Shelley Mastro & Mark Mastro

Congress has passed a bill extending the Homebuyer Tax Credit

Shelley Mastro — Thu, 01 Jul 2010 19:38:00 GMT

I am happy to report that Congress has passed a bill extending the Home buyer Tax Credit closing deadline to September 30, 2010. This is a huge win for REALTORS® and home buyers, and NAR worked closely with members of Congress to make it happen.

The extension applies only to transactions that had ratified contracts in place as of April 30, 2010, and have not yet closed. There will be no gap between June 30 and the date the President signs the bill into law.

Additionally, Congress has extended the National Flood Insurance Program (NFIP) through September 30th. The bill is retroactive and will cover the lapse period from June 1, 2010, to the date the law is enacted. NAR will continue to work with Congress on the NFIP Reform bill, and we will keep you posted on those efforts.

For additional information on both the tax credit deadline and the NFIP, visit Realtor.org/Government_Affairs.

Neither of these bills would have passed without your support. Nearly 83,000 REALTORS® responded to our latest Call for Action, sending more than 250,000 letters to Congress asking them to extend the National Flood Insurance Program. I know many of you also raised your voices in support of extending the tax credit deadline.

Barclays Lowers REO Inventory Estimate

Shelley Mastro — Mon, 10 May 2010 19:26:00 GMT

Barclays Lowers REO Inventory Estimate

By: Carrie Bay 05/07/2010
A recent study by Barclays Capital says that U.S. lenders are holding fewer foreclosed homes than previously assessed by the research firm. Some are viewing the revised estimate as a testament to the stability that istaking hold in the housing market, but Barclays warns that the industry should expect REO inventories to grow – albeit gradually – over the next couple of years, as banks push more properties through the pipeline and foreclosure alternatives are exhausted.
The firm’s analysts estimate that as of the end of February, 480,000 repossessed homes were held by U.S. lenders, mortgage investors, and the GSEs. As the Wall Street Journal explained, Barclays has acquired more data on mortgages and refined its methods for analyzing foreclosure trends. Under the company’s previous methods, the REO inventory estimate would have come in above 600,000.
The analysts at Barclays say the number of bank-owned properties will continue to rise over the next year and a half, hitting a peak in January 2012 of 536,000.
The research firm says it’s loss mitigation efforts like the Treasury’s Home Affordable Modification Program (HAMP) that are preventing another debilitating flood of foreclosures from hitting the market. Although HAMP and its private sector counterparts are likely simply delaying the inevitable and “prolonging the pain,” as Barclays analysts put it, such programs support a better outcome for the industry than one big market-shattering shock, they say.
Barclays says it will likely take years to work through the current glut of foreclosures. The company calls the foreclosure pipeline “alarmingly large,” with about 5.5 million mortgages either seriously delinquent or already in some stage of foreclosure.
Barclays is expecting to see 1.6 million distressed home sales this year, meaning foreclosure sales or short sales transacted to escape foreclosure. The firm projects another 1.6 million distressed sales in 2011, before the number begins to taper off to 1.5 million in 2012.
The company’s 2010 and 2011 estimates of foreclosure-related sales equate to about 30 percent of all home sales projected for those calendar years. In a “normal” housing market, Barclays analysts say such distressed sales would account for only about 6 percent of total home sales.

Who is Eligible for HAFA?

Shelley Mastro — Fri, 26 Mar 2010 14:41:00 GMT

Most homeowners in facing financial hardship are eligible. As a rule, if a homeowner is eligible for HAMP but cannot pay the mortgage, then he or she is eligible for an assisted short sale through HAFA. However, loans owned or guaranteed through Fannie Mae or Freddie Mac do not qualify. Servicers must consider possible HAMP eligible borrowers for HAFA within 30 calendar days if the borrower has one or more of the following criteria4 :

Does not qualify for a HAMP Trial Period Plan
Does not successfully complete a HAMP Trial Period Plan
Is delinquent on a HAMP modification by missing at least two consecutive payments
Requests a short sale or deed-in-lieu

For a loan to qualify, it must meet the following criteria2:

The property is the borrower's principal residence
The mortgage loan is a first lien mortgage originated on or before January 1, 2009
The mortgage is delinquent or default is reasonably foreseeable
The current unpaid principal balance is equal to or less than $729,750
The borrower's total monthly mortgage payment (as defined in Supplemental Directive 09-015) exceeds 31 percent of the borrower's gross income
The mortgage is not owned or guaranteed by Fannie Mae or Freddie Mac

Details of HAFA

Shelley Mastro — Fri, 26 Mar 2010 14:35:00 GMT

HAFA was introduced to simplify and streamline the short sale process. HAFA accomplishes this in the following ways2:

Compliments HAMP by providing viable alternatives for borrowers who are HAMP-eligible
Utilizes borrower financial and hardship information collected in conjunction with HAMP, eliminating the need for additional eligibility analysis
Allows the borrower to receive pre-approved short sale terms prior to the property listing
Prohibits the servicer from requiring, as a condition of approving the short sale, a reduction in the real estate commission agreed upon in the listing agreement
Requires that borrowers be fully released from future liability for the debt
Uses standard processes, documents and timeframes
Provides financial incentives to borrowers, servicers and investors

HAFA provides financial incentives as follows:

Financial incentives for lenders participating in the program include a $1,000 servicing bonus
Homeowners can receive up to $1,500 in relocation assistance (which, in some cases, may classify as taxable income) after a short sale or deed-in-lieu has been executed
Lenders pay all servicing fees - homeowners suffer zero out-of-pocket expenses

What is HAFA?

Shelley Mastro — Fri, 26 Mar 2010 14:31:00 GMT

The Home Affordable Foreclosure Alternatives (HAFA) Program1 is a government-sponsored initiative led by the US Treasury Department assisting all Home Affordable Modification Program (HAMP)-eligible homeowners in avoiding foreclosure, specifically through short sales or deeds-in-lieu. First introduced November 30, 2009 in Supplemental Directive 09-092 as part of HAMP, HAFA assists eligible homeowners in quickly and effectively implementing short sales by providing financial incentives to lenders that work in conjunction with HAMP to assist homeowners in need. The program was introduced in part with the intent to remove the stigma from short sales and help keep communities from being destroyed through massive foreclosures. HAFA in its current state is only applicable to conventional-type, non-Governmental Serviced Enterprises (non-GSE) mortgages and therefore does not apply to loans owned or guaranteed with Fannie Mae or Freddie Mac. These organizations may have plans to release their own versions of HAFA

The new short-sale rules

Shelley Mastro — Tue, 16 Mar 2010 14:19:00 GMT

What sellers can expect from participating lenders starting in April:

-- Sellers must be unqualified for a loan modification under the Home Affordable Mortgage Program or be unable to afford the modification.

-- The bank will set an acceptable value of the home upfront, based on an appraisal or broker's price opinion.

-- Lenders must approve or deny a purchase offer within 10 days of it being submitted.

-- Once the bank approves a home for short sale, sellers may stop paying all related mortgage payments, and unpaid mortgage debt will be forgiven.

-- These mortgage payments will not be shown as late on credit reports.

-- At closing, sellers are entitled to as much as $1,500 from the government to cover relocation expenses.

3 Story For Sale in Lake Manassas

Shelley Mastro — Tue, 02 Mar 2010 15:44:00 GMT

Gated Lake Manassas

• 5,550 sq. ft., 5 bath, 5 bdrm 3 story "Fully Fin. Bsmt" - MLS® $674,900 - Rutledge Model

Lake Manassas, Gainesville - You will love this meticulously maintained luxury home at an amazing price! Gleaming hardwood floors through out main level. "Rutledge" floor plan in award winning gated community*Amenities include paved trails, pool, tennis, tot lot & stocked Lake *Spacious home with separate Living Room, Formal Dining Room, Library & Gourmet Kitchen w/ Granite, two sided Fireplace in Kitchen to Family Room *Wonderful luxurious owner's Suite has Sitting Room, custom Bath with over sized double shower and sunken Jacuzzi tub *Lower level has a projection TV , granite wet bar, Exercise/play Room, fifth bedroom, full bath & game area*Irrigation System with great landscaping & amazing Stone Patio*Wegmans & Stonewall Golf Club in community. The pickiest buyers will be satisfied.

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3 Story For Sale in Broad Run

Shelley Mastro — Tue, 02 Mar 2010 15:42:00 GMT

6,000 +sq ft on 5.4 acres

• 6,141 sq. ft., 4 bath, 4 bdrm 3 story - MLS® $465,000 - Custom Built..

Broad Run, Warrenton - CUSTOM BUILT COLONIAL HOME SITS ON 5.39ACRES OF SCENIC LOT*HOME OFFERS 4BR,3.5BA W/LARGE COUNTRY EAT-IN KIT W/TILE BACKSPLASH, EXTENSIVE CROWN MOULDING THRU-OUT, LIV RM W/BUILT IN BOOKCASES& WIDE PLANK PINE WOOD FLOORING THRU-OUT*WRAP AROUND PORCH AND STONE PATIO**FINISHED LL W/REC RM, FULL KIT, FULL BATH & SEPARATE LAUNDRY RM PLUS FOUR ROOMS*...

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CANT PAY YOUR MORTGAGE...DEED FOR LEASE ANYONE?

Shelley Mastro — Wed, 06 Jan 2010 19:57:00 GMT

Can't pay the mortgage? You still might be able to stay in your home. Government-controlled mortgage company Fannie Mae is going to give borrowers on the verge of foreclosure the option of renting their homes for a year.

The change announced Thursday could give a temporary break to thousands of homeowners, but critics question whether it will only add to the mushrooming losses at the company, which has received billions in taxpayer money.

The new "Deed for Lease" program will allow homeowners to transfer title to Fannie Mae and sign a one-year lease, with potential month-to-month extensions after that. It also helps save money because the lender does not need to complete the often lengthy and time-consuming foreclosure process.

The program helps "eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities," Jay Ryan, a Fannie Mae vice president, said in a statement.

It also does less harm to the borrower's credit record.

"It shows that you put your best effort to work out a solution," said Gabe del Rio, director of homeownership at Community HousingWorks of San Diego.

However, Mike Himes, director of homeownership services at NeighborWorks Sacramento, said the industry should push harder to modify loans at lower monthly payments. "The preferred option is allowing people to retain ownership," he said.

Fannie Mae executives said the rental program is designed to help delinquent homeowners who don't qualify for a loan modification, but still want to stay in their homes.

To qualify, homeowners have to live in the home as the primary residence and prove that they can afford the market rent, which will be established by the management company running the program. Rents are based on current market rates.

The plan is expected to be particularly attractive in places like Phoenix or Orange County, Calif., where homeowners are stuck paying large mortgage bills on properties that are now worth far less than they originally paid. At the same time, rents have been falling in those areas. So by renting the same house, former homeowners could wind up paying far less every month.

In Orange County, for example, the average monthly rent for all apartments was about $1,450 in September, down nearly 8 percent from a year earlier, according to research firm MPF Research. In Phoenix, the average renter paid about $720, also down about 8 percent from last year.

Still, the effort is likely to attract a relatively small number of homeowners.

In the first nine months of the year, Fannie Mae took ownership of nearly 2,000 properties through a process known as a deed-in-lieu of foreclosure. That pales in comparison to the 90,000 foreclosed properties the company repossessed in the period.

Deed-in-lieu works like the new program, allowing homeowners to turn over title to Fannie Mae, but rather than renting, the owners simply walk away.

While Fannie Mae executives say the company's motives are community-minded, critics say the company is simply gambling that the properties will eventually sell for a higher price. That's folly, says Peter Schiff, president of Euro Pacific Capital in Darien, Conn., and a longtime bearish investor.

"Taxpayers are now going to own all these houses that (Fannie Mae) should have unloaded," he said. "It's going to cost a fortune."

The announcement came as Fannie Mae asked for an additional $15 billion in government aid after posting another big loss in the third quarter. The mortgage finance company, seized by federal regulators in September 2008, posted a quarterly loss of $19.8 billion, including $883 million in dividends paid to the Treasury Department.

Pessimists like Schiff say the recent stability in the housing market is just temporary, and argue that there is a huge backlog of foreclosed homes that haven't gone on the market. Refusing to sell those homes, they say, only prolongs the problem.

But other experts say that Fannie Mae's new policy could make sense, even if prices don't rebound quickly. The company will get rental income while avoiding costly foreclosure expenses.

It will also help to safeguard the homes, which are less likely to be vandalized when occupied.

"There are a whole lot of costs you avoid," said Thomas Lawler, a former Fannie Mae economist. "You don't necessarily have to believe that home prices a year from now will be higher than today."

Fannie Mae's sibling company, Freddie Mac, launched a similar effort in March. That policy, however, requires the foreclosure to be completed and only allows month-to-month leases. Freddie Mac declined to detail how many borrowers have participated.

The two companies purchase loans from banks and sell them to investors. Together, they own or guarantee almost 31 million home loans worth about $5.5 trillion, about half of all U.S. mortgages. They have been badly hurt by the housing bust and have required $111 billion in federal aid since being seized by government regulators 14 months ago.

Home buyers using FHA~ update.

Shelley Mastro — Fri, 13 Nov 2009 14:42:00 GMT

FHA has a federally mandated reserve requirement of 2%. The audit today (11/12/09) came out at having only 0.53% in reserves. It was expected to be less than 2% but not this low. This means we should be strapped in for a bit of turbulence with FHA. Unlike conventional loans which normally have “regional” guidelines, FHA is FHA regardless of the area of the country. Expect to see some possible further tightening of credit guidelines and maybe even higher down payment requirements. The main cause of low reserves…housing values continue to decline (nationally), job loss and rising defaults.

Now for the good news. The rates are still amazingly low, coupled with the extension of tax credits, what a great time to buy. Let us know when you are ready! www.BuyorSellHomesinVA.com

3 Story For Sale in Braemar

Shelley Mastro — Fri, 09 Oct 2009 06:00:00 GMT

Clean & Vacant

• 4 bath, 3 bdrm 3 story - MLS® $249,900 - Normal sale!

Braemar, Prince William County - TRADITIONAL SALE. LOVELY 2 CAR GARAGE 3 BEDROOM TOWNHOUSE IN SOUGHT AFTER BRAEMAR HAS EVERYTHING YOU ARE LOOKING FOR. LARGE LIVING AREAS UPGRADED APPLIANCES AND PROFESSIONALLY CLEANED. LOCATION CONVENIANT TO SHOPPING, ENTERTAINMENT AND TRANSPORTATION.

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11114 Wainwright Pl. in Paradise is Sold!

Shelley Mastro — Thu, 08 Oct 2009 06:00:00 GMT

Paradise, Manassas - The 3 story at 11114 Wainwright Pl. has been sold.

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3 Story For Sale in Lake Manassas

Shelley Mastro — Tue, 14 Jul 2009 06:00:00 GMT

Ask about renting or purchasing

• 5,680 sq. ft., 7 bath, 6 bdrm 3 story "Colonial" - MLS® $809,900 - Spectacular Home

Lake Manassas, Gainesville - Breath Taking! This GRAND Colonial in Gated LAKE MANASSAS has it all! The NEWELL Model is GORGEOUS with 6bed rms 6.5 baths, a soaring 2 story FM rm w/built-ins, GLEEMING hd wd fls* GRANITE in Kit W/STAINLESS Appl. LG island* SPECTACULAR GOLF & LAKE views off 2 story Balcony's *Main level bedrm W/full bath *IN-LAW SUITE w/FULL kitchen in LL w/separate entrance *FLAGSTONE patio backs to MATURE Oaks.

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