Foreclosed Homes Sell at 27% Discount

Homes in the foreclosure process sold at an average 27 percent discount in the first quarter as almost a third of all U.S. transactions involved properties in some stage of mortgage distress, according to RealtyTrac Inc.
A total of 232,959 homes sold in the period had received a default or
auction notice or were seized by banks, RealtyTrac said in a
report today.
The discount reflects the average sales price of homes in
the foreclosure process compared with the average sales
price of properties not in distress. About 31 percent of all
U.S. sales in the quarter were of homes in some stage of
foreclosure, RealtyTrac said.

Government Control Of Fannie Mae Dictates New Rules

In showing it’s hand in controlling Fannie Mae, new rules were announced this week that require EVERYONE involved in a Fannie Mae financed real estate transaction to be checked against a national database of “Excluded Parties”. If any party appears on the list, the loan is not eligible for a Fannie Mae loan. The new regulations take effect June 1st.

Who is everyone? The borrowers, Loan Officers, Underwriter, Appraiser, Listing Agent, Listing Agent’s company, Selling Agent, Selling Agent’s company, Escrow Officer, Escrow company, Title Officer and Title Company.

The database contains roughly 3,700 pages of names of individuals that are anything from suspected terrorists to those convicted of drug offenses. The list also includes people who have been convicted of violating federal procurement laws, housing discrimination, and wage violations on Federal projects. To see if you or a potential client is on the list, here’s the website: https://www.epls.gov.

No one wants to aid a terrorist, but the mortgage market has long been private enterprise at its best. Fannie Mae and Freddie Mac used to be private government sponsored entities. This new requirement demonstrates that residential mortgages sold on the secondary market (90% of all mortgages) are now controlled by the Federal government.

The Foreclosure Rate...What is it doing?

Despite the drop in foreclosure rate, banks are still repossessing homes at an alarming rate -- over 92,000 homes were reclaimed in April. Home buyers, however, are snatching them up.

According to the National Association of Realtors®, distressed homes accounted for 35 percent of all April home resales with a typical discount ranging near 15 percent.

That's good value if you can find REO that's in decent condition.

Trade In Your Case-Shiller Index For Real-Time Real Estate Data Instead

The Case-Shiller Index is flawed for 3 major reasons and better real estate decisions start with better data. No matter where you live, you should be getting these free weekly market reports -- no question.

Adjustable Rate Mortgages

Adjustable Rate Mortgages Are An Absolute Steal Right Now. Have You Checked The Rates Lately?Home buyers would be behind to not at least consider the 5-year ARM right now. As compared to the 30-year fixed, the 5-year ARM is an absolute steal.
Courtesy of The Mortgage Report.

Re - Pre-Approval / Prequalification Letter

Planning To Use The $8,000 Tax Credit? It’s Time For A Re-Pre-Approval.
If your pre-qualification and/or pre-approval letter is more than 8 weeks old, get yourself "re-pre-approved". Mortgage guidelines have been in flux and your original lender letter may now be invalid.

LOCK RATES - NEGOTIATE A LOWER INTEREST RATE

How To Use Rate Locks To Negotiate Yourself A Lower Mortgage Rate.
Whether you're buying a home in Cincinnati or refinancing one, there's several ways to make a play for lower mortgage rates or fewer loan fees. (1) Have a higher credit score, (2) Make a larger downpayment, (3) Do your Good Faith Estimate homework. But, sometimes, the easiest way to save money on your mortgage is to pick a better closing date.