Curtis Johnson

Mortgage lenders are starting to figure out that it is in their best interest to assist struggling homeowners with loan modifications. Many have developed their own plans outside the government’s attempt at a cure for the problem.

The Home Affordable Modification Program was touted as the solution to the problem, increasing the public’s view that “Uncle Sam” would do more than tax us to death. In reality though, while the program’s guidelines are not necessarily wrong, the banks simply choose not to use it.

MakingHomeAffordable.gov boasts that over a million borrowers have been helped, but less than 390,000 borrowers who took advantage of the program are still using it. Over 500,000 struggling home owners who qualified have walked away from the plan in favor of a more lucrative bank-sponsored plan, the rest have ended up losing their homes anyway.

Banks simply don’t want to use the government’s program, have been notorious at denying those who are 100% qualified for the program, and have often favored foreclosure over any realistic attempt at helping a homeowner who can’t get caught up with past-due payments.

But it seems they are beginning to realize that having millions of foreclosures in their files is not good for business. When too many mortgages are foreclosed, banks begin to see negative effects on their own credit quality.

While still resisting the Obama administration’s plan, and less inclined to assist high-risk customers, more and more banks are developing their own plans to assist struggling home owners who would have previously been considered low-risk borrowers.

For example, last quarter Wells Fargo was able to move $1.8 billion worth of distressed loans back to a “performing” status. This was done without the use of government programs. According to Hope Now, bank-sponsored modifications have helped 8.2 times as many home owners as has the Home Affordable Modification Program.

The only large lender to effectively and widely use the Home Affordable Modification Program is Citibank, in which the US Government holds ownership stake. However, “effective” and “wide” amounts to only approving about 30% of eligible home owners.

Banks, like most of us, simply prefer to claim responsibility for their own success and do not like to depend upon the government’s rules or help.

Banks see that assisting those home owners who were high risk to begin with is not wise, and these are the mortgages that are usually denied assistance. But there is an increasing number of regular, low-risk mortgages that are in trouble. These are the people who, if given some time to get back on their feet, will likely catch up and eventually pay off their mortgages as planned.

Perhaps it is the reality of these mortgages that is causing banks to really wake up to what is happening. In response, Bank of America, Wells Fargo, JPMorgan Chase and Citigroup have together added nearly 30,000 new positions with the sole job of processing these loan modifications more effectively and quickly.
If you are in trouble with your mortgage, give the Curtis Johnson team a call. The Curtis Johnson Team is helping individuals who are facing foreclosure and those who are seeking their dream homes.

Go to www.CurtisJohnsonRealty.comor call 1-888-Curtis-J.

When the Obama Administration announced the Home Affordable Modification Program, it was touted as the solution to the crisis that distressed home owners were in. It was supposed to stabilize the housing market, reduce foreclosures, and help home owners get back on their feet without losing their homes.

Here we are a year and a half after the program started and not even half a million people are currently participating in the program. It’s not that more haven’t tried; banks simply don’t want to cooperate. The program claims to have helped 1 million homeowners, but half who started in the program have dropped out, or been kicked out.

Some banks have said that the plan is unrealistic, and many just don’t want to follow more government rules than they have to. Fortunately, most of the same banks have created their own solutions, which are helping far more homeowners than the government’s plan.

The foreclosure problem is still huge though, even bigger than it was in January, 2009 when the program was announced. Nearly 2 ½ million homes have been foreclosed upon since December 2007, with 900,000 of those in 2009 alone. Foreclosures in 2010 are on track to break that record and top out over 1 million. Compare that to the “normal” number of foreclosures prior to the mortgage crisis of 100,000 per year.

To be honest, many of these homes have been in trouble for years. The banks are just now getting caught up with their foreclosure paperwork. But many of these homes could be salvaged for their owners if banks were more willing to cooperate.

The Home Affordable Modification Program will probably end up helping only about 500,000 people get back on and stay on track with their mortgages. Some of this is the fault of the banks for not doing their part, some of it is the fault of the government for not creating a better plan, and some of it is the fault of the homeowners themselves. Many homeowners find themselves in increasingly worse financial situations even after altering their mortgage, and end up losing it anyway, whether due to job loss, health problems, or simply poor financial choices.

Banks have claimed that the Obama administration has pressured them to accept people who have not yet proven their qualifications. The Obama administration denies these claims. Home owners claim they have sent in the required paperwork, but the banks claim they never received it. It seems to be a nightmare of finger pointing and disorganization is to blame for much of the problem.

Whatever the cause, if you find yourself with a distressed mortgage and need immediate help to sell your home, give The Curtis Johnson Team a call. We help sellers get quick sales, and we help buyers find what they are looking for. Check out what our happy clients have had to say about The Curtis Johnson Team.

Go to www.CurtisJohnsonRealty.comor call 1-888-Curtis-J.

The media tells us that the housing market has stabilized, but homeowners aren’t so sure. A recent report by Zillow.com shows that homeowner confidence has dropped in the second quarter of 2010. One-third of homeowners believe that home prices can still go lower.

Nationwide, only 24 percent of homeowners think their home has increased in value in the past year, even though 34 percent of homes are actually worth more than a few months ago.

Perhaps some of the reason is because many believe that the economic recovery is temporary. The nation as a whole is indeed teetering on the brink, with the national debt closing in on the gross domestic product for the first time since the Great Depression. Many economists are predicting a second dip, and even a full-blown depression, as early as 2011.

On the other hand, history shows that significant economic recessions and depressions tend to result in American’s feeling less secure for decades to come. How many of us recall the oddly frugal habits of our parents or grandparents that were a direct result of the Great Depression? Many of their generation didn’t even trust banks to hold their money and instead invested their savings in jars buried in the backyard.

Zillow’s report also showed that “27 percent of homeowners believed their own homes' values would increase in the next 12 months, 35 percent believed they will stay the same, 12 percent expected a decrease and 26 percent did not know.”

Western homeowners, including those here in Arizona, who do expect a rise in home values, are hoping for a 10 percent jump. Northeastern homeowners also expect that 10 percent, but the rest of the nation is coming in closer at a hopeful 5 percent.

There are also many homeowners who want to sell their house, but have not had any success or just haven’t bothered. They are waiting for sure signs of stability and rising prices to put their homes on the market.

Unfortunately, the potential of 3.8 million new homes on the market could cause those rising home prices to slow or even stop. The higher the inventory, the more homes buyers have to choose from and the more sellers have to lower their prices. It’s a buyer’s market, but most homeowners want to see a seller’s market.

What can we expect? The housing market is sure to recover eventually, but that recovery may not be as fast as many would like to see. Zillow suggests for three to five years after “the bottom” that the housing market will grow at a very slow rate until the inventory levels out.

If you are in worried about the housing market, give the Curtis Johnson team a call. The Curtis Johnson Team is helping individuals who are facing foreclosure and those who are seeking their dream homes.

Go to www.CurtisJohnsonRealty.com or call 1-888-Curtis-J.

Many interesting people walk through the doors of the Curtis Johnson Realty office, including an increasing number of international buyers. We have seen it, the Phoenix area culture is being influenced by it, and now the National Association of Realtors has confirmed it: Arizona is one of the top places that international buyers go when searching for their American dream home.

We mentioned the other day about the increasing number of Canadian buyers in the Phoenix market, but there are house hunters from other countries as well. Citizens of 53 other countries have purchased homes in the United States recently, with the largest numbers being from Canada, Mexico, the U.K., and China or Hong Kong.

Whether vacation homes, investment properties, temporary residences for holders of student or work visas, or permanent homes for new immigrants, 7% of the United States housing market is owned by a non-U.S. citizen. About 2/3 of their recent purchases have been single-family detached homes, most of which are being purchased to live in themselves or for a family member. The other 1/3 are probably investment properties and the owner may or may not reside in the United States.

International buyers are looking for bargains, as are many American buyers these days, but their buying power is greater on average. International buyers paid an average $219,400 for a home this year, compared to the overall price of $172,500.

Whether you are an American or a citizen of another country looking to settle in Phoenix or to invest in some choice properties, the Realtors with the Curtis Johnson Team can probably find you what you need. Contact the Curtis Johnson team, go to CurtisJohnsonRealty.com or call 1-888-Curtis-J.

Whether Canadians are flocking to purchase homes in Arizona because it’s a buyer’s market, or simply because they are tired of snow, the effect is the same: 1/4 of all out-of-state buyers in the Phoenix area recently are Canadian citizens!

It’s true that you don’t have to “shovel sunshine” - and this alone could be the original source of Canadians who are buying homes in Phoenix. However, as we all know, the real estate market in Arizona is struggling, the United States dollar isn’t as strong as it could be, and the fear of loss of jobs or loss of retirement income is at nearly every American’s doorstep. But Canada’s dollar is stronger, and they are not as affected by the recession.

Canada’s retirees, who may have decided another winter of shoveling several feet of snow is just not possible for their aging bodies, younger people, and even investors are looking to the struggling US real estate market for bargains. The warmer the area the better;we sure have plenty of warmth here in Phoenix!

Is this good or bad for the Phoenix area? Well, it will certainly bring non-US dollars into the area, which is a good thing for our economy. It will mean fewer foreclosures and other empty homes on the market, which will eventually increase and stabilize home prices again. Since many of the Canadian buyers are retired, it’s quite possible that these new residents will have independent sources of income, so will not decrease the pool of available jobs. Many may even increase the job market if they are small business owners or even just need to hire some domestic help -not to mention the increase in services and places to shop that will be needed with an increase in population.

This trend is not new; even before the recession we were seeing more and more Canadians heading to the sunny city of Phoenix. Now we see fewer Californians purchasing in Phoenix, a population that has traditionally been the leader in out-of-state buyers. We are also seeing an increase in buyers from northern United States regions and the Midwest.

Quite possibly, the best thing that these new buyers will bring is more stability. Those who are looking to invest and live in Phoenix these days are a population group that typically stays put for a long time.

If you are ready to trade in your snow-bunny gear for shorts and sandals, give the Curtis Johnson team a call. We know the Phoenix area and can help you find the home of your dreams or a great investment property. Contact the Curtis Johnson team, go to CurtisJohnsonRealty.com or call 1-888-Curtis-J.