Realtor Coaching & Training: julie harris
What is the #1 Question Julie and I receive from current and future Harris Real Estate University students alike?
“Coach Tim and Julie…when will the housing market be finally done depreciating…when can we expect the markets to return to normal?”
We always answer the same way:
1) Know Thy Market: Even in the worst hit housing markets there are pockets of housing that are doing great. From a historical perspective, even during the Great Depression there were areas of the US that seemed to be almost immune. Get into your MLS and learn the housing market. Know what is selling and what isn’t.
2) Do No Harm: “Its a great time to buy”….isn’t that what we agents are told to say? Well, is it true? Nope and…depends. Know your client. If they want to keep the home for 10+ years then…yes…in certain markets and price ranges this is indeed a great time to buy. FHA fiance-able price ranges that are in sync with rental rates are probably safe. For example, if you can rent a home for a similar price as it would take to buy the home using FHA financing…them, jump in.
3) Rates Are Going Up…and Loans Will Be Harder To Secure: If you have been reading this blog for any amount of time you know that the fed has backed off buying mortgage backed securities. Mortgage interest rates no longer have the artificial support of the government. That will almost certainly mean…higher rates. If someone is trying to time the market you need to make them fully aware of the ramifications of rising interest rates. Sure, a homes value may fall another x% but, what difference will it make if they can’t qualify for the loan?
Here is an article from Washington Post.
The housing market is facing swelling ranks of homeowners who are seriously delinquent but have yet to lose their homes, and this is threatening a new wave of foreclosures that could hit just as the real estate market has begun to stabilize.
About 5 million to 7 million properties are potentially eligible for foreclosure but have not yet been repossessed and put up for sale. Some economists project it could take nearly three years before all these homes have been put on the market and purchased by new owners. And the number of pending foreclosures could grow much bigger over the coming year as more distressed borrowers become delinquent and then, if they can’t obtain mortgage relief, wade through the foreclosure process, which often takes more than a year to complete.
Translation: Agents, we are in THIS market..for a long time. What can you do now? Learn how to make money from listing and selling Short Sales. As we have been sharing with you since 2007…Short Sales are the best solution to avoid foreclosures. Starting NEXT MONTH the new treasury departments Short Sale Guidelines kick in. Learn the new ways to easily list and sell short sales. Watch the Free HREU CDPD Short Sale Secrets video and download the FREE Short Sale Book NOW.
As these foreclosed properties add to the supply of homes for sale, they could undercut housing prices, which have increased modestly through December, according to the most recent figures in the S&P/Case-Shiller home prices index. That rise partly reflected a slowdown in the flow of foreclosed homes onto the market.
The rate at which J.P. Morgan Chase seized properties, for example, peaked in the middle of 2008 and fell steadily last year, according to a February investor report. But the bank expects repossessions to increase this year, nearly doubling to 45,000 by the fourth quarter.
“Some of the positive housing data may not be signaling a true turning point, as many servicers are holding back on foreclosures and the related houses are not yet being offered for sale,” said Diane Westerback, a managing director at Standard & Poor’s. Westerback said it could take 33 months to clear the backlog.
Data released Thursday by RealtyTrac illustrate the dynamic. While banks repossessed fewer homes in February than a month earlier, borrowers continued to fall behind on their payments, adding to the inventory of properties headed toward foreclosure that have yet to be put on the market, said Daren Blomquist, RealtyTrac’s spokesman.
“Just looking at the numbers, we would expect there to be a bigger percentage of properties” repossessed by banks by now, he said.
This “shadow market” reflects the increasing lag between defaults and foreclosures. Many lenders are struggling to keep up with the overwhelming number of borrowers who can’t make their payments, and they’re reluctant to rush repossessed homes onto the market when prices are depressed.
Note: the total number of so-called bank shadow inventory homes? Low end, 8,000,000…..high end…15,000,000. Bottom line: millions of homes will come on the market over the next 3-5 years as REOs. Is it too late for YOU to become a REO Listing Agent? No. Watch the FREE Agent REO Secrets video and download the FREE How-To List REOs book now.
Delinquent borrowers
Today’s delinquent borrowers, for the most part, differ in a key regard from those who were caught up in the surge of defaults in 2008. That earlier wave, which precipitated the financial crisis, consisted largely of subprime borrowers who defaulted when their risky loans became unaffordable.
The borrowers in trouble now are, for the most part, people who have better credit and safer loans and have become delinquent because they’ve lost their jobs or are dealing with other economic setbacks, economists said. More than 75 percent of the borrowers who are now seriously delinquent — meaning they have missed at least three monthly payments — have traditional prime loans, according to First American CoreLogic. Most of these borrowers have not made a mortgage payment in six months.
Strategic Foreclosures are the reason….literally millions of homeowners choosing to do a short sale (the smart ones) or let the home go back to their lender and suffer the negative ramifications of a foreclosure. A recent study demonstrated that homeowners with the BEST credit will walk away (short sale or a foreclosure) when their home is 1) $70,000 upside down or..25%.
These borrowers are among the most difficult to help. Homeowners with economic troubles such as extended unemployment often cannot make even reduced mortgage payments. And the longer borrowers stay delinquent, the more difficult it is to fashion a mortgage relief plan for them.
Some lenders are giving distressed borrowers more time to see whether they can modify the terms of their loans.
It can take a borrower six to seven months to find out whether he or she qualifies for a permanent loan modification under the federal foreclosure relief program, Making Home Affordable, according to Barclays Capital.
In Maryland, for example, lawmakers extended the foreclosure process from 15 days to 135 days in 2008 and are considering emergency legislation to force lenders into mediation with a borrower before foreclosing on a property. But other states and jurisdictions have even more drastic measures to slow down the foreclosure process. “There were cases where sheriffs were refusing to file foreclosure notices,” said Jay Brinkmann, chief economist for the Mortgage Bankers Association.
After a temporary foreclosure moratorium in 2008, the backlog of homeowners facing foreclosure in Maryland has surged. The number of Maryland homeowners who are seriously delinquent or in the midst of the foreclosure process nearly doubled during the fourth quarter of 2009 compared with the same period a year earlier, according to data from the Mortgage Bankers Association.
“Lenders are deluged by late-stage delinquencies. The pent-up foreclosure inventory is there,” said Massoud Ahmadi, director of research for the Maryland Department of Housing and Community Development.
Housing prices
The uptick in foreclosure sales is helping depress Maryland home prices, he said. “We have seen that home sales are on an upswing, but prices are on a downswing. That is the impact of the shadow inventory. It is keeping prices down,” Ahmadi said.
In addition to those already in default are 11 million more U.S. borrowers who owe more on their mortgage than their home is worth — known as being underwater — and are in danger of becoming delinquent, said Sam Khater, chief economist for First American CoreLogic.
Agents…did you catch that…11 MILLION!
Over the past year, the number of foreclosed homes going up for sale has declined. Distressed properties made up just 38 percent of purchases in January, compared with the 49 percent peak in March 2009, according to the National Association of Realtors. That helped the inventory of homes on the market fall to a 7.8-month supply, close to the figure during normal times and down from more than 11 months in July 2008. But as prices continue to stabilize, lenders are likely to take advantage of the situation by putting more of these distressed properties on the market, economists said.
“Banks have remained in foreclosure paralysis, allowing that backlog to get larger and larger. You can’t do that indefinitely,” said Sandeep Bordia, head of U.S. residential credit strategy at Barclays Capital.
That impact could be muted if enough buyers emerge to snap up properties or efforts to enroll borrowers in mortgage relief programs improve. Some lenders are looking for ways to ease delinquent borrowers out of their homes without a foreclosure. For example, lenders are allowing more short sales, in which the home is sold for less than the outstanding loan balance. Citigroup is testing a program that allows delinquent borrowers to stay in their home for six months free if they leave the property in good condition, making it easier to sell afterward.
“We are anticipating a foreclosure glut that is likely to come up in next 16 to 18 months. We are trying to stay ahead of this,” said Sanjiv Das, chief executive of CitiMortgage. These types of programs are “protecting house prices and consumer sentiment from going down further,” he said.
What does this mean to you…HREU Student (or future student)? Please understand that the housing markets will not significantly improve for years. Short Sales and REOs are the market and will only be more so over the next 24-36 months.
Regional impact
The impact of the coming foreclosure wave will vary by region. The Washington area has a “shadow inventory” of about 67,000 properties that could go into foreclosure this year, an 11-month supply at the current sales rates, according to research by John Burns Real Estate Consulting in Irvine, Calif. That is slightly higher than the national average but far less than the hardest-hit communities, such as Orlando and Miami, where there is two-year backlog.
And the backlog will hang over some communities for years. By the end of 2012, 39 percent to 50 percent of home purchases in Phoenix will still be foreclosed properties, J.P. Morgan Chase has estimated. In Los Angeles, they’ll account for 28 percent of home sales.
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Join us for this week’s FREE live Harris Real Estate University Superstar Interview.
This weeks featured HREU Superstar’s are:
Lance and Karen Kenmore.
The Kenmore’s are long time HREU students having been personally coached by Tim and Julie Harris for years. Listen in as we ask the Kenmore’s how they have gone from selling only a handful of homes per year just a few years ago…..to today, where they will sell well over 100 homes in 2010. The Kenmores fully embrace the HREU rule of having multiple lead generation spokes. The Kenmore’s have a weekly radio show, are Dave Ramsey preferred agents, have a fantastic system for keeping in contact with their centers of influence and past clients.
Join us for this FREE HREU Event. Here is the info for your schedule:
EVENT: Super Star Interview
DATE & TIME: Friday, March 12th at 9:00am Pacific
FORMAT: Simulcast! (Attend via Phone or Webcast — it’s your choice)
TO ATTEND THIS EVENT, CLICK THIS LINK NOW…
http://AttendThisEvent.com/?eventid=11669457
A little info on Lance and Karen from their website:
The Kenmore Team is a full service real estate team assisting buyers and sellers in residential resale, relocation, investment properties, short sales, foreclosures and luxury homes sales in Tri-Cities, Washington (Richland, Pasco, Kennewick) and surrounding areas.
As life long residents of the Tri-Cities and active members of our community our first hand experience and knowledge of the area provide you a major advantage when making important real estate decisions. Working as part of a powerful team we provide our clients with exceptional customer service, technology, and most importantly results. We back this up with a guarantee that most agents wouldn’t even consider.
Popularity: 2% [?]
Interesting perspective on housing from a true real estate billionaire Mort Zuckerman.
Mr. Zuckerman made his money…in real estate. So,it would be safe to assume he would do his best to be a real estate cheerleader.. to talk up real estate…vs what he seems to do in this blog post.
Read what he has to say…and understand the ramifications of his comments…
America’s housing crisis has not gone away. If anything, it is getting more severe. Today, median single family house prices nationwide are down by slightly more than 30 per cent from their early 2006 peak. Fusion IQ, the research group, estimates that excess inventories will push prices down by a further 10 per cent. This is a critical issue because home equity was for years the largest asset on the balance sheet of the average American family.
The sheer number of empty homes overhanging the residential property market points to lower prices. There are an estimated 7m homes empty today, and an estimated 7.7m houses and condominiums behind on their mortgage payments. This is tantamount to a shadow inventory.
Agents, his estimates for potential upcoming foreclosures are the same as we have reported on this blog…15,000,000. Can there by any doubt that its NOT TOO late for you to become a REO Listing Agent? Take action now and watch the FREE Agent REO Secrets video and download the FREE Agent REO Secrets book. Learn how to become a HREU RSD and get the jump on the next wave of foreclosures!
More than 4m of those are now delinquent and going through some form of foreclosure or related procedures that will put them on the market in the next year or two. Fannie Mae’s 90-day delinquency rate is now roughly 5.5 per cent, double that of a year ago.
Home sales are depressed, too, by competition from some 6m rental vacancies, or 11 per cent of total rental supply. Median asking rents have been declining by an estimated 3.5 per cent over the past year – and that is accelerating.
There is no cheer in the new residential numbers either. January’s new home sales plunged by more than 11 per cent month-on-month to an annual rate of 309,000 units, the weakest on record. It now takes a record 14.2 months to sell a finished house. In the boom years, it took about three.
Even worse, the median price for new homes sold was $203,500, almost a seven-year low, and that for existing single-family homes fell 3.5 per cent month over month to $163,600, a new eight-year low. Inventories rose to a 9.1 month supply, which on top of the shadow inventory of unsold houses and those in the foreclosure pipeline does not bode well for homebuilders or housing. Neither does the sharp decline in mortgage applications to the lowest levels since May 2007 and the rise on the 30-year mortgage rates to more than 5 per cent.
Roughly one in four mortgages today exceeds the house’s value – approximately 10.7m homes. American Corelogic, the research provider, estimates an average deficiency per home of $70,700 or an aggregate of about $800bn.
OK, this is scary. If you will recall, last week in this blog post we shared with you the new research that proved that homeowners will do a strategic default at considerably higher rates when they are…$70,000 or 25% upside down. Using Corelogic’s numbers this would result in 10.7 million potential strategic defaults!
An additional 2.3m homes had less than 5 per cent equity. The remaining equity for many other homeowners is at historic lows. With declining prices beginning to hit the middle to higher ends of the housing market, we are looking at another foreclosure wave.
….and that is what we have been predicting for over a year….agents, if even half of what this blog post were to come true..what would that mean to your real estate market…and your real estate business? Are you ready…have you learned the new 2010 Short Sale Guidelines? Hopefully you know by now that the Obama administration is focusing on making short sales the solution to the inevitable massive increase in foreclosures. Watch the FREE Harris Real Estate University CDPD Short Sale Secrets video now…and grab your free short sale book.
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Harris Real Estate University.
New Obama Treasury Department program PAYS homeowners to avoid foreclosure..and do a short sale….lets call this one…’Cash For Walkers’
Why not?
We already have..’Cash For Clunkers’ and the proposed ‘Cash For Caulkers’….maybe this new program should be called…Cash For Walkers?
Afterall, this is what happens when someone decides to take the Treasury Department up on their offer to do a short sale vs allowing the home to go into foreclosure.
We first reported on this detail of the soon enacted HAFA Program clear back in November. Watch the videos we made for you about HAFA..and why 2010 IS the year of the Short Sale.
In case you missed it…here are the details:
In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave.
This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration’s most aggressive attempts to grapple with a problem that has defied solutions.
More than five million households are behind on their mortgages and risk foreclosure. The government’s $75 billion mortgage modification plan has helped only a small slice of them. Consumer advocates, economists and even some banking industry representatives say much more needs to be done.
Agents, are you now 100% convinced that 2010 IS the year of the Short Sale? If not, go back and read those last few sentences again. Next, learn NOW how to become a HREU CDPD (Certified Distressed Property Designation). Watch the FREE Agent Short Sale Secrets video and download the FREE Short Sale book!
For the administration, there is also the concern that millions of foreclosures could delay or even reverse the economy’s tentative recovery — the last thing it wants in an election year.
Taking effect on April 5, the program could encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification program to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.
Re-read that. Part of the new HAFA program is that the lenders CAN’T Go after deficiency judgments. And….they can NO LONGER request that the seller sign a promissory note…or cash at closing. Watch the videos that we created for you…you need to understand what a simply massive shift will take place April 5th once the new HAFA Guidelines are in place. Watch the videos NOW.
“We want to streamline and standardize the short sale process to make it much easier on the borrower and much easier on the lender,” said Seth Wheeler, a Treasury senior adviser.
The problem is highlighted by a routine case in Phoenix. Chris Paul, a real estate agent, has a house he is trying to sell on behalf of its owner, who owes $150,000. Mr. Paul has an offer for $48,000, but the bank holding the mortgage says it wants at least $90,000. The frustrated owner is now contemplating foreclosure.
To bring the various parties to the table — the homeowner, the lender that services the loan, the investor that owns the loan, the bank that owns the second mortgage on the property — the government intends to spread its cash around.
Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in “relocation assistance.”
Should the incentives prove successful, the short sales program could have multiple benefits. For the investment pools that own many home loans, there is the prospect of getting more money with a sale than with a foreclosure.
For the borrowers, there is the likelihood of suffering less damage to credit ratings. And as part of the transaction, they will get the lender’s assurance that they will not later be sued for an unpaid mortgage balance.
Agents, please understand…if the homeowner does NOT do a short sale…they are still on the hook for a possible judgment! Once homeowners learn about this….do you think they will want to do a short sale? Of course. Now the only question is…will you be the agent to list and sell that short sale? Learn the new proven ways to easily list and sell short sales. Become a HREU CDPD Now for only $97! Go here now to learn more.
For communities, the plan will mean fewer empty foreclosed houses waiting to be sold by banks. By some estimates, as many as half of all foreclosed properties are ransacked by either the former owners or vandals, which depresses the value of the property further and pulls down the value of neighboring homes.
Under the new federal program, a lender will use real estate agents to determine the value of a home and thus the minimum to accept. This figure will not be shared with the owner, but if an offer comes in that is equal to or higher than this amount, the lender must take it.
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What will happen when the Fed pulls out the support for the mortgage markets..later this month?
That is one of the biggest ‘unknowns’ in the real estate industry.
Interesting points from this video:
* Home sales DOWN over 7%.
* Despite interest rates BELOW 5% demand is not increasing…why?
* Millions of homeowners are upside down and can’t move up…so interest rates don’t help those folks.
* Jumbo Loans are still VERY difficult to obtain. Lenders have to use their own money vs Fannie/ Freddie.
* Shadow inventory expected to hit the markets….5,000,000.
* Government programs are slowing the correction that must happen inorder for the housing market to completely ‘clear’.
Here is the video:
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As Promised, here is the email that I sent to all Harris Real Estate University students earlier today….join us for this weeks HREU RSD Agent REO Secrets FREE event!
Hello,
Tim Harris here…
You are serious about taking REO listings…right?
Of course you are…
After all, everyone knows that REO listings are the listings to have in this market. Take a look around your market. Who are the top producers…the agents raking in all the dough?
The agents with the REO Listings.
Go here now for all the call-in info for this Thursday March 4th how-to list REOs Event:
Important Link—> Agent REO Secrets Event Info
Now, the real question is…How do YOU become an REO Listing Agent?
Here’s how…
Several months ago we held the *F-R-E-E* Harris Real Estate University Agent REO Secrets teleconference….As we expected, that call was completely full.
This is the intense live 90 minute teleconference (or webinar) where you get direct access to all the secrets you must have to get started in the make-money-now business of bank owned homes, REOs.
On the last call we announced that we were closing the doors for the Agent REO Secrets class……for at least 90 days…
….and that is exactly what we have done.
Unless you contacted us directly….you couldn’t enroll in the class..
Here is what happened…we received many requests from agents who missed the last REO Secrets Event….They were all asking (make that demanding) that we provide another FR-EE Event…
So, that’s what we are going to do…..THIS THURSDAY March 4th….
We are setting aside 500 spots for this week’s Agent REO Secrets teleconference (or webinar). I suspect that (like the call before) all of these spots will be taken….
In other words, we have limited space and it’s first come…first served. (Call in or log-in at least 10 mins early)
Here is the information for the call..
THIS THURSDAY March 4th, 2009 you are invited to attend the Agent REO Secrets Teleseminar.
Go here now for all the call in info:
Important Link—> How-to list REOs Teleconference
This is going to be another fantastic call. You will get direct take-action-now access to real agents who are making real money listing and selling REOs….
We are interviewing 3 fellow Realtors who have become REO listing machines…
1) An agent from the Midwest who is listing REOs like a mad man…He is now taking 4-6 new listings directly from REOs per week……making more money and its taking 50% less time and effort. Last year alone he sold 144 homes…90% REOs!
2) You won’t believe our next agent expert’s REO experience…he is listing dozens of homes directly from 5 REO sources this month. That is not a typo…20+ listings. You will learn exactly how he is doing it…we are holding nothing back!
3) As promised we will also interview an agent from California…Jennifer. She is making a fortune doing…BPOs. Matter of fact, she has been averaging well over $10,000 per month…from BPOs!
Your spot on this THURSDAY’s March 4th Agent REO Secrets teleconference has been reserved. Remember, this teleconference is no cost to you.
Go to this link now for important call-in information:
Important Link—> Agent REO Secrets, List REOs Event Info
Remember, we only have 500 spots available for this teleconference.
Once those ’seats’ are taken..they are gone.
To guarantee your seat… here is what you need to do…
You will want to call in (or log in using the webinar) at least 10 minutes early to be guaranteed your spot.
When you attend the event this THURSDAY here are a few of the things you will learn:
1) How to contact the lenders…YES…we are giving out names and numbers of the largest REO companies.
2) We will tell you exactly how to ‘present’ to the REO companies so they will want to list their homes with you.
3) You will learn the 3 biggest mistakes you must avoid at all costs.
4) How to make money now from BPOs.
5) Here is a new topic…IF you have REO listings we will tell you the top 3 reasons you will lose those listings…YES, the banks are pulling listings…you must know these 3 crucial mistakes to avoid.
On this 90 minute call you will learn our proven step-by-step process to becoming an REO listing agent.
We aren’t holding anything back on this call. Get ready to take pages of great notes.
Here is the best part about these 3 agents…none of them had any REO listings 6-12 months ago. They applied what they learned from Agent REO Secrets and are now having their best years ever.
Go here now for all the call in info:
Important Link—> How-To List REOs Teleconference (or Webinar) Info.
One more thing….I know this sounds crazy. Please don’t share the info about this call with other agents. We expect the call to be completely full.
Speak with you soon!
Tim and Julie Harris
P.S. This is not a ‘fluff call’. We respect your time and will be
giving you the information you must have to cash in on the REO
listings explosion taking place right now.
P.P.S. This call is taking place at 12:00 pm PST, 1:00 pm MTN,
2:00pm CTR, 3 pm EST.
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URGENT BREAKING NEWS:
Harris Real Estate University Students…and future students. THIS IS POTENTIALLY HUGE NEWS.
President Obama is considering forcing ALL lenders to stop ALL foreclosures!
His goal maybe to literally force every distressed homeowner (and their lender) to attempt a loan mod using the governments HAMP Program. We can assume that once the borrower chooses not to do a mod (or doesn’t qualify for a mod) they will then be pushed to the HAFA program. Remember, the HAFA program is all about SHORT SALES (or deeds in lieu of foreclosure).
What effect will this have on REOs? Virtually none. Why? Because of the sheer number of homes that are already in the foreclosure pipeline. Any temporary moratorium would be just that…temporary. So, REO Listing Agents…you need to prepare for a years of REO listings to come. If you would like to learn how to become a REO Listing Agent..watch this video and grab your FREE How to list REOs book.
Obviously, the Obama Administration is watching the dramatically increasing foreclosure rates….and will do something more radical to attempt to slow the rate of folks losing their homes.
Bottom line…AGENTS…please be 100% clear about this. 2010 IS the Year of the Short Sale. It NOT too late for you to learn the new ways to do short sales. Earn your HREU CDPD (Certified Distressed Property Designation). Watch the FREE Agent Short Sale Secrets video now…and download your FREE Short Sale guide book.
Believe me, we will be watching this emerging story 24/7. If any new news breaks…we will let you know.
Here is the story from Bloomberg.
The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program.
The proposal, reviewed by lenders last week on a White House conference call, “prohibits referral to foreclosure until borrower is evaluated and found ineligible for HAMP or reasonable contact efforts have failed,” according to a Treasury Department document outlining the plan.
“It is one of the many ideas under consideration in the administration’s ongoing housing stabilization efforts,” Treasury spokeswoman Meg Reilly said in an e-mail. “This proposal has not been approved and there are no immediate planned announcements on the issue.”
She confirmed the authenticity of the document, which hasn’t been made public.
At present, lenders can initiate foreclosure proceedings on any loan that hasn’t been submitted for HAMP eligibility. Under current HAMP rules, foreclosure litigation can proceed while borrowers are under review for the program or even in a trial modification.
The proposed changes would prohibit lenders from initiating new foreclosure actions before loan screening by HAMP and would require lenders to halt existing proceedings for borrowers once they are in a trial repayment plan.
‘Improved Protections’
The Treasury Department will soon release guidance “which will include a set of improved protections for borrowers” in HAMP, Phyllis Caldwell, chief of Treasury’s Homeownership Preservation Office, said today in testimony prepared for a House Oversight and Government Reform subcommittee. She didn’t provide details.
Earn your HREU CDPD (Certified Distressed Property Designation). Watch the FREE Agent Short Sale Secrets video now…and download your FREE Short Sale guide book.
The proposal goes further than rules adopted amid the crisis by federally controlled mortgage-finance companies Freddie Mac and Fannie Mae, which require lenders to review borrowers for a federal loan modification before a foreclosed property can be sold.
Foreclosure proceedings can still be initiated without a review, said Freddie Mac spokesman Doug Duvall. Fannie Mae spokeswoman Amy Bonitatibus said it adopted the same policy last March.
About 89 percent of outstanding residential mortgage loans are covered by the voluntary HAMP program.
About 2.82 million U.S. homeowners lost properties to foreclosure last year and 4.5 million filings are expected in 2010, RealtyTrac Inc., an Irvine, California data company, said last month.
Seven Million
Obama’s foreclosure prevention initiative, announced in February 2009 to help as many as 4 million Americans avert foreclosure, has modified 116,297 loans through steps such as lowering interest rates or lengthening repayment terms. More than 830,000 borrowers received trial repayment plans through January, according to Treasury data.
“Foreclosure processes differ among states, and the process is often confusing to homeowners already facing distress,” Caldwell said in her prepared testimony. “Treasury has been reviewing guidelines around outreach and the foreclosure process as part of its continual assessment of program effectiveness and transparency.”
Foreclosures may reach as many as 7 million mortgages, and an additional 5 million are at risk of default because borrowers owe more than the property is worth, Laurie Goodman, senior managing director at Amherst Securities Group LP in New York, said in a Feb. 17 interview.
Republican Criticism
“This is a problem of mammoth proportions,” Goodman said. “You can’t throw 12 million people out of their homes, so you need a successful modification program. My fear is that this isn’t it, but I’m highly confident that the administration will continue to iterate until they succeed.”
The Treasury proposal would require all borrowers who are 60 or more days delinquent on their mortgage to be sought out for participation in HAMP. Mortgage companies would need to try to contact the borrower at least four times by phone and twice by certified mail over 30 or more days before going to foreclosure.
Under current Treasury policy, foreclosure proceedings are only halted when a borrower receives a permanent modification plan.
Earn your HREU CDPD (Certified Distressed Property Designation). Watch the FREE Agent Short Sale Secrets video now…and download your FREE Short Sale guide book.
House Republicans criticized HAMP as a failure today, saying in a report that it is prolonging the economic crisis and harming homeowners.
“By every empirical measure, HAMP has failed,” according to the 18-page report released by Republicans on the House Oversight and Government Reform Committee. “In its current form, HAMP both hurts homeowners who might otherwise spend their trial-period mortgage payments on rent and also distorts the housing market, delaying any recovery.”
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