Distressed Properties and First-Time Home Buyers - The Recipe for Real Estate Recovery?

Distressed Properties and First-Time Home Buyers - The Recipe for Real Estate Recovery?
By Mary Ellen Podmolik Print Article
RISMEDIA, May 19, 2009-(MCT)-Value-conscious, first-time buyers have become key to the housing market’s recovery, and they are snapping up priced-right foreclosures despite the warts-and-all, sold-as-is condition of the properties. Half of the sales made in the year’s first quarter were to first-time buyers and almost half of all these sales were distressed properties, the National Association of Realtors reported. Distressed properties include foreclosures and short sales, which are private transactions in which a homeowner sells the property for less than the amount owed on a mortgage.

The glut of foreclosures has pushed down home values, so heightened interest in buying them benefits the immediate neighborhood and the overall housing market.

“It’s a very good first step,” said Lance Ramella, a principal at RW Real Estate Advisors in Oakbrook Terrace. “The first step is selling the most value-conscious units and those are the foreclosures. We’re not going to see any real sustainable price appreciation until we move the foreclosures off the inventory list.”

Moving homes off the foreclosure inventory list may take a while though. With the lapse of several industrywide foreclosure moratoriums, lenders nationwide are initiating foreclosure proceedings again. Government-led efforts to refinance or modify troubled loans can’t help the rising number of people unable to pay their mortgages because they’ve lost their jobs.

In Illinois, more than 7,300 homes became bank-owned during the year’s first quarter, according to RealtyTrac. It’s impossible to determine how many of them are listed for sale, or sold, at any one time because the area’s real estate listing service doesn’t require a property to be listed as a foreclosure.

To capture new interest in home sales thanks to lower interest rates and a first-time-buyer tax credit, a growing number of lenders and asset management companies that own foreclosed homes now appear more willing to drop prices. Banks used to hold fast on pricing and held back properties so they didn’t flood the market, but that has changed, said Susan Sirles Fidler, an agent at Re/Max 10 in Oak Lawn who works with lenders.

Attractive pricing is causing a noticeable increase in multiple offers. In just the past two weeks, a two-bedroom, two-bath Lincoln Park condo listed at $289,000 garnered 60 showings in two days and 20 offers; it sold for just over $330,000. A vandalized East Village penthouse that needed at least $80,000 in repairs was listed at $159,000 and sold for $245,000. In Northbrook, a foreclosed home listed at $719,000 received multiple offers and sold for $730,000.

A bidding battle on a foreclosure with potential “is not the exception,” said Henry Torn, a buyer’s agent at Chicago Realty Partners.

The uptick in interest is encouraging to lenders as well. “That’s what gives us hope,” said Sanjiv Das, chief executive of CitiMortgage. “It’s positive, healthy activity. We’re actively lending to that end of the market, the owner-occupant.”

Finding diamonds in the rough can be a test of stamina, determination and an ability to hold one’s breath. There can be evidence of vandalism, water damage, multicolor mold and squatters who didn’t have access to bathroom facilities because the plumbing fixtures were stolen.

“This is not for the faint of heart,” said Marki Lemons, an agent with Rubloff Residential Properties, who carries a flashlight into properties and keeps paper masks in her car. “You have to be patient, be non-judgmental and have some vision. You have to decide if you can stomach this.”

Others are in decidedly better shape, in part either because companies are offering departing homeowners cash for keys and a clean property or they are sprucing up the properties before they put them on the market.

“These asset managers are at a point where they’re writing checks and trusting the Realtor to get the work done and put it on the market,” said Dean Rouso, owner of Prime Property Partners in La Grange. “We’re helping the neighborhoods because instead of having this comparable property out there for $99,000, we now have a comp for $150,000.”

Not all buyers, however, find themselves on the winning end of foreclosure deals, and that is causing them to look for value in the traditional market.

‘Making Home Affordable’ Program Delivers Much-Needed Relief to Homeowners

‘Making Home Affordable’ Program Delivers Much-Needed Relief to Homeowners
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RISMEDIA, May 18, 2009-With the Making Home Affordable (MHA) program delivering much-needed relief to homeowners and to our economy just over two months after the release of program guidelines, Treasury Secretary Tim Geithner and Housing and Urban Development (HUD) Secretary Shaun Donovan provided an update on the program’s impact on stemming the housing crisis and keeping families in their homes and announced new options for homeowners facing foreclosure.

“In just over two months, the Making Home Affordable program is up and running, helping our economy recover and making a difference in the lives and livelihoods of thousands of American homeowners. Historically low interest rates are allowing Americans to refinance and save money, and modifications are helping homeowners avoid foreclosure,” said Secretary Geithner. “We are announcing a new program component to help homeowners obtain modifications in areas suffering from home price declines. If a modification is not possible, we are also announcing steps to encourage the quick private sale or voluntary transfer of property, which will save homeowners money and protect their financial future. These are critical steps in stemming the foreclosure crisis and stabilizing the housing market, both of which are critical to our economic recovery.”

“I can’t stress enough how important our HUD-approved counseling agencies are to the success of the Making Home Affordable program, and ultimately, to helping keep American families in their homes,” Secretary Donovan said. “That’s why HUD has requested a $100 million investment in our Housing Counseling Assistance Program for fiscal year 2010, a $35 million increase from our 2009 budget. This investment will help further support the work of our 2,600 HUD-approved housing counselors across the nation, just like those at NCRC, who play a key role in ensuring that borrowers can take part in the modification and refinancing options made available through Making Home Affordable.”

The new details on the Making Home Affordable program include:

-Foreclosure Alternatives provide incentives for servicers and borrowers to pursue short sales and deeds-in-lieu (DIL) of foreclosure in cases where the borrower is generally eligible for a MHA modification but does not qualify or is unable to complete the process, which helps prevent costly foreclosures and minimizes the damage that foreclosures impose on borrowers, financial institutions and communities. The new details will simplify and streamline the process of pursuing short sales and deeds-in-lieu, which will facilitate the ability of more servicers and borrowers to utilize the program. The program provides a standard process flow, minimum performance timeframes and standard documentation, and it offers financial incentives to servicers and borrowers to pursue these alternatives to foreclosure.

-Home Price Decline Protection Incentives (HPDP) will provide lenders additional incentives for modifications where home price declines have been most severe and lenders fear these declines may persist. To encourage the modification of more mortgages and enable more families to keep their homes, the Administration, building on insights pioneered by Chairman Bair and the FDIC, has developed an innovative payment that provides compensation based on recent home price declines. Together, the incentive payments on all modified homes will help cover the incremental collateral loss on those modifications that do not succeed. HPDP payments will be linked to the rate of recent home price decline in a local housing market, as well as the average cost of a home in that market.

Since the launch of Making Home Affordable, more than one million Americans have now refinanced, due to historically low interest rates, and thousands of underwater borrowers have refinanced under the Home Affordable Refinance Program. Fannie Mae has had over 233,000 eligible refinance applications through its refinancing program, with more than 51,000 of these having loan-to-value ratios between 80% and 105%. More than 55,000 Home Affordable Modification offers have been extended to qualifying borrowers. Additionally, servicers have mailed more than 300,000 letters to homeowners who are potential candidates for the program. The refinance application volumes and modifications underway make clear the desire of homeowners to take advantage of the Administration’s program.

Making Home Affordable, a comprehensive plan to stabilize the U.S. housing market, was first announced by the Administration on February 18. The three part program includes aggressive measures to support low mortgage rates by strengthening confidence in Fannie Mae and Freddie Mac; a Home Affordable Refinance Program, which will provide new access to refinancing for up to 4 to 5 million homeowners; and a Home Affordable Modification Program, which will reduce monthly payments on existing first lien mortgages for up to 3 to 4 million at-risk homeowners. Two weeks later, the Administration published detailed guidelines for the Home Affordable Modification Program and authorized servicers to begin modifications under the plan immediately. Fourteen servicers, including the five largest, have now signed contracts and begun modifications under the program. Between loans covered by these servicers and loans owned or securitized by Fannie Mae or Freddie Mac, Home Affordable Modification participants now account for more than 75% of all loans in the country.

For more information, visit www.financialstability.gov.

Why Live In Texas... You gotta see this video

This video shows the growth and opportunity here in Texas. The stats are real and Texas is not only the perfect place to live but the perfect place to have a job. With times as they are we as real estate agents are seeing more and more out of state home buyers who are relocating to either find new jobs or their actual headquarters moved to Texas. That says a lot. We hope you enjoy this video. Click here if you have any questions.

Fort Worth Added More Residents than any other North Texas City in 2008

Newly built homes dot the skyline west of I-35W at North Tarrant Parkway in far north Fort Worth.


Fort Worth continues to lead the way for growth in the Metroplex.

Cowtown added 17,400 residents last year — up from 16,000 in 2007 — and now has a population of 720,250, according to figures released Thursday afternoon by the North Central Texas Council of Governments.

But while Fort Worth continues to boom, growth overall in the 16-county North Texas region has slowed, mostly because of declines in the housing market.

Overall, the region’s population grew by 92,480; the first time the estimated growth was less than 100,000 in 13 years. Last year, the region added 131,000 residents.

Duane Dankesreiter, manager of research and information services for the North Central Texas council, said the slower growth reflected the mortgage crisis and broader economic recession. Both are scaring off residential construction in the area. Just 27,339 single-family units were built in the region in 2008, a 30 percent drop from the year before.

Construction of new multifamily units kept pace with previous years.

"We still have people coming into the region, but it’s definitely slowed," Dankesreiter said. "I don’t think it will go too much lower, given that our economy is still better than most out there."

Fort Worth was the leader in growth, but Dallas and Arlington grew as well, Dallas by 6,000 residents and Arlington by 1,300. Tarrant County as a whole gained 27,650 people last year, more than any other county in the North Central Texas region, which is anchored by Dallas, Tarrant, Collin and Denton counties.

Fort Worth Mayor Mike Moncrief attributed the city’s growth to its unique quality of life and diverse work force. But with the growth comes the need for more police, fire and other city services.

"As the city grows and our numbers grow, then the demands grow accordingly," Moncrief said. "I’d much rather have 17,400 new people than lose 17,400 Fort Worth citizens, any day."

Dankesreiter admitted to being surprised by Fort Worth’s resilience. He had not expected to see the city add more people in 2008 than it did in 2007, he said. He guessed that the new jobs created by the Barnett Shale – a huge natural gas field that lies beneath Fort Worth and other parts of North Texas -- may have been an important factor.

Moncrief agreed that jobs related to activity in the Barnett Shale have helped insulate the city from economic problems that other parts of the country are experiencing.

"I know that Fort Worth is not bulletproof," he said. "I do believe we are going to be affected less. I think we’re going to be affected last."

Mansfield leads the charge

Mansfield saw the largest percentage growth in Tarrant County, a 5.2 percent jump, bringing the city’s population to 55,950. Spokeswoman Belinda Willis said the city’s building boom began to ebb about four years ago, after several years of seeing requests of more than 1,000 single-housing permits annually.

"If that trend had continued, we’d actually be at 65,000, but that trend has backed off for quite awhile now," Willis said.

Roanoke in Denton County also saw a large increase, growing by 800 people, or 13 percent, to 6,950 people.

Farmers Branch leads Dallas County

In Dallas County, Farmers Branch had the biggest growth, jumping 8.1 percent to 31,100 people. Spokesman Tom Bryson said city leaders have been working to foster quality mixed-use and multifamily developments. A 2-year-old controversy over aggressive measures to force out illegal immigrants in the city had spurred concerns that it might deter the city’s growth.

"I’d say that if you go through anecdotal information, obviously you hear things on both sides, but I think the numbers speak for themselves," Bryson said.

Nearby Addison had by far the largest population drop in the region, of 12.4 percent, which Dankesreiter attributed to the city’s demolition of several multifamily units to make room for a new mixed-use development.

The Council of Governments’ population estimates are based on current housing inventories and weighed against other statistics including occupancy rates and labor force estimates.

AMAN BATHEJA, 817-390-7695
abatheja@star-telegram.com
Star-Telegram

2009 Spring Tour of New Homes

Looking for a new home? Curious what the 2009 new home builder has to offer in a new home? Looking for decorating tips that will set you apart from all your neighbors and friends? Well, come out to the 2009 Spring Tour of New Homes and see.

May 1-3, May 8-10, & May 15-17

This year there will be over 70 homes ranging from $110,000 to $2.3 million in Denton, Hood, Johnson, Parker, Tarrant and Wise Counties.

For details check out the website below for times and locations to pick up the Tour Book.

www.fwspringtour.com

Check it out! You will be glad you did!

Fannie Mae and Freddie Mac Helping More Homeowners - Loan Modifications Increasing

Fannie Mae and Freddie Mac Helping More Homeowners - Loan Modifications Increasing
RISMEDIA, April 17, 2009-Fannie Mae and Freddie Mac modified nearly 24,000 loans during the fourth quarter of 2008, an increase of 76% over the third quarter. The modifications, along with the suspension of foreclosures that began November 26, reduced the number of foreclosures by nearly 27% during the quarter, according to data released by James B. Lockhart, Director of the Federal Housing Finance Agency (FHFA), as part of the Foreclosure Prevention Report for the fourth quarter for 2008.

The FHFA report details the actions Fannie Mae and Freddie Mac have taken to prevent foreclosures and keep people in their homes. It analyzes data provided by the companies with adjustments to account for the impact of the foreclosure suspension. The suspension, originally set to end Jan. 9, 2009, was later extended to Jan. 31, 2009.

“Fewer homeowners are losing their homes as a result of the foreclosure prevention efforts,” said Director Lockhart. “We expect the numbers of those getting relief to grow further as the Making Home Affordable program picks up speed in coming months.”

The foreclosure prevention options include forbearance plans, payment plans, delinquency advances and loan modifications. Workout options that led to resolution of delinquent accounts, which means the account was either reinstated or removed from the portfolio, increased 15% in the last quarter of 2008.

The report shows that as of Dec. 31, 2008, of the Enterprises’ 30.7 million residential mortgages:

• Modifications represented 34.0% of fourth quarter loss mitigation actions up from 22.2% of the third quarter.
• Completed payment plans represented 19.0% of fourth quarter loss mitigation actions compared to 24.2% of the third quarter.
• Short sales represented 8.9% of fourth quarter loss mitigation actions compared to 7.7% of third quarter.
• Deeds in lieu represented 0.8% of fourth quarter loss mitigation actions compared to 0.7% in the third quarter.

As a result of increased loss mitigation efforts and the foreclosure suspensions, the overall loss mitigation performance ratio (loss mitigation actions as a percentage of mortgages for which foreclosure was likely) for mortgages serviced on behalf of Fannie Mae and Freddie Mac, increased from 55% during the third quarter of 2008 to 65.7% in the fourth quarter. For prime loans, the ratio increased from 45.1% to 54.2%, and for nonprime loans from 64.7% in the third quarter to 75.3% in the fourth quarter.

Suspensions gave servicers more time to work with borrowers in foreclosure who were eligible for the Streamlined Modification Program introduced in early November 2008. The impact of the suspensions caused December 2008 numbers for completed foreclosure and third-party sales to decline and for total loans, 60-plus, and 90-plus-days delinquent loans to increase.

When adjusted to account for foreclosure suspensions, the month-over-month change in the delinquency rates decreased. The month-over-month change in the 60-plus-days delinquency rate from October 2008 to November 2008 was an increase of 14.39%. The month-over-month change from November 2008 to December 2008 was an increase of 9.31%.

For more information, visit www.fanniemae.com or www.freddiemac.com.

Chef' Point Cafe on Food Network

Chef Point Cafe

Look for us on

Food Network's
Diners, Drive-Ins and Dives

Monday, April 6, 2009
9pm
Check your local listing
for more information

A Unique Fort Worth, TX Restaurant

Gourmet chef Franson and his wife Paula Nwaeze chose an unusual place to open an upscale Fort Worth restaurant.

A Conoco gas station in Watauga, TX.

How the Chef Point Café came to be there is a funny story of perseverance and creativity.

Quirky and fun, Chef Point Café’ has as its motto: Fill'er-up outside, fill'er-up inside. While you relax and await one of the chef’s signature dishes, you’re welcome to thumb through the latest issue of Auto Trader or buy a scratch off lotto ticket.

But don’t expect the usual convenience store fare.

A mixture of hearty American comfort food and Italian cuisine, the Chef Point Café menu includes such delectable culinary creations as crab cakes topped with roasted bell pepper, lobster bisque, and grilled sea scallops in garlic butter.

And don’t you dare visit the Chef Point Café without tasting the bread pudding smothered in hot cognac sauce, the bread pudding voted best among Fort Worth restaurants.

(817) 656-0080
5901 Watauga Rd
Watauga, TX

If you have not experienced Chef Point Cafe you don't know what you are missing. The food is beyond words, the wait staff is friendly, the dress if comfortable and the prices are good! Check it out..See for yourself..You will be glad you did.