Two Reasons I am Optimistic about the Economic Stimulus Package

After hearing about the different housing programs in the media, I really didn't think I'd see much change. It 's been two years of "we're gonna fix it" and frankly, I am a bit more than cynical. All the media hoopla hasn't amounted to much.

I was pleasantly surprised this week when I ran across it the first time, I was shocked. And the second time....I actually got a little optimistic about the economy!

First off, here's a blurb to get you up to speed:

HOUSING RESCUE PROGRAM DETAILS RELEASED

WASHINGTON (RISMedia, New York Times, Associated Press) – President Obama earlier this week unveiled details of his home loan aid plan designed to help millions of Americans who are at risk of losing their homes.

Administration officials say the Homeowner Affordability and Stability Plan could help nearly nine million households restructure or refinance their mortgages to avoid foreclosure.

The plan includes a $75 billion homeowner stability initiative that targets at-risk homeowners, many of whom have adjustable-rate mortgages that have increased house payments to as much as 50 percent of their monthly incomes.

This initiative offers cash incentives to lenders and borrowers for working out loan modification agreements that result in lower monthly mortgage payments and allow homeowners to keep their homes. Any bank that receives federal money under the Treasury Department’s $700 billion financial rescue program will be required to take part.

Another component of the plan is intended to help as many as five million responsible homeowners who took out conforming loans owned or guaranteed by Fannie Mae or Freddie Mac to refinance through those institutions.

To finance that effort, the Treasury is providing the two companies with up to $200 billion in capital on top of $200 billion that it had already pledged to them.

“This is not going to save every person’s home,” said White House spokesman Robert Gibbs. “The plan is not intended to . . . augment somebody’s loan for a house that they couldn’t afford under any economic situation, good or bad.”

According to the latest data from the Mortgage Bankers Association, nearly 12 percent of homeowners — a record 5.4 million — were at least one month late or in foreclosure at the end of last year.
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The first thing I heard was over a nice pinot at Crush on Friday night. One of my running buddies works at GMAC. She's been tasked with understanding the guidelines so GMAC can help their clients fit within the programs. With $1,000 incentive per successful loan mod, there is a lot of money at stake!

Secondly, I work with a company that contacts borrowers that are in default. I am the one that knocks on their door and asks if there is a way to work things out. We have strict guidelines, ie; we are considered debt collectors, etc. Friday, I got three new assignments. They are all potential loan mods. They are for people that have ALREADY LOST THEIR HOMES! Our goal is to re-instate them! WOW!

I am not a big Obama fan. The debt we are going into makes me worry. However, I am in the trenches, or front steps, with people that are stressed to the edge with worry over losing their houses. Without a place to call home, it's a scary world out there.

After 45 years of living full on red. I might just be getting a little purple tinge on some of my rough edges.

My Texas friends will just shrug it off; "She's from California, after all"

Last Minute Dallas Deals!!

Auction Baby!

There are 150 properties going on the block this weekend! I was disappointed last week when I went to the auction unprepared BUT, I just got a second chance!

150 properties fell out for whatever reason - which means less people, less competition and, if last week was any indication, some AWESOME deals.

If you've been thinking Dallas, this is the weekend. Shoot me an email or call me at 214-257-0193 and we'll go together!

Loan Mod Info - If you are having trouble making payments - You gotta read this!

Real Time Economics : Treasury Loan-Modification Guidelines

Treasury Loan-Modification Guidelines

The following is a summary of the guidelines for modifications of eligible mortgages provided by the Treasury. See full guidelines here.

Fact Sheet

Making Home Affordable will offer assistance to as many as 7 to 9 million homeowners, making their mortgages more affordable and helping to prevent the destructive impact of foreclosures on families, communities and the national economy.

The Home Affordable Refinance program will be available to 4 to 5 million homeowners who have a solid payment history on an existing mortgage owned by Fannie Mae or Freddie Mac. Normally, these borrowers would be unable to refinance because their homes have lost value, pushing their current loan-to-value ratios above 80%. Under the Home Affordable Refinance program, many of them will now be eligible to refinance their loan to take advantage of today’s lower mortgage rates or to refinance an adjustable-rate mortgage into a more stable mortgage, such as a 30-year fixed rate loan.

Awesome Auction Opportunities!

I am not usually a big fan of auctions but, I understand the rationale. Advertise like crazy, create excitement and then sell everything while the frenzy has people thinking competitively vs intelligently.

I am normally the one doing the foot work. I am there to hold the house open for the week prior and answering all the same questions over and over and over as throngs of people parade through.

This time I was not holding the homes open, this time a friend's client called because he wanted to go.

I've been to a ton of auctions; IRS, RTC, DEA. They all have their quirks and quirky people that attend.

There were probably 2000+ people at this auction in Dallas. Just like the typical auction, the vast majority of people came with pennies in their pocket hoping for a steal on that perfect home. Then there were the serious investors, the ones that had seen 10+ properties and had maximum bids determined on all of them. Thirdly, there were the folks that had one specific property in mind and if they could buy it at a deal, they were ready. And finally, there were the lookie-loos, they were just wondering what all the fuss was about.

There were some deals that went a little high for me but there were plenty that went well below. My favorite home was one beautiful house by Preston Center that was worth $600-$650K that went for $250K! WOW!

I should have brought more money!

Coulda Woulda Shoulda! Now I'm sounding like my clients :-)

PS If you want info on future auctions just shoot me an email - 'cause I'll be there!

Forebearance - an Option to Foreclosure or even Loan Modification

While working on a loan modification, sometimes the terms just can not be worked out. Maybe the Borrower doesn't have pay stubs or doesn't show enough income to qualify for a fully amortized loan.

In Forebearance, the underlying note remains unchanged but the bank and the Borrower both agree to modified terms to get the Borrower back on track. This is a temporary stop gap approach to the foreclosure issue.

Forebearance keeps the Borrower in their home and it keeps the loan in the Bank's "performing assets" file.

NOD Filings Dropped in January

January brought an unexpected, across the board drop, in the total Notices of Default, Notices of Trustee Sale, and sales at auction in California, not only from the prior month, but year-over-year as well, according to a report released by ForeclosureRadar on Thursday.

Housing and default activity in California is often used by analysts and experts as a barometer for measuring the state of the overall housing market, and ForeclosureRadar tracks every foreclosure in the Golden State, providing daily auction updates on foreclosure property sales.

Based on ForeclosureRadar's data, California's Notices of Default decreased 11.8 percent over Notices recorded for December and are down 10.6 percent from January 2008. Due to the fact that January had two fewer recording days then December the average daily decrease was 3 percent.

3% decrease in Default filings in December. Isn't it funny how everything needs to be "headline grabbing"!

In the interest of looking good, Fannie and Freddie had publicized how they were taking the holidays off. Homeowners got a reprive so they could enjoy the holidays.

If that's so, why are these numbers so high? A 3% drop doesn't sound like a lot when I put it into that context.

Secondly, I just heard a statistic that approximately 3% of mortgages are in default.
If that number is true - which it came from an awesome economist that I LOVE - then I am really tired of hearing about all the doom and gloom.

This too shall pass. There is opportunity in every market. Kill your TV! :-)

Mixed Emotions

TEXAS BORROWERS RECEIVE RESTITUTION


DALLAS (Dallas Morning News) – As part of the largest predatory-lending lawsuit in history, Countrywide will use $8.4 billion to modify mortgage terms for 400,000 borrowers in Texas and ten other states who received unaffordable loans from the lender.

The settlement has reserved $7.5 million for Texas to distribute restitution payments worth $2,300 to help borrowers who already lost their homes or are near foreclosure — 120 days or more delinquent on payments.

About 3,260 Texans are eligible for restitution, according to a spokesman with the Texas Attorney General's office.

Under the settlement, borrowers could get the $2,300 payment if their first loan payment was due between Jan. 1, 2004, and Dec. 31, 2007, and they made six or fewer payments before losing their home.

For borrowers who can't afford to refinance their mortgage and have to leave their home through a foreclosure sale, the settlement provides relocation assistance of $2,000 per borrower.


My first impression is that we are a bunch of big irresponsible babies. We can't drive with coffee in our laps. We can't take responsibility for our MEGA consumption and ruin of the earth. Now we also can't be expected to actually read what we're signing. Who are these people that bought houses that they could only afford for 6 months?

I honestly don't know the extent of this lawsuit. I haven't read what the complaint was. I haven't done any research. All I know is that a few people that overextended without considering the consequences have now made getting a loan so hard that it's considered a heroic event!

I'm blaming it on all the Jocks in high school. The ones that would do anything to bed a cheerleader :-)