Welcome to the "Z" Team!

Start of a new trend? Banks are agreeing to more short sales, and for the first time, short sale transactions are exceeding foreclosure deals, according to the most recent housing data from Lender Processing Services (LPS) Inc. “It’s a fairly recent phenomenon that short sales have been increasing,” Jonathon Weiner, a vice president with LPS, told Bloomberg News.

So why are banks getting more agreeable to short sales? Banks are realizing that short sale transactions usually sell for higher prices than foreclosures. In fact, foreclosed homes tend to sell for 29 percent less, on average, than comparable non-distressed properties. Short sales tend to sell at a 23 percent discount, according to Lending Processing Services data from January.

Banks and government agencies in recent weeks have taken steps to speed up the short sale process, setting new timelines for how long mortgage servicers have to respond to short sales offers. Also, some banks, such as Wells Fargo and JPMorgan Chase, are even offering some home owners cash incentives — up to $35,000 — if they agree to do a short sale instead of let the home fall into foreclosure.

Source: “Short Sales Surpass Foreclosures as Banks Agree to Deals,” Bloomberg News (April 17, 2012)

 The Federal Housing Finance Agency Federal Housing Finance Agency announced a new policy to speed up the process that mortgage servicers use to handle short sales, deeds-in-lieu, and deeds-for-lease for mortgages that are backed by Fannie Mae and Freddie Mac.

The FHFA, the regulator of Fannie and Freddie, says the new policy includes a revised timeline that will require mortgage servicers to respond to a request for a short sale offer within 30 days. Servicers also will be required to make a final decision on the short sale offer within 60 days.

For any short sale offer still under review after 30 days, banks will be required to provide weekly status updates to borrowers regarding the pending short sale offer.

The new policy, which will roll out in stages starting in June, aims to “prevent foreclosures, keep homes occupied, and help maintain stable communities,” says Edward DeMarco, the FHFA’s acting director. “These timeline and borrower communication announcements set minimum standards and provide clear expectations regarding these important foreclosure alternatives.”

The FHFA also says that by the end of the year there will be additional announcements from Fannie and Freddie that are aimed at addressing borrower eligibility and evaluation, simplifying documents, property valuation, fraud mitigation, payments to subordinate lien holders, and mortgage insurance. Please provide your thoughts about this policy?

Source: Federal Housing Finance Agency 

The El Dorado County, California region strikes Gold again? Investors are buying foreclosure bargains and then turning the properties into money-making rentals, which has some drawing comparisons to another “Gold Rush” of sorts. 

Diane Gozza, the executive vice president of Integrated Mortgage Solutions in Houston, recently wrote in an article for National Mortgage News that investors are eyeing the properties similar to how those risk-takers did back in the 1848 California “Gold Rush,” who also had dreams of striking it rich.

They have plenty to choose from: The government-sponsored enterprises, which includes Fannie Mae and Freddie Mac, own more than 200,000 single-family foreclosed homes, and banks own about 600,000 more. To help accelerate the “rush,” the Federal Housing Finance Administration recently launched a pilot foreclosure-to-rental program, offering up investors the chance to bid on 2,500 foreclosure properties owned by Fannie. But some housing experts have argued that such REO-rental programs aren’t needed because investors are already flooding the market to buy up foreclosures and a government intervention isn’t necessary. (Read “NAR: REO Rental Programs Largely Unnecessary” and “Calif. Lawmakers Oppose REO Rental Program“)

“Taking into account the enormous stockpile of REO properties currently held by the GSEs, the auction and bulk investment in REO to rental properties may indeed be the next gold rush,” Gozza writes. “Much in the spirit of the 1848 gold rush, there will be risks and tough lessons learned. But, this private-sector imitative has the potential to be the catalyst for housing market recovery.”

Source: “Tapping into the Next ‘Gold Rush,’”  National Mortgage News (4/10/12)

Our tax updates for sharing! With the April 17 tax deadline less than a week away, you still have time to take advantage of the valuable tax benefits home ownership affords. The National Association of REALTORS®’ consumer site, HouseLogic.com, can help.

“Our government encourages home ownership because it benefits families, communities, and our nation’s economy; home ownership is an investment in our collective futures,” says NAR President Moe Veissi. “HouseLogic.com helps home owners identify the benefits that will save them money today and plan ahead for future savings, as well.”

HouseLogic.com provides tips and tools for home owners, and devotes an entire section of its site to tax incentives for the home. Check out A Home Owner’s Guide to Taxes to find helpful articles you can pass along , such as 10 Easy Mistakes Home Owners Make on their Taxes, 12 Tough Questions (and Answers) About Home Office Deductions, and 6 Deduction Traps and How to Avoid Them that provide consumers with a wealth of information to ensure they get the maximum return to which they’re entitled.

Tax benefits that encourage home ownership include mortgage interest deduction, deductions for property taxes, and tax credits for energy-efficient remodeling projects and heating and cooling systems.

For more information on tax deductions and preparation as well as articles you can add to your blog or Web site, visit www.houselogic.com.  Article data source: NAR

Are you increasingly hanging out in the social media world? Do you know Facebook is not the only one offering help for you? Plus, informative daily news on Blog or Web sites? 

Pinterest, in particular, is growing rapidly, seeing its Web traffic surge nearly 50 percent in February compared to January, according to recent data from Experian Hitwise. The site now ranks as the third-most-popular social media site, behind Facebook and Twitter. What’s more, the site has been growing as a source for referrals to other Web sites: Pinterest users referred traffic to more Web sites in January than Google+, LinkedIn, and YouTube combined, according to a separate study by the site Shareholic.

Ninety-one percent of adults online use social media sites regularly, according to the report. Therefore, we feature daily info. on: www.sierraproperties.com, Trulia, etc!

Experian Hitwise reports the following top six social media Web sites, based on total visitors from March: Facebook: 7 billion, Twitter: 182 million, Pinterest: 104 million, LinkedIn: 86 million, Tagged: 72 million and Google+: 61 million

Source: “ The 2012 Digital Marketer: Benchmark and Trend Report,” Experian (2012) and “New Study Pegs Pinterest as the Number 3 Social Web site,” Forbes (April 9. 2012)

Great news for our regions of Lake Tahoe and the Sierras. Some buyers are calling the vacation-home market the “perfect storm,” — falling home values, low mortgage rates, and increased affordability — prompting more opportunity in the second-home market!

The National Association of REALTORS® reported last week that vacation home sales increased 7 percent in 2011 over the prior year. Of those surveyed, 33 percent of the vacation home owners surveyed say they purchased a home because of the low real estate prices. Also, 91 percent reported they plan to rent out their second home purchase in the next year. Seventy-one percent say the higher rental income potential from investment properties helped motivate their purchase.

Many second home owners may have been sitting on the sideline, waiting for the perfect time to pounce on bargain prices, but are seeing that time as now, housing experts say. And more buyers are making all-cash purchases, too: 42 percent of vacation-home buyers paid cash for their home, according to the NAR survey.

Vacation home buyers are also looking past popular beach or ski resorts to make their purchase, says Walter Molony, spokesman for the National Association of REALTORS®. “Name destination resorts are only a component of the picture,” Molony told MSNBC.com. “Most people want to be within an easy drive of their [vacation] home.”

Check out: www.sierraproperties.com for some ”Best Buys” and regional information.

Source: “‘Perfect Storm’ Encourages Sales of Vacation Homes” MSNBC.com (4/ 4/12)

According to Census Bureau data, 4.4 million households had three generations or more under one roof in 2010. That is a 15 percent increase compared to two years prior.

The “double-up” phenomena is particularly pronounced among adult children, who are increasingly moving back with their parents after college to curb costs. The number of 25-to-34 year olds living with their parents jumped by more than 25 percent between 2001 and 2007, according to Census data.

The larger household sizes are causing builders to take notice and redesign floorplans to accommodate multi-generational households. Pulte Homes says it’s swapping out one of the garages in its two garage plans to allow for extra space in a home for a guest room. And Toll Brothers reports that it’s creating new floorplans to accommodate multiple generations, such as a guest suite with a kitchen added where a family room may have once been. Please provide your comments on your market trends.  

Source: “The New American Household: 3 Generations, 1 Roof,” CNNMoney (4/3/12)

Waiting a few years to sell? Make a few changes for your desires?  Many home owners are opting to tackle improvement projects around the house, according to a new survey of 1,500 adults by American Express Spending and Saving Tracker.

Seventy percent of home owners surveyed say they intend to take on a home improvement project this year, and they plan to spend about $3,500 on sprucing up their home, according to the survey. That’s an increase of about $100 compared to last year.

The projects will primarily concentrate on the indoors, according to the survey. More than one-third of those polled say they are devoting some of that budget to home accessories, such as throw pillows, or on appliances and new furniture.

The top home project they have lined up? Painting, which 37 percent of those surveyed say they plan to do this year. Twenty-four percent said they will do landscaping projects. These could be improvements or upgrades to increase value for a future sale?

Also, more home owners this year compared to last year say they’re going the do-it-yourself route, with plans to refurbish their houses themselves rather than hiring a professional to do it. In the survey, 43 percent of owners say they’ve been inspired to tackle home projects themselves by watching design shows on television, followed by seeing in-store displays or from viewing online design and do-it-yourself Web sites.

Source: “Home Decision 2012: Improving or Moving?” American Express (3/12)

Fannie Mae and Freddie Mac reportedly are in talks with their regulator to allow principal write-downs in order to minimize losses and prevent foreclosures. Both firms seem to have concluded that giving homeowners a big break on their mortgages would make good financial sense in many cases.

“Principal reduction works,” says Mark Zandi, chief economist of Moody’s Analytics. “If someone gets a reduction in their principal amount, it gives them a powerful hook to really fight to try to hang on to the home and not go into foreclosure.”

The Obama administration has increased incentives to lenders for write-downs, reimbursing half of what the lender writes off in some instances. Your comments?

More information at source: “ Fannie, Freddie Press for Mortgage Write-Downs,” WBUR.org (3/23/12)

Great news to share with you! The U.S. Supreme Court handed private property owners a victory yesterday with a decision allowing a couple to appeal an EPA ruling that their property contains a wetlands. Please view and provide your comments.

The court’s decision is supported by the National Association of REALTORS®, which along with other organizations submitted a friend-of-the-court brief in the case.

The ruling is on a narrow procedural issue: whether the owners have the right to appeal the EPA’s wetlands determination or wait until they first restore the property to its original state and then institute expensive and time-consuming monitoring activities? Noncompliance with the directive can subject violators to fines of up to $75,000 a day!

Lower courts have sided with the EPA, saying the agency’s compliance orders aren’t subject to judicial review. Only when the agency goes before a judge to assess a fine for noncompliance is the order reviewable by a court. But the Supreme Court in its unanimous decision said it’s appropriate to allow parties to contest agency decisions before having to first comply with the order.

NAR argued in its brief that the property owners in this case were being denied due process because the compliance procedures take years to work through and the costs are significant — all before the main question of whether the property contains a wetlands is even considered.

In this case, Mike and Chantell Sackett bought a piece of property in an already developed subdivision near Priest Lake in Idaho with sewer infrastructure already in place. After they started to prepare the property for construction of their house, they were directed by the EPA to stop and mitigate the changes they had made to the land out of a concern that the property contained a wetland — even though the property was adjacent to other developed properties and there was no water on the site at the time.

The Sacketts sought a hearing for their case to determine whether the property contained a wetlands, but EPA said that question couldn’t be decided until after they undertook the restoration and monitoring activities, or refused to do that and were levied a fine.

With the Supreme Court decision, the Sacketts can now get their day in court.

We appreciate this source from Robert Freedman, REALTOR® Magazine