Fannie Mae and Other Banks Postpone Foreclosures Through the Holidays

Fannie Mae is one of a few banks who have decided to put a moratorium on evicting those facing foreclosure from December 19, 2011-January 2, 2012.

Executive Vice President, Terry Edwards, was quoted in a CNNMoney article stating that “No family should have to give up their home during this holiday season.”

Others also putting evictions on hold are Freddie Mac, Chase Mortgage, and Wells Fargo. Dates for each bank may be different, and only applies to those they actually own, not just service. If they service loans for other banks or companies, they have to follow the wishes and rules of those companies.

If you are facing foreclosure in Baltimore, please contact me. You may have other options available to you!

Foreclosure Backlog Could Lower Baltimore House Values Further

The foreclosure backlog is large, and with foreclosure filings up 33% in August over July, analysts think the real estate market has yet to hit bottom.

What does this mean for Baltimore real estate?

Well, it could mean that Baltimore house values could see further drops.

As more foreclosures come on the market in any area, the surrounding houses often see values drop. Technically, these “distressed” properties are not used as “comparables” for appraisal purposes, but the buyers/consumers see value in their own light.

Put yourself in a buyer’s shoes. Let’s say there are 30 houses on the market in one Downtown Baltimore neighborhood. 15 of those houses are foreclosures or short sales, so they are at a reduced price. Let’s say of those 15, three of the foreclosures are in decent condition, need little work, and were rehabbed just seven years ago.

Buyers are savvy and know that the banks will often negotiate on price if there are not many offers on the table.

Why would they buy a more expensive house in the same neighborhood if they can get a deal on that one?

Yes, there are some buyers who need to find homes that are in good condition due to their type of financing, especially if using the CDA program and an FHA insured loan. That buyer, though, will not be willing to overpay (and due to their loan type cannot overpay since their appraisal must come in at the contract price!) and can wait for another deal. With a large number of houses on the market, they have plenty to choose from.

With the foreclosure filings up, this still doesn’t include those in the early stages of the foreclosure process, according to RealtyTrac and a NASDAQ article.

Baltimore home sellers need to price their homes aggressively to get them sold, and stage them to make them stand out. Contact me for help. I know how to get your Baltimore home sold!

Four Years to Remove Shadow Inventory

The S&P (Standard & Poor)’s rating service states that it will take four years to clear “shadow inventory” from the real estate market, according to their recently released report from the end of 2010.

“Shadow Inventory” is the number of houses where the homeowners are more than 90 days delinquent on their mortgage payments.

The Baltimore real estate market has be faring a bit better than the national average, so our shadow inventory is hopefully much much less!

There are bits of good news with this, as the S&P report shows that it is up 11% over the previous quarter, but the overall level of distressed properties has fallen since it’s height in March of 2010, and loan modifications and short sales have been helping the situation.

If you are facing foreclosure in Baltimore, please contact me. You may have other options available to you!

Two Week Foreclosure Freeze

Fannie Mae and Freddie Mac are freezing foreclosure proceedings on homes from December 20, 2010-January 3, 2011 in an attempt to join in the holiday spirit for those who will lose their homes.

What they will prevent is people being evicted from their homes during this time period, hopefully allowing families to spend one last one together in them.

CNNMoney.com also interviewed Bank of America executives, who state that this is a practice they tend to follow each holiday season. Wells Fargo and JP Morgan Chase do as well. According to the article,

With the number of bank repossessions amounting to around 100,000 a month recently, the temporary reprieve could affect tens of thousands of borrowers in default.

That is a large number of people who could possibly have more time together.

The eviction process is the last step in the foreclosure process where the house has already been either sold at auction or been repossessed by the bank. The occupants of the house must either leave on their own at that point or face eviction.

So, a number of residents in foreclosure will get a few more weeks to breathe.

If you are facing foreclosure in Baltimore, please contact me. There may be other alternatives!

Maryland Foreclosures in October 2010 Down 52%

Foreclosures in Maryland were down 52.4% in October 2010 from the same time last year.

This is a welcome statistic in the Baltimore real estate market!

According to the Baltimore Business Journal article,

One in every 736 homes in Maryland faced a foreclosure filing in October, down from one out of every 348 homes this time last year. The total number of homes facing or in foreclosure for October was 3,169, compared to 6,661 in October 2009.

Compared to the rest of the United States, which had 1 out of every 389 homes receive a foreclosure notice, these statistics are even better!

Entering the fourth quarter of 2010, this is great news, because the third quarter showed Baltimore foreclosures up 460% over the same time last year.

Keep in mind, that if you have received a foreclosure notice, you may have alternative open to you to avoid going into actual foreclosure. Baltimore short sales are becoming more common, as are loan modifications. A third, if you qualify and have a Fannie Mae loan, could be the Deed-for-Lease program.

Contact me for more information on how to avoid foreclosure in Baltimore. You may have other options!

Baltimore Foreclosures Up in Third Quarter of 2010

Baltimore foreclosures were up in the third quarter of 2010, up 94% from the second quarter.

RealtyTrac, a site that reports on foreclosure filings and trends across the US, says that 5,753 Baltimore area homes received a foreclosure filing, which is up 460% (yes, that is four hundred sixty PERCENT) over the same time last year, according to an article in the Baltimore Business Journal.

Essentially, one out of every 193 homes in the Baltimore area received a foreclosure notice in the third quarter of 2010.

If you received a foreclosure notice, you may have options. Many Baltimore homeowners underwater are looking towards doing a short sale. Baltimore short sales are becoming more common. Another may be to do a loan modification. A third, if you qualify and have a Fannie Mae loan could be a Deed-for-Lease.

Contact me for more information on how to avoid foreclosure in Baltimore. You may have other alternatives!

Maryland to Receive $6.8M to Help Stop Foreclosures

The US Housing and Development has awarded Maryland $6.8 Million to help stop foreclosures as part of the Neighborhood Stabilization Program.

Areas receiving awards are allowed to use the money to buy land and property to either rehabilitate or knock down houses, and also to offer downpayment and closing cost assistance programs to low-to-moderate income homebuyers in the areas.

The Baltimore Business Journal reports that $1.8 Million is directed to Price George’s County, while the rest of Maryland will receive $5 Million.

I am hoping that a large portion will be directed to Baltimore homebuyers, where foreclosures have risen so highly, and neighborhood values hurt in many places.

The focus from HUD is that

“These grants will support local efforts to reverse the effects these foreclosed properties have on their surrounding neighborhoods,” said HUD Secretary Shaun Donovan, in a press release. “We want to make certain that we target these funds to those places with especially high foreclosure activity so we can help turn the tide in our battle against abandonment and blight.”

This Month in Real Estate September 2010

This Month in Real Estate September 2010 is here early!

September’s video discusses foreclosures, and how California, Florida, and Arizona topped the list in most foreclosures per state.

Maryland foreclosures too are at an all time high, as I discussed in both July & August, up 56.2% in the first half of 2010, and 10th worst in the US.

What the high foreclosure rate is doing is allowing buyers to take advantage of the market. In 2009, 1 of every 4 second home purchases was a foreclosure. This is partially due to the areas hardest hit being in vacation areas, but also due to the possibility of foreclosures being up to a 20% discount over neighborhood market values.

Byron Ellington discussed tips for buying foreclosures. These are great tips for buying a Maryland foreclosure:

1) Expect a little more time to hear back from your offer than you would from a general seller. Banks have a process that can take 12 days or more to respond back to an offer.

2) Understand that most banks sell their foreclosed homes AS-IS, meaning they won’t make repairs on the house for inspections or other purposes. This is especially important to understand if you are using an FHA insured loan, because often there are repairs required by the FHA appraiser — that the seller (the bank) would not agree to fix. If you are planning to use FHA for your mortgage, make sure to speak with your mortgage professional prior to even looking at foreclosed properties to understand your options and obligations.

3) Each bank has their own policies and procedures, so even if your friend or acquaintance has gone through the process, yours may be extremely different, because each bank if very different.

4) Having a real estate professional on your side is very important to help you navigate the waters.

Contact me for more information about buying a Baltimore foreclosure.

FHA Refinance of Underwater Borrowers

FHA is offering refinances for qualifying underwater borrowers, according to a mortgagee letter sent out by HUD last week.

Mortgagee Letter 2010 -23 came as a result of the changes announced by HUD in March 2010 in the MHA (Making Housing Affordable) FHA program.

The letter states that the focus of the program is:

These enhancements are designed to maintain homeownership by providing borrowers, who owe more on their mortgage than the value of their home, opportunities to refinance into an affordable FHA loan. This opportunity allows borrowers who are current on their mortgage to qualify for an FHA refinance loan provided that the lender or investor writes off the unpaid principal balance of the original first lien mortgage by at least 10 percent.

Hopefully this will help a large number of people who do not want to leave their homes and can possibly make smaller payments per month to remain.

The refinances must have their case numbers assigned after September 7, 2010, and all of these qualifying loans must close by December 31, 2012.

The mortgagee letter is more than five pages long, and there are many details and eligibility requirements.

Participation is voluntary and requires the consent of lien holders. In order for a loan to be eligible, the following conditions must be met:
1.    The homeowner must be in a negative equity position;

2.    The homeowner must be current on the existing mortgage to be refinanced;

3.    The homeowner must occupy the subject property (1-4 units) as their primary residence;

4.    The homeowner must qualify for the new loan under standard FHA underwriting requirements and possess a “FICO based” decision credit score greater than or equal to 500;

5.    The existing loan to be refinanced must not be a FHA-insured loan;

6.    The existing first lien holder must write off at least 10 percent of the unpaid principal balance;

7.    The refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75 percent;

8.    Non-extinguished existing subordinate mortgages must be re-subordinated and the new loan may not have a combined loan-to-value ratio greater than 115 percent;

9.    For loans that receive a “refer” risk classification from TOTAL Mortgage Scorecard (TOTAL) and/or are manually underwritten, the homeowner’s total monthly mortgage payment, including the first and any subordinate mortgage(s), cannot be greater than 31 percent of gross monthly income and total debt, including all recurring debts, cannot be greater than 50 percent of gross monthly income;

10. FHA mortgagees are not permitted to use premium pricing to pay off existing debt obligations to qualify the borrower for the new loan;

11. FHA mortgagees are not permitted to make mortgage payments on behalf of the borrowers or otherwise bring the existing loan current to make it eligible for FHA insurance; and

12. The existing loan to be refinanced may not have been brought current by the existing first lien holder, except through an acceptable permanent loan modification as described below.

Baltimore underwater homeowners should find out if they are eligible by a Baltimore mortgage professional. If this option is not open to you, and you still want to avoid foreclosure in Baltimore, contact me to help you. There may be other options open to you.

Maryland Foreclosures Up in July 2010

Maryland foreclosures were up in July 2010, an increase even over June, which was up 104%.

There were 6,961 foreclosure filings in July, up from 6,304 in June. The first half of 2010, Maryland foreclosures were up 56.2% over this same time last year.

Maryland increased 10.4% over June, while nationwide, foreclosure filings were up 4%, the Baltimore Business Journal reported. This makes Maryland the 10th hardest hit state in the US. From July 2009 to July 2010, Maryland’s filings have risen 35%.

I am still hoping to see foreclosure numbers drop as more people look to do a short sale in Maryland. This seems to be the case, as default notices have dropped consistently in the past six months, according to RealtyTrac.

Contact me for more information on how to avoid foreclosure in Baltimore. You may have other options!

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