MARKET UPDATE - DEC 2011

HARP II IS OFFICIALLY HERE. NOT SO FAST

The new HARP II program was officially implemented on December 1^st, 2011. The HARP II program will allow homeowners that currently have a Fannie Mae or Freddie Mac guaranteed loan originated prior to June 1^st, 2009, to refinance at a lower rate with no restrictions on loan to value. In laymen’s terms, no appraisal needed. Regardless of how upside down you currently are, you may still be able to refinance. This program may help up to 12 million homeowners who are upside down and on time with their payments.

Despite the fact this is the biggest change in lending guidelines, which will actually help people, maybe ever, the celebration is on hold. Fannie Mae and Freddie Mac, while currently recognizing the new changes HARP II brings, does not have the ability to perform the automated underwriting required. Their automated underwriting engines will not be updated until March, 2012.

Lenders, prior to March, do have the option to “manually” underwrite the loans, which would increase underwriting timelines and risk for the lender. At this time, no lenders have announced that they will accept HARP II loans for manual underwrites. We will keep you posted if that changes. We are anticipating taking full loan applications for the HARP II program in February.

HARP I is currently available. Below is a brief outline of the HARP I and HARP II programs.

HARP I (Available Now)

• Appraisal Required. Note: Appraisal waivers are common, so value may not be an issue.
• Maximum Loan to Value: 125%
• Maximum Combined Loan to Value: Unlimited
• Occupancy: Owner Occupied / Non Owner / 2^nd Home
• No late payments in the last 6 months and no more than one late payment in the last 12 months.
• Loan must be guaranteed by Fannie Mae or Freddie Mac.
• No cash out.
• If there is a 2^nd mortgage, 2^nd mortgage lender must agree to subordinate.
• Loan must have been originated prior to June 1^st, 2009.
• The interest rates are based on credit and loan to value.
• Pricing has improved since December 1^st.

HARP II (Available on or before March 2012)

• No Appraisal

• Maximum Loan to Value: Unlimited
• Maximum Combined Loan to Value: Unlimited
• Occupancy: Owner Occupied / Non Owner / 2^nd Home
• No late payments in the last 6 months and no more than one late payment in the last 12 months.
• Loan must be guaranteed by Fannie Mae or Freddie Mac.
• No cash out.
• If there is a 2^nd mortgage, 2^nd mortgage lender must agree to subordinate.
• Loan must have been originated prior to June 1^st, 2009.

Please contact me if you want to see if you can take advantage of the HARP I or HARP II programs. (CHRISTILLER@BRETT-TANNER.COM 602-561-1346)

Important Notice: If your zip code has changed since the mortgage has been originated, please disclose this at time of application as Fannie Mae and Freddie Mac may not recognize the new zip code.

THE HIGHEST RISK LOANS STILL GENERATE THE LARGEST PROFITS

“Ginnie Mae reported $1.18 billion in net income for the fiscal year 2011, more than double the $541 million the year before. Ginnie guarantees timely payment of principal of interest on securities backed primarily by Federal Housing Administration (FHA) and Veterans Affairs (VA) loans.”

"Ginnie Mae has had a remarkable year; it’s our best yet," said Ginnie President Ted Tozer. "Our financial performance this fiscal year – despite a mortgage market still in turmoil – is a testament to our well-functioning business model.”

“Combined with Fannie Mae and Freddie Mac, the government backs roughly 95% of all home loans.” (housingwire.com)

HOME SALES CONTINUE TO RALLY IN PHOENIX MARKET

Home sales in the Phoenix Metropolitan market increased nearly 18% in September from this time last year. 8,661 homes were sold in the month of September. The median home price was $124,500; off 52.9% from the peak median price of $264,000 in June 2006. (housingwire.com)

BETTING ON VEGAS HOUSING MARKET

The Vegas housing market is down 60% from the peak in 2006. Many analysts anticipate an additional decline of home prices over the next year. But even with all of the negative attention the Vegas housing market has received over the past several years, it is poised for a big comeback.

“Home sales, especially of bank repossessions, have picked up significantly. Nearly 36,000 homes have been sold so far this year through September 30, an 11% increase compared with the same period in 2010, according to Lawrence Yun, chief economist for the National Association of Realtors. As a result, inventory of both new and existing homes has shrunk significantly over the past year. Currently, there are about 10,000 single-family homes on the market, according to David Tina, general manager of Realty One Group, a Las Vegas real estate broker. With the current sales pace near 5,000 units per month, that's just a two-month supply. Typically, those are inventories seen in extremely healthy markets.” (cnnfn.com)

PORTLAND HOUSING MARKET HAS A PULSE

“September home sales in the greater Portland, Ore., area rose 10.2% from a year earlier, with 2,296 new and resale homes recorded in the five-county region that encompasses Portland and surrounding communities, DataQuick said Tuesday. In September, distressed property sales accounted for 31% of the Portland area's resale market. Foreclosure resales represented 17.2% of September sales, while short sales accounted for 13.9% of the resale market in September.” (housingwire.com)

FREDDIE MAC REO PROPERTIES FOR 15 YEARS

At the end of the third quarter, Freddie Mac held 60,000 REO properties on its books. Freddie Mac currently reduces its net supply of properties by approximately 1,000 units per quarter. At the rate, Freddie Mac will clear its inventory in 15 years. (housingwire.com)

Chris Tiller - Realtor

The Brett Tanner Team

Keller Williams Realty

4862 E. Baseline Road #103

Mesa, AZ 85206

Phone: 602-561-1346

Fax: 1-888-292-0678

christiller@brett-tanner.com

Website: www.phxrealty.com

Blog: http://tillersreupdate.blogspot.com/

MARKET UPDATE - NOVEMBER

VALUE NO LONGER AN ISSUE ON CONFORMING REFINANCES

Whether you like his policies or not, if you are a home owner, you will likely want to take advantage of the new revisions President Obama recently made on the HARP Program.

The HARP program initially allowed homeowners to refinance up to 125% of the home’s current value. In States like Arizona, Florida, and Nevada, 125% was not enough, as most homeowners owe considerably more than 125% of the value of their home.

Next month, loan to value (LTV) will no longer be a factor. Under the new HARP guidelines, the loan to value “cap” has been removed. Regardless of the home’s value, homeowners that meet the revised guidelines will finally be able to take advantage of the low interest rates. Example: House is worth $150K, but you owe $250K, no longer an issue.

Important guideline highlights:

• No late payments in the last 6 months and no more than one late payment in the last 12 months.
• Loan must be guaranteed by Fannie Mae or Freddie Mac.
• No cash out.
• If there is a 2^nd mortgage, 2^nd mortgage lender must agree to subordinate.
• Loan must have been originated prior to May 31^st, 2009.
• The interest rates are based on credit and loan to value.

The HARP revisions go into effect as early as November 15^th, 2011, but may take a few weeks for lenders to implement.

Please contact me if you want to see if you can take advantage of the newly revised HARP program. (christiller@brett-tanner.com) 602-561-1346

FOREIGNERS WELCOME BUT ONLY IF YOU BUY A HOUSE

Senators Charles Schumer and Mike Lee introduced a bill this month that would allow foreign investors who invest at least $500,000 in U.S. real estate to obtain a three year visa. One stipulation is that at least half of the investment must be spent on a primary residence and the investor must live there at least 180 days and pay taxes.

Foreigners bought the housing debt we didn’t want, so why not sell them the actual real estate.

“Foreigners spent $82 billion buying up U.S. homes in the 12 months ended in March, up 24% from a year earlier.” (NAR)

FED CONSPIRACY OR JUST THE TRUTH

The Government Accountability Office made formal recommendations to the Federal Reserve board of directors to reform its reputation for holding severe conflicts of interest. The GAO found that although the Fed manages potential conflicts of interest, stronger and more transparent rules should be installed to prevent the appearance of some directors taking advantage of their Fed status. For instance, 18 former and current members of the Fed board were affiliated with banks and other companies that received emergency loans from the central bank during the financial crisis.

JPMorgan Chase CEO Jamie Dimon served on the Federal Reserve Bank of New Yorkboard at the same time Chase received these loans from the Fed. In March 2008, the Fed also provided Chase $30 billion in financing to purchase Bear Stearns. Dimon was able to persuade the Fed to grant his bank an 18-month exemption from risk-based leverage and capital requirements, the GAO said. The central bank also took on troubled mortgage assets off the Bear Stearns balance sheet before the acquisition.

Potential conflicts of interest ran the other way as well. At the end of 2008, the New York Fed approved Goldman Sachs as a bank holding company, providing access to bargain loans from the reserve. Stephen Friedman, then chairman of the New York Fed, also sat on the board of directors at Goldman and even owned shares of Goldman stock, which was prohibited by conflict of interest regulations, the GAO said.

Additionally, the GAO said the Fed should urge its group of regional banks to consider how to broaden pools of potential candidates. Officers below the senior executive level should be included, the agency said, in order to diversify their boards. For instance, of the 108 members making up the nine-member boards at the 12 regional Fed banks, 78 were white men, elected by banks to represent their interests. (cnnfn.com)

A PLAN TO REFORM HOUSING

The Progressive Policy Institute is devising a plan to reform housing and roll back Fannie Mae’s and Freddie Mac’s near monopoly on home loan financing.

The Progressive Policy Institute has proposed a five part plan:

1. Do no harm: PPI warned against a qualified residential mortgage definition in Dodd-Frank that would mandate a 20% down payment. It recommended restoring the conforming loan limits that expired Oct. 1.
2. Throw a lifeline to underwater borrowers: The paper recommends encouraging lenders to write down loans in exchange for a share in future appreciation and a mass refinance of GSE portfolio loans to lower rates, a topic under consideration now by the Obama administration.
3. Soak up supply by sparking new demand: A $5,000 permanent homebuyer tax credit would help low- to moderate-income families. It would require a dollar-for-dollar match by the homebuyer. The "HomeK" account would allow employees to segregate up to 50% of their retirement account into a housing specific sub account. Funds could be withdrawn without penalty and applied toward a down payment. The authors also support a bulk REO-to-rental program and "homeownership vouchers" that would be targeted toward lower-income, first-time buyers.
4. Fix Fannie and Freddie sooner rather than later.
5. Articulate a new national housing policy: For the last 30 years, housing policy has been driven primarily by the homeownership rate. That thinking needs to be broadened, according to the PPI paper.

(Content: Housingwire.com)

Chris Tiller - Realtor

The Brett Tanner Team

Keller Williams Realty

4862 E. Baseline Road #103

Mesa, AZ 85206

Phone: 602-561-1346

Fax: 1-888-292-0678

christiller@brett-tanner.com

Website: www.phxrealty.com

Blog: http://tillersreupdate.blogspot.com/

Our team is closing 50 deals per month in Phoenix. Ask me how.

MARKET UPDATE

OCTOBER 2011

LOW RATES FOR EVERYONE

There has been much speculation that the Conforming “streamline” refinance may be coming in the near future to help home owners and stimulate the economy. The problem has not been interest rates, but equity. Unlike FHA “streamline” refinances that do not require an appraisal, Conforming loans (those guaranteed by Fannie Mae and Freddie Mac) do require an appraisal.

“Roughly 60% if borrowers in Nevada were underwater in the second quarter, the highest percentage of any state but down from 68% one year ago. It was followed by Arizona at 49% and Florida at 45%.” (housingwire.com) Low home values have eliminated many home owners from being able to take advantage of these historically low interest rates. That may all change soon.

In a recent speech, President Obama announced "We’re going to work with federal housing agencies to help more people refinance their mortgages at interest rates that are now near 4%.” He went on to say "That's a step that can put more than $2,000 a year in a family's pocket, and give a lift to an economy still burdened by the drop in housing prices."

Last week Federal Reserve Chairman Ben Bernanke announced Operation Twist; a move by the Central Bank to buy $400 billion in long term Treasuries. Bernanke stated “By reducing the supply of longer-term Treasury securities in the market, this action should put downward pressure on longer-term interest rates, including rates on financial assets that investors consider to be close substitutes for longer-term Treasury securities.” After the introduction of Operation Twist, 30 year fixed mortgage rates fell to their lowest point in over 60 years.

Obama’s plan could benefit as many as 25 million borrowers, according to Glenn Hubburd and Chris Mayer, finance and economics professors at Columbia Business School. (cnnfn.com) The plan would have to create a new mortgage product, or revised guidelines of current mortgage products, and eliminate the valuation variable (i.e. appraisal), creating a conforming “streamline” refinance program available now only to borrowers with FHA mortgages.

“The Congressional Budget Office estimates such a program, if enacted, would require the federal government to spend $600 million.” (cnnfn.com)

The benefits may out weight the costs. Much of the money that would be saved on one’s mortgage would be money injected into the economy. Home owners would likely spend the monthly savings, not save it. Also, there are millions of homeowners that are underwater, but current. These homeowners could substantially lower their monthly mortgage payment and may be less likely to simply walk away from the property.

If President Obama’s refinance strategy comes to fruition, it will be for a limited time only and likely will only apply to those homeowners with a loan guaranteed by Fannie Mae or Freddie Mac. If you are interested in more information on this program as it become available, please email me at christiller@brett-tanner.com.

At this time, both Fannie Mae and Freddie Mac allow you to refinance your property up to 125% of the current market value. With good credit an assets, appraisal waivers (no appraisal required) are often granted. Many homeowners have not taken advantage of these programs, because they simply do not realize they even exist.

PHOENIX IS ON FIRE

Phoenix home sales in August were the highest in over 5 years. 9,657 homes were sold in the month of August. The median sales price, a whopping $118,000 (housingwire.com).

NEW HOME SALES DIP

New homes sales nationally dropped once in again in August. The 2.3% drop was better than economists anticipated.

DROWNING IN NEGATIVE EQUITY

“Nearly 11 million properties, roughly 22.5% of all U.S. homes, were worth less than the underlying mortgage in the second quarter, according to CoreLogic. The percentage of properties in negative equity declined slightly from 22.7% the previous quarter and down from 24% one year ago. Another 2.4 million borrowers held less than 5% equity in their home, what analysts call near-negative equity. CoreLogic also showed nearly three-quarters of all underwater borrowers are paying above-market interest on their home loans.” (housingwire.com)

"High negative equity is holding back refinancing and sales activity and is a major impediment to the housing market recovery," said Mark Fleming, CoreLogic chief economist. (housingwire.com)

NATIONAL DEBT REDUCTION AT A GLANCE

Last week, President Obama unveiled a plan to reduce the nation debt by $3 Trillion over the next decade.

Spending cuts: $580 billion ($248 billion coming from cuts to Medicare).
Medicaid: $72 billion
Cuts in other mandatory programs: $250 billion
Includes $33 billion in savings from farm subsidies;
$42.5 billion from federal worker benefit programs, including those for civilian workers and military personnel;
$92.2 billion the administration estimates it can save from "restructuring government operations and reducing government liabilities."
Tax revenue: $1.5 trillion.
Includes $800 billion from letting Bush-era tax cuts to expire for high income households.
Capping Deductions and Limiting Exemptions: $400 billion
Closing Various Tax Loopholes: $300 billion
War savings: $1.1 trillion.
Reduction in spending in Iraq and Afghanistan over the next decade that will result from the planned drawdown of troops and the changing nature of the operations in those countries.
Interest savings: $430 billion.

Obama stated "I will not support any plan that puts all the burden on ordinary Americans.” Obama even introduced the "Buffett Rule" for millionaires -- named after investor Warren Buffett, who has frequently argued that the very rich are not taxed enough.

But the Obama plan has already drawn criticism from Republicans, who have been adamant about not wanting to raise anyone's taxes (cnnfn.com)

Chris Tiller - Realtor The Brett Tanner Team
Keller Williams Realty
4862 E. Baseline Road #103
Mesa, AZ 85206
Phone: 602-561-1346
Fax: 1-888-292-0678
christiller@brett-tanner.com
Website: www.phxrealty.com
Blog: http://tillersreupdate.blogspot.com/
Our team is closing 50 deals per month in Phoenix. Ask me how.

Why rent and pay more?

Least Expensive Cities to Buy a Single Family Home
Single Family Own or Rent Index Rank
City Own or Rent Ratio

If you are renting in Maricopa County you are paying more per month than it costs to own. The largest factor is that you are not building any equity for your future or taking advantage of historically low interest rates. Find your city below for an idea of how large the difference is and how much money you’re wasting every month on rent.

If you are interested to purchase feel free to contact me. Finding out if/what you can qualify for is free and our mortgage reps will give you a free consultation.

Ratio of 1-15: Owning less expensive than renting.
Ratio 16-20: Renting makes more sense but buying may make sense depending on circumstances.
Over 20: Renting less expensive than buying.

1 Florence 5.0
2 Coolidge 5.5
3 Phoenix 5.9
4 Casa Grande 6.3
5 El Mirage 6.5
6 Glendale 6.7
7 Tolleson 7.0
8 Avondale 7.8
9 Mesa 8.2
10 Buckeye 8.3
11 Maricopa 8.3
12 Laveen 8.7
13 San Tan Valley 8.9
14 Goodyear 9.1
15 Peoria 9.1
16 Tempe 9.1
17 Chandler 9.7
18 Surprise 10.1
19 Sun City 10.5
20 Gilbert 10.8
21 Litchfield Park 11.2
22 Queen Creek 12.8
23 Sun City West 14.9
24 Scottsdale 15.6
25 Fountain Hills 15.8
(Data for ratios from Arizona Regional Multiple Listing Services, Inc.
August data)

Chris Tiller - Realtor

The Brett Tanner Team

Keller Williams Realty

4862 E. Baseline Road #103

Mesa, AZ 85206

Phone: 602-561-1346

Fax: 1-888-292-0678

christiller@brett-tanner.com

Website: www.phxrealty.comBlog: http://tillersreupdate.blogspot.com/

Our team is closing 50 deals per month in Phoenix. Ask me how.

MARKET UPDATE

SEPTEMBER 2011

"Markets will rise and fall, but this is the United States of America. No matter what some rating agency will say, we will always be and always have been a triple-A country." – President Obama

Just because you say it, doesn’t make it so.

COMMONWEALTH PROPERTY GROUP, LLC UPDATE

Short sale fraud

Fraud in real estate? Freddie Mac, with the help of investigation and law enforcement agencies, is trying to crack down on short sale fraud.

Fraud with short sales typically occurs when a real estate agent fails to disclose to the other parties in the transaction all offers made on a particular property. The agent will submit only low bid offers from investors, who have a pre-arranged relationship with the real estate agent (non-arm’s length) forcing the value down. Once the property is sold to the investor, the investor then flips the property to one of the higher offers that were made, but were never disclosed to the seller, or Freddie Mac. This is not only happening to Freddie Mac, but all banks involved with short sales.

Short sale fraud creates multi-million dollar loses to the banking industry. And when referring specifically to Fannie Mae or Freddie Mac, those loses come at the expense of the tax payer.

Goldman sachs ceo blankfein lawyers up

Goldman Sachs CEO, Lloyd Blankfein and other employees hired lawyers as they came under fire for allegedly misleading clients into purchasing subprime mortgages that the firm knew in advance where worthless; and were perhaps even betting against.

On August 23nd, 2011, CIFG filed a lawsuit against Goldman Sachs. CIFG is an insurer selected by Goldman to insure $275 million worth of securities tied to Goldman's securitization of 6,204 residential mortgage loans. This is the second lawsuit this month against Goldman pertaining to toxic mortgage backed securities and misrepresentation. This first was filed by Allstate Insurance earlier this month. (housingwire.com)

Unwind Fannie and Freddie? Back the government out of the mortgage industry, and hand it over to Wall Street? Those in favor may want to rethink that.

New home sales slip in july

New home sales fell 0.7% in July. Although new home sales posted disappointing numbers in July, housing inventory nears lowest level in decades, with a 6.6 month supply. (housingwire.com)

The next big bubble??

Gold prices hit an all-time high August 23, 2011, at a price of $1,917.90 per ounce. Historically gold is a hedge against inflation, which has averaged 2.4% on an annual basis over the last ten years. Gold has been on a 21% per year increase over the same period. (cnnfn.com)

Foreclosures on the decline in phoenix

A report from the W.P. Carey School of Business at Arizona State University shows that foreclosed homes account for less than 30% of the existing home sales. This is the lowest level in over two years.

Existing home sales in Phoenix dropped 13.2% in July. 9,050 homes were sold in the Phoenix market in the month of July. (housingwire.com)

Tax the rich, all 3% of them

The Federal Government has a budget problem. Spending exceeds income. The solution to the problem is simple, increase revenue (taxes), cut spending, or both. That is how every successful business in America operates. Yet, the working class does not want to pay more taxes. Corporations will just keep hiding profits overseas. Spending cuts are going to have a negative impact on someone; likely the poor, elderly, teachers and civil servants. The bottom line is that someone or everyone is going to have to take a little “pain for the cause.” But who?

President Obama and many in the Democratic Party have been proposing an increase of taxes for the wealthy. Now aren’t you glad you not one of those people. Statistically, you likely are not. As defined by the President, the wealthy are those whose income is $200,000 per year or greater.

“According to a recent report from the Internal Revenue Service, that leaves out about 97% of the tax-paying population. The report, which provides a complete breakdown and analysis of returns for the 2009 tax year, found that only a mere 3% of tax returns were filed by people earning a gross adjusted income of $200,000 or more. Americans earning $1 million or more were even more rare, comprising just 0.2% of total tax filers and accounting for a mere 236,883 of the 140 million tax returns received in 2009. The wealthiest taxpayers -- those earning $10 million or more in adjusted gross income -- are even less prevalent. There were only 8,274 people belonging to that elite club, according the IRS. Out of the nearly 4 million "rich" people making more than $200,000 a year, 1,470 didn't pay any income tax whatsoever in 2009. But the people who did pay taxes earned a total of nearly $2 trillion in income -- about 26% of total taxpayer income in 2009.” – cnnfn.com

“President Obama's tax proposals -- which many Republican's call "job-killing" tax hikes -- include getting rid of some corporate tax breaks enjoyed by oil and gas companies and corporate jet buyers, and restoring some Bush-era tax rates for high-income households. If the Bush tax cuts expire as planned in 2012, the top two income tax rates will revert to 39.6% and 36% from 35% and 33%, respectively.” (cnnfn.com)

Hedge fund manager John Paulson made more than $5 billion (yes, with a B), in 2010. Because his income is considered long term capital gains, he was taxed at a rate of 15%; verses 35% average income tax most American workers pay. The moral: Be rich.

RATE WATCH

MORTGAGE TYPE	INTEREST RATE	APR
30 YEAR FIXED	4.000%	4.113%
15 YEAR FIXED	3.250%	3.446%
5/1 ARM	2.375%	2.765%

Interest rates as of 08/25/11. Conforming interest rates. Interest rates and APR based on loan amounts not to exceed $417,000. Loan to values not to exceed 80%. 720+ credit score. Owner occupied only. Purchase and rate in term refinances. Not all applicants will qualify. Call today for your individual scenario rate quote.

Chris Tiller - Realtor The Brett Tanner Team
Keller Williams Realty
4862 E. Baseline Road #103
Mesa, AZ 85206Phone: 602-561-1346
Fax: 1-888-292-0678
christiller@brett-tanner.com
Website: www.phxrealty.com
Blog: http://tillersreupdate.blogspot.com/
Our team is closing 50 deals per month in Phoenix. Ask me how.