HREU Students….we have been telling you for over a year that short sales were going to become easier and there was going to be a ‘Stream lining’ of the process….well, here it is. Also, pay special attention to the last section of this

article…’20% of all closings in last quarter were short sales’.

Here is the article…

Fannie Moves to Facilitate Short Sales

By Kate Berry (thanks Kate…Great artcle)

Fannie Mae plans to roll out a new program in the next few months to encourage short sales of delinquent borrowers’ homes, a move that shows mortgage investors may be willing to make further concessions as housing prices fall and the inventory of foreclosed properties continues to grow.

As the holder of credit risk, Fannie take losses on homes that sell for less than what is owed on the mortgage, but generally the loss is not as big as it would be if the home went into foreclosure.

Many loan servicers and some brokers of “real estate owned” — properties that have been repossessed by a lender — say the number of short sales has increased significantly in the past few months, largely because more foreclosed homes have flooded the market.

Jason Allnut, a vice president for credit loss management in Fannie’s Dallas office, said the government-sponsored enterprise is looking at ways to persuade servicers and REO brokers to do short sales while streamlining the process. “We want to incentivize the borrower with a program of preapproved short sales,” Mr. Allnut said Monday at a conference in Indian Wells, Calif., sponsored by REOMAC, a trade group. That statement drew applause from the audience of about 1,700 default servicing professionals.

Many REO brokers complained that servicers typically cut the broker commissions on short sales, compared with a 4% to 5% fee on foreclosure sales. But Mr. Allnut said: “Fannie is telling servicers not to cut broker commissions.”

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Kevin Kanouff, the president of the fixed-income services unit of Clayton Holdings Inc., a Shelton, Conn., due diligence, surveillance, and loan servicing company, said short sales used to be an “afterthought” for banks but are increasingly seen as a practical alternative to foreclosure.

Clayton has noticed “a significant increase in the number of short-sale liquidations in the past year” by clients, because servicers are getting more borrower requests to effect such sales, he said. Second liens that have negative equity positions are typically getting $1,000 to $3,000 from short sales after the senior liens are paid off, he said.

A nationwide survey of real estate agents conducted last month by Campbell Communications Inc. of Washington found that 20% of all completed home sales in the fourth quarter were short sales or preforeclosure sales. The survey, which was published this month in the newsletter Inside Mortgage Finance, found that about two-thirds of pre-foreclosure and short sales are initiated by homeowners, the rest by servicers. In all, the real estate agents surveyed said about one-third of borrowers signed short and pre-foreclosure sale deals that fell through; the most common reasons were home inspections and property damage, a refusal by sellers to sign “deficiency notes,” and sellers’ inability to pay closing costs.

In February, Freddie Mac expanded a short-sale program to include more loans with a higher likelihood of loss, said Brad German, a spokesman for the GSE. The program lets servicers submit short sales with few documents from the borrower. Late last year, Freddie authorized its Tier One servicers — those that have shown “superior performance” — to accept short sales at bigger discounts and to pay out more to junior lien holders, Mr. German said. As a result of these changes, short-sale approvals nearly doubled last quarter from the previous quarter, and closings of such sales increased by more than half, he said.

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As promised HREU has launched HREU.TV.

We will be updating the videos every 2 weeks. These videos are designed to help you take action now and thrive in this market.

Please register to get the newest videos sent directly to you.

Here is the link to the first video…..let us know what you think!
Click here now: (don’t forget to subscribe)

Harris Real Estate University TV

There is no end in sight, no bottom near. That creates massive opportunity for agents who have the skills this market demands.

The number of Americans signing contracts to buy previously owned homes declined more than forecast in February, indicating no sign of a bottom in the U.S. real-estate recession that is entering its third year.

Clearly, the best opportunity in this market is helping homeowners who have to sell their homes because they can no longer afford them. Agents who know how to do short sales are the agents who will thrive in this market. Knowing how to do a short sale in no longer optional.

CLICK THE LINK NOW TO ATTEND TODAYS (04/09/08) TELECONFERENCE:

Click Here Now To Attend the Free Agent Short Sale Secrets Teleconference.

The National Association of Realtors’ index of signed purchase agreements decreased 1.9 percent to 84.6, the lowest reading since records began in 2001, the group said today. The drop follows a revised 0.3 percent increase in January.

Looking for a bottom in housing is a little premature,” Drew Matus, senior economist at Lehman Brothers Holdings Inc. in New York, said in a Bloomberg Television interview. “Prices are likely to come down and we expect that to continue for some time.”

The NAR forecast existing-home sales in 2008 would fall to 5.39 million compared with 5.65 million last year. Purchases of new homes will decline to 576,000 from 775,000 in 2007, the group said today.

Th slow down in home sales and the dramatic decrease in home equity creates opportunity for agents who know how to do short sales.

CLICK THE LINK NOW TO ATTEND TODAYS (04/09/08) TELECONFERCENCE:

Click Here Now To Attend The Free Agent Short Sale Secrets Teleconference. Be The Agent Who Thrives In This Market.

Pending resales dropped in two of four regions, led by a 5.5 percent decline in the South. Purchases fell 3.7 percent in the Midwest. Pending sales increased 3.2 percent in the Northeast and 2.1 percent in the West.

The pending figures are considered a leading indicator of resales because they track contract signings. The purchase data, due later this month, reflects closings, which typically occur one or two months later.

Demand for houses continues to languish as defaults on subprime mortgages and rising foreclosures push even more properties onto the market. Banks selling foreclosed homes and builders eager to get rid of inventories are slashing prices.

We are blessed to get emails from Students like this one often. Julie and I always read them personally and share them with the entire University.

Sue is a student of the University, enrolled in Agent Short Sale Secrets. Its because of wonderful students like Sue that HREU is now the number one

short sale coaching and training company for fellow agents.

We are holding a free teleconference about Agent Short Sale Secrets this Wednesday 04/09 at 12 nn PST/ 3pm EST. The event is nearly full so if you would like

to attend here is the link.

Click here NOW:
http://instantteleseminar.com/?eventid=2388108

Here is Sues email….

Good Evening Tim,

I look forward to the calls and have learned a lot and am trying to get going on it. I live in a good market right now, but see a lot of foreclosures coming on the market and really want to be of service to those people. I really care about people and have a heart of compassion and care what happens. I know I was put on this earth to be of service to others. I really enjoy your short sale coaches, I really feel that they are out to serve others. They are Great Coaches for this Course.

I guess I need to make things clear, I really appreciate you and Julie, I have just heard more of the Short calls than anything else. I need to go back through and listen to all of the calls. So much good information that I am trying to put into practice right now.

I just needed to happen tomorrow.

I did write an offer and it sounds like it will be excepted tomorrow.

God Bless You All.

Sue

The Federal Reserve has been lowering rates to bail out the economy. Does this mean that that mortgage rates will fall?

In some cases yes in most cases no…read on.

Lets start with the 30-year fixed rate mortgage. The 30-year fixed rate mortgage is not tied to short-term treasuries. Fixed mortgage rates are tied to long-term bond yields that move based on the outlook for the economy and inflation. True, even as the Fed has lowered rates, the 30-year fixed has come down, but that’s because of the outlook for slower economic growth in the months ahead. While the decline in treasury yields has helped push mortgage rates lower, the decline in long term rates hasn’t been in lockstep thanks to the fact that these mortgages are securitized and sold on the global market. Investors now demand a higher risk premium on these mortgages due to higher delinquencies and foreclosures.

Next lets take a look at 7 and 5-1 Adjustable Rate Mortgages (ARMs) Yes, this is good news if your 5-year (or 7 year) ARM is pegged to a treasury index.  So if you’re facing a reset on, say, a $200,000 loan, you’re now getting a payment increase of about $150 a month, as opposed to $370 a month, which you would have had before the Fed started cutting rates.

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Do the Fed Rate Drops Help  Sub-Prime mortgage Holders?
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Nope. Unfortunately if you have a sub-prime ARM it is more than likely pegged to LIBOR, which has moved in the opposite direction. Because of the liquidity issues in global financial markets, LIBOR rates have actually increased at the same time that treasury and other benchmark yields have been declining, so the Fed lowering rates today would not help too many sub-prime mortgage holders.

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How are Home Equity Lines of Credit Effected?
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How about my Home Equity Line of Credit (HELOC): Yes, if you have that home equity line of credit that you used to renovate your bathroom/kitchen recently, then when the Fed lowers rates, your rate comes down as well. That’s because HELOCs are predominantly pegged to the prime rate, which moves in step with the Federal Reserve.

Here are the potential details:

Modernize the FHA: A likely element would overhaul the Federal Housing Administration’s loan insurance program, which helps homebuyers with weak credit or little cash get an affordable mortgage.

Key proposed changes to the FHA loan program have included permanently raising the size of loans the FHA may insure; reducing the program’s down payment requirements to 1.5% from 3%; and making it easier for borrowers in high-cost loans to refinance.

Help for troubled borrowers trying to refinance: The bill could let states offer $10 billion in tax-free municipal bonds, the proceeds from which would be used to subsidize mortgage refinancing for subprime borrowers trying to get out of unaffordable loans.

Under current law, state and local housing agencies are allowed to issue tax-free bonds only to help subsidize mortgages for first-time homebuyers or those purchasing property in distressed areas.

Tax credits for buying troubled properties: The bill could create a tax credit of up to $15,000 for homebuyers who buy foreclosed homes, homes where the current owner is in default or homes built after September 2007 that have been sitting empty.

Bigger tax break for homebuilders: The bill could expand the so-called net operating loss carryback. The provision would extend to five years from two the time a company may apply its 2006 and 2007 losses to past tax bills.

Money to aid areas hit by foreclosures: The bill could allow $4 billion in grants to state and local governments to buy and rehabilitate foreclosed homes. The White House has said, however, it considers such a provision a bailout for lenders and speculators.

More money for consumer counseling: The bill may call for $200 million more for housing counselors working with homeowners at risk of foreclosure.

Greater transparency for borrowers: The bill might call for greater disclosure in the mortgage application process so consumers could more easily understand the terms of their loans and won’t be surprised by big payment increases.

Think its tough for resale homes…..

Builders have it worse!

Yesterday Julie and I  saw a sign from a new homes builder…that read…(get ready for this, you won’t believe it)

“Buy A Home And Get The Second Home For Free”

And for builders, it gets worse…

New home sales fell to their lowest level in 13 years in February, according to a key government report on the battered housing market released Wednesday.

February sales came in at a seasonally-adjusted annual rate of 590,000, the Census Bureau report showed, down 1.8% from a revised 601,000 in January and down 29.8% from a year earlier.

New home sales fell despite continued price declines. The median price of a new home sold in February was $244,100, down 2.7% from $250,800 a year earlier.

This decline in median price probably doesn’t accurately capture the weakness in prices for new homes, since about three out of four builders have reported having to pay buyers’ closing costs or offer other incentives, such as expensive features for free, in order to maintain sales.

“Falling prices are a double-edged sword,” said National Association of Home Builders chief economist David Seiders. “Affordability of homes needs to be restored, but some prospective buyers stay away because they believe home prices will continue to go down further.”