ResiLandscape report, issued by analysts at Moody’s Investors Service warn that there’s a change the country will slide back into a recession, and they forecast a “longer and deeper housing correction.”
The chief economist for Moody’s Analytics said “We have lowered the near-term economic outlook and raised the risk of a double-dip recession from one in four to one in three.”
He also says the US recovery has lost significant momentum since the spring. Retailing, housing, business investment, and industrial activity have all weakened, and the job market is no longer improving. After ticking higher to 9.6% in August, he is expecting the nation’s unemployment rate to drift back into double digits in the coming months.
Celia Chen, senior director for Moody’s Analytics expects house prices to fall until the 3rd quarter of 2011, significantly longer than Moody’s previous projections of a 1st quarter 2011 bottom in homes. She says the flood of 4 million homes either in late-stage delinquency or foreclosure is clogging the foreclosure pipeline from the servicers to the courtrooms, creating delays.
Distortions due to the first time homebuyer tax credits previously offered are partially to blame for the expected double-dip.
Image by TheTruthAbout… via Flickr
New data was released on 9/22/10 by Treasury and HUD on the Home Affordable Modification Program (HAMP). Just over 33,000 homeowners received a PERMANENT HAMP modification in August, 2010. This figure is down 27% below the number of PERMANENT HAMP modifications in July, 2010.
The borrowers whom received the PERMANENT HAMP modifications have seen their mortgage payments drop by a median of 36%, or more than $500 per month. Homeowner’s who received these modifications saw their housing expenses fall from 45% to 31% of their monthly income.
In August, 2010, 26,628 TRIAL HAMP modifications were added to the HAMP roster. Currently there are 202,521 active trial modifications. Federal officials are pushing the loan servicers to make decisions for borrowers who have completed the trial phase and either drop them from the program or make them permanent modifications.
The Treasury stated that the most of the cancellations are due to insufficient documents received or missed or late trial payments. In addition, if their principal housing expenses are already less than 31% they do not qualify for the program.
Fannie Mae “FNMA” took back 130,767 foreclosed properties in the 1st and 2nd quarters of 2010 and they were holding 129,310 single-family Real Estate Owned “REO” properties.
Fannie Mae with such a large inventory announced incentives to buyers and sellers of its REO properties.
On 9/22/10, the program announced a seller assistance incentive for properties listed on their REO website, HomePath.com. They are also expanding the initiative to offer additional incentives to real estate agents and brokers. Qualified owner-occupied homeowners can received up to 3.5% of the sales price which may be used towards the buyer’s closing costs including a home warranty. Buyer’s agents may also qualify to receive a $1500 bonus.
Eligible offers must be submitted on or after September 23, 2010 and must close by December 21, 2010. The maximum amount of days to close escrow is 60 days from acceptance of their offer.
As the recession lingers on workers are really feeling it in their pocket. Nearly eight-in- ten (77%) of workers in 2010 said they felt they lived paycheck to paycheck to make ends meet, up from 61% in 2009. One-in-five (22%) said they have missed payments on bills in the last year in a survey conducted by Career Builder between May and June, 2010.
Some workers are making ends meet by dipping into their long-terms savings. More than one-in-five (21%) say they have reduced their 401(k) contributions or savings to get by; while 33% state they do not participate in any programs such as 401(k), IRA or retirement plans. 30% also reported they don’t put any money aside into their savings each month while 28% set aside $100 or less for savings and 14% save less than $50.
As a result some workers said they have made changes to their living and spending habits as follows:
- Cut back on leisure activities – 54%
- Used coupons or shopped at discount stores – 48%
- Drove less to save on gas – 37%
- Cancelled cable and other subscriptions – 12%
- Used public transportation – 5%
This survey found that six-in-ten felt that the recession has made them more fiscally responsible.
Nearly 31,000 borrowers with Fannie Mae (FNMA) and Freddie Mac (FMCC) loans forfeited their homes through a short sale or deed-in-lieu of foreclosure during the 2nd quarter of 2010. This is a 27% increase over the 24,000 transactions completed during the 1st quarter of 2010.
During the same period last year there were 11,700 transactions up from 3,000 the year before.
Federal Housing Finance Agency (FHFA) also reported that loan modification and refinancing by FNMA and FMCC were up in the second quarter. The Home Affordable Modification Program (HAMP) increased 65% while refinancing under the Home Affordable Refinance Program (HARP) increased by 30%. Loan servicers completed 171,200 permanent loan modifications on these types of loans thru HAMP and nearly 88,600 borrowers in HAMP trials transitioned to permanent modifications bringing the two companies HAMP numbers to nearly 225,000. FHFA’s report also stated that approximately 202,000 of the borrowers were in a HAMP trial period at the end of the 2nd quarter, compared to nearly 448,100 at the end of the first quarter. That means minus the 88,600 permanent modifications 157,500 homeowners’ HAMP trials were cancelled as a result of missed payments or inadequate documentation.
FHFA also noted that more than ½ of the modifications completed in the 2nd quarter lowered borrowers’ monthly payments by more then 30%. During this same period the two companies initiated 275,100 new foreclosures, an increase of 12%. Completed foreclosure sales and 3rd party sales totaled 112,400, up 15% from the previous quarter.
With the Sacramento Real Estate market full of Short Sale Properties for Sale it is taking longer to close on the purchase of your new home. Due to the vast number of short sale properties available, the banks are starting to back up again on the approval of short sale properties.
If you are unwilling to wait a minimum of 60-90 days for an approval of your offer then a short sale is NOT for you. With the decrease of inventory available for sale in the Sacramento area, we are seeing an increase of multiple offers on our listings for sale. We are also seeing quite a few buyers who are unwilling to wait for short sale approval. This is the main reason we take BACKUP offers on our listings and ask that our buyers be held in backup position. We have seen countless buyers who are in 1st, 2nd and even 3rd backup position get their home. Patience is the name of the game in the short sale process.
If you are making an offer on a Short Sale Property, be prepared for a lengthy process. Updates are sometimes hard to come by, but working with a diligent agent who is well versed in Short Sales will help make the process quite a bit smoother and sometimes quite a bit faster.
The Obama Administration said that through the existing Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets, the US Treasury will make $2 billion of additional assistance available to housing finance agencies in 17 states to implement local programs for unemployed homeowners struggling to make their mortgage payments. Yesterday the US Treasury Dept added $476.2 million to a $64 million state program. California received the largest share of the $2 billion awarded.
California Housing Finance Agency “CalHFA” will be the administrator of this program as the state’s affordable housing bank. In the capital region, unemployment has soared to 12.4 percent and the State of California has more than 42,000 laid off homeowners.
Beginning on November 1, 2010, the government will help those QUALIFIED individuals help make their mortgage payments (up to $1,500 month) while they look for another job. They aim to help 19,000 make a few months of mortgage payments between November and next July and 23,000 will receive help in the next two years.
Qualifications for this program:
- Homeowners must be out of work
- Eligible for unemployment benefits
- Live in the home tied to the problem
- They must be FEWER than 90 days behind on mortgage
- Meet LOW & MODERATE income guidelines (generally less than $70,000 for couples in El Dorado, Sacramento & Placer counties
- EXCEPTION: Loan must be purchase money mortgage and NOT a refinance
To find out additional information at the KEEP YOUR HOME website at http://www.keepyourhomecalifornia.com/ or call (916) 373-2585.
With utility costs on the increase, homeowners and businesses are making the move towards solar energy. We know that solar energy is a good thing, but we don’t always know why.
Advantages
- Government financial incentives available
- No fuel required
- Savings on your utilities are noticed immediately and for many years to come
- Energy from the sun is virtually free
- Solar energy is clean, sustainable and renewable which helps protect our environment
- Solar energy doesn’t release carbon dioxide, nitrogen oxide, sulphur dioxide or mercury into the air like most traditional forms of electrical generation does
- Contributes to the decrease of harmful greenhouse gas emissions
- Solar energy is generated where it is needed and can be utilized to offset utility-supplied energy consumption
- Continues to supply energy to your home in the event of a power outage
- Virtually maintenance free and will last for decades
- No additional recurring costs after installation
- If additional energy is required, you can add additional panels
Disadvantages
- Initial upfront costs to install
- Solar panels require a large area for installation to achieve a good level of efficiency
- Efficiency of the system relies on the location of the sun; however this problem can be overcome with the installation of certain components
- Production of energy is effected by the presence of clouds
- No energy will be produced during nighttime although a battery backup system and/or net metering will solve this problem
- Pollution can be a disadvantage as it can degrade the efficiency of photovoltaic cells
- Appearance
As you can see, the advantages outweigh the disadvantages for installing solar energy and with all of the government incentives now may be the time for you to consider solar energy.
Check back for the next blog on Government incentives available for Solar Energy products.
Are you still on the fence trying to decide whether to keep on renting or take the leap into home ownership? You may never again experience these low home prices combined with the lowest interest rates ever again. Check out this handy calculator to help you see the advantages of home ownership. (CLICK HERE)
If you are still unsure, you should contact a REALTOR to discuss the advantages of purchasing a home and find out how much of a loan you can qualify for.
Don’t be left sitting on the fence saying should’ve…..would’ve…..could’ve Act now and contact your Real Estate specialist.
ResiLandscape report, issued by analysts at Moody’s Investors Service warn that there’s a change the country will slide back into a recession, and they forecast a “longer and deeper housing correction.”
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