Good News for Foreclosures??

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A smaller percentage of mortgages were delinquent and the rate of those entering the foreclosure process slowed in the fourth quarter of 2009, possible signs that the foreclosure crisis that has gripped many of the nation’s housing markets is finally starting to ease, a trade group has reported.

“We are likely seeing the beginning of the end of the unprecedented wave of mortgage delinquencies and foreclosures that started with the subprime defaults in early 2007,” said Jay Brinkmann, chief economist of the Mortgage Bankers Association, in a written statement.

The delinquency rate for mortgages on one- to four-unit residential properties was a seasonally adjusted 9.47% of all mortgages outstanding in the fourth quarter, down from 9.64% in the third quarter and up from 7.88% in the fourth quarter of 2008, according to the MBA’s quarterly delinquency survey.

Delinquencies include mortgages that are at least one payment or more past due but not yet in foreclosure.

Meanwhile, 1.2% of outstanding mortgages entered the foreclosure process in the fourth quarter, down from 1.42% in the third quarter and up from 1.08% in the fourth quarter of 2008. The percentage of mortgages at some point in the foreclosure process at the end of the fourth quarter was 4.58%, up from 4.47% in the third quarter and 3.3% in the fourth quarter of 2008.

The MBA survey covers about 44.4 million loans on one- to four-unit residential properties, or about 85% of all first-lien residential mortgage loans that are outstanding in the country. No doubt, the foreclosure nightmare isn’t over yet.

The percentages of loans 90 days or more past due and loans in foreclosure process set record highs in the fourth quarter, according to the report. Many of those loans more than 90 days past due are in loan modification programs, and some of them have been seriously delinquent for months waiting for modifications to get finalized.

But the good news is there are fewer problem loans actually entering delinquency—likely a result of fewer layoffs, Brinkmann said. “We normally see a large spike in short-term mortgage delinquencies at the end of the year due to heating bills, Christmas expenditures and other seasonal factors. Not only did we not see that spike but the 30-day delinquencies actually fell by 16 basis points from 3.79% to 3.63%,” he said. He added that the non-seasonally adjusted 30-day delinquency rate has only dropped three times in the past between the third and fourth quarter—”and never by this magnitude.”

Depending on the fate of seriously delinquent mortgages—whether they are cured with modifications or ultimately enter foreclosure—the percentage of mortgages somewhere in the foreclosure process could start to see a gradual decline in the second half of the year, he said during a conference call with reporters.

If normal seasonal patterns hold, there could be a bigger drop in the 30-day delinquency rate in the first quarter of 2010, Brinkmann said. That would be a positive sign for the months and years ahead. “The continued and sizable drop in the 30-day delinquency rate is a concrete sign that the end may be in sight,” he said. “With fewer new loans going bad, the pool of seriously delinquent loans and foreclosures will eventually begin to shrink once the rate at which these problems are resolved exceeds the rate at which new problems come in. “It also gives us growing confidence that the size of the problem now is about as bad as it will get,” he said.

According to the MBA data, Florida was the most problematic state, in terms of delinquencies. Twenty-six percent of Florida mortgages were one payment or more past due at the end of the year, and 20.4% of mortgages in the state were 90 days or more past due or already in the foreclosure process.

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Housing Market and Mortgage News

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National average mortgage rates declined from the previous week to 4.72% in the latest Primary Mortgage Market Survey released weekly by Freddie Mac on June 10th.  Rates have recorded weekly declines in seven out of the past nine weeks.  Fixed mortgage rates are now just slightly higher than the all-time low of 4.71% set in December 2009.

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Changes For Credit Card Users

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After more than a year of talking about it, actual change has finally arrived for the tens of millions of Americans who rely on credit cards.

Come February 22, 2010, card lenders will be barred from raising interest rates on most borrowers’ existing balances—a practice that increasingly irked consumers over the last decade and one of several that federal regulators and lawmakers finally barred as unfair and deceptive.

But the new law already requires banks to give cardholders 45 days’ notice of any change in terms. So if your bank didn’t mail you a rate-change notice by January 7, 2010, you no longer face a doubling or tripling of your interest rate on your current balance—as long as you keep paying and don’t fall 60 days late. The Federal Reserve recently issued more than 1,100 pages of rules telling card issuers how to implement that new prohibition and other elements of the nation’s new credit card law, whose main terms take effect February 22.

If you’re a “convenience user” of credit cards—one of the four in 10 cardholders who pay off your bill each month—you’ll be less affected than those who carry a balance. But pay attention, anyway, because the new rules are forcing the card industry to reevaluate business models that for too long relied on tricks and traps to generate revenue. It isn’t yet clear how the card market will evolve, especially since this is playing out during the middle of a deep and painful recession.

Still, many of last year’s dire warnings don’t seem to be coming true. “Rewards” programs haven’t vanished, nor have annual fees suddenly become the norm. Average rates even dipped in November 2009, which the bankers called evidence that “issuers are working to keep rates down even in these tough times.”

In short, good customers still seem able to enjoy the benefits of paying with plastic without shouldering much more of the costs. And that’s unlikely to change, because of competition and also because of one of the basic dynamics of the credit card business: Since they also get lucrative fees from the companies that accept plastic payments, the last thing card issuers want is to steer you to start paying with cash or checks.

Highlights of the new rules include
-No rate increases on existing balances. The dirty little secret of what card issuers called “risk-based pricing” was that some of the best prices were offered to some of the riskiest customers. The trick was that they knew they could profit by offering lucrative deals to these customers because they could predict that some portion would soon be paying much more—often “default” or “penalty” rates topping 30%—on big balances.

Sometimes the new rate was triggered by a late payment of a few hours. Sometimes it was triggered by a late payment to another creditor. Sometimes it was caused by nothing more than a dip in a consumer’s credit score and contract terms allowing rates to be changed “at any time for any reason.”

What’s changed: Except for introductory rates, which must last at least six months, interest rates cannot be raised on existing balances except in rare situations, such as if a cardholder falls 60 days late.

-Faster payoffs for some borrowers. The new law also ends a trap sprung on cardholders who were lured by low-interest or no-interest balance-transfer offers but didn’t read the fine print. If they subsequently used the card for purchases carrying a higher rate, they soon found that they were accumulating interest no matter how much they paid each month. Card issuers would not allow them to pay off the purchases until the low-rate or interest-free balances had been fully paid. What’s changed: Starting February 22, any payment over the monthly minimum must go toward paying down the portion of the balance carrying the highest interest rate.

-No increases for the first 12 months. When it comes to new purchases, less has changed. You may still face an interest-rate increase based on triggers in your card contract- even for tardiness paying another creditor, the trap that came to be known as the “universal default.” But there are two key differences. The first is that since August 2009, you’ve been entitled to 45 days’ notice and the right to say “no, thanks” to new terms. The second is that, as of February 22, a card issuer cannot raise your rate during the first year an account is open, unless an “introductory rate” is expiring and the “go to” rate was plainly disclosed at the start. Of course, since card issuers can no longer apply new rates to old balances, opting out may no longer be the best solution, in part because the law allows the issuer to double your monthly minimum. You’d be better off if you simply quit using the card. But if the issuer imposes a new annual fee, opting out may be your only alternative.

-New billing and payment terms. Starting in February, your card company must mail or deliver your bill at least three weeks before your payment is due, and give you a consistent monthly due date. Payments must be credited if they arrive by 5 p.m. on the due date. And if that day falls on a Sunday or holiday, you’ll be entitled to an extra day.

-Over-limit charges. As of February 22, a card company has to ask whether you want it to approve charges that push you over your credit limit. If you say yes, the issuer can only charge you one over-limit fee per month. And if you opt out, it can’t charge you a fee if it allows such a purchase.

-Young borrowers. If you’re under 21 and want a credit card, you’ll now need to show that you have the financial resources to make payments, or obtain a cosigner.

-Big changes still ahead. This isn’t the last of the new credit card rules. By August 2010, the Federal Reserve has to decide how to implement two of the trickiest parts of the new law: its requirements that penalty fees be “reasonable and proportional,” and that card issuers who have raised customers’ rates since Jan. 1, 2009, reevaluate those rates to see if they should be reduced, and to do so at least every six months.

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Unique Tahoe Keys Property With 2 Boat Slips

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I have a unique Tahoe Keys duplex condo for sale.  It is in the middle of a remodel so it would have to be a cash offer- although the seller is open to any creative solution.  It has a 2 bedroom 1.5 bath unit that is currently rented and a studio with full bath and kitchen.  The studio is in the remodel stage.  The owner has the new kitchen cabinets, stove/oven, 40k BTU gas fireplace, and dishwasher uninstalled on site.  He is tired of the project and just wants out.  Not in the MLS yet-

It has one garage space, outside parking, keys amenities (pools, hot tubs, tennis courts, boat launching, private beach), a nice mountain and marina view, and 2 boat slips…… A legal duplex with one APN number….

Offered in the very low $300’s

When you finished with this project you could flip for a nice profit or keep it and rent one unit and keep one for yourself.

Call or email  me for more information.

Joel Dameral
530-545-8827
info@JoelDameral.com

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HUD To Speed Resale of Foreclosed Properties

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In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan recently announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration’s commitment to addressing foreclosure. Secretary Donovan recently announced $2 billion in Neighborhood Stabilization Program grants to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes.

“As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential home buyers,” said Donovan. “FHA has an unprecedented opportunity to fulfill its mission by helping many home buyers find affordable housing while contributing to neighborhood stabilization.”

With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.

“This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed,” Donovan said.

In today’s market, FHA research finds that acquiring, rehabilitating and reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

“FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties,” said FHA Commissioner David H. Stevens. “This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity.”

The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of “flipping,” where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:

-All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
-In cases in which the sales price of the property is 20% or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.
-The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

For more information, visit www.hud.gov.

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Repeat Buyers Must Act Fast For Tax Credit

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By now it is well documented that today’s affordable housing prices, historically low interest rates and federal home buyer tax credit have combined to create one of the most attractive first-time buyer markets in recent memory. What many Americans might not realize is that a recent expansion of the buyer tax credit has created an equally desirable opportunity for existing homeowners.

This past November, Congress elected to expand the home buyer tax credit to repeat buyers after seeing the success the temporary financial incentive had on the housing market and overall economy. As a result, current homeowners who will have lived in their home for 5 consecutive years out of the last 8 may now be eligible to receive a $6,500 tax credit.

“The expanded tax credit offers a great financial opportunity for existing homeowners, particularly those looking to trade up,” said James M. Weichert, president and founder of Weichert, Realtors, one of the nation’s largest independent real estate companies. “Not only can you receive a large sum of money from the government, you’ll also likely purchase your next home for less money and at a lower interest rate than you could have in years past or years to come.”

To qualify for the tax credit, the repeat buyer must have signed a binding contract by April 30, 2010 and close on the home by June 30, 2010. Tax credit eligibility is subject to income limits, $125,000 for single buyers and $225,000 for couples. In addition, the sale price of the home being purchased can not exceed $800,000.

There is no requirement that existing homeowners must have sold their home to be eligible for the $6,500 tax credit. However, Weichert encourages existing homeowners who want to benefit from this incentive to move quickly, particularly those who prefer to first sell their current home before purchasing a new one.

“Typically, it takes three months or longer to sell a home. That’s why it is critical repeat buyers put their home on the market right away. Otherwise they might not leave themselves enough time to both secure a buyer for their current house and find a new home by the April 30 deadline,” added Weichert.

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2022 Winter Games in Tahoe???

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The Lake Tahoe basin remains a potential host for the 2022 Winter Olympics.

While local organizations have spearheaded efforts to bring the games to Lake Tahoe in recent years, there is reason for renewed optimism, according to Lt. Governor Brian Krolicki, chairman of Reno Tahoe Winter Games Coalition (RTWGC), a nonprofit organization dedicated to having Reno/Tahoe selected as the next North American region to host an Olympic Winter Games.

“The latest comments from the USOC are an absolute shot in the arm for the Lake Tahoe region’s latest bid to host the games,” he said. “This will allow us the necessary momentum to create a network and a partnership between Nevada and California that can focus on putting a package in place that makes it compelling for the USOC.”

A shakeup in the United States Olympic Committee leadership has led to a reprioritization of how the committee will approach the bidding process.

USOC Chairman Larry Probst and newly appointed Chief Executive Officer Scott Blackmun indicated they may want to pursue a 2022 Winter Games bid.

“Nothing’s off the table at this point,” chairman Larry Probst said during an interview at Associated Press headquarters Tuesday, when asked about a possible 2022 bid.

In the past, the USOC has focused on bringing the Summer Games to a bid city, as the games are typically viewed as a stronger economic engine for the host city.

However, in wake of Chicago’s last place finish in the bidding process for the 2016 Summer Games, the USOC indicated that bringing the Winter Games to the United States could be a positive step in repairing their relationship with the International Olympic Committee.

“The idea is to face in the right direction and start walking,” Blackmun said, “and we’ll know when we get there.”

According to reports from the Associated Press, the two strongest candidates to host the 2022 Winter Games are Denver and Reno-Tahoe.

“We’re really supportive of the USOC and the Olympic movement,” KieAnn Brownell, president of the Denver Sports Commission, told the Associated Press. “We have aspirations from the standpoint of wanting to host international events of all types. We’re going to follow the USOC’s lead and see where that goes.”

Local Impact

Bringing the 2022 Winter Games to Lake Tahoe would give the region an opportunity to dramatically improve its infrastructure, said Tahoe Regional Planning Agency Spokesman Dennis Oliver.

“Lake Tahoe could be the first Olympic site to deliver a Green Olympics with an underlying theme of sustainability,” he said.

Oliver said preparations for hosting the games should include installing a public transportation system capable of serving residents long after the event has concluded.

Oliver also envisions the creation of new more energy efficient hotel accommodations, athletic facilities with minimal impact on the local environment, and a system of feeding the athletes with locally grown agricultural products.

“It would be an event with an underlying theme of carbon neutral and I know a lot of local leaders would be interested in pulling it off,” Oliver said.

Krolicki agreed.

“The 2022 Winter Games would be a spectacle and a delight for several weeks,” he said. “But the improvements made to the infrastructure of the Lake Tahoe Basin in lead-up to the games would benefit residents for decades.”

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California State Parks Need Our Help

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California State Parks narrowly escaped major closures during last year’s state budget crisis, and supporters are going to the voters for help to ensure the worst doesn’t happen in 2010.

The California State Parks Foundation and other organizations have created the State Parks and Wildlife Conservation Trust Fund Act of 2010, needing more than 430,000 signatures to get it in the November 2010 ballot.

If successful, the act would add $18 to California’s annual vehicle licensing fees, said Pam Armas, California State Park Ranger Association President, raising about $500 million each year for state parks, wildlife, land conservation and ocean conservation projects.

“That may seem like a lot, but we’ve been so horribly under-funded; this will get us to where we need to be,” Armas said, adding that state parks have an approximately $1 billion backlog in un-funded work.

The $500 million would be split 85 percent to state parks and 15 percent to the other conservation efforts, Armas said, likely finding its way to groups like the Sierra Nevada Conservancy and California Tahoe Conservancy, among others.

In return, California residents who paid licensing fees would get free day admission to all state parks, year-round, Armas said.

“If you go two or three times it pays for itself — state park day use now ranges from $8 to $15,” Armas said.

The effort comes in response to the threat in 2009 to pull $70 million from state parks to help balance California’s eroding budget, which would have closed up to 220 of the state’s 279 parks.

That cut was later reduced to $14.2 million, meaning no full-time closures, but reductions of services and partial closures.

A similar addition to vehicle licensing fees was discussed by lawmakers over the summer, but never gained traction in the capital, so groups like the California State Parks Foundation, Audubon Society of California and the Sierra Club are taking it to the voters, Armas said.

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No E-File For First-Time Home Buyer Credit

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While the Internal Revenue Service is encouraging taxpayers to file their returns electronically, taxpayers who used the first-time home-buyer tax credit will have to send in their tax return by paper this year.

First-time home buyers who used the credit will have to go to the IRS Web site, www.irs.gov, to download a form claiming the tax credit. Taxpayers can still use tax filing programs to prepare their return, but will have to print it out and mail it in.

The IRS said paper filing will help prevent fraud and catch people who may have taken advantage of the $8,000 tax credit but didn’t use it to buy a home.

The IRS said it plans to start processing returns by mid-February, adding it may take an extra two to three weeks for taxpayers who used the home buyer tax credit to see refunds.

Among other documentation required for taxpayers who used the home buyer tax credit:

• A copy of the settlement statement showing all parties’ names and signatures, property address, sales price, and date of purchase.

• For mobile home purchasers who are unable to get a settlement statement, a copy of the executed retail sales contract showing all parties’ names and signatures, property address, purchase price and date of purchase.

• For a newly constructed home where a settlement statement is not available, a copy of the certificate of occupancy showing the owner’s name, property address and date of the certificate.

In November, Congress extended the federal home buyer tax credit program to June 30 for buyers to settle on a property.

Homeowners who have lived in their home for five of the last eight years can also qualify for a $6,500 tax credit if they close on a home.

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FHA To Raise Some Premiums This Spring

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The Federal Housing Administration won’t raise the 3.5 percent minimum downpayment requirement for mortgages it guarantees as long as borrowers have FICO scores of 580 or better.

Beginning early this summer, however, borrowers with credit scores below 580 will be required to make downpayments of at least 10 percent in order to participate in FHA’s mortgage insurance program.

This spring, the Obama administration also plans to raise the upfront mortgage insurance premiums paid by all FHA borrowers to 2.25 percent, up from 1.75 percent now.