Roxborough Science in the News!

How Roxborough Elementary Encourages Participation in the Science Fair

All of U.S. home sales drop in line with Denver’s

Nationwide existing-home sales plunged to a 15-year low in July, falling 27.2 percent in July from June, and 25.2 percent from July 2009, shows a report released today by the National Association of Realtors.

The drop was similar to the 26.6 percent year-over-year drop for closings in the Denver area last month, which was reported earlier. Closings were down even more in the Denver-area in July compared with a year earlier, falling 28 percent. Denver-area home closings in July from June fell 19.5 percent.

Independent broker Gary Bauer, who prepares a monthly analysis of the Denver-area housing market based on Metrolist data, said that he thinks a lack of consumer confidence is the culprit both nationally and locally.

“We’ve seen a consistent drop in consumer confidence,” Bauer said. “When consumer confidence falls like it has been falling, long-term items such as buying a home are not on the radar screen. Maybe this is an indication that activity is going to continue to decrease for the remainder of the year.”

August outlook dim

He said that from his “individual perspective,” home showing and offerings dropped in August. Part of it is the normal seasonal impact, as with the start of school, moving close to a school is no longer helping to drive the market.

“I think August is not going to be a good month, but I am not ready to say it is going to be grim,” Bauer said. “The reason is I’m not going to say it is grim, because I have had conversations with people in the title industry and they said they are quite active. And a lot of their activity is not for refinancing.”

Beyond the latest report, Bauer is concerned by a comment by Thomas Hoenig, the chief of the Kansas City Federal Reserve.

Fed remark “irresponsible”

“If the American people are looking at the housing market to be their investment opportunity, I think they are making a mistake,” Hoenig said on Monday at a field hearing by the U.S. House Financial Service s Committee’s oversight and investigations subcommittee.

“That is irresponsible,” Bauer said about the comment. “Pretty much my first feeling is that something is coming down the line and they are not sure how to handle it. But I don’t think someone in that position should be making a blanket statement that if you are looking to invest or buy a home, you should not be doing it.” Former U.S. HUD Secretary Henry Cisneros, speaking in Denver today, noted that while he repects Hoenig and that homes primarily should be purchased as a place to live, and not as an investment, noted that Hoenig is almost always the lone dissenting vote of the Federal Reserve Board, and does not represent the direction the Fed is taking to help revitalize the housing market.

Lawrence Yun, NAR chief economist, said a soft sales pace likely will continue for a few additional months.

Low rates will drive demand

“Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired,” Yun said. “Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September. However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs.”

Cisneros said that he thinks the tax credits were still a good idea, even though some of the sales that would have included in the summer shifted to the spring. The credits also likely spurred some home buying that would not have occurred otherwise, he added. The housing market, which was especially vulnerable late last year and this spring because of weak demand, needed the boost of the tax credits, he said. Cisneros said that recoveries in the housing market led the country out of the last eight of nine recession.

NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, said there are great opportunities now for buyers who weren’t able to take advantage of the tax credit. “Mortgage interest rates are at record lows, home prices have firmed and there is good selection of property in most areas, so buyers with good jobs and favorable credit ratings find themselves in a fortunate position,” she said.

Article by www.InsideRealEstateNews.com

Why Are Loan Modifications So Difficult?

Article by By Selma Lewis, Research Economist at www.Realtor.org

Underwater homeowners have been in the news lately as the foreclosure crisis looms large. In response to the increasing crisis and the lack of a coordinated effort to prevent foreclosures, the federal government has initiated several programs to reduce unnecessary foreclosures. The most comprehensive initiative has been the Making Home Affordable (MHA) program, which is part of the Housing Affordability and Stability Plan (HASP) announced in February 2009. Two key MHA sub-programs are the Home Affordable Modification Program (HAMP) and the Home Affordable Refinance Program (HARP). Also, the latest effort to assist troubled borrowers has been the provision for short-sales and deeds-in-lieu of foreclosure.

In 2007, modifications were off to a slow start. Although they have increased in the past year, they have not kept up with the pace of delinquencies. The OCC Mortgage Monitor from the first quarter of this year reports that there were 390,204 modifications in the first quarter of 2009. The number rose to 695,746 in the third quarter of 2009 and maintained at 629,678 by the end of the first quarter of this year. However, this only averages about 19 percent of the serious delinquencies and foreclosures in process.

What is the problem? Authors of a series of discussion papers¹ point to several issues surrounding modifications. Firstly, modifications have traditionally been costly to mortgage servicers. Because they need to tailor the plan to the individual borrower, the work is time-consuming and requires staff; neither of which can be billed back to the investors. On the other side, foreclosures are deemed less expensive because they do not require working with the borrower and many of the expenses are billable to investors. In practice, in fact, direct “out of pocket” expenditures are reimbursable to servicers, yet the operating costs, such as labor, are not. It is also common for large servicers to provide REO and legal services in separate subsidiaries and can be recipients of these reimbursable costs.

Secondly, there is a lack of clear guidance about acceptable loan modifications. A very large share of subprime and near-prime mortgages that originated in recent years are held in private label mortgage backed securities (MBSs), which are governed by pooling and servicing agreements (PSAs). PSAs require servicers to initiate foreclosures on defaulted loans but provide little to no guidance on dealing with modifications. Although the PSAs vary, generally, they state that the servicer is obligated to maximize the interests of the investors by comparing the net present value (NPV) of a modification to the NPV of a foreclosure. In the case of loans secured by government-sponsored agencies, there are more specific guidelines on how to deal with delinquent loans than there are for private-label securities. But because loans are packed into securities tranches and sold to diverse investors, servicers have to deal with different guidelines, and are concerned about legal liability from unhappy investors, particularly when a modification benefits some inventors at the expense of others. Additionally, some securitization agreements prohibit lenders from contacting borrowers until they are at least 60 days delinquent. This means that lenders cannot contact homeowners who are at risk of going delinquent and offer them more favorable terms until they are already 60 days into delinquency.

Thirdly, servicers have not had the capacity to deal with the sheer volume of the modifications. They did not invest in labor or technology prior to the crisis because the rate of delinquencies in the past did not require such investments. In the midst of the crisis, servicers have been financially constrained given the broader financial crisis and a weak long-term prospect for the subprime industry.

Fourthly, both investors and servicers are concerned with the rate of recidivism, which may ultimately cost them more. Of the over 1 million modifications made in 2008 and 2009, 53 percent were delinquent or in some stage of foreclosure at the end of the first quarter of 2010. More than 41 percent were current and performing, and 1.1 percent were paid off. Of the 587,097 modifications done in 2009, nearly 52 percent were current at the end of the quarter compared with 27 percent of the 421,319 modifications done in 2008. Although, 2009 modifications are performing relatively better than those in 2008, servicers are often said to be reluctant about investing in the process because the modifications are merely postponing the inevitable foreclosures.

Finally, a major obstacle to refinancing and modifications is the presence of junior liens. More than one-third of the subprime adjustable-rate mortgages that originated in 2006 are estimated to have a junior lien present at origination². Very often, mortgages were split into a senior lien for 80 percent of a property’s value and a junior lien for the remainder. Also homeowners, in many cases, took out a home equity line of credit after originating the senior loan. Credit bureau data suggests that about 30 percent of all mortgages (prime and subprime) currently have an associated junior lien. The share of delinquent borrowers with a junior lien is assumed to be higher.

The problem that modifications present to senior lien holders is that their modified loans might be considered new loans, and thus subordinate to the existing junior liens. The laws on loans subordination vary from state to state. And while this is a legitimate concern for senior lien holders, it is not clear how often such subordinations occur. During the home price appreciation period, junior lien-holders often agreed to re-subordinate their loans when the borrower refinanced the senior mortgage. Nonetheless, because of the legal uncertainties surrounding modifications, senior lien holders generally require the junior lien holder to agree to subordinate their claim to the modified senior lien before agreeing to the modification. But junior lien holders are very slow and reluctant to agree to changes before getting the largest monetary compromise they can because the value of their lien is often worthless in a foreclosure. Consequently, many require some payment from the senior lien holder in order to agree. Many have also started demanding increasingly larger payments in order to agree to re-subordinate. This could be because junior liens are not traditional piggybacks, but it may also be that they are home equity lines with balances of $50,000 or more. Data also suggests that junior liens are less likely to go delinquent than first liens, which gives the junior lien holder no incentive to enter the modification process and take an accounting loss. Why borrowers are continuing to pay their junior mortgage while defaulting on the senior remains a puzzle. Experts wonder if it is due to more aggressive collection by the junior lender, perceived continued access to credit, a smaller payment, or perhaps a combination of the three. All in all, having another party in the already stressful modification process can lead to more lost paperwork and frustration with the process, which are all very discouraging for borrowers. And at the end, some servicers may still be waiting for policymakers to offer more carrots to do modifications.

Given the considerations discussed so far, the pace of modifications has been picking up. According to the first quarter 2010 OCC and OTS Mortgage Metrics Report, during the first quarter of 2010, servicers implemented 629,678 home retention plans, including loan modifications, trial period plans, and payment plans. Table 1 summarizes the number of actions over the past five quarters. The report covers 64 percent of all mortgages outstanding in the United States, so it is not a full modification picture. Nevertheless, servicers initiated 2,731,408 home retention actions in total over the last five quarters. The increase in the number of modifications was largely driven by the increase in permanent HAMP modifications. The drop in the number of trial plans from the previous quarter indicates that servicers have mostly exhausted the pool of borrowers who were eligible for modifications. Accordingly, the number of permanent modifications has increased as many of the trial modifications turned permanent. It also important to note that nearly half of the homeowners unable to enter a HAMP permanent modification entered into an alternative modification with their servicer. Also fewer than 10 percent of cancelled trials move to foreclosure sale. Servicers are claiming, though, that they are modifying many more mortgages than the HAMP program. In a recent hearing by the House Committee for Oversight and Government Reform on HAMP, representatives from five major mortgage servicers testified. They claimed that permanent HAMP modifications represent only about 7 percent of their total modifications. They claimed that somewhere between 70 and 80 percent of HAMP cancellations actually result in some other form of home retention action or avoiding foreclosure. In summary it is difficult to make any conclusion about the HAMP program yet. While the number of HAMP permanent modifications is not at forecasted levels, both HAMP and private label modifications are continuously rising. Also, the mere insistence on mortgage modifications by the government and requirement for servicers to participate in the HAMP program might have driven private labels to reconsider their own proprietary modification programs as well.

3rd-party foreclosure sales 30% of Colorado market

There were 4,535 distressed home sales in Colorado in the first quarter, accounting for slightly more than 30 percent of all of the homes sales in the state, shows a national report released today.

The report by RealtyTrac, based in Irvine, Calif., for the first time released a report tracking third-party sales by banks. The sales, which occur during any phase of the foreclosure process, typically fall into two broad categories, Rick Sharga, spokesman for RealtyTrac told InsideRealEstateNews. The first category is short sales, in which the bank agrees to accept less than the mortgage amount. The second category is after the bank has acquired the home in what is known as a REO (Real Estate Owned) and subsequently sells it to someone else.

In the fall, RealtyTrac plans to start breaking out short-sale data for each state, Sharga said.

An earlier report by the Colorado Division of Housing, showed 6,686 foreclosed homes being sold at public trustee auctions in Colorado during the first quarter.

Tracking short sales

“Our number for total sales is very close to that number,” Sharga said. “With this report, w were looking at third-party, arms-length sales. We did not count the foreclosure sales when the bank was the highest bidder.” Banks often bid the amount of the outstanding loan, as that does not cost them any money out of pocket. Investors can bid more, if they think the house is worth more. Typically, if a house had equity in it – that is the house had value beyond the loan amount – the homeowner would be better off selling the home on the open market. It’s estimated that nationally, one out of every four mortgages is underwater.

“There 4,535 number does still seem surprisingly low,” said Ryan McMaken, of the Colorado Division of Housing, who researches and authors state-wide foreclosure reports. “RealtyTrac is obviously using a different methodology that we do. I think their data will be valuable for future comparisons, rather than the absolute numbers.”

More Article at InsideRealEstateNews.com

My last Tax credit buyer closes on Thursday

My last tax credit buyer, Scott closes on his house on this Thursday! I’m totally excited that Scott was about to negociate a deal on a short sale property, lock in at 4.75%, using his VA eligibility and getting the home for zero down, and zero out of pocket! And a $8,000 check in the mail to boot! What a perfect end to this perfect storm. 

Scott was a typical buyer who I saw emerge in the last 6 months of this stimulus.  He wasn’t sure about home ownership, his job prospects, location, and so much more.  But the pros overwhelmed the cons and he jumped in with both feet at the last minute. 

It’s hard to say what the future holds as we’ve prefunded a lot of our market due to this stimulus.  Depending on your local market, foreclosures, short sales, and inventory may not be improving for some time. 

In my opinion, two things have to stabilize; Jobs and affordability.  Jobs will allow more people to own, less people missing there payments and a trickle down affect.  Being able to afford your home is necessary in so many markets, not only the “true” payment, but the availability of mortgage money.  With tighter underwriting standards, even the worthly buyers many have challanges.

June 2010 Mortgage and Housing Outlook

Below is some commentary from a 14 page article which PMI, one of the largest mortgage insurnace company publishes.  I felt like the following outlook was a good summary of the current times.  Let me know if you’d like the entire article.

The second tax credit had a significantly positive impact on home sales in March and April, and its expiration will reduce sales in coming months. The moving forward of sales into those two months from the next several months will make it difficult to determine the actual underlying pace of activity. It is likely, however, that the pickup in employment growth, continued low mortgage rates, and a faster pace of household formations will boost the trend rate of home sales – but this may not be apparent until the third quarter. For all of 2010, we project existing home sales to climb by 6.1 percent to 5.47 million units and new sales by 16.6 percent to 436,000 units (reflecting more depressed levels in 2009, new sales have more room to rise in 2010). The continued oversupply of homes on the market (mostly from foreclosures) still weighs on house prices, although the pickup in sales over much of the past year has tempered this. Over the course of 2010, with demand and supply in rough equivalence (with stronger sales but also more foreclosures), home prices probably won ’t be much changed on a national average basis. Stronger sales and fewer foreclosures should reduce inventories further next year, however, and allow modest national average home price gains (around 2.0 percent in 2011).

Starting June 1st, a second credit report will be pulled!

  If you’re thinking about applying for a home mortgage, here’s some important news: Beginning June 1, your lender is likely to order a second full credit screening immediately before closing.

 The last-minute credit report will be designed to find out whether you have obtained — or even shopped for — new debt between the date of your loan application and the closing. If you’ve made applications for credit of any type — for furnishings and appliances for the new house, a car, landscaping, a home equity line, a new credit card, you name it — the closing could be put on hold pending additional research by the lender.

 If you’ve actually taken out new loans that are sizable enough to affect the debt-to-income ratio calculations used in your original mortgage approval, the whole deal could fall through. The added debt load could render you ineligible for the mortgage because you suddenly appear unable to handle the payments without a strain on your household budget.

 The June 1 changes are part of a new effort by mortgage giant Fannie Mae to cut down on slipshod underwriting by lenders and fraud by borrowers. Fannie’s “loan quality initiative” will require lenders not only to pull two credit reports for each mortgage transaction but to perform additional verifications of borrower occupancy plans for the property, Social Security numbers and Individual Taxpayer Identification Numbers.

 ”There’s an almost irresistible urge” for many mortgage borrowers, said Don Unger, chief executive of Advantage Credit of Evergreen, Colo. “The lender says, ‘Okay, you’re approved for the loan,’ and you immediately think about shopping for all the things you need for the house. You go to Home Depot” or other major retailers, “and you put in an application.”

 In the past, that might not have raised an eyebrow — or even been detected. But under the new double-check policy, when the Home Depot application shows up as a “hard,” or borrower-initiated, inquiry on a credit report, Unger said, the lender “is going to have to contact” the merchant and determine whether credit was extended, in what amount, and how this might affect the applicant’s home financing transaction.

 Marc Savitt, president of the National Association of Independent Housing Professionals and a mortgage broker in Martinsburg, W.Va., said it’s not an uncommon scenario. “Most often the new debt involves furniture or other goods for the house,” Savitt said. “However, we have seen debt for new cars and other major purchases.”

 Terry Clemans, executive director of the National Credit Reporting Association, recalls one case in which the home buyers “went out and gorged on $40,000 worth of new furniture and all types of stuff” after their loan approval — incurring monthly payments far beyond what they could possibly afford. Under the new policy, they would likely be shot down before closing.

 Fannie Mae spokeswoman Janis Smith said lenders “will have to look for things like new credit accounts, increased credit lines, increased balances on existing accounts, undisclosed or newly recorded liens, second mortgages — anything that may have changed since initial application that might impact a borrower’s debt-to-income ratio.”

 As a practical matter, some lenders are likely to ask their credit reporting vendors to perform the actual investigations when new debts or inquiries pop up on borrowers’ files. Fannie Mae’s instructions say that “lenders must determine that all debts of the borrower incurred or closed up to and concurrent with the closing” are considered in the final loan analysis.

 Unger, however, said all this may not be as straightforward as it sounds. For example, if the credit report is pulled immediately before closing to comply with the “up to and concurrent” requirement, there may not be sufficient time to check out inquiries — especially those in which no actual drawdown of debt has been reported to the national credit bureaus. He also questioned whether entire loan packages might need to be re-underwritten — a time-consuming process — based on credit data discovered at the eleventh hour.

 In that event, poof goes your closing.

 How should home buyers and refinancers prepare for the new credit check procedures? Lenders and credit reporting company executives say everybody needs to follow just one basic rule: abstinence. Between your application for a mortgage and the date of closing — which might be a span of 45 to 60 days or more — resist the irresistible.

 Don’t apply for new credit unless you discuss it in advance with your lender and get a green light.

Banks Face Short-Sale Fraud as Home ‘Flopping’ Rises

June 10 (Bloomberg) — Two Connecticut real estate agents found a way to profit in the U.S. housing bust: Buy low, sell fast. Their tactic was also illegal. Sergio Natera and Anna McElaney are scheduled to be sentenced in Hartford’s federal court in August after pleading guilty to fraud. Their crime involved persuading lenders to approve the sale of homes for less than the balance owed –known as a short sale — without disclosing that there were better offers. They then flipped the houses for a profit.

The Federal Bureau of Investigation, the California Department of Real Estate and mortgage finance company Freddie Mac have warned that such schemes may be spreading after a plunge in values left homeowners owing more than their properties are worth. The scams threaten to deepen losses for lenders that are increasingly agreeing to short sales as an alternative to more costly foreclosures. “Short sales are an important tool that can help both the bank and the borrower,” said Morgan McCarty, executive vice president for mortgage servicing at Birmingham, Alabama-based Regions Bank, which lost money in the Connecticut case. “It’s just that criminals are always trying to find ways of profiting.” Barofsky Report An Obama administration effort to boost short sales may increase incentives for fraud, Neil Barofsky, special inspector general for the Troubled Asset Relief Program, wrote in an April 20 report to Congress.

The government, through its Home Affordable Foreclosure Alternatives Program, that month began offering as much as $1,500 to servicers, $2,000 to investors and $3,000 to homeowners who close short sales. “It appears that the program may lack necessary antifraud protections,” Barofsky wrote. A prevalent scam involves a practice called “flopping,” Barofsky said. In that scheme, investors or home buyers hire brokers to assess a home for less than its market value and convince banks to accept a sale at that level. The buyer conceals from the lender that he has lined up a higher offer and then quickly resells the property for a profit, as in the Connecticut case. “Flopping” occurs in more than 1 percent of short sales and may cost lenders $50 million this year, according to estimates from CoreLogic Inc., a real estate data and research company in Santa Ana, California. About 12 percent of existing home sales, or almost 622,000 houses, were short sales in the 12 months through April, data from the National Association of Realtors show. Quick Profit “A majority of the short-selling fraud is related to LLCs and investment companies trying to make a quick profit,” said Tim Grace, vice president of fraud analytics at CoreLogic. LLCs refer to limited liability corporations. The Treasury has “put reasonable protections in place” to prevent short-sale fraud, requiring that the buyer and seller have no hidden relationship and banning most resales within 90 days, said Laurie Maggiano, policy director of the department’s Homeownership Preservation Office in Washington.

Suspected property-valuation fraud almost doubled from the end of 2007 through the first quarter of this year, according to a June 8 report by Interthinx Inc., an Agoura Hills, California- based company that sells mortgage fraud detection software. In addition to banks losing money, “flopping” may hurt homeowners who complete a short sale and face higher deficiency judgments as lenders seek to recover unpaid mortgage balances, Ann Fulmer, vice president of Interthinx, said in an interview today on Bloomberg Television. ‘On the Hook’ Borrowers are “on the hook for larger deficiencies,” she said. “And there are indications that banks are increasingly turning to collection agencies and to civil lawsuits.” Investors often use real estate broker opinions, which may rely on drive-by inspections instead of full appraisals, to persuade lenders to sell at a low price, Fulmer said in a separate interview. She suggested an Internet search of “How to influence a broker price opinion,” which yielded 74,800 results. Near the top of the list is a video hosted by Mark Walters of CashFlowInstitute.com in Glendale, Arizona. It shows Walters feeding carrots to a pot-bellied pig while advising how to influence brokers to reduce their valuation. Among his tips: provide prices of comparable short sales to make the broker’s job easier, and be clear you want a low price. Swaying Favor “See if you might be able to sway what they do in your favor,” Walters says on the video. Walters didn’t respond to e-mails, a fax and phone messages requesting comment. In the video, Walters says he learned about influencing broker price opinions from Dean Edelson, owner of Elysium Investment Group Inc. in Sedona, Arizona. Edelson said efforts to influence broker price opinions, or BPOs, are needed to counterbalance lender pressure to inflate values.

Brokers often form an opinion based on a street view of a home, unaware of hidden flaws, he said. Attempting to influence their opinion is legal as long as there is no pressure or payment to get a desired outcome, according to Edelson, who says he has completed “a few hundred” short sales since 2003. “How is influencing a BPO fraud?” Edelson, 53, a former producer of promotional trailers for television shows including “Seinfeld” and “Frasier,” said in a telephone interview. “What’s fair market value? It’s determined by what a buyer is willing to pay for the property.” Investors can help the real estate market by paying cash to lenders, preserving property prices by reducing vacancies and helping homeowners avoid foreclosure, Edelson said. “Investors move inventory and help prevent market values from declining,” he said.

Taxpayer Losses By allowing broker price opinions, the Treasury exposes taxpayers to short-sale fraud after $49 billion of government bailouts for housing, Barofsky wrote to Congress. “As constituted now, the program permits home valuation, the key vulnerability point for a flopping scheme, without a true appraisal,” he wrote. “No program of this type and scale can be considered well designed without robust protections of taxpayer funds against the predation of criminals, particularly given the inconsistent treatment of home valuation.” Requiring a full appraisal instead of a broker opinion doesn’t guarantee getting the accurate value, the Treasury Department’s Maggiano said. “It’s all in the integrity of the person doing the valuation,” she said. “Clearly there are poor quality appraisers, licensed or not, and there are poor quality real estate agents, licensed or not.” Smaller Losses Lenders usually lose less from short sales than foreclosures, because there’s less property deterioration and repossession cost, Maggiano said. In April, the average loss in principal for prime loans that went into foreclosure was 42 percent, compared with a 33 percent loss for short sales, according to Amherst Securities Group LP, an Austin, Texas-based company that analyzes home-loan assets. At Bank of America Corp., the largest U.S. mortgage servicer, completed short sales are on pace to more than double this year from 2009, Jumana Bauwens, a spokeswoman for the Charlotte, North Carolina-based bank, wrote in an e-mail. She declined to provide more specific data. “We have language in our short sale approval letter that prohibits the flipping of a property and after closing we will audit transactions to identify ‘flips’ or ‘flops,’ ” Bauwens wrote. “It’s not in the best interest of our investors or communities at large to encourage or allow flipping.” Regions Bank, a unit of Regions Financial Corp., completed 498 short sales with $175 million in unpaid principal balances in 2009, double the value of its 2008 transactions, McCarty said. The lender completed 303 short sales worth $93 million this year through May. Short Sale Requirements The company requires a full appraisal before a resale, McCarty said. It also demands short-sale buyers sign statements affirming the transactions are arms length, with no hidden buyer-seller relationships, and that there are no agreements to resell the property. In the Connecticut case, Regions Bank in April 2008 agreed to a short sale of a Bridgeport house for $102,375, unaware that Natera and McElaney had a bidder willing to pay $132,500, according to the plea agreements. Eight weeks after the bank sold for a loss, the pair resold the house for a $30,125 gain. Natera’s phone has been disconnected and he couldn’t be reached for comment. Arnold Kriss, his defense attorney in New York, declined to discuss the case before sentencing. McElaney declined to comment when reached by phone. Her New York-based attorney, Mark Bederow, said he couldn’t discuss specifics of the case. “The mere act of a buyer in a short sale selling again quickly isn’t per se fraudulent,” he said. “That’s business.”

Article by Bloomberg.com

Tighter FHA Standards coming?

The House Financial Services Committee approved a bill to increase capital reserves in the Federal Housing Administration (FHA) and reduce risks to its insurance fund. The bill will now move to the House floor for debate.

The bill would amend the National Housing Act by increasing the cap of annual premium payments collected by the FHA from 0.50% to 1.5%. It would also hold approved lenders accountable for the FHA loans they write. Under the new bill, if the FHA pays out a claim on a mortgage it finds did not meet its underwriting standards or detects fraud involved with the origination of the loan, it could require that lender to pay reparations for the loss to the insurance fund.

The bill also widens the authority of the FHA to terminate its approval of lenders to write its insured mortgages. If the FHA finds a lender has an excessive rate of early defaults and claims, it could remove the lender approval for any area in the country not just within its region.

As far as who determines the risk to the insurance fund, the bill also establishes a new position, a Deputy Assistant Secretary for Risk Management and Regulatory Affairs, who would be responsible for ensuring the performance of mortgages insured by the FHA.

“The FHA is playing a vital role in the current housing market. We must therefore remain vigilant in making sure that our reserves are strengthened and that our lenders meet the highest standards of conduct,” said Shaun Donovan, secretary of the Department of Housing and Urban Development (HUD). “This legislation puts FHA on firmer footing to achieve its dual mission of helping to stabilize the housing market during tough times and providing affordable homeownership options to underserved American families while protecting the American taxpayer by bolstering the strength of the fund.”

Not everyone is as optimistic about the new bill. The law firm K&L Gates said the bill and new regulations increasing the minimum net worth of FHA-approved lenders to $1m would “wreak havoc” on small business trying to write these loans.

Link to more info

March 2010 South Denver Metro Stats

One month before the expiration of the tax credits and a number of markets are hot!  Specifically South Suburban and Highlands Ranch homes priced under $400,000.  If you are a seller, be ready to pack. If you’re a buyer, be prepared to make an offer the day you see it! 

As with previous months, sales in the Douglas and Parker area are stuggling with higher inventory  and slow sales. 

check out my Market Stats  page which has the most detailed market stats for South Metro Denver.