Starting on March 1, Fannie Mae will require mortgage servicers to extend the forbearance relief to qualified unemployed borrowers for six months – without any approval needed from Fannie Mae. The government-sponsored enterprise also says special consideration will be made for some borrowers in suspending mortgage payments or reducing them for up to a 12-month period.

Fannie’s announcement follows on the heels of Freddie Mac’s announcement earlier this week about similar changes to its mortgage relief program for the unemployed. Freddie Mac announced it would begin offering a 12-month forbearance period to qualified unemployed borrowers starting on Feb. 1.

To qualify, mortgage servicers will determine if the “borrower has less than 12 months worth of mortgage payments in reserves and has monthly housing expenses above 31 percent of their incomes before extending a forbearance plan,” HousingWire reports.

During the third quarter of 2011, the GSEs issued more than 7,000 forbearance plans, according to the Federal Housing Finance Agency.

Source: “Fannie Mae Unveils new Forbearance Program for Unemployed,” HousingWire (Jan. 11, 2012)

The Federal Housing Administration is extending its “anti-flipping” waiver through the end of 2012, which allows buyers to purchase homes that have already been sold in the last 90 days.

The waiver, which was soon set to expire, is “intended to accelerate the resale of foreclosed properties in neighborhoods struggling to overcome the possible effects of abandonment and blight,” Carol J. Galante, the acting Federal Housing Administration commissioner, said in a statement. “FHA remains a critical source of mortgage financing and stability and we must make every effort to promote recovery in every responsible way we can.”

An anti-flipping rule originally took effect in 2003 to stop a spike in home flipping that was being blamed on driving up home prices during the housing boom. The rule prevented FHA-backed loans from being used to purchase homes that had been owned by a seller for less than 90 days. But the U.S. Department of Housing and Urban Development decided to reconsider the 90-day limit in 2010 after skyrocketing foreclosures and abandoned homes were causing blight in neighborhoods across the country and hampering nearby property values.

The temporary waiver to the anti-flipping rule will allow buyers and investors to quickly resell refurbished homes and not have to wait 90 days to do so. Since the waiver took place in 2010, FHA has insured nearly 42,000 mortgages worth more than $7 billion on homes resold within 90 days of the last purchase, according to HUD.

“It’s certainly an inducement to move real estate and reduce inventories,” says Don Cameron, a real estate investor who owns a franchise of We Buy Ugly Houses in South Florida. “Why wait 90 days before you can close on a home?”

The waiver, however, still prevents predatory flipping, and sellers must justify any increases in value if the sales price of the property is 20 percent more than what the seller had recently purchased it for (such as by providing extra documentation on renovation expenses). Sales also must be in “arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.”

Source: “Government Extends Waiver of Anti-Flipping Law, Allowing Homes to be Bought and then Sold in 90 Days,” McClatchy-Tribune Regional News (Dec. 29, 2011) and HUD.gov

On the face of it, the latest news doesn’t bode well for potential house buyers. House prices will steadily rise in 2012 but economists don’t see prices outpacing inflation over the next three years, according to a new survey. Typically, home prices bounce back after a prolonged recession and even help fuel a broader economic recovery. Not this time, according to that survey. The growth in house prices won’t even keep pace with that of a loaf of bread.

As real estate prices begin their slow crawl north, interest rates have only one way to go – up. “Whether you’re a 35-year-old looking to get on the property ladder or a retiree wanting to downsize, it’s still a good time to buy,” says Jay Tyner, president and founder of Semmax Financial Group in Greensboro, NC.

Current conditions are a win-win for both potential homeowners and long-term investors, others say. “For households, the priority should be on meeting their shelter needs at the best price — which may not entail ownership at all. – and appreciation, if any, should be viewed as a bonus,” says Patrick O’Keefe, director of economic research at J.H. Cohn LLP in Roseland, N.J. “For investors with longer-term staying power and property management capability, conditions are attractive — but property specific.”

What’s more, rents are also on the rise. Consumers are being hit by the rise in rents and the decrease in concessions being offered, according to a new survey by online apartment-lister Rent.com. Property managers predict that rents will rise between now and the third quarter of 2012 by 3%, above the 2.5% inflation rate between now and 2014 expected by most economists in a Wall Street Journal survey. Plus, the nation’s ratio of house prices to yearly rents is nearly back to its pre-bubble average.

For this reason, foreclosures, evictions, relocation assistance (cash for keys) or lockouts should not be scheduled or occur during the following Holiday Moratorium dates:

• Dec. 22-26, 2011, returning to business as usual on Dec. 27, 2011.
• For VA properties, the year-end dates are Dec. 22 through Jan. 2, returning to business as usual on January 3, 2012.

If you receive any tasking or communications related to foreclosure, eviction, relocation assistance or lockouts during these moratorium periods, you must place a clarification call to the eviction specialist at Bank of America before proceeding with the tasking or communication.

When it comes down to a choice to either “pay or walk away” more and more homeowners are opting to abandon their homes to the foreclosure process.

If you decide to default on your mortgage and allow the lender to foreclose on the house, the important thing to remember is to avoid any risky behaviors that will have negative consequences for you once you have walked away. This sort of planned foreclosure is called a “strategic default.” Here’s how to protect yourself from prolonged and serious legal consequences:

1. Do know the type of foreclosure you are facing.
Non-judicial foreclosures do not go through the state court system. Essentially, homeowners simply stop paying their mortgage and wait for their lender to institute foreclosure proceedings. Depending on the housing market in their area, banks may be more or less eager to take back a particular property.

I know people who are still living in their homes several years after they have stopped making mortgage payments.

A judicial foreclosure proceeds through the state court system and in states where it is allowed a judgment for the deficiency (between what the house is worth and what you owe on the mortgage) will be rendered against you in a court of law.

In some states, lenders have the ability to sue for the unpaid balance for a period of time ranging from 6 months to 6 years depending on the circumstances. Research whether you live in a “non-recourse” state where lenders can take back the house, but not touch your other collateral or assets to close the gap in what you still owe them.

2. Don’t try to get “revenge” on the lender. No matter how angry you are over the circumstances that have caused you to abandon your home, do not take it out on the house! There are serious legal consequences to destroying a home in foreclosure.

3. Do remember that until the bank forecloses, you are still the owner of the property. Even if you aren’t living in the house, you are the responsible party until lender legally takes possession.When you leave, be sure to leave the house in good condition. Do a walk-through and make sure everything is okay. Take pictures that show the home is in good condition.

Keep your liability insurance current—remember, if someone is injured on the property, you are still the owner of record.

If you continue to live in the area, do occasional drive-bys. Make sure the house has not been broken in to or vandalized. Even if you are angry with your mortgage holder, try to have some compassion for your neighbors. Homes that have been foreclosed devalue the entire neighborhood; homes that have been foreclosed and are in bad repair drop everyone’s property values even more.

4. Do have a responsible plan for the future. Get a strong financial plan in place that will let you use the money formerly put toward your mortgage payments to regain stability.Rent a home if the rent is less than your monthly mortgage (otherwise, why leave the home at all?)

Know that your credit score will suffer moderate to severe negative impact depending on the circumstances around your decision to allow foreclosure.

Remind yourself that bad credit is a relatively short-term outcome (from 1 to 10 yeas) and be prepared to work to repair yours. Avoid other offers that entice you to live beyond your current means. After all, wasn’t it “easy credit” that got you into this situation in the first place?

In all of the solutions for getting out from an underwater housing situation, you must force the lender to come to you. You cannot count on parity, equality, good faith—you can’t count on any promises—on the part of the lender.

The fact is, you took their money on their terms and now they are entitled to take your money every month, change your interest, take or sell your house.

Homeowners in trouble need to be smart about their options to walk away, it’s the only way to maintain the possibility of ever gaining back their piece of the American Dream. Therefore, contact a reputable real estate attorney in your area for legal advice before making any rash decisions.

If you thought that owning a home in the land of sunshine, tropical breezes, white sandy beaches, and swaying palm trees was just a dream, it’s time to pinch yourself and look at all the opportunities that are NOW available in Paradise.

For investors and individual homeowners the time to buy is TODAY! Florida’s foreclosure rates are some of the highest in the United States.

Recently, the State of Florida ranked 2nd in the nation, with foreclosure filings rising 93% in the Southwest Florida region alone. In another adjacent county, it is estimated that for every 363 households there is one foreclosure. In another, one in every 221 properties is a foreclosure. Many of these properties are newer, pristine homes, some never even lived in!

We have access to thousands of foreclosures and short sales throughout Sarasota and Charlotte County as well as all of central and southwest Florida. Our site provides you with FREE information on available foreclosures and short sales, with NO obligations.

How can Buyer’s benefit?

Buyers can obviously benefit from buying foreclosures at deep discounts off market value. Buyer’s may also look at foreclosed properties as investment opportunities. Buying a foreclosed property often means the Buyer must be able to pay with cash (or be pre-approved for a mortgage), and it is important that the Buyer works with an experienced and knowledgeable Broker who understands the local laws surrounding foreclosures, bankruptcy and REO’s.

Perin Realty & Associates, LLC is ready to help you find your piece of paradise, at a fraction of what it would have cost 1-2 years ago. Since 1979, Bill Perin, Broker, has served thousands of clients and customers in Florida. Our company is committed to providing outstanding service and value to our Buyers and Sellers. We are known for developing quality long-term working relationships with our clientele….relationships based on respect, integrity, and trust.

Take a look at five short and sweet reasons that homeownership is great!

1. Equity. When you pay rent, you never see that money again. It is lining the landlord’s pocket. Yes, buying a home may come with some hefty initial costs (downpayment, closing costs, inspections), but you will make that money back over time in equity built in the home. Historically, homes appreciate by about 4 to 6 percent a year. Some areas are still experiencing normal appreciation rates. For the areas that have seen harder times since the recession, experts feel that the housing market will recover. Homeownership is about building long-term wealth. A home bought for $10,000 in 1960 is most likely worth 10 times that in today’s market.

2. Relationships: Renters tend to see their neighbors come and go quickly. Some people sign year leases while others are in the community for much shorter terms. Apartment complexes also tend to have less common shared space for people to meet, greet, and socialize. Homeowners, however, have yards, walking trails, or community pools and clubhouses where they can get to know each other. Neighbors stay put much longer (at least three to five years if they hope to recoup their closing costs). This means more time to develop relationships. Research has shown that people with healthy relationships have more happiness and less stress.

3. Predictability: Well, as long as you have a fixed-rate term on your mortgage it’s predictable. Most people buying homes today know that a fixed-rate is the way to go. This means your payment amount is fixed for the life of the term. If your mortgage payment is $500 today, then it will still be $500 a month in 10 years. This allows for people to budget and make solid financial plans. The sub-prime crisis meant many homeowners with adjustable rate mortgages saw their monthly payments rise and then rise some more. Homeownership, though, generally comes with a predictable table of expenditures. Even the big purchases are predictable. You know most roofs last just 20 years (or so). You know that each year you’ll need to pay for the gutters to be cleaned, and so on.

4. Ownership: Okay, this is a given. Homeownership means you “own” your home. That comes with some incredible perks, though! You can renovate, update, paint, and decorate to your heart’s desire. You can plant trees, install a pool, expand the patio, or do holiday decorating that would rival the Kranks (if the HOA allows!). The bottom line is this is your home and you can personalize it to your taste. Most renters are stuck with the same beige walls and beige carpet that has been standard apartment decor for 20 years. Now is your chance to let your home speak!

5. Great Deals: It’s a great time to buy. Interest rates are at historic lows. We’re talking 4% percent instead of 6% or higher. This means big savings for today’s buyers. Home prices have also taken a dip since the recession, which means homes are more affordable than ever. If you have steady income and cash for a downpayment, then be sure to talk to your local real estate agent about what homes in your area could be a fit for you.

Homeownership can be a real joy. It’s time to get off the fence and into a home that is right for you!

In select states (Florida), from now into October of next year, buyers need a down payment of only $100 to purchase a HUD-owned REO home.

The buyer must be an owner-occupant, utilizing financing insured by the Federal Housing Administration (FHA). Standard FHA underwriting guidelines apply, and the sale must be for the full amount of the current list price.

The $100 down payment incentive program has been approved for two of HUD’s four national regions – the regions managed by the Denver Homeownership Center and the Atlanta Homeownership Center. HUD homes in the states listed, as well as the Caribbean are currently eligible for the program.

HUD’s $100 down payment incentive program can also be applied to an FHA 203k loan, which can be used to fund repairs and renovations on the home. The 203k program allows buyers to finance both the mortgage and additional money for rehabilitation needs with a single government-insured loan. This is one of the most exciting features of the new incentive program and should drive a lot of exposure to FHA’s 203k offering.

With an FHA 203k loan, “buyers can find a property that needs some TLC, fix it up however they want to, and finance the whole thing for $100.”

In addition to $100 down instead of FHA’s typical 3.5 percent down payment, HUD says it will also cover up to 3 percent of the closing costs in most cases.

Scammers know that people in trouble make easy victims. They’re swooping in and offering to “help” borrowers — and ending up with their house. Victims sometimes spend years fighting to get their homes back and some never succeed.

Scam No. 1: The Bailout, or Equity Stripping

In theory, a person or company could help an owner keep his house via a process in which the homeowner sells the house very cheaply to them while the homeowner gets his finances in order. The new owner/buyer pays the mortgage, and the old homeowner pays to live in the home in the meantime, buying back the home (with interest) in a fixed amount of time. If the financial setbacks are temporary, everybody can win: The homeowner keeps the house and the company earns a profit for its role as rescuer.

But reconveyance, as it’s sometimes known, is ripe for abuse.

Suppose you have a $400,000 home, with $100,000 of equity in it. A loss of job and medical bills have you facing foreclosure. Suddenly, the phone rings with a bailout proposal.

So you sell your home, for $320,000 — not much more than what’s owed on the mortgage. Why sell for so little? Because it’s never intended to be a true sale; remember, you don’t think you’re selling the house permanently, but buying it back in a short period, right?

The new Buyer then takes out a $320,000 loan, wipes out any liens on your property and even gets you a little cash back; and you get a two-year lease with an option to purchase at the end.

But soon you realize you’re in trouble. Why? Because scammers aren’t about to let you get your home back. Often, the lease terms desperate homeowners initially agree to turn out to be as onerous as their previous mortgage payments that helped get them into trouble. Con artists also manipulate victims when facing crucial deadlines.

Clients are often told that payments are going be to under $1,000 a month. But the criminals dragged out the process until the foreclosure was imminent and they were backed into a corner. When they got to the closing they often change the terms for rent, example would be to raise the rent to $1,450. This increase is likely to make the Seller/Owner default on the rent.

The process to get to this point is often dragged out and leads to the home owner having very few options at this point because the bank is so close to foreclosure and taking back the home.

This likely leaves you with the only option of agreeing to the higher rent, and once you default on this rent payment the new purchaser/buyer evicts you as soon as possible, sells your $400,000 house, pays off the $320,000 loan and pockets about $80,000 — all for a few months of work. Some people don’t even fight back because they don’t know they have options — such as calling an attorney.

Don’t do any of the following:

Don’t fall for promises like “We’ll save your credit”; “We’ll buy your house ‘as is’”; or “We’ll get you a new mortgage with low monthly payments.”

• Don’t sign away ownership of your property (sometimes called a “quit claim deed”) to anyone without the advice of a lawyer you trust. “When people get behind on their loan payments, they get a bit desperate, but the answer is not putting someone else on your title”.
• Beware of any home sales contract where you aren’t formally released from liability for your mortgage. Also, make sure you know what rights you’re giving up and that you agree to giving them up.

Scam No. 2: Phantom Help

This scheme is fairly simple: Let’s say you’re way behind on your home payments and facing foreclosure. An individual or group approaches and offers to help — then charges you thousands of dollars for various administrative duties like filing forms and phone calls, or else keeps simply promising a big rescue later. You can probably guess what’s really going on: The “helper” isn’t really doing anything at all to stop your foreclosure despite collecting thousands from you. By the time you figure out you’ve been hoodwinked, it’s often too late.

How did the scammer know to target you, anyway? That’s easy: When a lender schedules the home for public auction, the matter becomes public record. In just more than half of the states, a lawsuit must be filed in order to spur a sale. In Florida, it’s called a “Lis Pendens”. Anyone can check the court documents to find the list of lawsuits. Soon a letter or phone call comes like something from a guardian angel — only it’s a vulture.

In the other states (including California and Massachusetts, for example), the process doesn’t go through the courts; foreclosure sales simply must be advertised publicly, as in the local newspaper. This latter process usually moves faster — and makes an already-stressed homeowner even more vulnerable to a scam.

Do’s and don’ts:

• Do call your mortgage company or lender if you’re in trouble. Ask for the loss mitigation department. If you take a proactive aproach you will have a better chance of working something out with your current lender and avoid possibly avoid foreclosure. Lenders do not want to take back your home through foreclosure.
• Don’t call for assistance from one of those ubiquitous signs on telephone poles that advertise help. Chances are, that’s not where help lies.
• Do proceed with caution, if a company or person:
  - Describes itself as a “mortgage consultant,” “foreclosure service,” or something similar;
  - Collects a fee before giving any services;
  - Advertises to people whose homes are listed for foreclosure, including anyone who sends fliers or solicits door-to-door; and says you should make home mortgage payments directly to them or to their company instead of your mortgage lender.
• Don’t panic. Get full information on the foreclosure process in your state. Make sure you know ALL deadlines — for court, for document filings, etc. States usually have associations that can offer free advice.

Scam No. 3: The bait-and-switch

In this scam, which we call the “bait-and-switch,” con artists actually trick a homeowner into signing over the deed to a home — without his knowledge.

How could somebody fall for this?

You don’t have to be old or a non-English speaker to be stymied by the legalese. These schemers get their victims to sign incredibly complicated legal documents that resulted in their property being transferred to specific entities. Most attorneys can’t understand some of these legalese agreements. And if a criminal can’t get the signature, forgery goes a long way in real estate these days.

Do’s and don’ts

• Don’t sign anything that has any blank spaces. Information could be added later that you didn’t agree to. (Yes, it happens.)
• Never sign a contract under pressure. Always know exactly what you’re signing. Take your time to review the paperwork thoroughly — ideally with an attorney who only represents your interests.
• Never make a verbal agreement. Get all promises in writing and get full copies.

Cast a jaundiced eye at deals that sound too good to be true. Lately, some scam artists promise they’ll wipe out or pay off your home’s debt for you (so-called “debt elimination”). Some flustered homeowners bite. Just remember the free lunch rule: There isn’t one.

A final thought: Remember, if you can’t fix your finances, selling your house may not be the end of the world. Sure, you’ll be a renter again, but chances are you’ll make more money in the future, which you can use to get back on your feet.