A good article on home prices

According to WSJ, homes prices are stabilizing. Read:

" Home prices appear to be stabilizing as demand for higher-priced homes picks up and distressed properties, still a large part of the market, are no longer changing hands at the deeply discounted prices of a year ago.

Overall, home prices declined 0.7% in the first quarter of 2010 to an average of $166,100, the lowest first-quarter national median price since 2002, when the average was $158,600 according to a report by the National Association of Realtors. However, there was wide variation by region, with median prices up 9% in the Northeast and down 8% in West.

And the number of metropolitan areas where median prices are rising, instead of falling, grew for the fourth consecutive time. In the latest quarter, prices gained in 91 of the 152 metropolitan areas tracked by the Realtors compared to 67 in the fourth quarter of 2009 and 30 in the third quarter.

"The general theme here is that most markets are recovering," said Lawrence Yun, chief economist at the Realtors group. In markets where prices are falling, "the declines are less severe," he said.

There were surprising gains in median home prices in the Midwest, including places in Ohio that have been badly hurt by the economy. Brokers say in some of these markets, buyers have already scooped up much of the inventory of foreclosed homes and are now buying non-distressed real estate again. And even prices of distressed properties aren't selling for the rock-bottom prices of a year ago.

"In urban Akron, you had some house prices on foreclosed properties that are $5,000, $14,000, $20,000. When you have a lot of those sales versus the existing sales, it really drove the prices down," said Jim Camp, president of Cutler Real Estate of Akron, Ohio. "The first-time homebuyer [tax credit] had more impact on our market than it did elsewhere,'' he said, pointing out that the $8,000 credit, ended April 30, was a bigger incentive in Akron's cheaper real estate market than in places like New York or Chicago.

Thomas Lawler, a Virginia-based housing economist, said that the wild shifts in places like Akron and Cleveland indicated that the mix of homes for sale is changing. Median prices in Akron, where 11.6% of workers were unemployed in March, fell from $119,000 for 2007 to $50,100 in the first quarter of 2009, only to rise 90.2% to $95,000 for the most recent quarter.

"If you're in a market where traditional housing values just plunge, and the only sellers are motivated sellers, you can get huge swings in the median," Mr. Lawler said.

Sales of foreclosed properties and other distressed real estate remain a large part of the market overall, however, accounting for 36% of sales in the first quarter of 2010, up from 32% in the fourth quarter of last year and 30% in the third quarter.

Most of those distressed sales are in the weakest markets, where they continue to drag down prices. Orlando saw the most precipitous drop, with median prices down 15%, followed by Ocala, Fla., down 14.5%; Cumberland Md., down 14.4%; and Indianapolis, down 13.9%. Las Vegas, the metro area that has led the nation in foreclosures for much of the last year, saw an 11.8% decline in median prices, from $155,300 to $137,000.

Meanwhile, sales and prices in the Northeast appear to be benefiting from growing demand for more expensive homes, due in part to the availability of financing. "A year ago, the only mortgage markets that were functioning were Fannie and Freddie-financed, or FHA-financed loans," Mr. Lawler said. "Now we're beginning to see some action in the jumbo loan market," he said, referring to loans of between $417,000 and $725,000, depending on the market, that come with slightly higher interest rates than smaller loans.

Another bright spot in the NAR numbers is California, which had some of the most battered markets a year ago but has been mending for several months. A year ago, bank-owned foreclosures constituted nearly half of the state's sales in 2009, up from 35.6% in 2008.

In Sacramento, the median price plunged from their 2007 level of $342,800 to $169,300 in the first quarter of 2009, but has begun to creep back up again, adding 6% and bringing the median price to $179,400.

Paul Kasriel, chief economist for Chicago's Northern Trust, said that going forward, the market will continue to be burdened by foreclosure inventory, speculators, and empty-nester baby boomers who want to sell their homes and downgrade to cheaper digs, but can't.

"We've made the turn, but it's going to be two steps forward and one step back, but a long time before we see home prices rise at a sustained rate," he said.
ROBBIE WHELAN

TIPS ON HOW TO AVOID HOME MODIFICATION SCAMS

Scams are not always easy to spot - but it helps if you know the warning signs. The list below includes red flags for homeowners that indicate you may be dealing with a loan modification scammer:
• A company/person asks for a fee in advance to work with your lender to modify, refinance or reinstate your mortgage.
They may pocket your money and do little or nothing to help you save your home from foreclosure. Free HUD-certified foreclosure assistance is available. Click here to visit our Free Counseling page, which includes links to free counseling resources.
• A company/person accepts payment only by cashier's check or wire transfer.
Scammers often require that homeowners pay via cash, cashier's checks, or wire transfers so that they can quickly take your money and run.
• A company/person guarantees they can stop a foreclosure or get your loan modified.
Nobody can guarantee to stop foreclosure or modify your loan. Legitimate, trustworthy HUD-approved counseling agencies will only promise they will try their very best to help you.
• A company/person advises you to stop paying your mortgage company and pay them instead.
Despite what a scammer will tell you, you should never send a mortgage payment to anyone other than your mortgage lender. The minute you have trouble making your monthly payment, contact your mortgage lender.
• A company/person instructs you not to contact your lender, lawyer, or credit or housing counselor.
When figuring out how to save your home, you should always speak directly to your lender and a HUD-certified housing counselor.
• A company pressures you to sign over the deed to your home or sign any paperwork that you have not had a chance to read or do not fully understand.
A legitimate housing counselor would never pressure you to sign a document before you had a chance to read and understand it.
• A company/person tells you to sign documents with blank lines and spaces.
Scammers often add information later without your knowledge or approval.
• A company/person offers to complete paperwork for you.
You should always review and complete all paperwork impacting your mortgage.
• A company/person offers to buy your house for cash at a fixed price that is not set by the housing market at the time of sale.
You should consult your lender or a HUD-certified counselor before you sell your home.
• A company/person encourages you to sign over your title in order to "lease" your home now and buy it back over time.
Scammers deceive homeowners into signing over the deed to their home and tell them they will be able to remain in the house as a renter and eventually buy it back. Usually, the terms of this scheme are so demanding that the buy-back becomes impossible. Therefore, the homeowner gets evicted, and the "rescuer" walks off with most or all of the equity.
• A company claims to offer "government-approved" or "official government" loan modifications.
They may be scam artists posing as legitimate organizations approved by, or affiliated with, the government. Contact your mortgage lender first. Your lender can tell you whether you qualify for any government programs to prevent foreclosure. And, remember, you do not have to pay to benefit from government-backed loan modification programs.
Also, if you want to contact a govern ment agency, type the web address directly into your browser and look up any address you are not sure about. Use phone numbers listed on agency websites or in other reliable sources, like the Blue Pages in your phone directory. Do not click on links or open any attachments in unexpected emails.
• A company/person you do not know asks you to release personal financial information online or over the phone.
You should only give this type of information to companies that you know and trust, like your mortgage lender or a HUD-approved counseling agency.
• A company/person offers to give you a "second opinion" on a denial of your loan modification application.
Never pay for a "second opinion" if you have been turned down for a loan modification.

If you think that you have been scammed, report it! Help ensure other homeowners do not fall victim, call 1-888-995-HOPE or click here to submit a complaint online.
http://www.preventloanscams.org/pages?id=0006

7 questions to ask while buying a Short Sale property

You are in the market to buy your future dream home and the one you have set your eyes on is a short sale! But you want “this one” and no other despite all the nightmare stories you heard about this kind of transaction, you are willing to try.
To make sure that you have all the odds in your favor to get to the closing table, there are key questions you need to ask your agent or the listing agent before jumping in:
1- How many liens are on the property?
The more liens on the property, the difficult is going to be to get approval from all the lien holder since each and every one of them have to give their approval for the short sale to go trough.
2- Have done a preliminary title search?
A preliminary title search will help to determine liens that are sometime unknown(?) by the seller or the seller’s agent such as mechanic liens, tax (income tax), child Support etc…
3- How do plan to satisfy the junior lien(s) holder?
2nd mortgage holder, Equity line of Credit servicers are key elements of a short sale success. If the listing agent doesn’t have a plan to satisfy them, you are probably wasting your time and the deal will not make it to the closing table.
4- Who is the Lender(s) or servicer of the loan(s)?
Knowing who you have to deal with as lender will help you determine approximately how long you have to wait for the lender approbation of the sale. While some Lenders/Servicers are quick to answer, others are pain in the neck to deal with.
5- How is the listing agent going to present the offer to the Lender?
You need to know if all offers will be forwarded to the lender regardless of if the offer makes sense or not. First, you don’t want your offer to land on the Lender’s table without the seller signature and second, how many chance do you think you have if you offer is the 8th on the same property with a Lender having thousand of short sale offer to review?
6- How far is the seller in the pre-foreclosure proceedings?
If the property is already schedule for the auction sale on court steeps, your chances to get the short sale approved are slim unless the auction sale is put on hold. Ask to see the document saying that the foreclosure is on hold before writing an offer, making inspection and appraisal.
7- Who is going to do the negotiation with the Lender (s)?
Is it the listing agent? A 3rd party negotiator or an attorney? You may want to know because depending on the negotiator experience is you short sale completion success.

R.I.P Federal Tax Credit; What Now?

The Federal Home Buyer Tax credit had expired on April 30th 2010. For those who were under contract before or on 04/30/2010, no worries, you will get your tax credit as long as you close the sale before July 1st 2010.
For a lot more people who miss the deadline, the expiration of the tax credit doesn’t mean you will be on you own if you chose to buy now. Program like the Georgia Dream Homeownership is helping first home buyer in the State of Georgia with interest free, non repayable (No payment due until home is sold, refinanced or no longer used as the borrower’s principal residence) down payment assistance. Eligible first time homebuyer will benefit from these different loan program assistance under the DCA:
STANDARD
All eligible home buyers$5,000
PEN
Eligible home buyers who are employed by entities that provide public protection (including the military), health care, or education. $7,500
CHOICE
Eligible home buyers whose household includes an individual living with a disability
Loan Amount Atlanta MSA Income Limit Statewide Income Limit
$7,500 $30,000 and over* $25,000 and over*
$10,000 Less than $29,999 Less than $24,999
*Maximum income and sale price limits apply
SIGNATURE COMMUNITY
Eligible employees of local governments designated as Signature Communities$7,500
GEORGIA DREAM REWARDS
As a reward for higher credit scores and to encourage savings, eligible borrowers will:
1) Have a total annual household income that does not exceed the Georgia Dream First Mortgage Loan Financing Limits on page one
2) May retain cash assets up to the greater of $20,000 or 20% of the purchase price
3) Contribute a minimum of $1,000 of borrower funds to the purchase transaction.
$5,000 if sales price is $150,000 or less
$7,500 if sales price is greater than $150,000
SINGLE FAMILY DEVELOPMENT
Affordable homes constructed under this special development program$7,500 - $20,000

In another hand, if you purchase an energy-efficient product or renewable energy system for your home, you may be eligible for a federal tax credit for energy efficiency. Known as Federal Tax Credits for Energy Efficiency, this program offer several incentives for homeowners who chose to update their principal or second residence. Unlike other tax credit, you actually have to own a home to be eligible for this program.

In an effort to clear up their REO inventory, Fannie Mae and Freddie Mac are offering several incentives for homebuyers ranging from 3.5% closing cost to rebate up to 30% on appliances and 2 years home warranty. Check with your Real Estate agent for more information.