What’s Going on at Full House Realty and Pelletier REO?

Pre-foreclosures (short sales). Team Pelletier has many years of experience with short sales. While we tried to concentrate on keeping our industry niche in post-foreclosed property (bank owned REO) , many homeowners were in need of services prior to foreclosure. As much as we tried to stay focused on REO, you kept asking us to help with short sales. Why? Probably because we are so good at it and the referrals we received were/are from friends and word or mouth based on our credibility. For several years now, we have been successfully negotiating short sales. Recently, FH has decided to ramp up our services. Unlike a lot of real estate agents, we do not outsource our transaction work to title companies or other agents. We have a well-oiled machine IN-HOUSE! There are a team of staff members ready to help. This team is managed by our pre-foreclosure transaction manager, Sabrina Cusumano. If you are an agent who needs help with a short sale or a home owner needing to sell their house, please email us at info@pelletierreo.com. We are here to help. ……and yes, we are good at it.

Cash-Paying Vultures Pick Bones of U.S. Housing Market as Mortgages Dry Up

(Source: Bloomberg News)

Delavaco Properties LP plans to spend as much as $30 million this year and $40 million in 2012 to buy bank-owned houses and condominiums in foreclosure-ridden South Florida. The private-equity fund will pay cash.

As lenders tighten mortgage standards and consumers stay on the sidelines amid a five-year slide in home prices, all-cash purchases are surging. The deals are done mostly by investors who can get properties for less than buyers needing loans, fix them up and resell or rent them.

“If there weren’t vultures out there, you’d have a city of dead carcasses,” Robert Theocles, an independent consultant for Fort Lauderdale, Florida-based Delavaco, said in a telephone interview. “It’s like the circle of life.”

A record 33 percent of existing-home sales were made to cash buyers in February, when an annualized 4.88 million properties changed hands, the National Association of Realtors reported March 21. That compares with 15 percent of the 4.82 million annualized sales when the Chicago-based trade group started monthly tracking of such purchases in October 2008.

In Florida’s Broward County, where Theocles is based, deals with no mortgages made up 69 percent of sales in February, according to Southeast Florida Multiple Listing Service data.

The national sales data don’t count homes bought in foreclosure auctions on courthouse steps, which are almost all cash-only transactions. The “lion’s share” of all-cash purchases are by investors, according to Walter Molony, a spokesman for the Realtors association, though the group doesn’t keep specific numbers.

Big Cash Cities

About half of all purchases were done with cash in the Miami, Las Vegas and Phoenix areas, where prices have plunged and bank-owned properties abound because of high foreclosure rates, said Oliver Chang, a housing-market analyst with Morgan Stanley (MS), the New York-based investment bank.

Cash sales in those cities — as well as in Chicago, Cleveland, Los Angeles, New York, Seattle, San Francisco and Washington — rose to 199,557 homes last year compared with 138,888 in 2004, according to a March 21 report co-written by Chang. Short sales, where the bank accepts less than the principal on a loan, and foreclosures accounted for 59 percent of last year’s cash sales, up from 10 percent in 2004, Morgan Stanley reported.

Cash buyers paid an average $81.83 per square foot for foreclosed properties in the 10 cities last year, 36 percent less than distressed properties bought with a mortgage, the report said.

Flippers’ Advantage

“It’s almost like an arbitrage,” Chang said in a telephone interview from San Francisco, referring to the investment strategy that seeks to exploit price differences between related securities. “You buy the house at a discount with cash. Then you flip it almost immediately to the first-time homebuyer who’s using a mortgage, simply because they were not able to buy at the foreclosure sale.”

Lenders reject mortgage applications for foreclosed properties because the homes lack utilities, appraisals are below agreed-upon prices or deals take too long to close, said Thomas Popik, research director for Campbell Communications Inc. in Washington, which conducts national monthly surveys of 3,000 real estate brokers.

“The proportion of cash deals could hit 40 percent by the end of this year,” Popik said in a telephone interview from his office in Nashua, New Hampshire.

Turnkey Deals

One emerging trend is turnkey transactions, where cash buyers repair foreclosed homes and manage them as rental properties for other investors, said Elmer Diaz, former president of the National Real Estate Investors Association in Covington, Kentucky. Diaz said he works with four groups raising money to acquire properties in Fort Collins, Colorado; Sarasota, Florida; South Bend, Indiana; and Houston. The groups manage a combined 200 housing units, adding about 10 a month, he said.

“We find the deal, do the rehab, find a tenant and manage the property for the turnkey investor,” Diaz said in a telephone interview from Sarasota. “Most of our investing is for the cash flow, not appreciation.”

Not all cash deals are done by property flippers. About 55 percent of international buyers paid cash for their U.S. homes, according to an April 2010 report by the Realtors group. International buyers, including recent immigrants and temporary visa holders, accounted for about 7 percent of $907 billion in U.S. home sales for the 12-month period ended last March 31.

Empty Nesters

Empty nesters, or couples with children who have gone out on their own, often pay cash when they move to a smaller house, said Sam Khater, chief economist for CoreLogic Inc. (CLGX), a real estate information company based in Santa Ana, California. Vacation-home buyers use cash because it’s hard to get a mortgage on a second home, while wealthy buyers often don’t need a loan, he said.

“You’re seeing an increase in cash deals at both ends of the price distribution curve,” Khater said in a telephone interview from Vienna, Virginia. “You’re seeing it in the hardest hit areas, where investors are coming in and picking up low-priced properties. And you’re seeing higher cash activity at the upper end as well.”

New-home sales fell to an annual pace of 250,000 in February, an all-time low in records dating to 1963, the Commerce Department reported March 23. Existing-home sales dropped to a 4.88 million annualized pace in February, down 2.8 percent from a year earlier, the National Association of Realtors said March 21, while the median price of existing homes fell to $156,100, the lowest since February 2002.

Record Affordability

Housing affordability is at an all-time high, according to records dating to 1970 from the Realtors group. Average monthly payments, based on home prices and mortgage interest rates, dropped to 13.1 percent of the median family income in January, the most recent month available, from 23.2 percent in 2006 at the peak of the housing bubble.

Lenders, who fueled the housing bubble with lax mortgage underwriting, are now too restrictive, said Molony, the Realtors spokesman.

“Lenders have only been willing to lend to the cream of the crop in terms of credit scores,” he said in a telephone interview from Washington. “As a result you’re seeing a depressed level of traditional buyers.”

FICO credit scores for loans insured by the Federal Housing Administration, a government program that extends credit to borrowers with down payments as small as 3.5 percent, rose to an average of 703 in February, up 10 points from a year earlier, on the scale of 300 to 850. FICO scores, developed by Fair Isaac Corp. (FICO), for FHA loans averaged 647 in February 2008. They climbed after the FHA imposed minimum scores for the first time in October and banks added stricter credit overlays.

Mortgage Bankers’ View

The weighted average FICO score for a home purchased with a Fannie Mae mortgage was 762 last year, up from 716 in 2006, the Washington-based mortgage finance company reported Feb. 24. Fannie Mae loans, which usually require a 20 percent down payment, had an average 68 percent loan-to-value at origination.

“It’s not surprising that the cash share has gone up if you couple both the number of distressed sales that are going on and the fact that, even outside of a foreclosure auction, mortgage credit is tightening,” said Michael Fratantoni, vice president of research at the Mortgage Bankers Association, a Washington-based trade group.

Rental Demand

The growth in all-cash deals occurs amid rising demand for rental housing as more homeowners go into foreclosure, Fratantoni said. The U.S. homeownership rate fell to 66.5 percent at the end of last year from a high of 69.2 percent in December 2004, according to a Jan. 31 Census Bureau report.

Mortgage financing to buy homes to rent is also shrinking, Fratantoni said. Residential-mortgage originations are expected to fall to $1.03 trillion this year from $1.57 trillion in 2010, his association said in a March 15 forecast. Investors submitted 6 percent of mortgage purchase applications in February, down from a 2007 average of about 10 percent, Fratantoni said. That’s a drop to about $6 billion in February from a monthly average of about $20 billion in 2007.

“What financing options will be available to investors in single-family properties who intend to rent them out?” Fratantoni said in a telephone interview. “That really has been cut back substantially.”

Delavaco, which hired Theocles as a consultant, financed about $400 million in deals last year, mostly in international oil and energy projects, said Andrew DeFrancesco, founder and chairman of the fund. Delavaco raises money from institutional and high net-worth investors in Canada and the U.S.

Delavaco Deals

The fund started buying homes in January 2010, acquiring about 70 foreclosed properties in Broward, Dade and Palm Beach counties with cash offers to get discounts, DeFrancesco said. While there’s still risk in Florida real estate, the downside is less than drilling for oil in the Ukraine or other places Delavaco has invested in energy projects, he said.

“Every time I drive by that house I know it’s there,” DeFrancesco said in a telephone interview. “I know the property and I know what county it’s in and I know it has a tangible value to it.”

The plan is to hold the properties between five and seven years, enough time for the market to absorb the glut of foreclosures and for resale values to rise, said Dallas Wharton, Delavaco’s chief operating officer.

In January, Delavaco paid about $32,000 for a bank-owned four-bedroom home in Pompano Beach, Florida, that had sold at the top of the market in 2006 for $285,000, Theocles said. Delavaco spent $11,000 to replace the interior sheetrock, plumbing and appliances. The house rents for $1,250 a month, and annual property taxes and insurance cost about $2,500, he said.

“We are the people that are going in, cleaning things up, renting the properties out to make nice homes for people,” Theocles said. “At the end of the day they’re worth a lot more.”

To contact the reporter on this story: John Gittelsohn in New York at johngitt@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

Cheaper To Buy Than To Rent in 72 Largest U.S. Cities

Despite the rising number of renters across the country, it is cheaper to buy a home rather than rent one in 72 percent of the 50 largest cities in the U.S., according to an index released by real estate search and marketing site Trulia.

“Since the start of the ‘Great Recession,’ many former homeowners have flooded the rental market. Following the principles of supply and demand, renting has become relatively more expensive than buying in most markets,” said Pete Flint, CEO and co-founder of Trulia, in a statement.

“Though necessary for achieving true economic recovery, stricter bank lending practices have also further aggravated the struggling housing market in the short term. Even highly qualified homebuyers face intense scrutiny on their income, savings, existing debt and credit history before they can get a mortgage loan.”

Trulia’s rent vs. buy index compares the median list price with the median rent on two-bedroom apartments, condominiums and townhomes listed on Trulia.com as of Jan. 10, 2011.

A price-to-rent ratio of 1 to 15 means that it’s much cheaper to buy than to rent in a particular city. A ratio between 16 and 20 means that it’s more expensive to rent than to buy, but, depending on the family’s situation, buying could “make financial sense,” the site said. Any ratio above 20 indicates that owning is much more costly than renting in a city.

In 36 out of 50 of the country’s most populous cities, buying a two-bedroom home is less expensive than renting one. These cities include many areas that have been hit hard by foreclosures, such as Las Vegas, Phoenix and Fresno, Calif.

Read More

New-home sales rise to 329,000 in December

Pace reclaims highest since April, but housing market still weak

By Jeffry Bartash, MarketWatch

Last Update: 12:45 PM ET 1/26/11

WASHINGTON (MarketWatch) — Sales of new single-family homes rose almost 18% in December to the highest rate since last spring, but builders in 2010 still suffered through their worst year in modern times.

Sales jumped to an annual rate of 329,000 on a seasonally adjusted basis, with almost three-quarters taking place in the West, according to the Commerce Department. Economists polled by MarketWatch had forecast sale to rise to 299,000.

The market might have gotten a jolt from a tax credit in California that expired at year end, some economists say.

“The impressive increase in new home sales in December is mainly due to the rush to beat the deadline of a tax credit in California,” the firm Capital Economics said in a report. “Without that boost, new sales would have been broadly unchanged.”

Whatever the case, new home sales in 2010 ended up at the lowest level since record-keeping begin in 1963. The government estimates that sales fell 14% last year to 321,000 from 375,000 in 2009.

Sales plunged during the recent recession, and with millions of homeowners threatened with foreclosure, the housing market continues to struggle to recover.

Economists expect sales to accelerate in 2011 as the U.S. economy improves and buyers are attracted by low prices and ultra-low interest rates. Yet the rate of growth will depend largely on how fast the nation’s high 9.4% unemployment sinks.

The lack of work has hurt many homeowners and the fear of losing a job has scared off prospective buyers, creating a surplus of available homes. Builders have reacted by slowing new construction.

In December, for example, the supply of homes at the current sales pace dropped to 6.9 months from 8.4 months, the lowest level since last spring.

And at the end of 2010, about 190,000 homes were available for sale, the fewest on the market since 1968, according to the Commerce Department.

The median price of new homes, meanwhile, climbed to $241,500 in December from $215,500 in November.

Fluctuating home prices can have a big impact on sales. If sellers think prices will continue to rise, for example, they might hold off on selling. Or if buyers think prices will fall, they might wait to purchase a new home.

Since data for tracking sales in new homes is volatile and subject to frequent change, economists tend to look at several months of data to gauge market trends. Over the three-month period of October to December, new-home sales averaged 296,000.

That’s about one-third the rate of sales in normal economic times, however.

---

Jeffry Bartash is a reporter for MarketWatch in Washington.

People Are Moving Again

People Are Moving Again

By Mark Heschmeyer, CoStar.com

While data compiled in the 2010 Census suggests that long-distance moves hit a record low, more recent data indicates, Americans seem to be on the move again. In 2010, Atlas Van Lines saw increases in the number of household moves, a possible sign that the economy is improving, according to its annual Migration Patterns study.

“The results are especially promising this year, as the number of moves has increased, with monthly numbers higher than last year’s,” said Jack Griffin, president and COO of Atlas World Group.

For some states, outbound moves were high. Due to high unemployment, residents of the Rust Belt continue to relocate elsewhere. States adjacent to the Rust Belt saw a great increase in the number of inbound moves.

For the first time in two years, Kentucky joined its surrounding Mideast states-North Carolina, Maryland, and Washington, DC – as inbound states. For the fifth year in a row, Washington DC had the highest percentage of inbound moves, while Ohio had the highest percentage of outbound moves.

Several states have remained constant in status for 10 or more years. California, Kansas and South Carolina have been balanced, Indiana has been outbound, and Alaska and North Carolina have remained inbound.

As the year progressed, Atlas saw increases in the monthly totals of household moves. Summer months continued to see the highest number of moves per season. Overall, the total for 2010 was 74,541.

The reports in the past week based on Census data was compiled from data collected up through March 2010.

Francis Yuen, an analyst with CoStar’s Property & Portfolio Research (PPR Global), says a host of factors have limited the average American’s mobility over the past several years.

“A soft economy and limited job opportunities dissuaded some from moving, causing many to double or triple up in apartments or live with mom and dad,” Yuen said. “The housing wreck left others unable to sell their homes at favorable prices. As a result, household growth and migration numbers dwindled.”

That is changing, though, now Yuen said.

“As the economy forges ahead and the prevalence of these issues subsides, Americans are starting to move again,” Yuen added. “The questions are: to where, and how can investors make money from it?”

If history is any indication, migration patterns have trended toward the Southeast and Southwest. And while research suggests much of this will continue to hold true, it isn’t the entire story.

“Metros like Phoenix, Austin, and Raleigh are projected to have some of the strongest 2011 household growth rates,” Yuen said, adding though that “most of these fast-growth metros will have household formation rates that will be below prerecession levels.”

By and large, the increase in average household growth rate is a result of an aging population (more homes needed), people moving into their own apartments (as opposed to doubling or tripling up), and stronger growth in traditionally slow-growth metros, like Boston and Detroit, though they too will continue to have household formation that is well below average.

There are a handful of metros that have grown faster than the average over the past decade and are forecast to best their prerecession household growth rates in 2011. More importantly, household growth in these three metros – Salt Lake City, Seattle, and Portland – isn’t solely a product of young adults moving out of their parents’ basements. In fact, while in-migration in the Southeast and Southwest has yet to reach prerecession levels, the Pacific Northwest (and Salt Lake City) is seeing out-of-towners arrive in even greater numbers.

“Part of the rationale for these migration patterns can be attributed to job opportunities,” Yuen said. “A number of major corporations, like Goldman Sachs (Salt Lake City), Intel (Portland), Boeing (Seattle), and Amazon.com (Seattle), have increased their presence in these metros over the past few years and are once again set on hiring.”

“But another, more qualitative reason that cannot be overlooked is that those moving are seeking a higher quality of life,” Yuen said. “The impact on these migration patterns will certainly have ramifications with regards to apartment demand and value. Although apartment demand in Salt Lake City, Portland, and Seattle will not shoot to the top of the rankings, expect it to outperform its historic averages in each market in the near term.”

“As for values, 2011 may be the best time to invest in these metros,” Yuen added. “While value growth will hardly be anything special in 2011, by 2012 Seattle and Salt Lake City are forecast to rank first and third in apartment value growth respectively, with Portland jumping into the top five by the outer years of the forecast. For savvy investors looking to get ahead in the New Year, the Pacific Northwest will be a great place to start.”

Mortgage Delinquencies Will Decline in 2011

(Source: DSNews.com)

The annual consumer credit forecast from U.S. credit bureau TransUnion predicts a 20 percent drop in national mortgage loan delinquencies by the end of 2011.

TransUnion predicts that the number of delinquent accounts — 60 or more days past due — will drop to 4.98 percent from an expected 6.21 percent at the conclusion of 2010.

The projected decrease would more than double the 9.87 percent yearly decline that is expected between the end of 2009 and 2010 (from 6.89 percent to 6.21 percent).

TransUnion anticipates at least double-digit declines in mortgage delinquencies in every state and the District of Columbia through 2011.

“Interestingly, the states projected to experience the greatest decreases in mortgage delinquencies – Nevada, Arizona, and Florida – are the same areas expected to have the highest 60-day mortgage delinquency rates at the end of next year,” TransUnion said.

TransUnion foresees North Dakota, South Dakota, and Nebraska having the lowest delinquency rates in 2011.

“We believe the nation will see a more robust improvement in mortgage delinquencies through the end of 2011,” said Steve Chaouki, group vice president in TransUnion’s financial services group.

Chaouki continued, “TransUnion expects a steady and improving unemployment picture and continued stabilization or rise in housing prices. A key driver that will lead the reversal in mortgage delinquencies next year will be an increase in the areas of the country experiencing a rise in property values and stabilization of values in those states and markets hardest hit by the recession.”

Survey: Rising Rates, First-Time Homebuyers Drive Market in November

(Source: DSNews.com)

Rising mortgage rates helped push first-time homebuyers to buy properties in November, while investors lost some of their enthusiasm for distressed properties last month. These are two of the major findings of the latest HousingPulse Tracking Survey released by the market research firm Campbell Surveys Monday.

The company found that first-time buyers’ share of home purchases jumped from 34.4 percent in October to 37.2 percent last month as long-term mortgage rates started to climb from the record lows set in early November.

Meanwhile, investor activity continued a two-month decline, falling from 21.4 percent of home purchase transactions in October to 19.9 percent in November, according to the survey results. During September, investor participation peaked at 22.3 percent, a 15-month high.

Separately, the share of home purchases made by existing homeowners also fell in November, going from 44.2 percent in October to 42.9 percent last month, Campbell Surveys reported.

“The recent surge in interest rates has made potential homebuyers nervous,” explained Thomas Popik, director of the HousingPulse survey. “If rates go up much more, then a good percentage of them will no longer qualify for the properties they want. As a result, they’re making bids on homes and quickly closing before their rate locks expire.”

Real estate agents responding to the latest survey commented on the rate-induced surge of homebuyer interest. “First-time buyers are back looking at homes,” reported an agent in Oregon.

“Interest rates have helped spur recent activity,” added an agent in Colorado.

Current homeowners, many of whom must sell their current residence to purchase another, are often precluded from quickly closing on properties, Popik noted, in explaining their reduced share of home purchase transactions in November.

Campbell Surveys found that not all types of property sales were impacted by the recent rise in mortgages rates – namely short sales, which require many months to obtain mortgage-servicer approval.

“Homebuyer concern for locking in interest rates while rates are low caused them to bypass short sale listings,” commented an agent in Hawaii.

“Most people are not prepared to wait for a short sale to settle…Buyers are concerned that interest rates are rising and don’t want to take a chance by agreeing to settle 5 or 6 months in the future,” wrote an agent in Virginia.

The large inventory of distressed properties is making investors nervous that prices will decline in 2011, Popik reported, adding that many investors see their previous business model – buy, rehab, and immediately sell – becoming increasingly difficult to execute and are now being forced to rent their properties.

“Investors are starting to get a little flaky and aren’t closing after getting short sale approval as they feel prices will drop further,” stated an agent in Arizona.

“Investors interested in buy and hold have become more numerous in recent months,” according to an agent in Virginia.

Campbell’s HousingPulse Tracking Survey polls more than 3,000 real estate agents nationwide each month to provide up-to-date market data on home sales and mortgage usage patterns.

Foreclosures Fall to Lowest Level Since 2008 on Robo-Signing Delays

(Source: DSNews.com)

New data from RealtyTrac shows that foreclosure activity last month fell to a level not seen since November 2008, after problems with paperwork prompted case reviews, foreclosure suspensions, and re-filings of affidavits by mortgage servicers.

Foreclosure filings nationwide in November dropped 21 percent from the previous month and 14 percent from a year earlier. For the first time since February 2009, RealtyTrac says the total number of filings for the month dipped below the 300,000 mark. The company tracked foreclosure filings – including default notices, scheduled auctions, and bank repossessions – on 262,339 U.S. properties during November.

That equates to one in every 492 U.S. homes hit with a foreclosure notice or taken back by the lender during the month, compared to one in every 389 homes during October.

James Saccacio, RealtyTrac’s CEO, said “While part of the decrease can be attributed to a seasonal drop of 7 to 10 percent that typically occurs in November, fallout from the foreclosure robo-signing controversy forced lenders and servicers to hit the pause button on many foreclosures while they scrambled to revamp their internal procedures and revise or resubmit questionable paperwork.”

According to RealtyTrac’s report, a total of 78,955 properties received default notices in November, a 21 percent decrease from the previous month and a 31 per-

cent decrease from November 2009. While the robo-signing scandal may have impacted the short-term numbers, this marked the 10th straight annual decline in default notices.

RealtyTrac says default notices in states that practice judicial foreclosures plummeted 31 percent from the previous month. Meanwhile non-judicial default notices decreased 9 percent between October and November.

Foreclosure auctions were scheduled for the first time on a total of 115,956 properties in November, a 16 percent decrease from the previous month and unchanged from November 2009. Scheduled judicial foreclosure auctions dropped 34 percent month-over-month, while scheduled non-judicial foreclosure auctions were down 7 percent from the previous month.

Lenders foreclosed on 67,428 homes in November, a 28 percent decline from October and 12 percent fewer than in November 2009. Bank repossessions, or REOs, decreased month-over-month in 37 states and the District of Columbia, according to RealtyTrac’s study.

November’s REO total was the lowest since May 2009, but November’s numbers pushed the year-to-date 2010 REO total to more than 980,000 – already above the record year-end total reported by RealtyTrac for 2009.

Despite a 20 percent monthly decrease in foreclosure activity, Nevada posted the nation’s highest state foreclosure rate for the 47th straight month. One in every 99 Nevada housing units received a filing in November – nearly five times the national average.

Thanks in part to sharp monthly drops in foreclosure activity in Arizona, Florida, California, and Michigan, Utah’s foreclosure rate leapfrogged to second highest among the states last month. One in every 221 Utah homes received a foreclosure notice in November.

California ranked third on RealtyTrac’s list of the highest state foreclosure rates, with one in every 233 housing units receiving a filing last month. Other states on the company’s top-10 list in November were Arizona, Florida, Georgia, Michigan, Idaho, Illinois, and Colorado.

HAMP Will Fall Short of Goal with Only 700K Helped: Report

(Source: DSNews.com)

The Obama administration’s signature foreclosure prevention program will help only 700,000 Americans save their homes, according to a scathing report released Tuesday by the Congressional Oversight Panel (COP).

The group’s assessment falls far short of the 3 to 4 million homeowners that the president pledged would receive more sustainable mortgage loans when the Home Affordable Modification Program (HAMP) was launched in March of last year, and is well below the 8 to 13 million foreclosures COP says are expected by 2012.

Treasury initially committed $75 billion of Troubled Asset Relief Program (TARP) funds to the HAMP initiative, which pays incentives to servicers, investors, and homeowners for each loan that is successfully modified. COP, which is charged with overseeing the use of TARP money, says it now appears Treasury will spend only $4 billion on HAMP incentives.

“Absent a dramatic and unexpected increase in HAMP enrollment, many billions of dollars set aside for foreclosure mitigation may well be left unused. As a result, an untold number of borrowers may go without help,” the report said.

The members of the congressionally appointed panel went so far as to call the government’s loan modification program “ineffective,” and they said Treasury’s reluctance to acknowledge HAMP’s shortcomings has had “real consequences.”

Since COP’s last report on HAMP eight months ago, the panel noted that Treasury has made “minor tweaks” to the program, but COP says the changes have not resolved its core concerns.

The report blatantly states that Treasury has failed to hold loan servicers accountable when they have repeatedly lost borrower paperwork or refused to perform loan modifications. Treasury has essentially outsourced the responsibility for overseeing servicers to Fannie Mae and Freddie Mac, but both companies have critical business relationships with the very same servicers, calling into question their willingness to conduct stringent oversight, according to COP.

The panel says Freddie Mac, in particular, has hesitated to enforce some of its contractual rights related to the foreclosure process, arguing that doing so “may negatively impact our relationships with these seller/servicers, some of which are among our largest sources of mortgage loans.”

Treasury’s authority to restructure HAMP ended on October 3, when TARP expired, and COP says because the deadline has come and gone for any major overhaul, “the program’s prospects are unlikely to improve substantially in the future.”

“Many of the problems now plaguing HAMP are inherent in its design and cannot be resolved at this late date,” the panel said in its latest report. “Other problems, however, can still be mitigated.”

For instance, COP says Treasury should enable borrowers to apply for loan modifications more easily by allowing online applications. The panel says Treasury should also carefully examine HAMP’s track record to pin down the factors that define successful loan modifications so that similar modifications can be encouraged in the future.

One area that COP called “most critical,” is redefaults. The panel says Treasury should carefully monitor and, where appropriate, intervene in cases in which borrowers are falling behind on their HAMP-modified mortgages.

“Preventing redefaults is an extremely powerful way of magnifying HAMP’s impact,” the report said. “Delinquencies that are flagged in their early stages can potentially be brought current through a repayment plan, but delinquencies that are left unchecked have the potential to undermine even the modest progress made by HAMP.”

COP says worse still, each redefault represents thousands of taxpayer dollars that have been spent merely to delay rather than prevent a foreclosure.

Time To Think Homestead Exemptions!

Homestead Exemption Tips

By Robert Pelletier

It’s time to think about Homestead Exemptions! If you buy and close on a primary residence before 12/31/2010, you will be eligible to homestead exempt the property for the 2011 tax year. Otherwise, you have to wait until 2012 to claim the exemption which is $50,000. Have your buyer call me now and let’s get this done!

Here are some other tax exemptions that can help your buyer and your sale:

$500 Exemption for Blindness, $500 Disability Exemption, $500 Widow/Widower Exemption, $5000 Veteran Disability Exemption, Service Connected Total & Permanent Disability Exemption, Granny Flat Reduction Exemption (assessment for living quarters of parents or grandparents), Historic Preservation Exemption, $25,000 Senior Citizen Homestead Exemption (restrictions apply).

For active duty armed forces members, Florida law allows you to rent your residence in your absences without loss of your homestead exemption.

Portability allows you to transfer some or all of your old homestead to your new home.

For more info, go to:http://www.coj.net/Departments/Property+Appraiser/Exemptions/Other+Exemptions.htm

These products are now available to help you sell more homes.  The right tools for today’s market!! Interest rates have dropped below 4.50%! The last time rates were this low Dwight Eisenhower was President and postage stamps were 4 cents!!

The USDA 100% financing loan is back in action. Whether you are buying or selling, this program is it for buyers with no down payment or sellers wanting to expand their pool of buyers! Available in Nassau, Clay, St. Johns, Baker, Putnam and Bradford Counties.

Fannie Mae Muliple Property Program – We now have an investment cash out, purchase or rate/term refi program for investors that own 5 to 10 properties. The LTV is 70%, minimum credit score 720, reserves 6 months (for all properties), no history of bankruptcy or foreclosures, no delinquencies in past 12 months, property in question can not have been listed for sale in last 12 months and the property has to have been owned for 12 months. 75% for rate/term refi and purchases. This is program in 15 and 30 year term, fixed or 5/1 ARM.

HomePath Mortgage – specifically for borrowers purchasing a Fannie Mae repo. No appraisal required, No mortgage insurance required, as little as 3% down, Available to both home owners and investors. Go towww.homepath.com to search out eligible

properties.

VA – 100% financing of the purchase price. If you need a list of the non-allowable buyer closing costs that the seller usually pays, I will email them to you upon request. Actually the sell can pay all the closing costs/prepaids if agreeable and reasonable.

FHA – 3.5% down payment required.Seller is allowed to pay up to 6% of the purchase price towards buyers closing cost/prepaids. Gift funds or family loans allowed for down payment. Reasonable MI. Call me and let’s talk FHA!

USDA Guaranteed Rural Housing Loan – permits 100% financing of the purchase price and the closing costs may be financed if the home value exceeds the purchase price. Certain income limits apply as well as demographic area (not available in DuvalCounty). Call or email me to see if the property qualifies.

Conventional – minimum 10% down payment required. Many, many changes in policy.

Email or call me if you have any questions on any programs.

Robert L Pelletier, J.D.

Managing Broker

Team PelletierREO of Full House Realty Company

O 866 970 9295

F 904 339 9943

A-REO RDCPro certified