Latest Market @ A Glance C.A.R. closely monitors and analyzes trends in the residential real estate industry. The table below contains the latest reported existing home sales series, median home prices, unsold inventory index, median time on market, first-time buyer housing affordability index, and the latest mortgage rates.
An summary update (by CAR.org) on the mortgage relief plan by the federal government, covering an article by The Mercury News:
In his State of the Union Address, President Obama laid out a plan to help responsible borrowers and support a housing market recovery. Details of that plan were released yesterday. However, funding for the proposed program must be approved by Congress, lowering the possibility that it will be implemented quickly. Making sense of the story:
Operated by the Federal Housing Administration, the plan would allow underwater homeowners to refinance into cheaper federally insured loans. Borrowers with good credit who are current on their loan payments are eligible.
The measure also streamlines the process of refinancing an underwater mortgage, eliminating the need for an appraisal or submitting a new tax return.
To qualify, borrowers must be current on their mortgage, have a minimum credit score of 580, and must be refinancing a loan on a single-family owner-occupied principal residence.
Lenders only need to confirm that the borrower is employed. Loans that are more than 140 percent of the home value probably would not qualify until banks wrote down part of the balance.
Congress must approve $5 billion to $10 billion in funding, leading housing experts to praise the plan’s objectives with skepticism of it passing this year.
2011 was supposed to ratchet up steady, if not, robust growth in the US economy. However, several economic and geo-political events tripped up the economy during the year that have left would be home buyers dazed and confused about jumping into the housing market.
Looking in the rearview mirror: 2011
Here’s what we know–2011 has been wrought with uncertainty and unexpected shocks that has hobbled output in the US and around the globe and caused a huge crisis of confidence for consumers, investors, and businesses alike. The list of wildcards is long: the DC midterm elections, the change of power in the House, the Japanese earthquake and tsunami, the Arab uprising, the oil price shocks, the European debt crisis, the battle over debt ceiling, the downgrading of the US long-term debt, and the fallout with the volatility in the stock market. All of which have left output through the first half of the year below the growth rates that accompany a recovery. The probability of a double-dip recession has gone up and has caused economists far and wide to downgrade their outlook for this year and next.
What does next year have in store for housing?
Here is what C.A.R. is forecasting for 2012:
While the probability for a double-dip recession is higher, the most likely scenario is for a continuation of the slow-moderate growth we have seen for the last few years. The outlook is for modest but positive growth with GDP coming in at 1.7% in 2011, 2.0% in 2012.
We are moving forward, albeit bouncing along the bottom for most of 2011 and we can expect the same for next year, with a flat sales forecast for 2011/2012 (-0.1% year-to-year loss in 2011 and 1.0% gain in 2012).
Prices are expected to come in 4% below 2010 levels and should show a modest gain in 2012 (+1.7% year-over-year).
Overall, we’ve seen uncertainty and a lack of urgency put a damper on the housing market in 2011.
Hopefully, 2012 will prove less uncertain and could even show signs of urgency as current prices and mortgage rates are phenomenal and will not stay this low forever.
A new law that will be implemented on November 15, 2011 is yet another slap in the face to the American Homeowner regarding modifications.
The basic eligibility requirements for an enhanced HARP (Home Affordable Refinance Program) loan are as follows:
Existing mortgage loan must be owned or guaranteed by Fannie Mae or Freddie Mac. To check whether a borrower has a Fannie Mae or Freddie Mac loan, go to MakingHomeAffordable.gov’s page on “Look up your loan“.
Existing mortgage loan must have been sold to Fannie Mae or Freddie Mac before June 1, 2009.
Existing mortgage loan cannot have been refinanced under HARP previously (except for Fannie Mae loans refinanced between March and May 2009).
Current loan-to-value (LTV) ratio must be more than 80%.
Existing mortgage loan must be current, with no late payments in the past six months, and no more than one late payment in the past 12 months.
More information is available from the Federal Housing Finance Agency (FHFA) on the agency’s website: www.fhfa.gov.
The reason why HARP is not good, is the same basic reason that HAMP (Home Affordable Modification Program) and the traditional modification is as follows:
It is strictly voluntary with all lenders; even though they say they participate. Of course, there are factors with the seller or borrower that have an affect on being put in a modification plan that eliminate many from it. This problem could be avoided if the banks would just lower the loan amount to the fair market value and a greater percent of people would have been able to keep their homes. Even a future shared equity with the lender would have been acceptable if the property was sold for a profit in the future. Few banks are offering this program as well.
In conclusion, it is obviously important that we talk ASAP to go over your situation. I have several associates waiting to help: accountants, attorneys, and credit repair company. If you’re moving on, getting back on track with your credit, staying in your home with an extended time without payments due in order to recoup finances, and most importantly receiving thousands from your bank at closing are all opportunities within your grasp! I am just a phone call away!