The Debt Relief Act ~ Latest News

I had read a while ago that Obama put an extension in the budget for 2013, but that was anyone's guess if it was really going to make it.

Right now, the Mortgage Forgiveness Debt Relief Act is still set to expire at the end of this year, 2012. That's the bill that allows people who have had housing debt forgiven via Short-Sales, Foreclosure, and Loan Modifications not have to pay taxes on the amount forgiven.

L. A. Times, one of my daily Real Estate reads, notes:

The Senate Finance Committee has approved a bipartisan bill that would extend the Mortgage Forgiveness Debt Relief Act through 2013.

and points out:

It was after heavy lobbying by the National Assn. of Realtors and the National Assn. of Home Builders. The bill, which now moves to the full Senate for possible action next month, also would extend tax write-offs for mortgage insurance premiums for 2012 and through 2013 and continue some energy-efficiency tax credits for remodelings and home construction.

Read the Full Article Here:  Senate Panel Wants To Extend DRA

Now, we can only hope that this settled BEFORE the election. If not, then we are struggling to see who is in and what their decision is. To continue the help, or cut it off?

Is This A Temporary Bubble?

I asked my fish-guy husband today for a blog post topic. I read the news, everyone knows the market is going up. So, I thought, "I'll ask a normal person what they want to read about" And, my normal person said, 'How's the market, is this a smart time to buy?" I almost peed myself laughing out loud. Don't all people ask Realtors that?

He did probe a bit more with..."Is this appreciation we are seeing going to last?"

So, again without my crystal ball, what do I think about this little bubble we are seeing? Hmmm.....

Well, if the inventory stays low, the appreciation is definitely going to last. Most definitely, the infamous supply and demand theory, we all know that. If interest rates stay low, yes, people can still buy. Tough for some to qualify, but enough can still buy to eat up the inventory.

Once we start getting more homes on the market, the demand will ease up. Right now we are seeing multiple offers on most median priced homes. More standard sellers coming on the market too and some are getting premium prices.

Right now, we are about 1/3 of our Santa Clarita Valley healthy market number of active homes in the MLS. I think we can handle twice what we have and still see significant appreciation, most definitely. I believe once we get to the 1200-1400 range, we will be setting down and go back to the 2-3% appreciation that is more of what we consider normal.

Do I think we may see a bubble burst again? Me? No, not really. I think we may see a staleness, a flat line, but not a near death again. I think we will be floating along nice and easy. Maybe not perfect, but a little less of the near death experience for certain.

It's Been FOUR Years...

I'm reading all the Real Estate news this morning. Most important that keeps coming on my computer screen ~ in every different format ~ is that Fannie Mae earned enough of a profit that they could pay the Treasury back 2.9 million which leaves them just about 96 million more to cough up ~ Truth!

But, this week marked the first time in FOUR years that I've had an appraisal problem. This one is an escrow for a buyer. Appraisal came in below purchase price 5%. It's a small purchase to some, but it's a good chunk of change to the buyer.

Short-Sale that took over 3 months to get approved. And, now we have to ask them to reduce the purchase price.

I spoke with the appraiser....there really aren't strong enough comps to support the purchase price. Keep reading.....

Backwards now.....multiple offers on the property when we wrote. Buyer is doing 95% financing and we were competing against an all cash offer....from within the listing agents company! But, she stood true to her word and because ours came in first, the seller took my clients offer.

3 months ago we were still in a bit of a declining market, wouldn't you say? Fast forward to now and we are in a market that is appreciating. The inventory has reduced to horribly low levels, every property (short-sale or not) seems to have multiple offers on them. A buyer doing 95% financing has an uphill battle on acceptance with these conditions.

But, I don't just bend over. Nope. We have one comp for a lesser unit that closed closer to our purchase price....but that's not enough. So I contact escrow and ask is there any extra money floating around ~ they are checking. And, the listing agent is submitting the appraisal to the SS lender and asking for a reduction in purchase price.

Back on the sidelines is that all cash buyer just waiting to pounce!

So, 4 years later I'm working on it for my client. Last time it worked out AOK....we shall see how this works out.

Santa Clarita Valley MLS Stats August 4, 2012

Interesting stats of today....the numbers are a changin'......

ACTIVE inventory ~
432 total
121 are Short-Sales
41 are Bank-Owned
264 are Standard-Sales (61%)
and there, of course, is an odd-ball Probate, or HUD, etc. listing.

PENDING/BACK-UP (under contract) ~
1163 is the total number
829 are the Short-Sales
92 are REO's
234 are Standard-Sales
and, the remaining are as above....

and SOLD in the last 30 days ~
319 total units closed escrow...that's up from the last few reports I shared with you.
122 Short-Sales ~ what's that about 38 %?
68 were the REO's ~ 21%
Standard Sales numbered 125

So, while we still are seeing about 60% in closings were the distressed properties....look at the active....way more Standard Sellers coming on the market. Welcome Back I say!

DiMarco Says NO ! Fannie & Freddie No Principal Reductions

Yes, he's getting crap from both sides for sure. But, acting director of the FHFA will not allow Fannie/Freddie loans to do principal reductions.

His reasoning makes some sense, but for the people that have a Freddie or Fannie backed loan? They just have to keep paying until their home appreciates again. Until that time, DiMarco just didn't feel it was appropriate to burden tax-payers anymore.

Full articles here: L.A. Times ~ No Principal Reduction for Freddie or Fannie

and here: Housing Wire ~ Reaction to No PR

Hard news to swallow after one of my peeps just got a 217k principal reduction.....

Two Hundred and Seventeen Thousand Dollar Principal Reduction

Below is an excerpt from a letter that one of my clients received this week after reading one of my blog posts and contacting their bank:

~~~~~~~~~~~~~~~~~~

We are pleased to inform you that you are approved to start a Trial Period Plan for the new modification program recently introduced as a result of the US Department of Justice and State Attorneys General global settlement with major mortgage services, including Bank of America, N.A. This modification program includes significant principal reduction and an affordable monthly payment.

If you complete this Trial Period Plan by making all payments as outlined below, any past due late fees will be waived, interest and advances that we paid on your behalf will be added to your principal balance, and your loan will be brought up to date. We will then permanently reduce your principal balance by the amount of $217,709.41.*In addition, we will reduce your interest rate to 3.63%

~~~~~~~~~~~~~~~~~~~

This client had tried several loan modifications, then we initiated a Short-Sale, THEN, I read about Bank of America offering tremendous principal reductions to certain homeowners. The information said that the bank had to contact you, but my client contacted them directly and, 3 months later, received the news.

They had been so frustrated, were ready to just give up. Their income, like many others, had been hit hard with the economy and they had a medical issue as well. Good people, in a bad situation. Oh, and the trial period? Three months, only three months!

My local rep at Bank of America had this to say:

Happening more and more – but only with bank held loans…

So, while it may not happen for you, it just quite possibly could! Keep plugging away. If you are struggling, and many still are, don't give up! Especially if you have a bank held loan by one of the Robo-Signing Settlement big ones!

Buyers Be Sure to Find A Qualified Realtor ~ Even at an Open House

Yes, the market appears to be turning....so I don't need to write about that today! 

Just a little education for a new buyer today. How do you get a good Realtor? Get a referral from a trusted source. But if you can't get a referral, and you meet one at an open house, how do you know if they are one of the good ones? Most buyers that attend open houses already have an agent in mind, but for those of you that don't, consider these reasons to make sure you are getting a good Realtor working for you!

1) Will they help you understand the home buying process?

2) Will they point out defects in the property that you don't notice?

3) Will they open your eyes to other search areas?

4) Will they refer you to better service providers?

5) Will they negotiate the terms of the contract better than another?

6) Can they complete the home search process for your timeline?

7) Can they help you find a better interest rate/loan product?

All of these are important factors for a buyer completing one of the largest purchases in their life. Make sure you are working with a Realtor that can provide all of this. Make sure they have the experience and knowledge to find you the best home for you and your family.

It's an important decision, not to be taken lightly, due your due diligence in finding the right agent ~ 

just as I,  your Realtor, do mine in finding the right home.