Gillette, NJ

There were big doings at the White House last week over the future of Fannie Mae anThe Obama administration confirmed that it is putting together overhaul plans to restructure Fannie and Freddie, and maybe strip away their money-losing toxic loan portfolios to create a single, new super mortgage source.d Freddie Mac, the ailing giants who still finance roughly six out of ten new home mortgages in the U.S.

	New Jersey Estates/ Weichert Realtors Paul Stillwaggon & Pat Cornish August 2009 LINKING THE LATEST TECHNOLOGY TO OLD FASHIONED SERVICE Copyright © 2009 Realty Times All Rights Reserved.

How the administration's plans develop over the coming weeks could prove crucially important for home buyers, sellers, builders and other realty professionals -- and could expand, or restrict, the types of mortgages available in the marketplace.

If, for instance, the replacement for Fannie and Freddie is confined solely to buying the safest, least-likely-to-default types of mortgages, the menu of loans available to buyers theoretically could be limited to fixed-rate 30 year and 15 loans with big downpayments and high credit scores.

Though the White House is mum on where it's headed, the National Economic Council last week formally took up the question of what to do with Fannie and Freddie.

The council reportedly is exploring what officials call a "bad bank-good bank" scenario.

Under such a plan, hundreds of billions of dollars of seriously delinquent and nonperforming mortgages currently held in the two companies' portfolios would be transferred to a new entity that would manage their accounts, collect payments, attempt modifications and workouts where possible, and ultimately own the proceeds from foreclosures or loan sales.

The "good" bank, on the other hand, would come to life with a totally clean slate, buy mortgages from originators nationwide, and would seek to be profitable by minimizing risks

James Lockhart, the departing CEO of Fannie's and Freddie's regulator, the Federal Housing Finance Agency, has spoken in favor of this concept, as has Lawrence Summers, director of the president's National Economic Council.

Though the Obama administration has not indicated its timetable on Fannie and Freddie's future, analysts expect the plan to be rolled out in time for Congress' consideration early next year.

Why should real estate professionals care what happens to Freddie and Fannie, or keep a close eye on the administration's plans?

Because an overly risk-averse replacement agency, combined with the continuing absence of a private securitization market to handle higher risk or specialized loan products, could stand in the way of home purchases by self-employed individuals, or consumers with less than perfect credit.


Written by Kenneth R. Harney
August 10, 2009

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Borrowers current on payments with Fannie Mae or Freddie Mac guaranteed loans could be eligible for refinancing into new loans even if they owe as much as 125 percent of the home's current value.

	New Jersey Estates/ Weichert Realtors Paul Stillwaggon & Pat Cornish August 2009 LINKING THE LATEST TECHNOLOGY TO OLD FASHIONED SERVICE Copyright © 2009 Realty Times All Rights Reserved.

More homeowners suffering mortgages larger than the value of their home can now trade in their mortgage for a more affordable home loan, under a broader Making Home Affordable refinance provision.

Borrowers current on payments with Fannie Mae or Freddie Mac guaranteed loans could be eligible for refinancing into new loans even if they owe as much as 125 percent of the home's current value.

Previously, the Home Affordable Refinance Program's loan-to-value limit was 105 percent.

It's the latest Obama Administration effort to help more homeowners refinance their mortgage at a lower rate and reduce their monthly payments. A refinance can help owners buck up and keep homes that are worth less than they owe.

Also, if the existing mortgage was written without mortgage insurance, the new loan won't be burdened with the extra cost.

Fannie Mae and Freddie Mac loans typically require mortgage insurance when the loan is more than 80 percent of the home's value.

Of course, if the current mortgage has mortgage insurance and the new loan is 80 percent or more of the home's value, mortgage insurance comes with the deal.

As usual, high-coast areas including many in California, New England, New York and most resort and second home areas won't see much relief. Until the Fannie Mae Freddie Mac conforming loan limit was raised in high-priced areas last year, high-cost area homes were too expensive to be purchased under Fannie and Freddie guidelines.

The new 125 percent limit also may not apply if a second mortgage combined with the first exceeds the limit. The new deal also doesn't allow homeowners to take cash out.

The higher loan-to-value ratios are available now to qualified borrowers who apply through their existing servicer. After Oct. 1 a homeowner can shop around and refinance through any Fannie or Freddie lender.

To check your eligibility for a refinance under the new provision, go to Making Home Affordable.


Written by Broderick Perkins
August 6, 2009

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For further information Phone: Paul Stillwaggon (908) 561-5492 Cell: (908) 310-1358 Pat Cornish (908) 561-6499 Cell: (908) 578-0890

You can Email us at: njestates@gmail.com We are located at: 55 Stirling Road, Watchung, NJ 07069

Under the new rules, even where borrowers have negative equities of as much as 25 percent, they may be able to refinance into better loan terms, provided their mortgage is owned or guaranteed by Fannie Mae or Freddie Mac.

New Jersey Estates/ Weichert Realtors Paul Stillwaggon & Pat Cornish

July 2009 LINKING THE LATEST TECHNOLOGY TO OLD FASHIONED SERVICE

Copyright © 2009 Realty Times All Rights Reserved.

For further information Phone: Paul Stillwaggon (908) 561-5492 Cell: (908) 310-1358 Pat Cornish (908) 561-6499 Cell: (908) 578-0890

You can Email us at: njestates@gmail.com We are located at: 55 Stirling Road, Watchung, NJ 07069

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The key to understanding what's happening for housing and real estate right now is to remember this: In a recovery that's just getting going, don't expect all the economic arrows to point the same way at any given moment.

New Jersey Estates/ Weichert Realtors Paul Stillwaggon & Pat Cornish

June 2009 LINKING THE LATEST TECHNOLOGY TO OLD FASHIONED SERVICE

Copyright © 2009 Realty Times All Rights Reserved

The latest numbers on housing sales, prices, mortgage rates and foreclosures are great examples of that point:

Sales of existing houses came in on the upside for May, with a 2.4 percent increase nationally over the month earlier.

That's the first consecutive monthly gain in resales in the U.S. since way back in September of 2005.

But then again -- last month also saw sales of newly-constructed houses fall by six tenths of a percent, as low-priced foreclosures swamped the market and pulled buyers away from builders' showrooms and subdivisions.

Meanwhile, prices in both the resale and the new construction segments continued to head downwards. According to the National Association of Realtors, the median home sale price in May was $173,000, 16 percent below what it was a year earlier.

The number one reason for the drop, according to Lawrence Yun, chief economist for the National Association of Realtors, was the heavy presence of foreclosures carrying rock-bottom prices in many markets.

Nationally, one of every three homes that went to closing in May was a "distressed" situation -- foreclosure or short sale. In some hard-hit areas, the percentage was much higher -- well over half.

Prices won't really stabilize until foreclosures fall to a much lower proportion of total transactions.

Now, on the other hand, there were scattered reports of resale prices beginning to get a foothold. For example, in the Tampa Bay metropolitan market on Florida's west coast, median prices jumped by four percent. They were also up slightly in Orlando.

On the sales side, Florida markets were red hot, with record increases in closed transactions. Florida as a whole saw a 16 percent statewide gain in May. But Broward County sales were up a phenomenal 47 percent and Orlando condo sales were off the charts for the month -- up 206 percent!

Looking ahead, mortgage rates appear to have at least temporarily reversed their recent increases. According to the Mortgage Bankers Association, the average 30-year fixed rate loan went for 5.4 percent last week -- that's down from 5. 5 percent the week before and close to 6 percent just a few weeks ago, based on quotes from major lenders.

Thanks to slightly lower rates, homebuyers continue to pour into the mortgage market. Applications for home purchase loans were up by 7.3 percent last week, pointing to continuing strength in sales during the coming several months.


Written by Kenneth R. Harney
June 30, 2009

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