Fannie Mae selling foreclosed houses as rental units

As part of the government’s Real-Estate Owned (REO) pilot program, Fannie Mae has put nearly 2,500 foreclosures, including properties in Los Angeles, up for sale as rental units. Pre-qualified investors will be able to bid on these homes, of which only 429 are vacant according to DSNews.com. The majority of those 2,500 properties are located in Los Angeles and Riverside, making up 23% of the units.

The idea behind the government’s REO initiative is that the rental market is in high demand, and turning those foreclosures into rentals would stabilize neighborhoods and the reduce number of foreclosures on the market.

Investors interested in the pilot program can visit the FHFA REO Initiative page of the Federal Housing Finance Agency website.

Obama proposing extension of Mortgage Forgiveness Debt Relief

Even though many predicted the Mortgage Forgiveness Debt Relief Act (set to expire this year) wouldn’t get an extension, President Obama’s administration has included an extension in its 2013 budget proposal. The Act, passed in 2007 at the height of the financial crisis, was created to relieve homeowners who owed taxes on forgiven mortgage debt, allowing the borrower and the lender to work more freely together on mutually beneficial grounds. Without the extension, a borrower would face income tax with the short sale of their house.

Under the Mortgage Forgiveness Debt Relief Act, up to $2 million of debt elimination will be tax-free. The extension of this Act would apply to debt forgiven before January 1, 2015.

Home Builders say home buyer sentiment is improving

As we mentioned in a blog post last December, consumer sentiment had been on the rise when it comes to thinking positively about the course of housing prices in 2012. Additionally, the National Association of Home Builders/Wells Fargo announced Wednesday that home builder optimism has also continued to rise for the fifth month in a row. Builder sentiment index rose to 29 in February, up from 25 in January, and up 15 points since September. An overall improvement in consumer interest has contributed to this positive outlook (sales of previously owned homes increased in December), as well as a rise in home construction at the end of last year. Additionally, the average rate of a 30-year fixed mortgage is below four percent.

Despite this improved sentiment, the industry still needs some time. Sales of new homes aren’t improving, and builders are having to compete with foreclosures which have forced the price of previously owned homes down.

Read more about this on the San Francisco Chronicle.

Fannie Mae now accepting HomePath offers online only

As of February 2, 2012, all offers made on Fannie Mae HomePath homes must be submitted using the HomePath Online Offers Program. Agents and brokers representing buyers are now required to submit offers exclusively on HomePath.com. The HomePath Online Offers Program is designed to ease use and create transparency during the offer submission process with the following features:

• An easy-to-use, self-service offer submission system that can be assessed through HomePath.com
• A transparent offer process that keeps selling agents informed of the status of their clients’ offers on HomePath properties listed on HomePath.com
• Improved communication between the selling agent and the listing agent regarding offers on HomePath properties listed on HomePath.com

The goal is that the online, automated system will help move inventory quicker, thus contributing to recovery of the housing market.

h/t DSnews.com

CoreLogic economist says home prices in 2012 will grow

Chief economist Mark Fleming of CoreLogic is predicting 2012 will be a turn-around for housing prices, saying the prices will grow again this year. Typically, housing recessions take 3-5 years to reach rock-bottom, and this one has "bounced along the bottom" for two years now.

Additionally, the statistics are starting to point toward a positive season for Spring and Summer, which DSNews.com attributes to a couple of improvements: "...households are paying off their debts and at the same time accessing credit more easily, with some even adding Home Equity Lines of Credit in the third quarter of last year – the first such movement for these second-lien mortgage products since the financial crisis began."

Along with a decline in household debt (which improves overall affordability), existing home sales and single family housing starts have started to increase, and confidence is improving.

Unemployed homeowners getting some relief from Freddie Mac

Unemployed homeowners are getting a little bit of a boost after Freddie Mac announced on Friday it would be giving them a little bit of leeway. Those homeowners can now get up to 12 months forbearance, in some cases without requiring prior approval. According to DSNews.com, under the new directive, "servicers may offer up to six months of forbearance to unemployed homeowners without prior approval, and with prior approval servicers may offer up to six months more totaling a possible one year available in some cases."

That's good news for unemployed homeowners, who make up 10% of delinquencies because of unemployment circumstances.

Good news for 2012: Mortgage rates at a record low

New numbers released by Freddie Mac recently indicate it's looking like good news in terms of mortgage rates for the new year. Averages of fixed year mortgage rates have fallen to a record low this week as the yield on the 10-year Treasury note fell below 2%. The average rate on a 30-year fixed mortgage rate is down to 3.91%, while the average on the 15-year fixed mortgage is down to 3.23%.

Despite the low rates, Americans are still having trouble taking advantage. Unemployment is still high, and many are having difficulty qualifying for loans. The Associated Press says new home sales in 2011 will likely be the worst year on record in the last 50 years.

In addition to the low mortgage rates, consumer sentiment indicates a more positive outlook when it comes to the housing market in 2012, so builders are hopeful that sales will improve this year.

Click here for the full story.

Contact us if you're interested in learning more about home loan rates in your area!