Homeowners with “underwater” mortgages face a financial and moral dilemma when making the monthly mortgage payment becomes a challenge: try to work with their lender to work out a payment or short sale arrangement, or let the home go into foreclosure.  For many homeowners who purchased a home or refinanced a home loan during 2004-2008, declining home values have put left them with a home that simply isn’t worth as much as the financing debt, and it may be years before home values appreciate enough to make up the difference.

New mortgage lending rules are being proposed and implemented that will make  “walking away” from a home more costly for homeowners that chose not to try to work out a solution with their lenders.  Old rules allow homeowners with a foreclosure to qualify for a new home mortgage in as little as three years after the foreclosure.  Changes are on the way that may delay the ability to make a home purchase for 7 years for a Fannie Mae loans, and FHA, currently more lenient for homebuyers with bruised credit, may altogether prohibit allowing a borrower with a foreclosure on their credit report from securing a new FHA home loan.

Other proposed changes include higher down payment requirements, higher mortgage insurance premiums, and significantly higher mortgage interest rates for more risky “walk-away” borrowers in the future.

Options for an at-risk homeowner that wants to best preserve their ability to obtain a new home loan:  submit a request to your lender(s) for assistance as soon as the risk of a foreclosure becomes known, even before missing a mortgage payment.  Lenders are more willing and have programs available that were not accessible months ago.  Working through the maze can be difficult and frustrating, but it will be critical to have documented efforts on behalf of the homeowner to prevent a foreclosure.  In the event the lender is unable to provide a temporary workout or loan modification, the next best choice may be to sell the home, typically involving a short-sale.  Doing so will still affect a homeowner’s credit, though may be seen more favorably by future lenders as opposed to a “walk-away” borrower.  Additionally, a successful short-sale can help a homeowner avoid a potentially costly deficiency judgement debt that may follow the homeowner for years after a foreclosure and attach to future income or assets. 

Homeowner Options to Stop or Avoid Foreclosure

View “The Truth About Short Sales” video

For more information about preventing foreclosure and a confidential consultation, please contact Bryan Messick at 303-378-7677 as soon as the first signs of mortgage trouble arise.  Taking action early is key to preventing foreclosure.

Fannie Mae gets tough on ‘strategic’ mortgage defaults – USATODAY.com.

Coloradans jump at state program to further energy efficiency – The Denver Post

via Coloradans jump at state program to further energy efficiency – The Denver Post.

Broker analysis of Metrolist data showed the average sold price of a detached single family house in Littleton Colorado increased to $298,811  in May 2010, up 3.4% compared to an average sold price of $288,886 in April of 2010, though down slightly from an average sold price of $297,381 in May 2009.  The number of homes sold in May increased 18.7% over May 2009, a sign of increased buyer activity, thanks in large part to the Home Buyer Tax Credit stimulus program which ended April 30th, 2010.

The number of traditional, non-distressed homes (pre-foreclosure short sales or bank owned properties) sold in May increased 22.2% over May 2009, though the average sold price decreased by $1,794, or 0.6% compared to the previous year’s average sold price.  Current year trends show overall increases in Littleton home values, with an improvement of 6.9% for non-distressed single family homes, or $19,826 compared to recorded Littleton home sales in April 2009.

Littleton non-distressed home sales comprised 83.7% of all Littleton homes sold in May 2010 vs 81.3% in May 2009
Littleton bank owned foreclosure home sales comprised 8.7% of all Littleton homes sold in May 2010 vs 13.5% in May 2009
Littleton short sale home sales comprised 7.6% of all Littleton homes sold in May 2010 vs 7.1% in May 2009

View Homes for Sale and Neighborhood Information for Littleton Colorado

Compare Local Littleton Home Values by Neighborhood

Find Bank Owned Foreclosure Properties in Littleton

Contact Bryan Messick for More Information, or call me directly at 303-378-7677

Perhaps thanks in large part to the expiring federal tax credit incentive for home buyers as of April 30th, the number of home and condo sales closed in April 2010  increased 21.3 percent and 28.1 percent respectively over April 2009.  The average sales price also jumped by 15.0% from $262,228 in April 2009 to 301,530 in 2010 for resales of single family homes  South Jefferson County, whereas the average sales price for resale condos and towhomes rose a more modest 3.9% over the previous year. 

South Jefferson county homesellers should continue to see residual results from the tax credit stimulus in home sales through June 30th, as the rules to qualify for the homebuyer tax credit only required a contract by April 30th, with a closed transaction date no later than June 30th, 2010.

Though south Jefferson county is experiencing a “mild seller’s market” in both single family homes and condos/townhomes, there may be some concern for sellers considering putting their homes on the market.  The number of new listings coming on the market in April 2010  increased 10.9% over 2009 for single family homes, and condos/townhomes experienced a similar increase over April 2009 with an 11.5% increase.  More supply of resale homes with fewer motivated buyers typically leads to downward pressure on home prices, as picky buyers have more homes to choose from, and we could see a transition back toward a buyer’s market in the early summer months, especially with expected increases in bank owned foreclosure supplies coming on the market as well.  Still, for well-marketed homes under $300,000 that are priced properly, homes sell in under 90 days in south jefferson county, and closer to 60 days for first time buyer entry level homes.

If you are considering selling your home, or buying a home to live in or for investment wealth, now is a good time to consult with a real estate professional to discuss your real estate goals and develop a successful strategy.  Call Bryan Messick 303-378-7677 at Keller Williams Realty anytime or visit www.LivingInLittleton.com to learn more about buying and selling homes in south Jefferson County, including Littleton, Lakewood, Morrison and Southwest Denver.

For homeowners who are at risk of a pending foreclosure, knowing what action to take may seem about as precarious as petting an angry porcupine.  The nightly news talks of the failure of government loan modification programs designed to help a select few homeowners who qualify to narrow standards.  Lenders aren’t much help either, with a huge backlog of delinquent files and mixed signals about their willingness to help and cooperate with desperate homeowners.  Which is the best solution: work out a loan modification with the lender, request a deed in lieu of foreclosure, attempt a short sale, file bankruptcy, wait and see what happens next, or just walk away?  What are the benefits and consequences of taking any of these actions???

The “Helping Our Neighbors in Need” program was recently introduced to Colorado homeowners and has a distinct mission: as Certified Home Rescue Experts, our goal is to help educate and inform homeowners about their options so that they may choose the best course of action for themselves.  This proven program is administered by real estate lawyers, bankruptcy attorneys, certified public accountants, economists, credit experts and Realtors, all of whom have joined toegther to offer options and solutions to the financial challenges that confront struggling homeowners.

In a recent article on the Wall Street Journal, the author cited an estimate by First American CoreLogic that more than 11 million U.S. homes are “underwater”, where the amount of combined mortgage debt owed is more than the current value of the home.  Additionally, the article references recent Congressional testimony from Bank of America that approximately 1.4 million of it’s mortgage customers are at least 60 days deliquent in their mortgage payments, and more than half of that number have not made a mortgage payment in over a year.

With so many homeowners struggling to keep up with their mortgage payments and also struggling with the dilemma of continuing to make payments on a house that is worth less than the outstanding mortgage debt, it is reasonable to expect the number of foreclosures and homeowners walking away from their homes to continue to be a problem for the foreseeable future.  The foreclosure moratoriums of early 2009 and bank’s hesitation to take foreclosure write-downs on their profit and loss statements are in the past.  As financial institutions come through the economic crisis and continue to show profits, the backlog of “shadow inventory” homes will begin to go through the foreclosure process.  The number of foreclosure filings is up, and with trial loan modifications expiring and the threat of rising interest rates, foreclosure activity will likely continue to accelerate throughout 2010 without additional government intervention or voluntary write-downs of mortgage principal.  In the current environment, both seem very unlikely to happen any time soon.

For homeowners wanting to take back control of their situation and take action to relieve the stress and burden of potentially losing their home, their equity, and their credit, the first step is to evaluate all of the available options.  If you know of someone who could benefit from a free, confidential conversation with a Certified Home Rescue Expert without any cost or obligation, please contact one of our local Certified Home Rescue Experts or visit our Helping Our Neighbors in Need webpage to learn more about how we can help.  We are here to offer you as much support as you need to make an informed decision.  Visit www.HelpOurNeighbors.com today

The Federal Reserve has announced well in advance it’s intention to withdraw from purchasing mortgage-backed securities to help keep mortgage interest rates at historically low levels.  On April 1, 2010, this program is slated to end, though the Fed has indicated it will keep a close watch on the after effects.

Added motivation for home buyers is the pending expiration of the federal tax credits for new and existing homeowners.  Under current law, buyers looking to cash in on the $6,500 or $8,000 tax credit programs must have their new home under contract with the seller no later than April 30th, 2010, and successfully close on the purchase contract no later than June 30, 2010.

With low resale home inventory and newly built homes coming into the local housing market, sellers are seeing the benefit of buyer competition for homes and upward pressure for listed homes under $300,000 in most areas of Metro Denver.

While there has been much debate over the overall impact that tax credits have had on stabilizing the housing market, an increase in interest rates may have much more negative impact in the coming months. 

A rule of thumb states that for every 1% increase in mortgage interest rate, a buyer’s purchasing power decreases by 10% of the sale price.  This means if interest rates increase from 5% to 6%, a borrower looking to borrow $200,000 would only qualify for $180,000 toward the purchase of their new home.  Sellers may find fewer buyers are able to qualify for loans to purchase their home at one price, and may face price reductions to stay competitive with other homes in the area.

Now may be the perfect window of opportunity, both for home sellers and home buyers.  If you’re considering making a move, call Bryan Messick directly at 303-378-7677 and let’s discuss your options.

Link to Bankrate.com article: Mortgage rates fall again to new low

“Mortgage rates fell slightly this week, to the young year’s lowest point.

The benchmark 30-year fixed-rate mortgage fell 4 basis points this week, to 5.08 percent, according to the Bankrate.com national survey of large lenders.

The Fed is in the final three weeks of a mortgage-buying initiative that began more than a year ago. In all, the Fed plans to buy $1.25 trillion in mortgage-backed securities. The central bank is down to the last $30 billion or so of these purchases. Afterward, it will be up to investors to buy mortgages and keep home loans available.”

Homes sold slightly faster, with the average days on market for a single family home in Littleton coming in at 79 days vs 83 days for February of 2009.

Interestingly, the number of homes sold during the month of February declined almost 20%, with 90 home sales closed during the month of February.

The number of Littleton single family homes sold as bank-owned or HUD-owned foreclosures dropped from 35 sales, or 31.2% in February 2009 to 11 sales, or 12.2% for February 2010. Industry experts expect the number of foreclosure sales to increase in the coming months due to expiration of trial loan modification programs and delayed foreclosure proceedings due to moratoriums in 2009.

For more information about home values and real estate sales in Littleton and the Greater Denver area, call Bryan Messick at 303-378-7677.

*Source: Agent analysis of Metrolist and IRES sales data and may not reflect all real estate transactions; information deemed reliable but cannot be guaranteed

Thanks to a post on 9News.com, I have finally found a convenient way to “opt-out” of these unwanted deliveries and save a trip to the recycling dumpsters. I’m so glad I found this – I’ve always thought having 3 phone books delivered was a huge waste of natural resources.

Here’s how to Opt-Out: Simply make note of which edition of the phone books you are currently receiving, then visit the link below and enter your zip code to opt-out of each delivery service.

http://www.yellowpagesoptout.com/

“…Supporters claim the 500-plus million directories delivered each year in this country are an environmental hazard as they take 19 million trees and 1.6 billion pounds of paper to produce.”

Below is a link to a Bankrate.com article which summarizes three issues that buyers need to be aware of if looking to buy a home with FHA financing.

FHA buyers should also be aware that the rules and requirements for FHA financing are about to become more strict for buyers with less than perfect credit and low downpayment money available.

For more information about buying or selling a home, call Bryan Messick at 303-378-7677 or email BryanM@kw.com to discuss the benefits and potential challenges of real estate transactions using FHA financing.

Read the full article at www.Bankrate.com  Print: Fixing 3 common FHA loan snags

“If you’re planning to buy a home, odds are good you may be seeking an FHA mortgage.

First-time homebuyers, buyers with less-than-perfect credit and purchasers who make down payments of less than 20 percent all are likely candidates for FHA mortgages.

Banks saddled with billions of dollars’ worth of bad mortgages are deathly afraid of these types of buyers, so the FHA has stepped in to fill the void, says Dennis Geist, vice president of government programs at Wells Fargo Home Mortgage in Des Moines, Iowa.

“FHA is back again in force because of market conditions,” Geist says. “We’ve seen a lot of foreclosures, and the risk has been greater recently than it’s been in the past.”

Do you know of somebody looking to stop or avoid a foreclosure?  Visit www.HelpOurNeighbors.com

Bankrate.com Article: HAFA short sale rules may help sellers