Inked Home Sales Continue To Increase

Multiple home price indexes have revealed a welcome uptick in property values in recent weeks. Following suit, pending home sales are up for the fifth consecutive month, the first time in six years for such a streak.

According to a report released by the National Association of Realtors (NAR) this week, expected home sales are up 3.6 percent. This projection is based on contracts signed in June, keeping in mind that it can take as long as two months to close on a home after signing a contract.

On a regional basis, homebuyers in the South appear to be getting back into the game the quickest – the Pending Sales Index there jumped 7.1 percent in June. In the West, the index rose 2.9 percent. In the Northeast, it gained 0.4 percent, and in Midwest part of the country, pending sales are up 0.8 percent.

Lawrence Yun, NAR’s chief economist, credits a combination of positive market factors for fueling the gains. “Historically-low mortgage interest rates, affordable home prices, and large selection are encouraging buyers who’ve been on the sidelines. Activity has been consistently much stronger for lower priced homes,” Yun explained.

“A monthly rise in home prices and somewhat higher mortgage interest rates led to a modest decline in affordability in June, but it was still the sixth highest index on record, dating back to 1970,” Yun explained. “Because housing is so affordable in today’s market, job security and the first-time buyer tax credit are bigger factors in influencing home sales.”

With the window for the $8,000 federal tax credit shrinking, first-time buyers will need to act quickly to take advantage. Taking into account the lag time between contract signing and closing, first-time homebuyers have until November 30 to finalize the deal in order to get the refund.

Yun says he expects existing-home sales to gradually rise over the balance of the year, with conditions varying around the country. “It appears home sales are on a sounder footing and inventory is gradually being absorbed,” he added.

source: DS News

Why Are Home Mortgage Modifications Moving So Slow? A Glance at the Red Tape and Reasoning

If servicers appear to be failing in their implementation of the Obama administration's loan-modification program, it may be for good reason: Reunderwriting hundreds of thousands of borrowers who got low- or no-documentation mortgages just takes time.

Some say that's not a bad thing, as the extra verification steps this go-round will only help the mods to stick, reducing fraud along the way. "This is all about putting evidence together to support or deny a loan. We have to stop making bad loans and we can't make 'no-doc, low-doc' mods," said Jay Meadows, the chief executive of Rapid Reporting Verification Co. LP, of Fort Worth.

Servicers methodically gathering documents, collecting signatures and, in particular, verifying income, may be slow to produce results, but not taking these precautions could result in modified loans that redefault, observers say.

"The verification process is at the root of getting an acceptable pull-through rate, which is the be-all and end-all of why we're doing this," said Bill Garland, a senior vice president at Fiserv Home Retention Solutions, a unit of Fiserv Inc. in Brookfield, Wis., hired by Fannie Mae to assist servicers in collecting information from borrowers. "It's a more permanent fix."

The tortoise-over-the-hare approach also allows servicers to address an increased threat of fraud that comes with the Home Affordable Modification Program. "The best time to steal from a store is when the shopkeeper is busy and you can stick stuff in your pockets," said Meadows. Putting customers through a series of verification steps, while time-consuming, is preventive medicine, experts say.

"We've elected to basically require that and get that done up-front, so you do not end up with the problem whereby you give someone a Hamp modification based on a verbal and then they don't provide information that's equivalent," said William Erbey, the chairman and CEO of Ocwen Financial Corp., a servicer of subprime mortgages, said on a conference call last week. "That becomes a difficult situation further on down the line."

Ocwen trailed most other servicers in the report card on the program that the Treasury Department released last week. Only 6% of the West Palm Beach, Fla., company's eligible loans had begun a trial modification at the end of July, compared to 9% for all participating companies and 25% for Morgan Stanley's Saxon Mortgage, the leader of the pack. But Ocwen said it was taking the time to verify income before modifying loans.

source: American Banker

Forclosure Market Represent Half of 1stQ Purchases

While most of the real estate world is still reeling from sunken property values and the effects of the housing bubble fallout, one type of property out there is in hot demand. New statistics released by Los Angeles-based Foreclosure-Support show that during the first quarter of 2009, one out of every two home sales in the nation was a foreclosure or short sale property. Experts with the company say that this data is indicative of a trend that has been growing among homebuyers for the past two years.

Steve Siefken, business analyst for Foreclosure-Support, said, “After the market crashed no one was buying anything. But once foreclosures started to come onto the market in bigger and bigger numbers, I think people began to take notice and thought, ‘Hey, there’s a potential for deals here.’”

Foreclosed homes often sell for extremely large discounts, especially in areas where there are a lot of foreclosures available. Foreclosure-Support says depending on the location and condition of the property, a foreclosure now goes for anywhere from 10 percent to 60 percent off the price it was selling for only a year ago. And even though property values across the country have plummeted, the company says investors are now snatching up distressed properties in anticipation of the eventual turn-around.

Siefken explained, “At first, it was mostly the professionals at foreclosure auction, just like always. Then we got reports of certain sales in the high-demand areas like Texas, California – they were seeing record turnouts at these sales. But the interesting thing was that even though there was high competition, these properties were still going for way less than what was originally paid for them, so the value’s still there.”

High-demand areas like Los Angeles, Miami, and Charlotte, North Carolina, all report significant increases in foreclosure sale attendance. Foreclosure-Support says more foreclosures actually signify smart investment opportunities for savvy buyers.

Foreclosure-Support specializes in providing daily updates of foreclosure listings and foreclosure information from across the nation. With over a decade of experience in the foreclosure marketplace, Foreclosure-Support says its team helps buyers and investors get a detailed perspective on the foreclosure marketplace so they can make informed and profitable purchases.

source: DS News

Mortgage Modifications: Sluggish Start for Some Banks

WASHINGTON - The government's $50 billion program to ease the mortgage crisis is helping only a tiny fraction of struggling homeowners, and a list released Tuesday showed which lenders are laggards.

As of July, only 9 percent of eligible borrowers had seen their mortgage payments reduced with modified loans. And the first monthly progress report showed that 10 lenders had not changed a single mortgage.

The report indicated that lenders such as Bank of America Corp. and Wells Fargo and Co. have lagged behind government expectations. Both banks received billions in federal bailout money.

BofA modified just 4 percent of eligible loans, and Wells Fargo 6 percent. Wachovia Corp., which was taken over by Wells Fargo in December, modified only 2 percent.

"We think they could have ramped up better, faster, more consistently and done a better job serving borrowers and bringing stabilization to the broader mortgage markets and economy," said Michael Barr, the Treasury Department's assistant secretary for financial institutions. "We expect them to do more."

Wells Fargo says it plans to speed up its efforts, signing up most borrowers for the Obama plan with one phone call and sending customers a trial offer within two days.

The report is "only part of the story" because the numbers do not reflect an additional 220,000 loans that Wells modified outside the Obama plan this year, a company executive said.

BofA said it would improve its "processes for reaching those in need" and continue working with the Treasury Department to help homeowners who fall outside the program's eligibility requirements.

source: MSNBC

3 Great Ways to Reduce Your Monthly Mortgage Payment

Griping about the government's inability to balance the budget is a national pastime. The apple doesn't fall far from the tree: there are plenty of people with the same problems, albeit on a much smaller budget. If you find that you've spent your way into heavy debt, consider using the following tried and true methods for reducing your monthly mortgage payments.

Rate reduction

Compare Refinance Rates

Compare rates from up to 4 lenders for refinance

The easiest way to lower your payment is to refinance your current mortgage to a lower rate. While rates are not near the rock-bottom levels of the last several years, they're still low when compared to the historical rate climate. If you didn't cash in on these low rates, you still may be pleasantly surprised at what a mortgage refinance could do for you.

The thrill of a single bill

How many credit cards do you have? Too many? If you have multiple pieces of plastic generating multiple monthly bills, consider a debt consolidation mortgage loan. Whether you consolidate your debts into a new first or second mortgage loan, you'll most likely lower your overall monthly

payments. Debt Consolidation works because the rates for credit cards are generally much higher than those for mortgage loans. Home loans are also tax-deductible, another reason to purge the plastic.

Coming to terms with a long-term loan

Another way to lower your monthly payment is to increase the repayment term of your loan. Many people switch from 15-year to 30-year mortgages under this approach, although there are 40- and 50-year mortgages, as well. While this definitely frees up short term money, you'll eventually wind paying more money in interest payments over the long-term.

If the monthly bills have you singing the budgetary blues, take a good look at your mortgage payment options. Start checking out rates and crunching numbers on our mortgage loan calculator. The results might show you just how easy it can be to move out of the red and into the black-and into the green of cold cash.

source:Mortgageloan.com