Bill Black CMP

Hello,

Business is booming- I swear all we need here in the NW is a little sunshine and it makes people want to buy property! I have worked on We have maintained a diversification with our lending options for investors, first time home buyers and Jumbo loans and have seen a mix of all the last couple weeks. The moratorium on foreclosure was in place from January- March so we will see more homes being foreclosed which will increase the supply of affordable homes. The last couple weeks I have seen multiple offers on housing making an assumption that the bottom has hit…. I do not feel we are there yet but for some they are picking up once in a lifetime deals. Recent borrower just had an offer accepted at $720,000 for an 8200 Sq. ft. home that sold for 1.6M 2 years ago!

It is a time to educate the buyers and have them prepared to buy as well as having the sellers qualified for their next purchase in advance. I received a phone call yesterday from a Realtor that was looking for a “Stated Income” loan for her listings owner.

Seems that a year ago the sellers mortgage broker told him they had a loan for him so he assumed nothing has changed…now an offer is on his house, appraisal completed, earnest money in play and ready to close in 15-20 days so the seller FINALLY goes to get his loan for a downsized condo and found out his brokers office is shut down and just realized his 2008 income taxes show a MUCH greater loss then in 2007 and his preferred Stated Income loan does not exist! He can sell and lease a place but losing the opportunity of the bottom of the market is not going over good with him…

After a year of the Realtor marketing this place we finally have a buyer and most likely a sell fail is not going over good with her either…. The seller is even blaming her for not communicating this with him- I feel for you Realtors as I hear all the issues from buyers and they seem to always want to blame the Realtors! What a mess!

If you have a listing and your seller has not been pre-approved I would strongly encourage them to begin that procedure. If it has been more then 3 months I would have them follow up to get an updated approval.

Market Update:

Mortgage bonds are still at highest level of the day after the Fed’s minutes released showing risk of deflation and risk were rising that the economy would worsen more then forecasted. The staff economists at the Fed lowered their forecast for economic growth this year and next, raised their forecast for unemployment, and lowered their inflation forecast.

Rates are doing well this morning. Mortgage bond prices opened slightly weaker only to turn positive extending the gains from yesterday afternoon. There is no data today. The 3 year Treasury note this afternoon received a B grade for sales. The additional debt supply hitting the market has the potential to move mortgage interest rates.

Once again expect stocks to take remain a focus. Stocks have been negative so far this week but are currently up 30 points. This will be a short trading week with the bond market closing early Thursday and the entire day Friday. Trading conditions will likely be thin as we head towards the extended holiday weekend.

As always, with so much uncertainty caution is the key. We remain positive right now which is great news. Take advantage of gains when they come your way.

Fannie Mae Oversees A Third Of U.S. Home Loans- and getting creative on selling 65,000 of the ones they now own!

Fannie Mae owns or guarantees about a third of the nation's home loans —18.3 million loans valued at $2.7 trillion — according to recent data from the Federal Housing Finance Agency. Due to the increased number of investment foreclosures and the fact that 60% of homeowners walked from their home instead of trying to work out a modification Fannie Mae is found in a situation trying to get creative to move 65,000 homes with as much finesse as one could imagine- call it the world series of managing a crisis.

Homepath to the rescue- For those that learn about the benefits of Homepath will benefit the most as well as the neighborhoods due to the stabilization of value.

"Our No. 1 strategy is to sell them one-by-one," says Gabrielle Harrison, Fannie Mae's vice president of foreclosure sales.

But that strategy is both time and cost intensive. Many of the homes are left in disrepair, or have been vandalized as former owners move out.

Selling Foreclosed Houses

On average, Harrison says, the company spends about $10,000 per property to fix it up for sale. Then Fannie Mae has to assess the price and manage the sale. In all, Harrison says, it's taking the company an average of 90 days to sell a home — even in some of the nation's most distressed areas like California, Nevada and Florida.

"Our main philosophy is to preserve communities and maintain property values," Harrison says. Doing so, she says, means identifying the exact right price for each home.

Arriving at that price, however, can feel like pinning down a moving target.

The real challenge for Fannie Mae, which since last year has operated under government conservatorship, is that it has two mandates that sometimes conflict. On the one hand, it wants a quick sale so it can reduce its exposure to the housing market. On the other hand, it doesn't want to price homes so low that it ends up undercutting the prices of other homes.

With the creative Homepath loan Fannie Mae basically is treating this purchase almost like a streamline refinance with some INCREDIBLE- almost unbelievable benefits.

Borrowers save money and time by WAVING THE APPRAISAL PROCESS that's right- No more appraisal issues that are killing these deals. We are seeing so many “worst case” scenario underwriting options that they use AVM which is Automated Value which overrides the professional and drops value to an almost insulting price. Purchase Price is what is accepted with up to 6% seller closing cost on owner occupied and 2% on Non-Owner.

NO MORTGAGE INSURANCE REQUIRED UP TO 97%- That’s right we are beating FHA that has a 3.5% down requirement and a .55% MI for 5 years! We are also saving the transaction by not having to rely on unstable mortgage insurance companies that are re-underwriting transactions and killing the deals for no apparent policy reasons besides the fact that they “don’t like the area”.

90% Non-Owner Occupied Purchases which are unheard of in this market. Majority of lenders are at 75%- no other options. Now we can do 10% down with NO MI! Hint-Hint: Mr. Investor- It’s time to roll!

6% seller contributions on Owner Occupied and 2% on Non-owner occupied

Not very well known as it has limited lenders and not offered via the “big banks” such as Wells Fargo, Metlife, Bank Of America, US Bank etc. They do not seem to see the value in these loans or I guess we can say the “PROFIT”. Sometimes what is good for the buyers is not exactly the most profitable for the banks.

Rates are in the same low Fannie Mae Rates offered from all lenders.

Leveraging Technology

Pat Mahoney manages Fannie Mae's valuation team, which uses software that integrates several real estate databases and Google Maps to evaluate various markets around the country. Even with all that data, it's hard to gauge a market that's still falling quickly in so many places, he says. In the Northwest they are working with very knowledgeable Realtors that are marketing the houses accurately and completing the work that is needed to spruce up the home for the buyers. A recent offer was listed at $229,000- dropped down to $224,900 after a sale fail and a few days later another offer was accepted at $216,000 from Fannie Mae.

Multiple offers are starting to come in as more Realtors are learning how to offer these benefits, rates are at all time record lows, and the bottom is starting to show its face.

Meet The New Landlord

In January, Fannie Mae started a new rental program, allowing tenants living in foreclosed properties to continue to live there with the company as their new landlord. The company has some 1,800 tenants living in foreclosed properties, and to date it has secured 20 signed leases.

"Having a tenant is good for neighborhood stabilization," because tenants take care of their homes and participate in the community, says John Bauer, director of the company's rental operations. Homes that are occupied also tend to fetch better prices when sold, especially if the buyer is an investor, he adds.

But all the properties, whether or not they have tenants, must be sold. And most of Fannie Mae's sales have to be handled remotely — far from the company's Dallas sales operations — by relying on local real estate agents who help handle the sale. Shannon Wheeler and the Sundin Realty group has a handle on it in the Pacific Northwest currently as they have been listing homes as fast as they can enter them on the www.homepath.com site.

We at America One Finance- Downtown has been utilized as the preferred lender for these specific loans and are having great success competing with the popular FHA loans and yanking the investment shoppers off the fence with the unheard of 90% option.

The Homepath program is only offered on specific Fannie Mae homes that have been selected from Fannie Mae as Homepath qualified homes. To be pre-approved for a homepath loan or for more information feel free to email me at bill@aofdowntown.com

Great weekend with all the activity about the listings that Sundin Realty has for the Fannie Mae foreclosed homes. With 6% seller concessions, no appraisal, No MI what's not to love! This will slowly make the difference in some neighborhoods.

I just rescued another deal where this incredible house was listed for $339,000 and the offer was for $341,000 with seller paying $6,000 in closing costs and Wells Fargo declined it due to low value or the new policy of using an AVM and the value was 10% out of perimeter so they don't like it. Come May it is even going to be worst as National Companies need to order appraisals and they are guaranteeing value to the lenders...hmmm- value has always been what one will pay so how the hell they goin got do that?

Nothing to do with the fact that the appraisal was a licensed appraiser and is bonded and trained in the field.... and an AVM is like pulling off Zillow- never accurate and especially if you have a nicer neighborhood and less then a mile away has an ugly ran down neighborhood that you are now pulled into! I just can't believe they will take an automated value over a true professional. UGGGH!~

Well I sometimes wonder about these big banks.... seem to be making it worst for themselves and society as a whole. I think we saved the day with our Homepath loan program! We are able to offer the same 95% loan and this time go the full 6% seller contributions and had en even lower rate! Clients are ecstatic...and I scored a new affiliate partner I hope for once again stepping out of the box and finding solutions to the problems of today.

We have a really incredible bridge loan as well that I think I will be offering training on next....I think it will be another GREAT TOOL that will make a difference of a tranasaction. For those struggling the box is getting smaller and for those who are adventurous I say it's time to LEAP! Try something different- make sure you have the very best lender you have ever spoken with... market like you have never markete before....

As hard as it is to compete with the banks today....finding what works in this market and educating the Realtors and buyers has became my true passion and is what it's all about! We all need to step outside the box, that is one thing that separates the application takers from the true professionals.

Yours truly,

A broker refusing to join them in the box!

Bill BlackCMP

Not seen inside the box!