Move right outta here baby. Go on pack your bags. Just who do you think you are? Stop acting like some kinda star. Just who do you think you are? Take it like a man baby if that's what you are.
The declining home ownership rate is a serious concern for government policymakers. Increasing home ownership has been a policy of the US Government since the 1920s. The precipitous decline in home ownership caused by the tsunami of foreclosures has government officials groping for policies to stabilize the trend.
A year into its First Look program, Fannie Mae vendors have sold 29,000 REO properties to owner-occupants and 5,000 to public entities under the Neighborhood Stabilization Program.
Fannie launched First Look in August 2009 to allow both owner occupants and those using NSP grants to submit offers 15 days ahead of investors. Fannie extended it to 30 days in Nevada.
"While investors play an important role in the REO market, homebuyers who intend to occupy a home make an immediate and lasting commitment to the community and therefore merit priority consideration in the REO sales process," said Jay Ryan, vice president for alternative REO dispositions at Fannie Mae.
Roughly 70% of the 123,000 Fannie Mae REO sales in 2009 went to owner-occupants. Not all of those were sold through the First Look program.
More than 800 public entities using the more than $7 billion in NSP grants have made purchases through First Look. Ryan said these entities are also working to rehabilitate and stabilize neighborhoods.
The government can't seem to accept the fact that its policies over the last several years were a failure. They took good renters and made them into bad homeowners. People can either make consistent monthly payments or they can't. If they can't they shouldn't become homeowners. Years of experience has shown that about 64% home ownership rate is stable. The increase from 1994 to 2006 was largely due to subprime lending, and as it turns out, many of those people shouldn't have been given title to real estate.
Fannie Mae will give REO agents and brokers who sell a previously foreclosed property to an owner-occupant a $1,500 bonus per sale.
The government-sponsored enterprise will also give qualified homebuyers 3.5% of the final sales price that can be used toward the closing cost, including home warranty. Eligible offers must be submitted on or after Sept. 23 and must close by Dec. 31, 2010. Fannie said the sale must close within 60 days of the accepted offer.
Terry Edwards, executive vice president of credit portfolio management at Fannie, said more than 87,000 families have purchased a Homepath property in the first half of 2010. Homepath is the in-house manager of the Fannie Mae foreclosures. It hires vendors and agents to rehabilitate the home and ready it for the market again.
"We continue to look for ways to stabilize neighborhoods and offer incentives to qualified buyers who will occupy these properties over the long-term and help support their communities," Edwards said.
Fannie Mae, Freddie Mac and many lenders have instituted a First Look program to give owner-occupants a head start ahead of investors to buy these previously foreclosed homes. In one year of the First Look program, Fannie has sold more than 29,000 REO to owner-occupants.
I think giving owner-occupants a first look at properties is a good thing. Families should not have to compete with investors for properties. I never liked that aspect of resale flipping (and yes, I do see trustee sale flipping as being different). I am troubled about giving brokers a financial incentive to push properties to owner-occupants. Shouldn't they try to get the best price? After all, we are paying for the losses as taxpayers. Do you want to subsidize an owner occupant when an investor was willing to pay more money for a property.
Like the many other government manipulations of the housing market, I really think they should just stay out. What great societal need are we serving here? If the home ownership rate drops to 61% from 69%, are we going to have riots and vandalism? Doesn't having a mobile society that is able to move to take a job also have value?
The way your supposed to manage your mortgage (almost)
Every once in a while, I come across a property where the owners didn't abuse HELOCs. It's rare, but it does happen. Today, I thought I would feature one just to remind everyone what good financial management is about.
This property was purchased on 4/29/1994 for $272,000. The owners used a $217,600 first mortgage and a 54,400 down payment.
On 1/29/1998 they refinanced for $212,650.
On 6/3/2002 they refinanced with a $187,700 first mortgage.
On 10/22/2002 they refinanced with a $181,500 first mortgage.
On 10/22/2003 they refinanced with a $165,000 first mortgage. That is ten years of declining mortgage balances.
On 10/27/2004 they refinanced with a $206,900 first mortgage. An increase, but still less than their original mortgage.
On 5/14/2010 they obtained a stand-alone second for $57,500 which was likely put into the property renovation prior to listing.
These owners owe a little over $260,000, so if they want to sell, they can lower their price to find a buyer. So far they have been lowering their price $10,000 a month, just as a patient seller would. Despite the ridiculous HOA fees, this house is priced close to rental parity with today's super low interest rates.
Home Purchase Price … $272,000 Home Purchase Date .... 4/29/1994
Net Gain (Loss) .......... $319,260 Percent Change .......... 117.4% Annual Appreciation … 5.1%
Cost of Ownership ------------------------------------------------- $629,000 .......... Asking Price $125,800 .......... 20% Down Conventional 4.31% ............... Mortgage Interest Rate $503,200 .......... 30-Year Mortgage $120,205 .......... Income Requirement
$2,493 .......... Monthly Mortgage Payment
$545 .......... Property Tax $0 .......... Special Taxes and Levies (Mello Roos) $52 .......... Homeowners Insurance $438 .......... Homeowners Association Fees ============================================ $3,529 .......... Monthly Cash Outlays
-$412 .......... Tax Savings (% of Interest and Property Tax) -$686 .......... Equity Hidden in Payment $196 .......... Lost Income to Down Payment (net of taxes) $79 .......... Maintenance and Replacement Reserves ============================================ $2,706 .......... Monthly Cost of Ownership
Cash Acquisition Demands ------------------------------------------------------------------------------ $6,290 .......... Furnishing and Move In @1% $6,290 .......... Closing Costs @1% $5,032 ............ Interest Points @1% of Loan $125,800 .......... Down Payment ============================================ $143,412 .......... Total Cash Costs $41,400 ............ Emergency Cash Reserves ============================================ $184,812 .......... Total Savings Needed
Property Details for 417 East YALE Loop Irvine, CA 92614 ------------------------------------------------------------------------------ Beds: 4 Baths: 3 baths Home size: 2,400 sq ft ($262 / sq ft) Lot Size: n/a Year Built: 1985 Days on Market: 39 Listing Updated: 40443 MLS Number: S629750 Property Type: Condominium, Residential Community: Woodbridge Tract: Ge ------------------------------------------------------------------------------
Absolutely the Best Value in Woodbridge. 4 Bedrooms with One Bedroom and Full Bath Downstairs Now Used as Den. Beautiful Formal Living Room with Vaulted Ceilings. Fully Upgraded Gourmet, Eat In Kitchen with Cooktop on Center Island, Granite Counters & Full Backsplash, Quality Appliances and Remodeled Cabinets. Separate Breakfast Nook Opens to Oversized Family Room with Fireplace and French Doors to Beautifully Landscaped, Relaxing Patio with Fountain. Romantic Master Suite with Window Shutters, His and Her Closets, Soaring Ceilings, Large Bath with Tub and Separate Shower. Hardwood Floors Downstairs. Newer Double Paned Windows and Custom Window Blinds Throughout. Custom Paint Throughout. Newly Refinished Wood Floors Downstairs. 2 Skylights - Stairwell and Master Bath. A/C 5 Years New. Furniture Negotiable. Lifetime Roof. 2(Two)Fireplaces! Within Walking Distance to Parks, Closed to Stonecreek. Woodbridge Amenites Include Lagoons, Beach Clubs and Dozens of Parks.
Absolutely the Best Value in Woodbridge? Yeah, right.
Why is this description in title case? Why would anyone write in title case except to write a title or a headline. Personally, I find reaching for the shift key is a pain, and it slows up my typing. It must have taken forever to write that description. Do you think they wrote it in Microsoft Word then changed it to title case? I doubt is considering they misspelled Amenites.
I hope you have enjoyed this week, and thank you for reading the Irvine Housing Blog: astutely observing the Irvine home market and combating California Kool-Aid since 2006.
I hope you have enjoyed this week, and thank you for reading the Irvine Housing Blog: astutely observing the Irvine home market and combating California Kool-Aid since 2006.
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