.S. housing market collapse.
This new rule will open up a new pool of homes to buyers. Waiving the 90-day flip rule is being heralded by many real estate investors as a boon to their ability to buy, rehab and resell foreclosed homes on a more efficient time line.
Federal program to streamline short sales in 2010
By Joel Cone
Like many of her colleagues, Chicago Realtor Carol Grobman has been wondering for a long time why the real estate community at large, and the federal government in particular, have not made a move toward relieving the prolonged short sale process that has been trying the patience of their sellers and buyers alike.
Since the real estate bubble burst back in 2007 many Realtors have been avoiding short sales altogether, either due to lack of training, or simply to avoid the hassle involved.
“Why are they taking six months to make a decision? By then the original buyer is gone. A lot of people can’t afford to wait because they have to move,” Grobman said.
Well, the federal government has finally answered back, adding another acronym to its list of government-sponsored programs. This one is called HAFA (it stands for Home Affordable Foreclosure Alternatives) and is part of the Home Affordable Modification Program (HAMP).
HAFA: The Government Response
Hoping to positively influence the nation’s housing market by shortening and simplifying the short-sale process, the Treasury Department released new guidelines for servicers late last year.
Under those directives, HAFA offers servicers and borrowers incentives for utilizing a short sale or a deed-in-lieu to avoid foreclosure on any loan that is eligible under the HAMP program thereby reducing the need for a potentially lengthy and expensive foreclosure process.
Key features of the program include:
- Sellers/borrowers can receive up to $1,500 for relocation expenses
- Lenders will receive $1,000 for each completed short sale
- Up to $1,000 for investors who allow up to $3,000 in short sale proceeds to be distributed to subordinate lien holders. Borrowers can receive pre-approved short sale terms prior to the property listing
- Borrowers are fully released from future liability for the debt
Shifting Short Sale Strategies
Both the popularity and thorniness of short sales are evidenced by the existence of Short Sale Pros, a San Diego Web-based company promoting itself as a solution for real estate professionals, investors and homeowners trying to navigate the short sale negotiation process.
“Homeowners are starting to realize that loan modifications aren’t as great as they thought they were going to be. From the loan modification end, if you can’t help with that then the short sale is the next logical thing,” said the company’s president, Michael Corradini.
As Corradini explained, negotiating short sales comes down to how a potential homebuyer, investor or real estate professional approaches the bank and presents the numbers. One tip he suggests when negotiating a short sale: show the bank the difference between your offer and an estimate of what they will net if the property goes to REO.
Fannie Mae adds new program “Deed For Lease”
Can’t pay the mortgage? You still might be able to stay in your home. Government-controlled mortgage company Fannie Mae is going to allow borrowers on the verge of foreclosure the option of renting their homes for a year.
Fannie Mae announced the program on Thursday and could give a temporary break to thousands of homeowners, but critics question whether it will only add to the mushrooming losses at the company, which has received billions in taxpayer money.
The new program is called the “Deed for Lease” program will allow homeowners to transfer title to Fannie Mae and sign a one-year lease, with potential month-to-month extensions after that. It also helps save money because the lender does not need to complete the often lengthy and time-consuming foreclosure process.
The “Deed For Lease” program helps “eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities,” Jay Ryan, a Fannie Mae vice president, said in a statement.
It also does less harm to the borrower’s credit record.
“It shows that you put your best effort to work out a solution,” said Gabe del Rio, director of homeownership at Community HousingWorks of San Diego.
However, Mike Himes, director of homeownership services at NeighborWorks Sacramento, said the industry should push harder to modify loans at lower monthly payments. “The preferred option is allowing people to retain ownership,” he said.
Fannie Mae executives said the rental program is designed to help delinquent homeowners who don’t qualify for a loan modification, but still want to stay in their homes.
To qualify, homeowners have to live in the home as the primary residence and prove that they can afford the market rent, which will be established by the management company running the program. Rents are based on current market rates.
The plan is expected to be particularly attractive in places like Phoenix or Orange County, Calif., where homeowners are stuck paying large mortgage bills on properties that are now worth far less than they originally paid. At the same time, rents have been falling in those areas. So by renting the same house, former homeowners could wind up paying far less every month.
In Orange County, for example, the average monthly rent for all apartments was about $1,450 in September, down nearly 8 percent from a year earlier, according to research firm MPF Research. In Phoenix, the average renter paid about $720, also down about 8 percent from last year.
Still, the effort is likely to attract a relatively small number of homeowners.
In the first nine months of the year, Fannie Mae took ownership of nearly 2,000 properties through a process known as a deed-in-lieu of foreclosure. That pales in comparison to the 90,000 foreclosed properties the company repossessed in the period.
Deed-in-lieu works like the new program, allowing homeowners to turn over title to Fannie Mae, but rather than renting, the owners simply walk away.
While Fannie Mae executives say the company’s motives are community-minded, critics say the company is simply gambling that the properties will eventually sell for a higher price. That’s folly, says Peter Schiff, president of Euro Pacific Capital in Darien, Conn., and a longtime bearish investor.
“Taxpayers are now going to own all these houses that (Fannie Mae) should have unloaded,” he said. “It’s going to cost a fortune.”
The announcement came as Fannie Mae asked for an additional $15 billion in government aid after posting another big loss in the third quarter. The mortgage finance company, seized by federal regulators in September 2008, posted a quarterly loss of $19.8 billion, including $883 million in dividends paid to the Treasury Department.
Pessimists like Schiff say the recent stability in the housing market is just temporary, and argue that there is a huge backlog of foreclosed homes that haven’t gone on the market. Refusing to sell those homes, they say, only prolongs the problem.
But other experts say that Fannie Mae’s new policy could make sense, even if prices don’t rebound quickly. The company will get rental income while avoiding costly foreclosure expenses.
It will also help to safeguard the homes, which are less likely to be vandalized when occupied.
“There are a whole lot of costs you avoid,” said Thomas Lawler, a former Fannie Mae economist. “You don’t necessarily have to believe that home prices a year from now will be higher than today.”
Fannie Mae’s sibling company, Freddie Mac, launched a similar effort in March. That policy, however, requires the foreclosure to be completed and only allows month-to-month leases. Freddie Mac declined to detail how many borrowers have participated.
The two companies purchase loans from banks and sell them to investors. Together, they own or guarantee almost 31 million home loans worth about $5.5 trillion, about half of all U.S. mortgages. They have been badly hurt by the housing bust and have required $111 billion in federal aid since being seized by government regulators 14 months ago.
This information has been provided by By ALAN ZIBEL, AP Real Estate Writer Alan Zibel, Ap Real Estate Writer – Thu Nov 5, 6:25 pm ET
Dan Pena OR License # NMLS-202226