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The REO Rental to Own Joint Venture Program Stats

by Roberts Johnson and Rachel Diedrich, Real Estate B

The REO- Rental to Own Joint Venture Program.

What the statistics show us.

Between the GSE, Government Sponsored Enterprise, and HUD, Department of Housing and Urban Development, there are more than 250,000 REO properties for this new program.

Fannie Mae, Freddie Mac, HUD has put about 2,500 home up for auction for the new REO-Rental Program.  Atlanta, GA, however has the highest number in the mix, 572 properties making up 23% of the total up this first sale.

1.75 million Homes are currently unoccupied.

Amherst Securities Group last fall suggested that there are more than 7 million shadowed properties.

 

Approximately 12 million homeowners, more than one out of five with a mortgage, are underwater. In

Georgia 30% of mortgages are in negative equity position.

 

1.3 million Consumer bankruptcies were filed in 2011

 

Nationally, house prices have plunged about 30% in nominal terms from their peak and nearly 40% in

Real (inflation-adjusted) terms. By some estimates, declines in house prices have reduced homeowners’

Equity by more than 50% in the aggregate since the peak of the housing boom, resulting in more than a

$7 trillion loss of household wealth.

 

Experts reported 2.8 million homeowners lost their home in 2009 with a forecast of 3.8 million during

2010 and 9 million over the next four years.

 

Three in 10 young adults live with parents, highest level since 1950s

 

Outstanding student loans are now about $870 billion, a bigger debt pile than credit card balances

($693 billion) and auto loans ($730 billion). And student debt was the only major loan category growing

in the middle of last year. What kind of balances do people carry into their 30s and 40s? The data shows

that most people (66%) who carry student debt are under 40. Sixty-two percent of borrowers have loan

balances under $25,000 and 43% have balances under $10,000. Of the 37 million borrowers who have

outstanding student loan balances as of third-quarter 2011, 14.4 percent, or about 5.4 million borrowers,

have at least one past due student loan account. Together, these past due balances sum to $85 billion, or roughly 10 percent of the total outstanding student loan balance.  The deferred student loans are not included in the past due balances.

Today’s life expectancy is 78.2.

40.3 million people are 65 and older with 10,000 turning 65 daily.  The south has the greatest number oat 14.9 million.

There are 7.4 million people age 75 – 79.

Those that are between 45 – 64 equal 81.5 million, 26.4 percent of the total U.S. population.

74.2 million people are between the ages of 18 – 44.

Information provided by Cathy McDaniel. 5/2012.

The REO - Rental-to-Own Joint Ventur Program

by Roberts Johnson and Rachel Diedrich, Real Estate B

The REO – Rental-to-Own Joint Venture Program

The REO – Rental-to-Own Program started selling bulk housing to investors in February of this year, 2012.  What that means is REO homes, foreclosed homes, in the inventory of Fannie Mae is selling its inventory to investors.  The investor fixes up the house, if it needs it, then rents it out to someone with the idea that in 5 years or less the renter will be able to buy the home in a rent to own program.

What this means to the investor?  In the words of John Burns, bulk sales of REOs could be a “game changer” for the U.S. housing market.  We are talking about a huge transfer of wealth to a group of investors in the name of stabilizing the market.  We need to keep distressed transactions off the market and we need to make sure people don’t go homeless.  The Rental-to-Own initiative solves the problem.  It will take a good property management team in place that knows the federal housing laws and can work with the renter/potential homeowner on how to manage their money and help them move towards homeownership, which will be federally mandated.

In rolling out this new program the government is also encouraging Realtors to get certified to work with the investors and the renters/potential homeowners.  The certification is called Real Estate Property Management Designation, REPM for short.  Investors buy the units but it’s up to the Realtor/Property Management Company to help set rental rates, setting future purchase pricing, the amount of rent that will be allowed to be used for purchase, making sure the home is maintained, fixing any and all problems with the property/renter and making sure the renter/home owner gets the education that will be required to purchase the property and stay in the home.

It is slowly making its way to different markets and it will only be a matter of time before it hits Colorado.  Give me a call and let’s talk about how to get in on this market.  The Real Estate Property Management, REPM, class has just had its 1st successful class in Denver to complete the class and gain the designation.

Great Deals Available Now!

by Roberts Johnson and Rachel Diedrich, Real Estate B

Wow, what a stellar weekend!

Had an inspection on a condo with great views, under a $150,000 in downtown Denver, while it rained on the garden Saturday morning and then Rachel and I went to the Five Point Jazz Fest and met up with a bunch of friends.  We weathered the weather under the Denver Water tent, best water in the country.   Then the rain stopped, the jazz started up and then a flash mob started to form dancing to the jazz and just grew and grew in size!  It was the coolest thing ever!  We all had a great time and Sunday was a day of rest.

I have 2 deals for you this week. 

1st deal is a condo in the golden triangle, 1322 sq ft, $209,900, that’s $159 a sq ft, 1 bedroom, 2 baths, enough room to put in a 2nd bedroom, it needs some TLC.  Unit in the same building, 1523 sq ft, 2 bed, 2 bath, sold for $295,000, that’s $194 a sq ft.

2nd deal is a 2 unit condo for $60,000.  Both units are currently rented at $1100 a month.  Cash on Cash return is approximately 19%.  You get your money back in a little more than 5 years.  (I know of 2 of these deals!)

Send me an email with a couple of available dates and times and we will take a look!

Also, I need to help at least 30 new clients between now and the end of the year, please send me their contact information and I will call them right away!  Thanks in advance.

Obama to Tout Success of Refi Programs

by Roberts Johnson and Rachel Diedrich, Real Estate B

Obama to Tout Success of Refi Programs

The White House is set to announce today figures reflecting a big jump in the number of Americans participating in federal initiatives meant to aid financially strapped home owners and bolster the sluggish housing market.

Officials say the new data underscore the efficacy of programs President Obama has implemented to let more home owners refinance into historically low interest rates.

Obama will use the figures to demonstrate the need for lawmakers to take even more action to give still more Americans the same opportunity.

Source: "Obama to Tout Success of Mortgage Refinancing," Washington Post (May 11, 2012)

 

Florida Case May Have Widespread Effect

by Roberts Johnson and Rachel Diedrich, Real Estate B

Florida Case May Have Widespread Effect

A lawsuit currently in the Florida Supreme Court has the potential to undo “hundreds of thousands of foreclosures and open up U.S. banks to severe financial liabilities in the state,” Reuters News reports.

This week the court heard oral arguments over whether banks filing foreclosure lawsuits using documents that were discovered to be fraudulent can dismiss the cases and then refile the cases with different paperwork.

Analysts say that the judges’ ruling on the case — which could still take eight more months to decide — has the potential to influence judgments in 26 other states that require lawsuits in foreclosures.

"If the Florida court takes a strong stand, it sends a strong signal to the mortgage servicing industry in the rest of the country," says Tom Cox about the case, Roman Pino vs. Bank of New York Mellon. Cox is a foreclosure attorney who in the past is known for bringing about one of the first foreclosure lawsuits in the country.

This current case, he says, has the potential to cause other judges to start overturning more foreclosure lawsuits.

"A broad universe of mortgages could be rendered unenforceable," former U.S. Attorney Kendall Coffey told Reuters News. “The cost to the financial industry is difficult to estimate, but it could be substantial."

The case has its roots in the robo-signing scandal, which rattled throughout the country in 2010 when banks were found to be approving foreclosure documents in mass numbers without conducting proper reviews.

Source: “Florida Foreclosure Case Could Slam Banks,” Reuters News (May 9, 2012)

 

Bernanke: Mortgages Still too Difficult to Get

by Roberts Johnson and Rachel Diedrich, Real Estate B

Bernanke: Mortgages Still too Difficult to Get

Even creditworthy borrowers are finding it difficult to get a mortgage nowadays and it’s unlikely banks will ease their standards anytime soon, Federal Reserve Chairman Ben Bernanke told a banking conference in Chicago Thursday.

While banks have made huge strides in improving their balance sheets and overall lending (such as for credit cards and auto loans), banks continue to be extra cautious when it comes to issuing new mortgages, he said. Even borrowers coming with a 20 percent down payment on a home purchase may face hurdles unless they have stellar credit, he said.

"A return to pre-crisis lending standards wouldn't be appropriate," Bernanke said in referencing how banks prior to the housing crisis were issuing mortgages with little or no documentation for jobs or incomes. "However, current standards may be limiting or preventing lending to many creditworthy borrowers."

The challenges of getting a mortgage have been cited by real estate professionals and economists as one of the biggest obstacles standing in the way of a full housing recovery.

An estimated 10 to 20 percent of creditworthy home buyers are being locked out of the housing market because of tightened credit conditions, U.S. Housing Secretary Shaun Donovan told Reuters.

Source: “Credit Easing in U.S., Fed Chairman Says,” The New York Times (May 10, 2012) and “Bernanke: Even Worthy Borrowers Can’t get Mortgages,” Reuters News (May 10, 2012)

 

Double-Digit Price Increases Coming Soon?

by Roberts Johnson and Rachel Diedrich, Real Estate B

Double-Digit Price Increases Coming Soon?

Home buyers and sellers need to get ready to pounce. Hard-hit housing markets are on the road to recovery and expected to see major price gains soon.

Some of the hardest-hit markets during the housing crisis — plagued by soaring foreclosures and plummeting home prices — are expected to post some of the biggest gains through 2013, according to a report released this week by Fiserv.

"Some markets may have overshot to the downside, and people are jumping in to try to catch the bottom," says David Stiff, Fiserv’s chief economist. Fiserv recently projected that nationwide housing prices will gain 4 percent a year over the next five years.

The areas projected to have the largest price gains, according to Fiserv:

1. Madera, Calif

Projected price increase by the end of 2013: 21.5 percent

2. Medford, Ore.

Projected price increase: 20.1 percent

3. Yuma, Ariz.

Projected price increase: 16.7 percent

4. Corvallis, Ore.

Projected price increase: 11.4 percent

Source: “10 Housing Markets Set for Double-Digit Price Gains,” CNNMoney (May 9, 2012)

 

How Low Will Mortgage Rates Go?

by Roberts Johnson and Rachel Diedrich, Real Estate B

How Low Will Mortgage Rates Go?

For the second consecutive week, fixed-rate mortgages reached new all-time records lows, offering another big boost to home buyer affordability.

The 30-year fixed-rate mortgage averaged 3.83 percent for the week ending May 10, posting a new record low from last week’s 3.84 percent average. The 15-year fixed-rate mortgage also posted a new record, averaging 3.05 percent this week.

Here’s a closer look at mortgage rates for this week:

  • 30-year fixed-rate mortgages: averaged 3.83 percent, with an average 0.7 point, down from last week’s previous record of 3.84 percent. A year ago at this time, 30-year mortgages averaged 4.63 percent. The 30-year fixed-rate mortgage, the most popular choice among home buyers, has averaged below 4 percent for nearly every week — except for one — since Dec. 8, 2011, according to Freddie Mac.
  • 15-year fixed-rate mortgages: averaged 3.05 percent, with an average 0.7 point, dropping from last week’s previous record low of 3.07 percent. Last year at this time, the 15-year fixed-rate mortgage averaged 3.82 percent.
  • 5-year adjustable-rate mortgages: averaged 2.81 percent, with an average 0.5 point, dropping from last week’s 2.85 percent average. Last year, 5-year ARMs averaged 3.41 percent.
  • 1-year ARMs: averaged 2.73 percent, with an average 0.5 point, rising from last week’s 2.70 average. A year ago, 1-year ARMs averaged 3.11 percent.

Source: Freddie Mac

 

Thousands of Realtors Ready for Housing Rally

by Roberts Johnson and Rachel Diedrich, Real Estate B

Thousands of REALTORS® Ready for Housing Rally

It’s an election year, and real estate professionals from across the country want to make sure their voices are heard. More than 10,000 REALTORS® from coast to coast are expected to come together next week to show their support for home ownership in the nation’s capital.

The Rally to Protect the American Dream will be held May 17 in front of the Washington Monument in Washington, D.C. The rally will take place during the National Association of REALTORS®' Midyear Legislative Meetings & Trade Expo, May 14-19.

Several members of Congress are also expected to attend the rally and listen to real estate professionals speak out about the critical issues facing home ownership today and how important housing is to an overall economic recovery. Among the housing issues to be addressed are the threats mortgage interest deduction, foreclosures and short sales, affordable financing, and ensuring that credit is available for those who want — and are able to — purchase a home.

To learn more about the REALTOR® rally or to register to attend, visit www.realtorrally.org.

By Melissa Dittmann Tracey, REALTOR® Magazine Daily News

 

TranUnion: Mortgage Delinquencies Down in 1Q to Lowest Level Since 2009

by Roberts Johnson and Rachel Diedrich, Real Estate B

TransUnion: Mortgage Delinquencies Down in 1Q to Lowest Level Since 2009

The rate of borrowers past due by 60 days or more on their mortgage payments fell in the first quarter to 5.78 percent, the lowest delinquency rate since 2009, according to TransUnion.

The pace was lower in all but eight states, with Florida and Nevada posting the highest rates. TransUnion forecasts a decline in delinquency rates this year as gradual improvements in the economy help more borrowers to repay their home loans.

Source: "TransUnion: Mortgage Delinquencies Down in 1Q to Lowest Level Since 2009," Wall Street Journal (05/09/12)

 

Displaying blog entries 1-10 of 15

Contact Information

Photo of Roberts (Bobby) Johnson Real Estate
Roberts (Bobby) Johnson
Cool Denver Homes, Inc.
2314 Curtis Street
Denver CO 80205
Roberts Cell: (303) 525-7599
Fax: (303)9635335

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