Happy Holidays From Fannie & Freddie

Fannie Mae & Freddie Mac issued orders suspending foreclosures from Nov 26 - Jan 9 just in time for the holiday season! This suspension is intended to help implement the new Streamlined Modification Program which will be launched in a few weeks.

The newly announced loan modification program is aimed to help high-risk borrowers who have already missed at least 3 mortgage payments and haven't filed for bankruptcy. Loan modifications can be done by either reducing the interest rate, extending the length of the loan, or temporarily reducing principal payments.

The suspension on foreclosures only applies to occupied properties, not to vacant homes and should help 6000 borrowers avoid foreclosure at the end of this year.

I think this is a great step in the right direction....

The Donkey & The Elephant Discuss Housing

In the weeks just prior to the election, you can't help but wonder...how do the candidates stand on home ownership? What will they do to crack down on predatory lending? Here are some brief details: Obama/Biden

~Universal Mortgage Credit - This credit will provide an average of $500 mortgage tax credit to 10 million homeowners, the majority of which earn under $50,000/yr.

~STOP FRAUD act - This act will officially define "mortgage fraud" in the law books as well as increase funding for enforcement programs and provide stricter penalties for those convicted of mortgage fraud.

~HOME score - Obama/Biden want to create a Homeowner Obligation Made Explicit score which will allow buyers to easily compare loans and understand the actual cost of borrowing.

~Bankruptcy Loophole - Currently, bankruptcy courts cannot modify mortgage payments for an individual. Obama/Biden want to eliminate this provision in federal law.

McCain/Palin

~Federal assistance to borrowers should not bail out speculators who took unnecessary risk.

~Increasing financial assistance should go hand-in-hand with increasing transparency and accountability.

~HOME plan - homeowners who meet certain guidelines will be given the opportunity to trade their mortgage for a manageable FHA loan reflecting their home's current market value. The McCain camp estimates this will keep up to 400,000 families from losing their home.

The Real Estate Paparazzi #1

Today's blog post is going to be the first of a group of posts titled "The Real Estate Paparazzi". Real estate is in the news so often these days that we almost seem to know what's going on in the market at all hours of the day, similar to how the paparazzi allow us to keep tabs on the daily lives of almost any celebrity we wish. I'd like to cover these topics and point out anything relevant to the Chicago market, as well as break them down into organized explanations. If you read any of today's headlines, you're sure to have noticed that they were chock-full of articles about how the housing market has plunged and has hit record lows and so-on. This was due to reports released by a few sources:

1) The Census Bureau report showed that 68.7% of all occupied homes were occupied by homeowners (versus renters). Last year, the number was 69.8%. This was the largest one-year drop on record. Not-so-good news for those unable to obtain a mortgage and are stuck renting, but not-so-bad news for landlords.

2) The SP/Case Schiller Index reported that this was the 11th consecutive month of negative annual home price returns nationally. This data is through Nov 2007. However, of the 20 major metropolitan areas surveyed, Chicago posted the 7th best annual return of -3.9%. Leading the pack was Charlotte who experienced a positive 2.9% annual return. Most hard-hit were Miami (-15.1%), San Diego (-13.4%), and Vegas (-13.2%).

3) Realtytrac, a real estate website which I subscribe to, reported that total foreclosure filings in 2007 increased by 75%. I just closed a bank owned foreclosure property last week which I got for my buyers at 18% below list price PLUS a $10,000 closing credit to them. If you're thinking about purchasing real estate right now for any reason, foreclosures might be the place for you to start looking. I have access to foreclosure listings; contact me so I can find you a great buy.