Fannie Mae & Freddie Mac Implement Loan Modification

Fannie, Freddie suspend holiday foreclosures

Streamlined loan mods launch Dec. 15

BY INMAN NEWS

Fannie Mae and Freddie Mac have ordered their loan servicers and attorneys not to evict about 16,000 troubled borrowers or sell their homes while they implement a streamlined loan modification program that could save some from foreclosure.

About 10,000 borrowers who have Fannie Mae loans scheduled for foreclosure between Nov. 26 and Jan. 9 will be contacted directly by the attorney handling the case to discuss workout options, the company said. Freddie Mac issued a similar statement pertaining to about 6,000 borrowers.

The temporary suspension of foreclosures is designed to allow borrowers to keep their homes while Fannie and Freddie work with mortgage servicers to implement a streamlined loan modification program scheduled to launch Dec. 15 (see story).

The streamlined modification program is aimed at borrowers who have missed three or more payments on their primary residence and have not filed for bankruptcy. The program could help some obtain a more affordable monthly payment through a mix of reducing the mortgage interest rate, extending the life of the loan, or deferring payments on part of the principal.

Fannie Mae said its loan servicers are also prepared to work with borrowers who have already tried, but failed to obtain workouts. Seriously delinquent loans are being reviewed under the company’s “Second Look” initiative to determine if the borrower has been contacted and all workout options have been exhausted.

Presented by
CAROL PERDEW
(209) 239-7979
wwwCentralValleyHomes

Builder States Foreclosures Have Hit Bottom

Manteca foreclosures hit bottom?
Builder notes demand puts dent into resale housing supply

Dennis Wyatt
Managing Editor
Manteca Bulletin

The Manteca foreclosure market is at its bottom.

It’s a bold statement for a builder to make but when you’re chief executive officer of a firm such as Florsheim Homes that puts its money where its mouth is, the observation carries a lot of weight.

Florsheim CEO Joe Anfuso drew a lot of flack from other builders back in January when his firm started offering price guarantees to homebuyers at their Valley Park and Valley Blossom neighborhoods southwest of Airport Way and Woodward Avenue.

It was a simple offer. Buy a house from Florsheim anytime in 2008 and if they lowered the base price during that year you’d get a refund on Jan. 1, 2009 for the difference.

It was a risky gambit in the eyes of some other builders who were slashing their prices $5,000 to $10,000 every few months during 2007 to try and compete with the downward spiraling resale market driven by a rising tide of foreclosures. Other builders gritted their teeth at what they thought was another marketing gimmick they may be forced to match especially in light of several builders who had to pacify home buyers who discovered the home they bought just six months previously was selling for as much as $25,000 less when they actually moved into them.

Florsheim Homes has only two of the roughly 30 buyers since the first of the year that they will be sending a refund check to when 2008 ends.

Floresheim – which shifted its product to a price point that targeted entry buyers when they saw the market changed three years ago – won’t debate that its still a rough road for new home builders.

But he sees a lot of good news in the feverish pace of home buying in the resale market.

“It’s good for us (new builders) because the foreclosures have to clean up before our demand picks up,” Anfuso said.

As of last week, there had been 967 previously owned homes that closed escrow so far this year with 750 of those being foreclosures. More telling is the fact there are 393 active resale listings in Manteca – down from a record 670 in September 2007.

Anfuso said from the prices that homes are selling for – the median deal price on 160 foreclosures now in escrow is at $192,193 – represent a price point that has brought enough buyers to put a serious dent into foreclosure inventory.

“It looks like it has pretty well hit bottom in Manteca,” Anfuso said, adding that it isn’t a straight-line bottom with small dips and rises.

He expects the resale market to stabilize in 2009.

Anfuso noted that you wouldn’t “officially” know the bottom has been hit until after several months when various statistics are examined.

“It’s pretty well there, I’d say,” Anfuso said.

Last week, as an example, 30 homes closed in Manteca while 32 new listings were added to the Multiple Listing Service for previously owned homes. Eight months ago, the number of homes going on the market exceeded those being sold each week by 50 percent.

Anfuso said the current economic problems are the outgrowth of loose lending policies.

“We found out that if you offer people free money they’ll take it,” Anfuso said.

Now he said buyers are down to earth and are putting “skin” in the game.

“Buying a home now makes a lot of sense if you’re going to hold on to it, live in it, enjoy it, and raise a family in it,” Anfuso said.

CAROL PERDEW
(209) 239-7979
wwwCentralValleyHomes.com

 

Signs of Advantageous Market Conditions for Home Buyers

Why I continue to be hopeful …

Perspective: CEO sees opportunity in downturn

By J. Lennox Scott,
Inman News 

With the volatility of the stock market of late, there’s understandably some uncertainty about how all of this will impact the real estate market. I’ve had the opportunity to listen to several economists recently, including Lawrence Yun from the National Association of Realtors, and believe it or not, I feel good about what I’m hearing.

Here’s why:

The bottom line is that the situation is manageable and things will improve.

The most recent decline is due to the psychological impact of the stock market.

People are still buying and selling homes, just not at the same levels.

The recent passage of the “bailout” bill (see Inman News) is a step in the right direction, but it will take time to see the results work their way into the economy.

The volatility of the financial markets is causing many home buyers to pause, but the truth of the matter is that market conditions are ideal for some first-time buyers, move-up buyers and investors.

Recent actions by the federal government are starting to thaw the credit freeze.

We’re starting to see some stabilization in the more affordable markets and markets that are close to major job centers.

Interest rates are at historic lows for conforming and FHA loans and there are a variety of great mortgage options available, despite perceptions to the contrary.

Consumer confidence will take time to rebuild, but in the meantime it’s important to understand that advantageous market conditions currently exist for those who are motivated to buy.

With the end of election season, consumers should be less distracted by political campaigning.

J. Lennox Scott is third-generation chairman and CEO of John L. Scott Real Estate, a Seattle-based brokerage company founded by his grandfather in 1931.

CAROL PERDEW
(209) 239-7979
www.CentralValleyHomes