FHA Orders Foreclosure Halt for Sandy Victims

FHA Orders Foreclosure Halt for Sandy Victims

The FHA (Federal Housing Administration) has ordered a 90-day temporary suspension of foreclosures in areas affected by Hurricane Sandy last week, the U.S. Housing and Urban Development announced Monday.

“I directed all FHA lenders to impose a moratorium on any foreclosures for 90 days in disaster-affected areas,” Shaun Donovan, HUD secretary, told reporters. “We don’t want families to be victimized twice — once by the storm and once by a foreclosure.”

Following the storm last week that ravaged the East Coast, mortgage giants Fannie Mae and Freddie Mac also announced mortgage relief for Sandy victims. Sandy victims with Fannie- or Freddie-backed loans might also qualify for temporary forbearance on their mortgages, possibly even up to a year.

Source: “US Orders 90-day Suspension of FHA Foreclosures in Disaster Areas,” Reuters (Nov. 5, 2012)

Extend Mortgage Cancellation Tax Relief.

Extend Mortgage Cancellation Tax Relief

The National Association of REALTORS® sent out a call to action to its million-plus members this weekend, urging them to support an extension of tax relief on mortgage forgiveness.

Under federal law, cancelled debt is generally considered taxable income. Since 2007, however, the Mortgage Forgiveness Debt Relief Act has exempted home owners from paying taxes on the amount of money their mortgage lender forgives as a result of a loan modification, short sale, or foreclosure. The act is due to expire at the end of the year, but the bill would extend the relief through 2014.

“Over a quarter of all transactions still involve distressed properties. That is why you must take action now,” the association said in an e-mail sent Sunday. “Homeowners shouldn’t be forced to pay a tax on money they’ve already lost with cash they never received.”

The organization asked its members to contact their elected representatives and tell them to complete their “unfinished business” after the election. Legislation aimed at extending the act has been introduced in both houses of Congress with bipartisan support in all cases. Senate Bill 2250 has 19 co-sponsors and awaits action in the Finance Committee. In the House Committee on Ways and Means, House Resolutions 4202 and 4336 are identical versions of the Senate legislation, and have 47 and 34 co-sponsors, respectively.

“It’s enormously important that we support this legislation,” NAR President Moe Veissi said in a video to members. “This is a vital, important message not just for our community of REALTORS®, but for the American consumer.”

Foreclosed Home Owners Rebound Faster With FHA Loans.

Foreclosed Home Owners Rebound Faster With FHA Loans

Home owners who experienced foreclosures are finding themselves owning again sometimes only three years later—possibly even less—with FHA loans.

Mortgage giants Fannie Mae and Freddie Mac usually require a seven-year wait following a foreclosure. However, FHA loans will approve loans after three years, if the borrower can show good credit and ability to pay the mortgage.

The FHA insures loans with low down payments, such as 3.5 percent, and tends to have greater flexibility with income requirements too.

“There’s definitely a movement of folks who had a foreclosure to re-emerge and re-engage in the market,” says Dustin Hobbs with the California Mortgage Bankers Association.

According to FHA loans guidelines, the agency will insure loans of a home owner who once faced foreclosure as long as the home owner can document circumstances beyond the borrower’s control that led to the foreclosure, such as a serious illness or death of a spouse. FHA notes that divorce or the inability to sell a home because of a job relocation don’t constitute such extenuating circumstances.

Source: “FHA Home Owners Recover From Foreclosures More Quickly,” RISMedia (Nov. 4, 2012

Homes Are Selling Faster as Inventories Fall.

Homes Are Selling Faster as Inventories Fall

The median time a home is on the market nationwide? Just 69 days.

The number of days on the market nationwide has fallen nearly 30 percent from year-ago levels.

Meanwhile, inventory levels are hovering at all-time lows, with the number of homes for-sale down 31.2 percent from a year ago. The inventory is at a 6.4-month supply of homes on the market, as of July data.

“As inventory has tightened, homes have been selling more quickly,” says Lawrence Yun, the National Association of REALTORS®’ chief economist. “A notable shortening of time on market began this spring, and this has created a general balance between home buyers and sellers in much of the country. This equilibrium is supporting sustained price growth, and homes that are correctly priced tend to sell quickly, while those that aren’t often languish on the market.”

For comparison, the time on the market for non-distressed homes peaked at 10 weeks in 2009. During the housing boom between 2004 and 2005, for example, the median selling time was just four weeks.

Source: “Low Inventory Levels Sells Homes Quick,” Realty Times (Nov. 2, 2012)

Home Ownership Rate to Rise Soon?

Home Ownership Rate to Rise Soon?

Another sign economic recovery: The home ownership rate is no longer falling. It remained unchanged from the previous quarter, standing at 65.5 percent in the third quarter, the Commerce Department reported this week. A year ago, the home ownership rate stood at 66.3 percent.

The home ownership rate is still far from its 70 percent peak during the housing boom. The rate started to drop soon after as the number of foreclosures began to soar, yet foreclosures are starting to slow.

The Commerce Department reported Tuesday that the home ownership rate vacancy rate dropped to 1.9 percent in the third quarter — the lowest rate recorded.

“Some industry watchers expect the home ownership rate to increase again as consumers take advantage of depressed housing prices — down by a third or more nationwide — and interest rates that have made owning a home cheaper than renting in many markets,” The Wall Street Journal reports.

Source: “Scared Americans Still Skipping Home Ownership,” The Wall Street Journal (Oct. 31, 2012)

Foreclosures on homes Make Less of a Dent in Market.

Foreclosures on homes Make Less of a Dent in Market

Foreclosures continue to fall as the number of short sales inch up, according to CoreLogic’s National Foreclosure Report for September.

“The continuing downward trend in foreclosures along with a gradual clearing of the shadow inventory are signs of stabilization and improvement in the housing market,” says Anand Nallathambi, president and CEO of CoreLogic. “Increasingly improving market conditions and industry and government policy are allowing distressed home owners to pursue refinancing, loan modifications, or short sales rather than foreclosures.”

CoreLogic reports that 57,000 foreclosures were completed in September, down from 83,000 in September 2011. Still, from 2000 and 2006, foreclosures for a more balanced market averaged about 21,000 per month — so today’s numbers still remain elevated.

Homes lost to foreclosure in September are down about 50 percent since peaking September 2010. Foreclosures are also down 22 percent compared to the beginning of the year, says Mark Fleming, CoreLogic’s chief economist.

“While there is significant progress to be made before returning to pre-crisis levels, the trend is in the right direction as short sales, up 27 percent year over year in August, continue to gain popularity,” Fleming notes.

The five states with the highest number of completed foreclosures for the 12 months ending in September (and accounting for nearly 48 percent of all completed foreclosures nationally) were:

• California (108,000)
• Florida (92,000)
• Texas (59,000)
• Georgia (55,000)
• Michigan (51,000)

Meanwhile, the states with the lowest number of foreclosures in the past year are South Dakota, District of Columbia, Hawaii, North Dakota, and Maine.

Source: CoreLogic

Freddie Mac & Fannie Mae Offer Mortgage Aid to Sandy Victims

Freddie Mac & Fannie Mae Offer Mortgage Aid to Sandy Victims

Borrowers with Freddie Mac or Fannie Mae-backed loans who suffered damage to their homes by Hurricane Sandy may qualify for temporary forbearance on their mortgages.

Affected home owners with Freddie Mac-backed loans may be eligible for forbearance for up to a year on their mortgage. These home owners also may be eligible to have a foreclosure or eviction suspended for up to a year or have penalties or late fees waived on their mortgage. Home owners must live in the zones classified by President Obama as major disaster sites in order to qualify.

Home owners with Fannie Mae-backed loans may be eligible for forbearance for up to 90 days. After that, a home owner’s individual situation could be evaluated to see if additional forbearance would be helpful, HousingWire reports.

Source: “Fannie Mae, Freddie Mac Offer Mortgage Relief After Sandy,” HousingWire (Oct. 30, 2012)