November 30, 2009
At the beginning of September only 1.36% of all trial modifications offered by loan providers through the Make Home Affordable Program were made permanent after the 3 month trail period, according to the Congressional Oversight Panel, a group that oversees the use of bailout funds provided from the government. These numbers are low by any standards and the Obama Administration has taken steps to provide further aid to struggling homeowners.
New steps will be taken through Obama’s Mortgage Modification Conversion Drive to put pressure on the loan providers that are not stepping up to the plate and working for the good of the homeowner. Under the new stipulations, loan providers will be required to report the status of each modified mortgage loan, to ensure that steps are being made to make temporary modification permanent.
Part of the new plan under the Obama Administration states that borrowers who qualify for long-term modifications can continue to make the lower payment that was agreed upon during the trial modification for five years. After five years the interest rate will be recalculated to match the rate at the time of the adjustment.
Financial institutes that fail to meet the obligations that are set could face sanctions and penalties. However, once the modification does become permanent, servicers, investors and homeowners alike will be eligible to receive thousands of dollars in incentives.
According to Phyllis Caldwell, the new head of the Treasury’s Homeownership Preservation Office, “We now must refocus our efforts on the conversion phase to ensure that borrowers and servicers know what their responsibilities are in converting trial modifications to permanent ones.”
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November 27, 2009
Sales of newly constructed homes across the nation rose to the highest level the market has seen in over a year during the month of October! Rising 6.2%, according to the Commerce Department is directly an effect of first-time home buyers actively seeking to close before the tax credit expired on November 30, 2009.
Congress passed the extension and expansion of the tax credit the first of this month to include qualified existing homeowners as well as first time homebuyers. The median sales price stood at $212,200 by the end of October, up .7% from September’s figures.
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November 25, 2009
October marked the second month in a row that home sales have raised, hitting the highest level seen in 2 1/2 years. Many experts believe that the reason behind the surge was first-time homebuyers rushing to close by the end of November to take advantage of the tax credit. On a nationwide scale, home sales are currently up 36% in comparison to the bottom sales in January according to a report disclosed by the National Association of Realtors (NAR).
Originally the First-time homebuyers’ tax credit program was scheduled to expire on November 30, 2009, however in the beginning of the month Congress passed an extension and expansion of the original program. The new tax credit will expire on April 30, 2010 and will include a $6,500 tax credit to qualified homeowners that have owned their homes for at least 5 years.
Economists believe that the home prices will not hit rock bottom until the spring of next year, as more foreclosures hit the market bringing sales prices down another 5 to 10 percent. The unemployment rate is even pushing those with good credit into default, according to the Mortgage Bankers Association, 14% of homeowners have received some sort of default notice or is in full blown foreclosure.
Although the market is stabilizing it could very well be another year before the real estate market is back to normal.
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November 24, 2009
Hernando County Commissioners got a little greener this month! By approving the funding for the improvement of the Glen Wastewater Treatment Plant, the next phase of water reuse was put into action!
In two years the treatment plant, as well as other utility projects that are underway, should be completed and the Hernando County Utilities Department will have added the capacity to increase the amount of reclaimed water by 37% per day!! Increasing the availability of reclaimed water is encouraged by the Southwest Florida Water Management District, affectionately known as Swiftmud. According to Anthony Andrade, senior analyst for Swiftmud, “Reclaimed water is a vital water resource, we look at it not only as a help to meet our needs, it’s critical to meet our needs.”
The reclaimed water will more than likely be heading toward the local golf courses for irrigation. Every gallon of reclaimed water that is used by a golf course for irrigation, a gallon of drinking water does not have to be pumped.
Great job, Hernando County!
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November 23, 2009
As the unemployment rate continues to rise, many experts believe that the foreclosure crisis will continue through to 2010, pulling home prices down and continuing to add to the financial situation across the nation.
Even those with good credit are finding themselves to be another statistic in the foreclosure crisis, according to a report from the Mortgage Bankers Association last Thursday. 14% of homeowners with a mortgage loan are either behind on their monthly payments or are already in foreclosure by the end of the 3rd quarter this year, in Florida; this breaks down to one out of every four mortgages.
There is no statistics out there that show that the foreclosure crisis will end anytime soon, according to Mark Zani, the chief economist at Moody’s Economy.com. He estimates that home prices will continue to decline another 10% and will not bottom out until November of next year.
Typically, after a recession, foreclosures will peak for nearly 6 months after the unemployment rate peaks, however many believe that the process could take even longer this time around due to all the loan modification programs and new laws. Others believe that it is the government programs that have put an end to this recession as quickly as it has. Either way, home prices are still attractive to potential homebuyers and the tax credits are equally attractive, buying now is a positive investment that can’t be denied.
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November 19, 2009
According to the National Association of Realtors (NAR), the sales of existing single family homes and condominiums rose 11.4% across Florida during the 3rd quarter of 2009 in a yearly comparison!
Lawrence Yun, the chief economist of NAR believes that it was the first-time homebuyer’s tax credit that was a significant factor in the rise of home sales, “It’s given buyers the confidence they needed to get off the fence and take advantage of extremely affordable housing conditions. The buying conditions this year are the most favorable on record dating back to 1970, but the tax credit is allowing buyers to set aside any reservations about waiting for a better deal.” Yun said.
Also in a yearly comparison, the national median existing single-family home price was 11.2% below the median during the 3rd quarter last year, coming in at an incredibly low $177,900. The median price is determined by finding the middle of the row; half of the homes sold for less than $177,900 and the other half sold for more. Due to the amount of distressed sales, the median price of homes is dropping as they sell at a discounted price.
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November 18, 2009
It appears that since Congress extended and expanded the first-time homebuyer’s tax credit to include buyers other than ‘first-timers’, real estate sales have picked up once again.
Many real estate agents claim that it was the tax credit that enticed potential homebuyers to the once collapsing real estate market. First-time homebuyers swarmed in to swoop up the incredible low home prices and $8,000 tax credit before the November 30, 1009 deadline. However, now the expansion of the program includes all homebuyers that have lived in their home for at least five years.
First-time buyers can get a credit up to $8,000 and other buyers are eligible for a credit of $6,500, as long as they’ve lived in their home for at least five years. Congress also expanded the program to include some buyers who already own homes.
Home sales in the Hillsborough and Pinellas County areas have increased 20% during the third quarter, which ended on September 30, 2009. Many experts believe that the first-time homebuyer credit is the top reason that housing inventory is diminishing. With the program expanding to include a $6,500 tax credit , it could be enough of a boost to keep the increase in home sales.
According to Mike Larson, Weiss Research analyst, “The credit is the icing on the cake, not the cake itself. What’s really leading to improvement is that homes are affordable again. If you throw an expanded credit into a market that already has good fundamentals, the market will respond.”
In order to take advantage of the new and improved tax credit, a prospective buyer’s home has to be under contract by April 30 of 2010 and the deal must close by June 30.
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November 17, 2009
According to the 2009 National Association of Realtors Profile of Home Buyers and Sellers survey that was released during the 2009 Realtors Conference and Expo, the number of first-time homebuyers rose to 47% during the past year, which is the highest market share on record!
Although, many different factors come into play that helped first-time homebuyers achieve this goal, many believe that it was the first-time homebuyer’s tax credit that brought most of them to the market. But make no mistake, the record low home prices and interest rates also played an important role in making first-time homebuyers full fledged home owners.
According to Paul Bishop, Vice President of research for NAR, “It’s interesting to note the last cyclical peak of first-time homebuyers was during the last noteworthy economic downturn, with first-time buyers starting the chain reaction that led the nation out of recession.”
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November 16, 2009
This week marked the second week in a row that interest rates for 30-year home loans remained below 5%. According to mortgage giant Freddie Mac, the average rate dropped .07% compared to last week, putting the interest rates at 4.91%. Freddie Mac collects the data on mortgage rates Monday through Wednesday every week from lenders across the nation.
Although we have not seen rates hit the record low of 4.78% since the spring of this year, the rates are still at an attractive level for those looking to purchase a home or refinance today! Rates on a five-year adjustable rate mortgage also dropped this week to 4.29%.
In an effort to keep the mortgage rates low, the FED has placed $1.25 trillion into mortgage-backed securities and Congress passed the bill that extended and expanded the federal tax credit to include all buyers that meet the requirements.
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November 13, 2009
October marked the third month in a row that the number of homes across the nation that received a foreclosure related notice has declined. Last month over 77,000 homes were repossessed by lenders, an amount that is 10,000 homes less than the month of September.
According to RealtyTrac Inc., foreclosures are still 19% higher than this time last year and the rising unemployment rate threatens the stabilizing market, however, at this time the foreclosure rate is dropping. The Obama Administration has pushed the loan modifications program in an effort to slow the rate of foreclosures, as of September over 650,000 borrowers have signed up for trial plans only 1,700 of these borrowers have made these modified plans permanent.
Last week congress expanded the federal tax credit to include homeowners that have owned their homes for at least five years as well as extending the program through to April 30, 2010.
Senior Vice President of RealtyTrac Inc., Rick Sharga stated “Anything that stimulates buying activity will go a long way to mediate the foreclosure problem.”
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