Phoenix Area New Listings for October 2009

Fannie Mae to Rent Foreclosed Homes Back to Borrowers

Fannie Mae to Rent Foreclosed Homes Back to Borrowers

Fannie Mae plans to allow homeowners facing foreclosure to stay in their homes and rent them for up to one year as part of the latest effort to help troubled borrowers while keeping a glut of foreclosed properties from hitting the housing market.

The Deed for Lease Program, which Fannie plans to roll out on Thursday, will offer borrowers who fail to complete or don't qualify for a loan modification or other workout to deed their property to the lender in exchange for a lease. Borrowers-turned-tenants will be able to sign leases of up to 12 months and will pay market rents, which in most cases are lower than the cost of mortgage payments.

Fannie Mae wouldn't say how many homeowners it expects will take advantage of the program. The company acquired 57,000 properties through foreclosure during the first half of the year, bringing its total real-estate owned inventory to 63,000 properties valued at $6 billion. The rental program will allow Fannie to hold inventory off of already saturated housing markets and makes a bet that the housing market will be stronger one year from now.

"If you keep more people in their homes, it's better for the community. It's better for the financial institutions that own those homes," says Jay Ryan, vice president of equity investments at Fannie Mae. "Hopefully less foreclosure product on the market will help stabilize those communities."

Borrowers who haven't missed any mortgage payments aren't eligible for the program, and the borrower's mortgage servicer would have to show that a borrower isn't eligible for a loan modification before the homeowner could apply for the Deed for Lease program.

More Housing News

o Developments: FHA Postpones Audit as Bailout Worries Mount
o Housing: Tax Credit Would Keep Prices Up

"I'm sure Fannie is hoping that when they sell the properties, the values will be higher," says David Berson, chief economist for PMI Group Inc., a private-mortgage insurer. "A year from now, we should be a year further into the economic recovery, and housing demand will be stronger…That will allow you to release homes that have been foreclosed upon but not put on the market."

The program could also help Fannie preserve the value of its nonperforming assets because occupied homes are more likely to hold up better that vacant homes. The rental programs also provide some rental income to the government-backed mortgage finance giants.

"If they can keep the property occupied and have at least some positive cash flow, that may end up being less worse than going the route of kicking them out and having a vacant home," says Thomas Lawler, an independent housing economist based in Leesburg, Va.

The move by Fannie follows a program by Freddie Mac that began offering month-to-month leases to owner-occupants who had lost their homes to foreclosure. But Freddie continues to market those homes for sale. The Fannie Mae program differs in one important respect: foreclosed homes won't be listed for sale. In February, both companies began allowing tenants whose landlords had lost their properties to foreclosure to sign month-to-month leases.

Borrowers will have to show that the monthly rent is less than 31% of their gross income. The program, which will use a professional management company to handle maintenance, will allow borrowers to renew their leases on a term or monthly basis and properties that are sold during the lease period will include an assignment of that lease to the new owner.

So far, around two-thirds of owner-occupants who have been offered monthly leases by Freddie Mac have taken them, and the break down of owner-occupants to tenants who have rented under the program is roughly two-to-one.

Freddie Mac says it is considering whether to extend longer-term leases to some troubled homeowners. "We're looking into our options because there are certain markets where there's just so much inventory on the market," said Ingrid Beckles, senior vice president of default asset management at Freddie Mac.

In recent months, some industry analysts have been puzzled over why more homes haven't been put up for sale as the rate of borrowers who default climbs higher. Well-intentioned efforts to keep families in their homes have led to delays that some analysts believe is prolonging the mortgage crisis by creating a "shadow" inventory of pent-up supply that will ultimately hit the market.

That has prompted some to question the logic of keeping homes off of the market at a time when demand for bank-owned properties has been soaring. The number of foreclosed properties for sale in Las Vegas, for example, has fallen to a less than three months' supply, according to SalesTraq, a local real-estate research firm. But housing demand typically falls in the winter, and the number of foreclosures continues to grow. "We're past the peak of when you would want to sell," says Mr. Lawler.

Over the past year, the Obama administration has increasingly used Fannie Mae and Freddie Mac as the centerpiece of its housing-rescue policy, charging the mortgage-finance companies with spearheading a campaign to modify and refinance millions of troubled and at-risk homeowners. The rental programs join a series of other initiatives, including efforts to improve short sales, where a borrower sells the home for less than the value of the mortgage designed to help borrowers that may not qualify for those programs.

Tax Credit Extended!!!

Signed Into Law November 6, 2009

President Obama has signed legislation to extend the Homebuyer Tax Credit. Passage of the bill was widely anticipated to further spur economic recovery in the housing sector, as more buyers are now eligible for tax breaks under the new law. The $8,000 first-time homebuyer tax credit was originally set to expire on November 30.
In addition to offering the $8,000 first-time homebuyer tax credit, the new law also allows a $6,500 credit for repeat or move-up homebuyers who have lived in their primary residence for five years or more.
The tax credits are available to buyers who sign purchase agreements on a new or existing primary residence between December 1, 2009, and April 30, 2010. Buyers would have until June 30 to close on their new homes.
There is an $800,000 price limit on all homes eligible for the credit. The income limits for all buyers are now $125,000 per year for individuals and $225,000 for married couples. Under the old program, the limits were $75,000 and $150,000 respectively. The first-time homebuyer credit is also available to those who have not owned a home in the previous three years. The credit does not have to be repaid unless the home is sold or ceases to be the primary residence within three years.

To find out more about the tax credit, contact your agent with My Arizona Home Team.

October Arizona Real Estate Wrap Up!!

More great news about the national real estate market was reported on Monday. September had an increase of 6.1% in Pending Home Sales. The rise from 110.1 million to 103.8 million marked the largest annual increase on record and the longest streak of gains since the measurement began in 2001.

The gains are attributed to homebuyers rushing to take advantage of the $8,000 tax credit which is set to expire at the end of this month. Forbes reported yesterday that the Senate voted 85-2 on Monday to move to a final vote on an extension through April 2010. This is a promising step closer to seeing the bill reach the President. There is also discussion of a tax credit of $6,500 for homebuyers who have lived in their home the previous 5 years. Click this link http://tr.im/E9PG to view the article.

Here are the Arizona market results for October 2009 (Information was provided by our friends at CromfordReport.com):

• Sales per Month @ 8,032 were up 191 from September 2009 @ 7,841
• Days on Market @ 91 was down 2 days from September 2009 @ 93
• Days on Inventory @ 163 remained steady from September 2009 @ 162
• Active Listings @ 38,733 were up 1,315 from September 2009 @ 37,418
• Median Sales Price @ 128K remained somewhat steady from September 2009 @ 130K
• Lender Owned Percentage of Monthly Sales @ 46% was down from September 2009 @ 50.6%

Give us a call today to help you or someone you know find a GREAT deal on a home!
480-889-1424

Home sales continue to increase

Phoenix Business Journal - by Jeff Clabaugh Contributing writer

One measure of home sales rose for the eighth consecutive month in September, the longest streak since 2001.

The National Association of Realtors' index of pending sales of existing homes rose 6.1 percent in September. Pending sales are up 21.2 percent from a year ago, the largest annual increase on record, the NAR says.

"What we are witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month," said NAR chief economist Lawrence Yun. "Home values will stabilize sooner rather than overcorrecting."

Existing home sales, which make up the vast majority of home sales, are leading the recovery. Reports last week said sales of new homes fell 3.6 percent in September,while existing home sales jumped 9.4 percent. Existing home sales were at a two-year high in September. New home sales are down nearly 8 percent from a year ago.

NAR predicts new home sales will continue to lag as home builders hold back production to drive down inventory. New home construction also continues to be hampered by an ongoing credit crunch for construction loans.

OPEN HOUSE in Queen Creek

Open House on Tuesday, November 3rd from 1pm - 3pm
1074 E. Trellis Road Queen Creek, AZ 85240
Call 480-433-8326 for Questions!

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Senators Agree to Extend Homebuyer Tax Credit Legislation Pending Approval From Congress

Senators Agree to Extend Homebuyer Tax Credit
Legislation Pending Approval From Congress

Senators have agreed to extend the $8,000 first-time homebuyer tax credit originally set to expire on November 30. Once the Senate officially votes on the bill it will move to the House of Representatives, which strongly supports the extension. The Obama administration has also signaled its strong support for an extension of the tax credit.

Aside from the first-time homebuyer credit, the new plan would offer a $6,500 credit for repeat or move-up homebuyers who have lived in their primary residence for five years or more. The tax credits would be available to buyers who sign purchase agreements on a new or existing primary residence between December 1, 2009 and April 30, 2010. Buyers would have until June 30 to close on their new homes.

There is an $800,000 price limit on all homes eligible for the credit. The income limits for all buyers would rise to $125,000 per year for individuals and $225,000 for married couples. Under the current program, the limits are $75,000 and $150,000 respectively. The first-time homebuyer credit is also available to those who have not owned a home in the previous three years. The credit does not have to be repaid unless the home is sold or ceases to be the primary residence within three years.

According to the Treasury Department, more than 1.2 million borrowers have claimed $8.5 billion of the $13.6 billion set aside for the first-time homebuyer tax credit.

Please be advised that this legislation has not yet passed, but I will be sure to keep you informed as it moves through Congress toward approval. I’m committed to meeting your home financing needs. Call me if you have any questions, or if you would like to get started on a loan application today!

A Tip From Energy Star

Reduce the Chill with a Ceiling Fan

By switching your ceiling fan to pull air upward versus push air downward, you'll actually be helping circulate the warm air down into living spaces. This will make better use of your heating and allow you to lower the thermostat to save energy while maintaining your comfort.

Gobblin Cheese Ball

Ingredients
• 2 (8-ounce) packages cream cheese, room temperature, plus 2 (8-ounce) packages whipped cream cheese
• 4 tablespoons butter, room temperature
• 1 tablespoon milk
• 2 cups shredded mixed cheeses , such as cheeses for tacos
• Green food coloring
• 2 large tortilla chips
• 1 whole pepperoncini pepper
• 2 pimiento-stuffed olives
• 1 bell pepper, cut 2 thin strips and 6 small triangles
• 6 pitted green olives
• 20 small carrot sticks
• 3 cups shredded red cabbage
• Toothpicks
• Assorted crackers
• Assorted vegetables

Directions
Place 2 packages of cream cheese, butter, and milk in a mixing bowl, scraping down the sides of the bowl a few times. Beat with an electric mixer until smooth and combined. Add the shredded cheese and mix until well combined. Cover the bowl with plastic wrap, and chill in the refrigerator for at least 4 hours, or up to 24 hours.
Remove the chilled cheese mixture from the refrigerator. Place the mixture on a piece of waxed paper and form the cheese ball into a head-like shape. Place 3 pieces of waxed paper around the edges of a serving plate, leaving open space in the center. Place the cheese in the center of the platter so some of it is right on the platter, but the edges are on the waxed paper. This will ensure that the platter does not get dirty while you make your goblin.
In a medium bowl, stir the remaining softened cream cheese until totally smooth. With a spatula, spread the whipped cream cheese over the head. It's O.K. if it's not totally smooth - this will give your goblin spooky skin.
Place a few drops of green food coloring in a small bowl. Add 1 tablespoon of water and mix well. With a pastry brush, paint the tortilla chips with the food coloring until they are the desired color. Set aside to dry for a few minutes.
Once the chips are dry, press them into the sides of the cheese ball to form ears. Skewer the pepperoncini with a toothpick and then attach it to the center of the head to make a nose. Press the pimiento-stuffed olives into the head to form eyes. Use the 2 red bell pepper strips to make eyebrows. Take the pepper triangles and insert them into the holes in the pitted green olives. The green olives will serve as toes, and the red pepper strips will be scary toenails. Once the olives are assembled, press them into the bottom of the head to form the toes.
Press the carrot sticks into the head to form teeth. Leave them sticking out a bit to make scary teeth. It's O.K. if your carrot sticks are different lengths and thicknesses. Hold the head onto the platter with a spatula and gently pull away the waxed paper. Finally, press the cabbage into the top of the head to make hair.
Serve with crackers and assorted vegetables.