What’s in a Price?

What’s in a Price?  

A Comparison of National Home Price Series 

Since all real estate is local, interpreting changes in home prices at the national or metropolitan level can be difficult. Not only that, but with so many housing price measures it can also be difficult to determine what the data each series presents is saying about the housing market. In order to break down the various series and detail their differences, the Research Division has compared the four major home price indexes that market participants follow. They are the National Association of REALTORS® Median Sales Price, the Case-Shiller Index group, and two Conventional Mortgage Home Price Indices: one by the Office of Federal Housing Enterprise Oversight (OFHEO) and one by Freddie Mac.

What’s in a Price: A Comparison of National Home Price Series (235.77K PDF)

The following Commentary articles also offer more insight into the different home price series:

Home Pricing: The Inside Story

High Highs and Low Lows; the Story of A Bi-Polar Index

Media Influence 

Fannie Mae announces new more flexible loss mitigation options

On Dec. 8, Fannie Mae announced it was giving mortgage servicers more flexibility and more loss mitigation options to minimize foreclosures. The changes will allow servicers to act earlier to avoid potential delinquencies. The changes affect mortgages in mortgage backed securities (MBSs) and mortgages held by Fannie Mae in portfolio.

The changes “build on and complement” the Streamlined Loan Modification Program (SLMP) that takes effect on December 15, 2008, and is described elsewhere in this week’s Washington Report. Highlights of the changes include:

1. Authority for servicers to apply loss mitigation tools for borrowers facing reasonably foreseeable, imminent default, so they don’t have to wait until they are late making payments.
   
2. A new Early Workout program that allows servicers to pre-negotiate a loan modification that takes effect and becomes permanent after the borrower successfully completes a trial period.
   
3. Clarification that a loan can remain in a pool even if it is 24 months delinquent, if there is ongoing activity to address the problem.
   
4. Elimination of the requirement that a loan must proceed to foreclosure after a specified period of delinquency.
   

Fannie Mae has also announced a new Single Family Master Trust Agreement that will allow servicers, for new MBSs, to remove a loan that is 30 days delinquent from the MBS to modify the loan.

Freddie Mac guidelines also permit servicers to address problems faced by borrowers who are at risk of imminent default. It is not known whether Freddie is considering enhancing this policy to complement the SLMP.

12/15/08

Help is out there for homeowners facing foreclosure

Sunday,  December 14, 2008 6:08 AM

By Kathleen Pender

SAN FRANCISCO CHRONICLE

David ZalubowskiAssociated Press

In Lakewood, Colo, an all-too-common sight: What was once just for sale is now in foreclosure. In response, several programs have been created nationally to help those homeowners.

Having trouble paying your mortgage?

The public and private sectors keep coming up with foreclosure-prevention programs. Unfortunately, no two programs are alike, and the rules keep changing.

Following is a summary of three major programs. The first two let qualifying homeowners refinance a mortgage into a more-affordable loan insured by the Federal Housing Administration. The third will reduce payments for qualified borrowers by modifying their existing mortgage.

For help weighing your options, consult a counseling agency approved by the U.S. Department of Housing and Urban Development. For a list, call 1-800-569-4287.

FHA Secure

Overseer: FHA.

Summary: Replaces a non-FHA loan with an FHA-insured loan for up to 97 percent of home’s current value, subject to dollar limits.

Eligible homes: Must be your primary residence (homes up to four units or condos).

Your existing loan: Must be an adjustable-rate mortgage made by a private-sector lender and not FHA insured. Existing lender (including second-mortgage holders, if any) must write off difference between old and new loan amount or convert it into a new second mortgage.

Payment status: Can be current or delinquent. If delinquent, you must have had a fairly good payment history before defaulting.

Your new loan: Must be made by a private-sector, FHA-approved lender. Can choose existing lender (if FHA approved) or new one. Can be fixed-rate or adjustable, up to 30-year term and fully amortized, with interest and principal paid each month. Cannot exceed 97 percent of appraised value.

New rate: Market rate offered by lender.

New loan limit: Ranges from $271,050 in low-cost areas to $729,750 in high-cost areas. Limit for 2009 (if program is extended) drops to $625,500 in high-cost areas. Although the FHA-insured mortgage cannot exceed those limits, if lender combines a first and second mortgage, the total could exceed the maximum for your area.

Debt-to-income: Your monthly payment (including insurance and taxes) should not exceed 31 percent of gross monthly income, although new lender might agree to go higher.

Fees: Normal closing costs on new loan. Also, FHA insurance premiums ranging from 1.75 percent to 3 percent of loan balance up front and 0.5 percent per year. Fees may be paid by lender.

Expiration: Delinquent borrowers cannot participate after Dec. 31. Borrowers who are current still will be able to refinance into an FHA-insured loan.

Whom to contact: Your loan servicer or any FHA-approved lender. Find one at www.hud.gov/ll/code/llslcrit.cfm.

Hope for Homeowners

Sponsor: FHA, FDIC, Treasury Department and Federal Reserve.

Summary: Replaces existing mortgage with new 30- or 40-year fixed-rate mortgage insured by FHA. Homeowner must share equity and appreciation with the government.

Eligible homes: Must be primary residence.

Your existing loan: Must have been originated on or before Jan. 1, 2008. You cannot pay it without help. As of March, your monthly mortgage payment (including taxes and insurance) must exceed 31 percent of monthly gross income.

Payment status: Current or delinquent, but you must have made at least six payments on your existing loan.

Your new loan: 30-year fixed-rate mortgage. You generally must refinance your existing loan with your existing lender. Your lender must reduce the balance on your loan to no more than 96.5 percent of your home’s current appraised value (if your new mortgage payment does not exceed 31 percent of income) or to no more than 90 percent of appraised value (if new payment does not exceed 38 percent of income). Second mortgages and tax liens must be paid off or forgiven.

New rate: Market rate offered by lender.

New loan limit: $550,440.

Other restrictions: You have no ownership interest in any other residential property. You have not been convicted of fraud in the past 10 years, intentionally defaulted on debts or provided false information to get your existing mortgage. After refinancing, you cannot take out a second mortgage for five years.

Fees: Normal closing costs on new loan. Also, FHA insurance premiums equal to 3 percent of new loan amount up front and 1.5 percent per year. Fees may be paid by lender. Upon sale, you share half of the appreciation with the government.

Whom to contact: Your loan servicer.

Expiration: Sept. 30, 2011.

Streamlined Modification

Sponsor: Federal Housing Finance Agency and Hope Now Alliance, a group of 33 banks and loan servicers.

Summary: Reduces your monthly payments by modifying (not replacing) your mortgage. Program starts Monday.

Eligible homes: Primary residence (home or condo).

Your existing loan: Must be owned or guaranteed by Fannie Mae or Freddie Mac or held by a Hope Now Alliance member. Must owe at least 90 percent of the home’s current value.

Payment status: Must be at least 90 days delinquent and certify that you had a financial hardship and did not purposely default to get a modification. Cannot have an active bankruptcy.

Your modified loan: Servicer will reduce your monthly mortgage payment (including property taxes, insurance and association dues) to 38 percent of your gross income by doing one or a combination of three things:

• Reducing the interest rate, but not below 3 percent, for up to five years.

• Extending the loan term up to 40 years.

• Reducing the principal on which monthly payments are calculated. Unpaid principal is added to the loan balance and due when you sell or refinance, but forgone interest payments do not have to be repaid. If you owe more than the home is worth, principal will only be reduced to 100 percent of market value.

If all three of these modifications cannot reduce your payment to 38 percent of income, you won’t qualify for streamlined modification.

Loan limit: None.

Fees: None to customer, but accrued delinquency fees and costs might be rolled into loan balance.

Whom to contact: Your loan servicer or Hope Now Alliance, at www.hopenow.com or 1-888-995-4673.

10 Reasons to list NOW!

10 Reasons

To list during the Holiday Season

 

1. You may receive more money for your home now because you have less competition.
   

 

1. Your home shows better during the Holidays.
   

 

1. One of the highest percentages of “Listings Sold” to “Listings Taken” occurs during this time of year.
   

 

4. Winter prospects are more serious buyers.

 

1. Throughout the Holiday Season, you may restrict showings during your personal family events.
   

 

1. Buyers have more time to look at homes during the Holidays, especially during vacations.
   

 

1. January is traditionally the biggest transfer month, and Corporate
   

Transferees, who need to buy a home now, can’t wait until spring.

 

1. By selling now, you may have a delayed closing or extended occupancy until the beginning of the following year.
   

 

1. When you sell during the winter, you have an opportunity to buy during the spring, when many more homes are on the market.
   

 

10. You may have fewer showings, but more qualified and motivated

prospects.