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Here's a video that is produced by two mortgage guys who explain why IndyMac wants to do shortsales and foreclosures and how our tax dollars are paying the bank for the difference. This is in layman's terms.
There's lots of interesting info coming out about lenders with foreclosures in the headlines. Twenty three states have halted foreclosures with GMAC and B of A. Unfortunately, Oregon is a non-judicial state so it does not fall into lucky 23 state catagory. A major title company has stopped issuing title insurance on foreclosures properties with Chase. Details can be found here.
Nationally, foreclosure buyers received a 26% discount when purchasing foreclosed properties if they purchased in the second quarter this year. Pre Foreclosure buyers received a 12.97% discount. REO or bank owned foreclosure buyers were able to receive a 34.54% discount for their purchase in the second quarter.
According to RealtyTrac, about 24% of sales in the U.S. were foreclosures! The hardest hit states were California, Nevada and Arizona averaging nearly 50% for all of them combined.
Oregon, in the second quarter had around 25% of sales as foreclosures. Of course these foreclosures impact pricing and are creeping into appraisal comparables if they are near a home that is selling. Bad news for sellers due to the impact they have on their values.
The good news is for buyers, there are many properties to choose from. Here is a list of the foreclosures currently for sale in the Mt. Hood area from Government Camp, Rhododendron, Welches, and Brightwood:
Great news! According to RealtyTrac Inc. Oregon has slipped out of third place in foreclosure activity in July. Here are the top ten numbers for the month of July.
What is HAMP? Home Affordable Modificaiton Program This government program helps homeowners get their payments modified so they can stay in their homes.
This chart shows the numbers of modifications currently in process.
Some of the dept to income ratios are shocking for modifications. The modification program does not work for many and after you see the numbers you'll know why. The median front end, or housing dept to income ratio was 44.8% of the income but combined with total debt, the median dept to income ratio was 79.7%. Yes, nearly 80% of the income of the borrower went to servicing debt.
After the HAMP modification, that total debt to income for all debts went to 63.5%. That is a huge amount of debt even after modification. This explains why there are still failures and drop outs after the modifications take place and why it has not been the big success the government had hoped for. It also shows why banks have not been quick to act in completing this program since they often end up foreclosing on the property any way.
The recently funded USDA loan program has just been refunded for our area. This includes Welches, Rhododendron, Brightwood and Government Camp. This program is for low income earners and is in very high demand. The loan is 100% financing!
Details may be found here.
If your purchasing in the Mt. Hood area it's a good idea to buy before September 7th, if you are using an FHA loan. New rules are coming down the road which will actually increase your monthly payment potentially making it harder to qualify. The "idea" is that FHA is trying to reduce the upfront costs of getting buyers into loans by reducing the Up Front Mortgage Insurance Premium (UFMIP) from 2.25% to 1%. This can be financed into the loan at the back end so there is really no "upfront cost". Technically this reduces your monthly payment slightly.
Meanwhile back at the ranch the MMI- the Monthly Mortgage Insurance Premium is getting raised from .55% to .85%-.90% depending upon the loan to value of the loan. This means your monthly payment will go up and you will be paying more for the same loan thereby potentially not qualifying for as much loan as you did prior to September 7th. With this rise in payment it essentially means a decrease in the loan amount by 4-5% to get the same monthly payment (a lower purchase price so the loan amount is lower).
Why is HUD doing this? To cover their operating costs and to cover anticipated losses. As a buyer, there are pluses to having an FHA loan. The main benefit is when you decide to sell your home these loans are assumable if the new buyer qualifies. This is an attractive prospect if they, HUD, doesn't increase the interest rate for the assumption. They seem to change the rules as administrations come and go. I'm not sure if this is a locked in guarantee or not!
The fact is, this is probably the best time in the past 80 years to purchase real estate. Swelling inventories and unbelieveable interest rates have created this opportunity. Not only is a house a home but what about the investment opportunities.
Here is how the housing values compares with the stock market over the past decade.
The numbers are in for June 2010 for Mt. Hood area real estate sales straight out of RMLS. The numbers are impressive with a total of 15 sales closing. My estimate is that these sales were put together in March and April and finally closed. We have seen a weakening of pending sales at the moment but hope with the fantastic weather we are having that more buyers will take advantage of the incredible inventory currently on the market. Now is the time to get a hec of a deal on a mountain property!
Market indicators show increasing inventory, fewer pending sales for the month, longer marketing periods but pending sales up nearly 50% year to date from 2009!
The numbers are out for the National Association of Realtors statistics for February 2010 in the Salem area foreclosures compared with the United Sates Numbers. Here is a chart of activity:
Displaying blog entries 321-330 of 415
