Anita Acacio- Preventing Foreclosures

The Mercury News

In his State of the Union Address, President Obama laid out a plan to help responsible borrowers and support a housing market recovery.  Details of that plan were released yesterday.  However, funding for the proposed program must be approved by Congress, lowering the possibility that it will be implemented quickly.

Making sense of the story

• Operated by the Federal Housing Administration, the plan would allow underwater homeowners to refinance into cheaper federally insured loans.  Borrowers with good credit who are current on their loan payments are eligible.
• The measure also streamlines the process of refinancing an underwater mortgage, eliminating the need for an appraisal or submitting a new tax return.
• To qualify, borrowers must be current on their mortgage, have a minimum credit score of 580, and must be refinancing a loan on a single-family owner-occupied principal residence.
• Lenders only need to confirm that the borrower is employed.  Loans that are more than 140 percent of the home value probably would not qualify until banks wrote down part of the balance.
• Congress must approve $5 billion to $10 billion in funding, leading housing experts to praise the plan’s objectives with skepticism of it passing this year.

Read the full story
http://www.mercurynews.com/bay-area-news/ci_19872097

The Wall Street Journal

Consumer expectations for U.S. home prices perked up in December, according to a monthly survey from mortgage market firm Fannie Mae.

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http://blogs.wsj.com/developments/2012/01/09/survey-mood-improves-on-home-prices/?mod=WSJBlog&mod=WSJ_Real Estate_BLOGSDEVELOPMENTSFEED

Americans’ attitudes on a variety of issues are marginally better than one month ago, according to results from Fannie Mae’s December National Housing Survey. Despite overall low levels of optimism among Americans, consumer sentiment trended in a positive direction in the final months of 2011.

Americans who say the economy is on the right track rose by 6 percentage points since November, while the percentage who say the economy is on the wrong track dropped by 6 percentage points. When asked about housing, more Americans expect home prices to  to increase compared to November and, on average, Americans expect home prices to increase by 0.8 percent over the next year, up from an expected 0.2 percent increase last month.

Highlights of the survey include:

• Thirty-six percent of Americans say that mortgage rates will go up over the next 12 months, up 3 percentage points from November and was even with October.
• Seventy-one percent of respondents say it is a good time to buy a home (up 3 percentage points since last month), and 11 percent say it is a good time to sell.
• On average, Americans expect home rental prices to increase by 3.5 percent over the next 12 months, up from 3.2 percent in November.
• Five percent expect a decline in home rental prices over the next 12 months (tying May 2011 as the lowest point in the past 12 months), while 43 percent of respondents believe that home rental prices will increase.
• Thirty-one percent of Americans say they would rent their next home, while 64 percent say they would buy, up 1 percentage point from last month.

More info

A 4 percent mortgage sounds too good to be true – and for more than 90 percent of borrowers, it is.

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http://money.cnn.com/2011/10/19/real_estate/mortgage_rates/index.htm?iid=Lead

Millions of current and former homeowners will have a chance to get their foreclosure cases examined to determine whether they should be compensated for banks’ mistakes, under a wide-ranging review being planned by federal regulators.

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http://online.wsj.com/article/SB10001424052970203791904576609310331811594.html?mod=WSJ_RealEstate_LeftTopNews