Jeramy Jones

An early Christmas present for hundreds of Utah families in danger of losing their homes at the holidays. Fannie Mae and Freddie Mac are suspending their foreclosure sales and evictions until January.

Utah economist Jeff Thredgold says, "It's one step in this whole process of trying to stabilize housing markets." The latest move from the two mortgage giants is putting off foreclosure sales scheduled to happen during November 26th to January 9th. This means nearly 16,000 families nationwide are breathing sighs of relief knowing they won't get the boot during the holidays.

Holiday cheer does play a small part but the big reason for this hold off is to give these companies time to implement their mortgage stabilization program. Thredgold says, "Mortgage servicers are so confused as to what to do and what not to do because programs keep changing, new proposals are made, other proposals are tabled so it's really in part just the idea of letting people catch their breath and they're supposed to do and not supposed to do."

The program targets high risk borrowers, the ones who have missed three payments or more, owns and lives in the house, and have not filed for bankruptcy. Part of the fast track method to affordable monthly payments could be extending the life of the loan, reducing the interest rate, or even deferring payments on part of the principal. Freddie Mac CEO David Moffett says, "By delaying these foreclosure sales, the nation's servicers will have the opportunity to work with more borrowers who could qualify for a modification under the new program."

But Utahns in this situation need to know this is not a time to kick their feet up and think the problem is fixed. Foreclosures will continue after the new year. Thredgold says, "You can just sit back and say boy we dodged a bullet because that's not the case."

The Streamlined Modification Program will launch December 15th. If you have a Fannie Mae or Freddie Mac loan, and fall into the November 26th to January 9th foreclosure schedule, you'll be notified by the attorney handling your case.

The free money comes from an under- used program in Utah called the Individual Development Account (IDA). The accounts are funded by a combination of private and governmental contributions and administered by the non-profit AAA Fair Credit foundation (877-787-0727 or email info@uidan.org). UIDAN stands for Utah Individual Development Account Network.

Here's who qualifies:

- Utah resident

- Minimum 18 years of age

- Currently employed

- Less than $10,000 in net assets (one house and one car do not count towards that $10,000)

- Income Limits:

Household Income

1 Person $20,800
2 Persons $28,000
3 Persons $35,200
4 Persons $42,400
5 Persons $49,600
6 Persons $56,800
7 Persons $64,000
8 Persons $71,000

Here's how they work:

You commit to a program that includes classroom instruction on money management. You open a savings account at a local bank and agree that for one to three years you will make regular, monthly deposits that are monitored by case manager. Your deposits are matched 3-to-1 up to $1,500. So, assuming you deposit the maximum $1,500, at the end of the program you will have $6,000 - plus interest.

That money can be spent on...

- 1st Time Home Purchase

- Tuition at a College or Vocational School

- Starting a Small Business

Martha Wunlerli, the statewide program coordinator for the IDA program said, "Individual development accounts allow low income people to build wealth and gain the financial skills to move into the financial mainstream and stay there. It's all about getting out of poverty and staying out of poverty or preventing poverty. A lot of savers are young people just starting their career. They may not think about being poor, but we know that if they don't watch their money carefully when they're young, and those students loans accumulate, that they could be the next generation of poor people."

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A short sale almost certainly will negatively impact credit scores because you are settling the mortgage debt for less than you agreed to pay originally. I say almost certainly because in rare cases a lender may report the debt as paid in full and forgive the remaining portion of the debt.

While it is possible that the lender would forgive any remaining balance, the words "short sale" will not appear on your credit report. Rather, the account status accurately should be reported as "settled," which means paid but not in the full amount that you originally agreed to repay, just as your lender described.

Because it is a mortgage, the impact of settling the account will probably be significant. Just how significant, though, depends on your unique credit history.

A short sale would have less impact on the credit scores for a person with no other negative information than for a person who had late payments or collection accounts in their history. In either case, though, the damage to your creditworthiness, and therefore your credit scores, will be substantial.

If your objective is to get rid of the debt so you can quickly apply for new credit, a short sale probably won't help. That should never be your goal, anyway.

Rather, you need to think about your long-term credit health. A short sale is one option that may help you get out from under debt you cannot manage. Once you are free of that unmanageable debt, you can begin to take steps to rehabilitate your credit history so that in months, or maybe even years, down the road you can obtain the credit you want and can manage in ways that work to your advantage.

Weber County Home Sales comparison of 2006 vs. 2007

Here are my unofficial 2007 sales statistics for MLS listings in Weber County and their relation to the 2006 home sales numbers.

# of Weber County Homes Sold
2006 - 4,329
2007 - 3,669
Change -660 15% decline

Average price of homes Sold:
2006 - $166,663
2007 - $184,752
Change +18,089 Appreciation of 9.8%

Number of condos sold:
2006 - 516
2007 - 475
Change -41 decrease of 8%

Average price of condos sold:
2006 - $116,915
2007 - $133,710
Change +16,795 Appreciation of 12.6%

Sales were down, but home prices went substantially up in the Ogden Weber Area.

Right now (Jan 2nd) There are 1,830 homes for sale in the Ogden Utah Area. If no additional homes were listed it would take approximately 6 months to exhaust the existing supply at the 2007 home sales pace. Their is ample inventory and interest rates are great. The scale leans towards a buyers market in Ogden.

Of the homes listed on the market right now the average price is $290,012! This is more than $100,000 more than the average sales price of '07. This is a result of investor and builder speculation. Many of the unsold homes are new build high end homes. Either the prices must go down, or else Ogden residents need to start earning substantially more money for the homes on the market to sale in a timely manner. Expect an increase in Ogden Foreclosures and a drop in the average price of homes on the market in '08. The demand for houses for Rent in Ogden, and average rent prices will also likely go up in '08.