The Jesse Herfel Group's Blog

New Decade Presents New Opportunities in Foreclosure Market

Wed, 17 Feb 2010 09:59:00 GMT

Q: What’s the outlook for foreclosure activity in 2010?

A: It’s likely that we’ll set a new record in terms of overall foreclosure activity for the fourth consecutive year. Over 1.3 million U.S. households received a foreclosure notice in 2007; over 2.3 million received notices in 2008; and although the 2009 numbers haven’t been completely counted as this issue goes to press, there will be somewhere in the vicinity of 2.8 to 3 million households in foreclosure. We’re likely to see more than this in 2010, with the number of homeowners in foreclosure probably exceeding 3.5 million, before the trend begins to reverse itself sometime in 2011.

Q: Will we see a flood of REOs?

A: Investors, home buyers and real estate professionals have all been anxiously awaiting a tidal wave of REOs for the past two years. Instead, inventory levels have remained frustratingly low, even in some of the hardest-hit foreclosure markets. Expect more of the same in 2010.

What this means for buyers and sellers is that there will be limited availability of REOs, albeit at higher-than-normal levels. No flood, but a good chance that the trickle on the market today will grow to a more steady stream. While this makes it less likely that we’ll see a “double dip” in home prices, we also won’t see much price appreciation until these distressed assets are finally gobbled up. The most likely scenario is a long, relatively flat period of recovery in the housing market.

Q: Will there be a surge in short sales?

A: A big frustration for potential foreclosure buyers has been the difficulty in buying a property via short sale. Agents have questioned why banks reject a short sale offer 20% below the mortgage amount only to spend tens of thousands of dollars to foreclose on the home and then sell it as an REO at a 50% discount.

We’ll see an increase in the number of short sales if the Treasury Department has anything to say about it. Lenders participating in the Obama Administration’s loan modification program will be strongly encouraged to offer any homeowner who doesn’t meet the requirements for HAMP (Home Affordable Modification Program) a short sale opportunity as an alternative to foreclosure.

But short sales won’t be a panacea, either. In many cases, the presence of a second loan will make negotiating a short sale much more difficult; in other cases, the owner of the primary loan might foreclose on the home, wipe out the second loan, and sell the home, using the amount of the second loan as a “market discount” to move the property.

by Rick Sharga

Why Now Is A Great Time To Sell...

Tue, 09 Feb 2010 12:39:00 GMT

4 Reasons to Sell Now
Selling a property in this tough market can seem like a challenge. Here are four factors that actually make this a good time to post a For-Sale sign.

Sell low and buy low. Because all property values are down, the loss on the property a home owner sells is really only a paper loss because the next property he buys also will be a bargain. If he buys smartly, when prices come back up in a few years, he’ll be in better shape.
Down-payment help is widely available. While nothing-down loans have disappeared, it is easy to find down-payment assistance for lower-income and first-time home buyers. Programs vary all over the country, but one good way to find them is to search online for “down-payment assistance programs” and the name of your region.
Your uncle has money to share. Besides the $8,000 first-time home buyer tax credit and the $6,500 move-up credit, there are an array of energy tax credits that can make home improvements pay off in cash.
Good help is available. Really talented real estate practitioners, contractors, and designers are available and eager for business.

Source: McClatchy Tribune, Kate Forgach (02/07/2010)

Short Sale Myths

Tue, 20 Oct 2009 00:00:00 GMT

A short sale can be an excellent solution for homeowners who must sell and owe more on their homes than they are worth. Unfortunately, a number of myths about short sales have developed, and it is important to understand the reality of this process should you find it meets your current needs.

Myth #1 – The Bank Would Rather Foreclose than Bother with a Short Sale

This is one of the most common misconceptions. The reality is that banks do not want to foreclose on your property because the foreclosure process is incredibly costly. Banks, investors, and even the federal government have all publicly stated that if a person is qualified for a short sale, the deal needs to be considered. Overwhelmingly, banks receive more on their investment through a short sale than a foreclosure.

The qualifications for a short sale include:

Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
Monthly Income Shortfall – “You have more month than money.” A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

Myth #2 – You Must Be Behind on Your Mortgage to Negotiate a Short Sale

While this may have previously been the case, today lenders are looking for verifiable hardship, monthly cash flow shortfall, or pending shortfall and insolvency.

If you meet these three requirements and believe that you soon may be unable to afford your mortgage, act immediately. Any delay could limit your options. Do not wait until the countdown clock to foreclosure has started and you have even less time left.

Myth #3 – There is Not Enough Time to Negotiate a Short Sale Before My Foreclosure

This is a myth that probably hurts homeowners the most. Many do not realize that foreclosure is a process, and that there is time to make decisions that may result in better outcomes.

The foreclosing party—in most cases a lender—can stall a foreclosure up to the final day of the process. Today, many lenders will stall a foreclosure with as little as a phone call from you explaining that you are trying to sell, and almost all lenders will stall a foreclosure with a legitimate contract. For real estate professionals who understand foreclosures and short sales, there is time available until the foreclosure process is complete.

Myth #4 – Listing My Home as a Short Sale is an Embarrassment

It is understandable to have reservations about letting the world know that you owe more on your home than it is worth. However, according to recent estimates, more than one out of eight homeowners in the U.S. is in the same situation. You are to be congratulated for admitting you need help, taking action, and finding a professional who can work with you toward a solution.

With recent estimates showing 40-60% of U.S. sales will be short sales or foreclosures, you are not alone.

Myth #5 – Short Sales are Impossible and Never Get Approved

This is a complete falsehood. Are short sales more difficult to execute? Yes. Do you, as a homeowner, need to learn about a new process? Yes. Are they impossible? Absolutely not.

For example, agents with the Certified Distressed Property Expert® (CDPE) Designation receive thousands of short sale approvals on a monthly basis. These professionals have undergone extensive training in methods to help homeowners in distress and process short sales. While there are no guarantees in any transaction, more and more short sales are being approved regularly. This is far from an impossible process.

Myth #6 – Banks are Waiting on a Bailout and Not Accepting Short Sales

You may have heard this, but the reality is that banks (and the U.S. government) are trying to do anything they can, within reason, to avoid foreclosing on properties. It is preposterous to believe they would deny a short sale in hopes that some future legislation would pass and pay them for losses.

Today, more banks are aggressively pursuing short sales and working with agents who understand how to process them. Freddie Mac recently hosted a national training Webinar for real estate agents where they expressly stated the organizational goal of “eliminating distressed assets through modification or short sale.”

Myth #7 – Buyers are Not Interested in Short Sale Properties

This is a myth that potential sellers hear all the time. Thankfully, this is just not true. In fact, many agents are getting calls from buyers who say they only want to look at foreclosure and short sales.

For buyers, short sales and foreclosures have become synonymous with “good deals.” More specifically, international buyers are targeting these properties. Listing with an experienced agent who is educated in the short sale process will provide you with a great chance of quickly seeing a contract on your property.

In conclusion, Agents with the CDPE Designation have been trained in all aspects of the short sale process, and know how to deal with the parties involved in foreclosures. Finding a CDPE can explain what options you have, and get you on the path to recovery.

Jesse Herfel is a CDPE designated agent! Jesse and his team are experienced short sale negotiators and can help you with selling your home!

Article provided by http://www.cdpe.com/short-sale-myths.html

Pace of U.S. existing home sales fastest in 2 years

Fri, 28 Aug 2009 00:00:00 GMT

Pace of U.S. existing home sales fastest in 2 years

By Lucia Mutikani Lucia Mutikani – Fri Aug 21, 5:22 pm ET

WASHINGTON (Reuters) – Sales of previously owned U.S. homes jumped 7.2 percent in July to mark the fastest pace in nearly two years, a survey showed on Friday, in a strong sign that housing is pulling out of a three-year slump.

Sales in July rose for the fourth straight month to hit an annual rate of 5.24 million units, the highest since August 2007, the National Association of Realtors said. The total beat market expectations of a 5 million unit pace and June's 4.89 million pace.

July's increase was the largest monthly gain since the series started in 1999. The last time sales rose for four consecutive months was in June 2004, the NAR said.

The Realtors group heralded the July sales as a turning point, while other observers offered a more cautious view.

"The housing market has decisively turned for the better. We are bouncing back. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales," NAR Chief Economist Lawrence Yun said.

With distressed sales accounting for 31 percent of the transactions in July, inventories rising and home prices remaining depressed, analysts said the housing market was not out of the woods yet.

The national median home price was $178,400 in July, down 15.1 percent from the same period last year, weighed down by distressed sales -- sales in foreclosure or close to it -- as such homes typically sell for 15 to 20 percent less than traditional homes.

"It's really going to take home prices to broadly stabilize and come back a bit before you want to characterize the housing market as being fully recovering," said Craig Thomas, a senior economist at PNC Financial Services Group in Pittsburgh.

"I will say there is not an indicator out there that doesn't suggest we are not moving in that direction."

White House spokesman Robert Gibbs said the housing market appeared to be bottoming out.

U.S. STOCKS RALLY

U.S. stocks rallied to new 2009 highs on the robust report, with shares of home builders posting hefty gains. D.R. Horton Inc gained 3.6 percent, while luxury home builder Toll Brothers Inc was up 3.7 percent. A broader measure of home construction stocks was up 3.65 percent.

Treasury debt prices fell as investors viewed the data as another indication that the recession that started in 2007 was close to an end, if not over.

U.S. Federal Reserve Chairman Ben Bernanke, speaking at a gathering of central bankers and top economists in Jackson Hole, Wyoming, said economic activity appeared to be leveling off, both in the United States and abroad, and prospects for a return to growth looked good in the near term.

The housing market is at the epicenter of the worst U.S. recession in 70 years. A recovery in the housing market would help to draw a line under losses at financial institutions, which have been battered by defaults on mortgages.

It would also improve the psychology of households, whose net worth has been decimated by the plunge in home values, and encourage them to spend rather than save to make up for lost wealth, analysts say.

Even more encouraging, existing homes sales in July were 5 percent higher compared with the same period last year, the biggest year-on-year gain since November 2005.

The improvement in July sales was broad-based, with sales of single-family homes, the worst-hit segment of the market, up 6.5 percent to an annual rate of 4.61 million units and multi-family dwellings up 12.5 percent to a 630,000 unit rate. Sales were up in three of the four regions.

Still, high unemployment threatens the budding recovery as many homeowners continue to lose their properties, and some economists question the sustainability of the economic recovery many see taking root.

A report from the Mortgage Bankers Association on Thursday showed late home loan payments jumped to a record high in the second quarter, with almost one in eight homeowners delinquent or in the process of foreclosure.

The inventory of existing homes for sale in July rose 7.3 percent to 4.09 million units from the previous month, NAR said. At July's sales pace, that represented a 9.4 months' supply, the same as in June.

"The inventory overhang needs to be reduced significantly further before prices can start rising on a sustained basis. Overall, these figures may suggest that the recovery in housing activity is gathering pace, but there is a long way to go yet," said Paul Dales, U.S. economist at Capital Economics in Toronto.

(Additional reporting by Nick Zieminski in New York; editing by Leslie Adler and Dan Grebler)

Pace of U.S. existing home sales fastest in 2 years

Thu, 27 Aug 2009 16:34:00 GMT

By Lucia Mutikani Lucia Mutikani – Fri Aug 21, 5:22 pm ET

WASHINGTON (Reuters) – Sales of previously owned U.S. homes jumped 7.2 percent in July to mark the fastest pace in nearly two years, a survey showed on Friday, in a strong sign that housing is pulling out of a three-year slump.

Sales in July rose for the fourth straight month to hit an annual rate of 5.24 million units, the highest since August 2007, the National Association of Realtors said. The total beat market expectations of a 5 million unit pace and June's 4.89 million pace.

July's increase was the largest monthly gain since the series started in 1999. The last time sales rose for four consecutive months was in June 2004, the NAR said.

The Realtors group heralded the July sales as a turning point, while other observers offered a more cautious view.

"The housing market has decisively turned for the better. We are bouncing back. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales," NAR Chief Economist Lawrence Yun said.

With distressed sales accounting for 31 percent of the transactions in July, inventories rising and home prices remaining depressed, analysts said the housing market was not out of the woods yet.

The national median home price was $178,400 in July, down 15.1 percent from the same period last year, weighed down by distressed sales -- sales in foreclosure or close to it -- as such homes typically sell for 15 to 20 percent less than traditional homes.

"It's really going to take home prices to broadly stabilize and come back a bit before you want to characterize the housing market as being fully recovering," said Craig Thomas, a senior economist at PNC Financial Services Group in Pittsburgh.

"I will say there is not an indicator out there that doesn't suggest we are not moving in that direction."

White House spokesman Robert Gibbs said the housing market appeared to be bottoming out.

U.S. STOCKS RALLY

U.S. stocks rallied to new 2009 highs on the robust report, with shares of home builders posting hefty gains. D.R. Horton Inc gained 3.6 percent, while luxury home builder Toll Brothers Inc was up 3.7 percent. A broader measure of home construction stocks was up 3.65 percent.

Treasury debt prices fell as investors viewed the data as another indication that the recession that started in 2007 was close to an end, if not over.

U.S. Federal Reserve Chairman Ben Bernanke, speaking at a gathering of central bankers and top economists in Jackson Hole, Wyoming, said economic activity appeared to be leveling off, both in the United States and abroad, and prospects for a return to growth looked good in the near term.

The housing market is at the epicenter of the worst U.S. recession in 70 years. A recovery in the housing market would help to draw a line under losses at financial institutions, which have been battered by defaults on mortgages.

It would also improve the psychology of households, whose net worth has been decimated by the plunge in home values, and encourage them to spend rather than save to make up for lost wealth, analysts say.

Even more encouraging, existing homes sales in July were 5 percent higher compared with the same period last year, the biggest year-on-year gain since November 2005.

The improvement in July sales was broad-based, with sales of single-family homes, the worst-hit segment of the market, up 6.5 percent to an annual rate of 4.61 million units and multi-family dwellings up 12.5 percent to a 630,000 unit rate. Sales were up in three of the four regions.

Still, high unemployment threatens the budding recovery as many homeowners continue to lose their properties, and some economists question the sustainability of the economic recovery many see taking root.

A report from the Mortgage Bankers Association on Thursday showed late home loan payments jumped to a record high in the second quarter, with almost one in eight homeowners delinquent or in the process of foreclosure.

The inventory of existing homes for sale in July rose 7.3 percent to 4.09 million units from the previous month, NAR said. At July's sales pace, that represented a 9.4 months' supply, the same as in June.

"The inventory overhang needs to be reduced significantly further before prices can start rising on a sustained basis. Overall, these figures may suggest that the recovery in housing activity is gathering pace, but there is a long way to go yet," said Paul Dales, U.S. economist at Capital Economics in Toronto.

(Additional reporting by Nick Zieminski in New York; editing by Leslie Adler and Dan Grebler)

More Homes Sold in Maricopa County in May 2009 than did in May 2005!

Mon, 08 Jun 2009 16:28:00 GMT

The total number of Home Sales in MAY of 2009 in the Single Family Detached category in FlexMLS as compared to MAY 2005, 2006, 2007 and 2008:

May 2009 home sales Vs. May 2008, 2007, 2006, and 2005 (sales according to FlexMLS)
	May-09	May-08	May-07	May-06	May-05
Total Sales (Single Family Detached Homes)	8,338	4,830	4,659	6,181	8,025
Between the price range of $1 to $399,999	7,852 (94.1%)	4,117 (85%)	3,480 (75%)	4,671 (75.5%)	6,483 (80%)
Between the price range of $400,000 and above	486	713	1,179	1,510	1,542
REO sales and percentage of total sales	5,349 (64%)	1,505 (31%)	99 (2.1%)	10 (<1%)	19 (<1%)
Short Sales and Percentage of total sales	947 (11.45%)	0	0	0	0

*Numbers as of 6/4/09
	2009 previous months activity
	Jan-09	Feb-09	Mar-09	Apr-09
Total Sales (Single Family Detached Homes)	4,285	4,869	6,881	7,655
Between the price range of $1 to $399,999	3,989 (93%)	4,525 (93%)	6,504 (94.5%)	7,222 (94.3%)
Between the price range of $400,000 and above	296	344	377	433
REO sales and percentage of total sales	2,881 (67%)	3,278 (67%)	4,709 (68%)	5,108 (66.7%)
Short Sales and Percentage of total sales	396 (9.2%)	444 (9.1%)	690 (10%)	774 (10.1%)

The Percentages in the chart above refer to the percentage of total sales for the month. Example: in MAY 2009 homes priced under $399,999 represent 94.1% of the total sales in May 2009 (7,852 total sales).

As you can see things are selling at an astounding rate...this is very positive news!!! WE SOLD MORE HOMES IN MAY 2009 THAN WE DID IN MAY 2005!!! As of 6/04/09, there are an amazing 11,852 Single Family Homes PENDING!!! And a total of 13,277 total properties Pending in the MLS!

Have a Great Day!

From The Jesse Herfel Group

This information was provided by PlainsCapital Corporation

Homepath vs. 203K Loan Programs

Wed, 15 Apr 2009 10:54:00 GMT

HomePath vs. 203k streamline...which is right for you?

There are many new loan programs that have been introduced recently and it can be difficult for a home buyer to know which one is right for them. There are many misconceptions about some of these programs which makes it even more difficult. What I would like to do today is briefly describe the difference between two of the more popular loan programs so you can decide what might be the best fit for you.

The first of these programs I would like to mention is the HomePath. For those of you who have been receiving my notes for a while, you may have read about this before. The HomePath is a program that has been rolled out by Fannie Mae. It has been designed to assist Fannie Mae sell more of their REO properties. As an owner occupant of the property, it can be purchased with as little as 3% down and there is NO mortgage insurance required which will save a lot in monthly expense. They also do not require an appraisal on this home. I don't think they really want to know what it is worth

Fannie Mae also offers this program for investors. An investor can qualify for this loan with a little as 10% down, no appraisal and they do not have to pay for mortgage insurance either. This is a fantastic way to assist an investor who is looking to maintain more of their personal liquidity.

Now comparing these to the 203k, there are many differences. The 203k can come in two different packages and is only for owner occupants. The standard 203k is really meant for major rehab jobs that may even include foundation issues. It has a standard draw process for the rehab money. The 203k streamline is really a good alternative to someone who just needs to fix up a property but does not want to do a complete rehab job. It has a simplified easy to use draw and can be used for cosmetics only. You are not limited to Fannie Mae homes and qualify in a similar manner that you would with any FHA style loan.

Neither the HomePath or the 203k have very stringent qualifying factors.

Information courtesy of Matt Redding

1st Time Homebuyer Tax Credit: New Info

Wed, 08 Apr 2009 14:25:00 GMT

Don't miss this chance to take advantage of the 1st Time Homebuyer Tax Credit! If you or anyone you know can benefit from this, call 602-565-2424 today! Visit this link for criteria and more information!

http://www.federalhousingtaxcredit.com/

Energy Efficient Housing Tax Credit and Grants

Tue, 03 Mar 2009 12:33:00 GMT

Homeowners will be able to claim and 30% tax credut for purchases of new furnances, windows and insulation through 2010. Attached is a link regarding the stimulus bill.

http://greeninc.blogs.nytimes.com/2009/02/17/obama-signs-stimulus-packed-with-clean-energy-provisions/?scp=1&sq=energy%20efficient%20tax%20credit&st=cse

Bail-out Infomation

Fri, 20 Feb 2009 11:10:00 GMT

Realtor Insider DC News and Events Report
President Signs the Stimulus Bill

H.R. 1, the "American Recovery and Reinvestment Act of 2009" (AARA), passed the House on February 13, 2009, by a vote of 246 - 184. On the same day, the Senate passed the bill by a vote of 60 - 39. The President signed the bill on Tuesday, February 17, 2009. The bill is a $780 billion package, with roughly 35% of the package devoted to tax cuts (mostly for 2009) and the rest to spending intended to occur in 2009 and 2010.

The mix of provisions of interest to REALTORS® changed frequently throughout the legislative process, with changes continuing to be made just hours before the measure was released prior to the vote. In the end, the elements of NAR's housing agenda were included. Congress and the President have announced that a finance and housing package (including tax provisions) will be the next "big" initiative, so Congress has by no means finished its work as it affects the housing industry and REALTORS®.

The bill includes the following provisions:

· Homebuyer Tax Credit — The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser. More details are available below in the Federal Tax Report>

· FHA, Fannie Mae and Freddie Mac Loan Limits — The bill reinstates last year's 2008 loan limits for FHA, Freddie Mac, and Fannie Mae loans. These limits were equal to the greater of 125% of the 2008 local area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of $729,750. For the few areas where the 2009 limits were higher, the higher limits will apply. In addition, the bill includes language providing the HUD Secretary with the discretion, if warranted, to increase the loan limit for any "sub-area", i.e.an area smaller than a county. The Secretary's discretion is again limited by the $729,750 cap. These 2009 limits will expire December 31, 2009.

The inclusion of these loan limit provisions in the final bill is a victory for homeowners, buyers and REALTORS®. While these new limits were included in version of the original stimulus bill approved by the House, the bill first approved by the Senate did not. NAR's Call for Action to both the House and the Senate prior to the final vote advocated strongly for the provisions which were then included in the final bill approved by both Chambers. NAR has estimated the new 2009 Loan Limits by county.

· Neighborhood Stabilization — Division A, Title XII of the bill provides $2,000,000,000 in additional funding for the Neighborhood Stabilization Program (NSP). The NSP was created by the Housing and Economic Recovery Act of 2089 (Public Law 110–289) to provide grants through the Community Development Block Grant program (CDBG) to states and localities to address the problems that can be created when whole neighborhoods are decimated by foreclosures. The funds can be used to purchase, manage, repair and resell foreclosed and abandoned properties. In addition, the funds can also be used by states and localities to establish financing methods for the purchase and redevelopment of foreclosed properties. After purchase the homes must be used to assist individuals and families with incomes at or below 120% of area median income. Twenty-five percent of funds must be used for households with incomes at or below 50% of area median income. By leveraging their expertise in partnership with others from both the public and private sector, REALTORS® in many communities have been making important contributions to their local communities' neighborhood stabilization programs.

More information on how REALTORS® can contribute to local community NSP efforts>

· Commercial Real Estate — Commercial real estate is impacted primarily through those provisions of the bill focused on green building and energy efficiency as well as business tax incentives. H.R. 1 provides significant funds for state energy programs, which could be used to support commercial property owners' investment in energy efficiency upgrades while commercial property owners seeking to invest in alternative energy systems for onsite power generation would benefit from the Department of Energy Renewable Energy Loan Guarantees Program. Of particular benefit to small businesses would be certain provisions of the bill that provide tax relief in the area of bonus depreciation and capital expenditures, as well as the 5-Year carryback of net operating losses for small businesses.

· Rural Housing Service — The bill provides an additional $500 million to existing USDA Rural Housing programs. The RHS provides both a guaranteed loan program and a direct housing loan program for those meeting the program's eligibility criteria. The direct loan program will receive $270 million while $230 million will be allocated for unsubsidized guaranteed loans. It has been reported that this level of funding would provide for an additional 192,000 homeowners.

· Low Income Housing Grants — Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations.

· Tax Exempt Housing Bonds — Tax-exempt interest earned on specified state and local bonds issued during 2009 and 2010 will not be subject to the Alternative Minimum Tax (AMT). In addition, financial institutions will have greater capacity to purchase tax-exempt state and local bonds.

Now is the time to buy!

Thu, 05 Feb 2009 01:00:00 GMT

Now is the time to buy! We can show you not only the deals, but the STEALS in today's market.

Call the Jesse Herfel Group today at 602-565-2424.

It may be time to think about buying a home!

Ron Lieber, New York Times

Five or 10 years from now, when the financial crisis has ended and housing prices are up smartly once more, we will look in the rearview mirror and realize that we missed a golden age for first-time home buyers.

Then, everyone who sat on their down payment savings accounts for a few years too long will kick themselves for not taking advantage of what may turn out to be the buying opportunity of a lifetime for those who can qualify for a mortgage.

Unfortunately, we do not know when this golden age will begin, because we will be able to identify a bottom to the housing market only with the benefit of hindsight. But as it does with the stock market, the moment will probably arrive when everyone is feeling the most pessimistic.

That moment is certainly getting closer. Housing prices have fallen drastically from their peak levels in many areas of the country. Rates on 30-year fixed-rate mortgages are already close to 5.5 percent, and this week there were suggestions that the federal government might try to drive them down to 4.5 percent, a truly incredible figure to be able to lock in for three decades.

Meanwhile, first-time home buyers have the same advantage they have always had, which is that they do not have to sell their old place before buying a new one. That is an added advantage in areas where many available houses simply are not moving, because the people trying to sell them will not be bidding against you.

If you're hoping for a recovery in the housing market, you ought to be cheering on the first-time home buyers. When they purchase homes, their sellers are free to move on or move up, stimulating further sales.

But if you are a potential first-time buyer yourself, or lending or giving the down payment to one, you are probably as frightened as you are tempted by all the "For Sale" signs that have become "On Sale" signs. So let's quickly review some of the still-grim pricing data in certain areas - and consider the reasoning offered up by first-time buyers who have forged ahead anyhow.
As is always the case with real estate, much depends on location. One study, "The Changing Prospects for Building Home Equity," tries to predict where today's first-time buyers in the 100 biggest metropolitan areas may actually have less home equity by 2012 as a result of continued price declines. The verdict was that buyers in 33 of the markets could see a decline by 2012, including potential six-figure drops on an average home in the New York City, Los Angeles, San Francisco and Seattle metropolitan areas.

This is obviously scary. (I've linked to the study, a joint effort of the Center for Economic and Policy Research and the National Low Income Housing Coalition, from the version of this article at nytimes.com/yourmoney.) It's worth noting, however, that these predictions came before the government made its most recent move to reduce borrowing costs.

Also, the price projections in the study are based, in part, on the fact that the ratio of purchase prices to annual rents is still higher in many areas than the historical average, which is roughly 15 times rents. While past figures may well have some predictive value, I have never been convinced that first-time buyers compare a home that they could own and one that they would rent in purely or even primarily economic terms.
When Jaime and Michael Proman moved this fall to Minneapolis, his hometown, from New York City, they craved a different sort of life after two years together in a 450-square-foot studio apartment. "We didn't want a sterile apartment feel," said Mr. Proman, who is 28 (his wife is 26). "We wanted something that was permanent and very much a reflection of us."

The fact is, in many parts of the country there are few if any attractive rentals for people looking to put down roots and enjoy the sort of amenities they may spot on cable television home improvement shows. Comparing a rental with a place that you may own seems almost pointless in these situations, especially for those who are now grown up enough to want to make their own decisions about décor without consulting the landlord.
Still, for anyone feeling the urge to buy, a number of practical considerations have changed in the last year or two. The basics are back, like spending no more than 28 percent of your pretax income on mortgage payments, taxes and insurance. Even if a lender does not hold you to this when you go in for preapproval, you should hold yourself to it.

You will also want to start now on any project to improve your credit score because it may take several months to get it above the 720 level that qualifies you for many of the best mortgage rates.
John Ulzheimer, president of consumer education for credit.com, a consumer credit information and application site, suggests starting to pay down and put away credit cards months before you apply for a loan. That is because the credit scoring system could penalize you if you use a lot of credit each month, even if you always pay in full. Also, check your three credit reports (it's free) at annualcreditreport.com and dispute errors.

While no one can easily predict the likelihood of losing a job, Friday's startling unemployment figures suggest the need for caution if you think you might be vulnerable. A. C. Panella, who teaches communications at Pasadena City College in California, waited until she had a tenure-track job before buying a home in the Highland Park section of Los Angeles with her partner, Amy Goldman, a lawyer for a nonprofit organization. "We could afford the mortgage payment on one salary, were something to come up," Ms. Panella, 31, said. "It's really about being able to stay within our means."

For many first-time home buyers, that philosophy stretches to the down payment, too. Ms. Panella and her partner put down 20 percent when they bought their home in September, as did the Promans when they bought their home in the Lowry Hill neighborhood of Minneapolis.

Alison Nowak, 29, put just 3 percent down on a Federal Housing Administration-backed loan last month when she and her partner, Lacey Mamak, bought a $149,900, 800-square-foot home several miles south of where the Promans live. "Anything that is an opportunity also has a bit of risk," she said. Her house was in foreclosure before a plumber bought it and fixed it up. "One way we mitigated it was that we bought a really tiny house in a very good neighborhood."

One other strategy might be to buy new instead of used. Ian Shepherdson, chief United States economist for the research firm High Frequency Economics, says he believes that a steep drop-off in inventory of new homes is coming soon, thanks to a rapid decrease in home builder activity.

Since prices generally soften in the winter, it may make sense to start looking seriously once the mercury bottoms out. "If you look at new developments next spring, you may not have the choice you thought you would have or be in the bargaining position you thought you would be," Mr. Shepherdson said. Also, if you wait after June 30, you will miss out on a $7,500 federal tax credit for income-eligible first-time home buyers that works like an interest-free loan.

Finally, allow yourself to consider how it would feel if you bought and then prices dropped another 10 or 15 percent. It might not bother you if you plan to stick around. Plenty of people seem to be making a longer commitment to their homes. According to a survey that the National Association of Realtors released last month, typical first-time buyers plan to stay in their home 10 years, up from 7 last year.

Perhaps people are more aware that they will not be able to build equity as rapidly as others did in the real estate boom. Or they simply have more confidence in hard, hometown assets now than in other markets.

"We wouldn't let another decline bother us," said Michael Proman. "You can never time a bottom. This is a long-term investment for us, and it truly is the best investment we have in our portfolio right now."

Don't miss this opportunity to take advantage of the market! To discuss your options, call us today! 602-565-2424

Visit our listings at www.JesseHerfel.com

The Jesse Herfel Group

2500 S. Power Rd #121

Mesa, AZ 85209

office 480-889-1402

fax 480-889-1400

direct 602-565-2424

jesseherfel@kw.com

Each office is independently owned and operated. Not intended to solicit properties currently for sale.

Low Rate Mortgage Plan Generates Hope

Fri, 05 Dec 2008 10:29:00 GMT

Information from the Arizona Republic on mortgage rates.

http://www.azcentral.com/php-bin/clicktrack/email.php/8475402

Short Sale vs. Foreclosure Credit Damage

Fri, 14 Nov 2008 10:57:00 GMT

If you or anyone you know may be in need of short sale assistance, the Jesse Herfel Group are your short sale experts! Call us today at 602-565-2424 to discuss your options!

Short Sale vs. Foreclosure

Basics of a Short Sale:

Short Sales happen when a lender agrees to accept

less than the amount owed against the home because

there is not enough equity to sell and pay all costs of

sale. Not all lenders will negotiate a Short Sale, and

that is why a Real Estate agent can be a tremendous

help by contacting the lender’s loss mitigation

department to find out.

You can’t just wake up one morning and decide you’re

going to sell your home at a loss by asking for a Short

Sale. Typically, lenders won’t even consider a Short

Sale if your payments are current. Lenders will be

more agreeable to negotiation if your payments are in

arrears. Plus, if you have cash assets, the lender might

try to tap those accounts. Doing a Short Sale is not for

the faint of heart.

How is the Seller’s Credit Affected?

According to Christopher Rockey, Director of Education

for Mortgage Resolution Services, sellers will take a

bigger hit on their credit report by going through

foreclosure or giving the lender a deed-in-lieu of

foreclosure. Rockey says the points lost on a FICO score

(the formula used to assess a borrower’s risk factor)

are as follows:

•

Both of these solutions affect credit the same.

Sellers will take a hit of 250 to 280 points. This

means if a seller’s FICO score before foreclosure is

680, it could dip as low as 400.

Foreclosure or Deed-in-Lieu of Foreclosure:

•

The affect of a short sale on a seller’s credit report

is much less damaging. The ding on credit will show

up as a pre-foreclosure in redemption status,

Rockey says, which will result in a loss of 80 to 100

points. This means a Short Sale with a previous

FICO of 680 will see it fall to 480 to 600.

Short Sale:

•

Borrowers must realize these numbers are only

theory. They must continue to be responsible with

their other consumer debt. Often if the hardship is

financially related, borrowers fall behind on other

consumer responsibilities.

Important Note:

Waiting Period Before Buying Another Home

•

Recently Rockey said, Fannie Mae and Freddie

Mac have changed their guidelines. Foreclosure is a

minimum of 5 years with a FICO score of 680 and

10% down. A Deed-In-Lieu is 4 years, 680 FICO,

and 10% down.

Foreclosure or Deed-in-Lieu of Foreclosure:

•

2 years, no minimum credit score and no minimum

down payment. These numbers are extremely

important to consider.

Short Sale

Short Sale/Foreclosure Deficiency Judgments

The bad news is a seller could be subject to a

deficiency judgment for the difference between the

loan amount and the amount paid. In Arizona, purchase

money loans are not subject to deficiency judgments;

however, hard money loans, home equity loans and

refinances are. Exception: refinances can be antideficiency

if paying off purchase money loans.

The lender has sole discretion whether to pursue a

deficiency judgment in those instances when the

judgment is permitted. To determine whether a

pending Foreclosure or Short Sale is subject to a

deficiency judgment, clarify the issue with the lender or

talk to a real estate lawyer.

For sellers trying to decide whether to let a home go

through foreclosure versus attempting a Short Sale,

salvaging their credit is the main advantage to doing a

Short Sale. Be sure to seek legal and tax advice

before making this decision.

Article obtained from www.about.com and authorized

by Elizabeth Weintraub who has an extensive

background in real estate spanning more than 30

years.

Effects on Credit

Sue Reagan

Marketing Representative

Cell: 602.230.6263

sreagan@securitytitle.com

LuAnn Pulver

Assistant Vice President and Branch Manager

S

Suite 122 · Mesa, AZ 85209 · 480.830.0534
UPERSTITION SPRINGS OFFICE · 2500 S. Power Road

New Mortgage Relief Plan

Wed, 12 Nov 2008 10:17:00 GMT

New Mortgage Relief Plan to assist homeowners...

http://www.azcentral.com/php-bin/clicktrack/email.php/8436693

$7,500 Tax Credit for First Time Home Buyers!

Wed, 12 Nov 2008 10:05:00 GMT

Now is the time to buy! Check out this link for frequently asked questions on the tax credit for first time homebuyers!

http://www.federalhousingtaxcredit.com/faq.php

Bank of America haults 2,000 foreclosures.

Mon, 03 Nov 2008 10:11:00 GMT

http://www.azcentral.com/arizonarepublic/news/articles/2008/11/01/20081101foreclosures1101.html

Foreclosures affecting home values in the Valley

Thu, 23 Oct 2008 09:42:00 GMT

http://www.azcentral.com/realestate/articles/2008/10/23/20081023foreclosureresale1023.html

Tips to Improve and Maintain Your Credit Score

Mon, 13 Oct 2008 11:53:00 GMT

Tips for Helping Your Clients Boost Credit Scores, Strengthen Financial Footing

RISMEDIA, -It is a three-digit score that can shape your financial future, whether you plan to buy a new car or qualify for

a reasonable mortgage loan to buy the home of your dreams. Your credit score is a determining factor in whether you

obtain financing and at what cost, and there’s never been a better time to clean up your credit history and boost your

score. The first step in improving your credit score is to know where you stand. Your credit records have been reduced to a

three-digit score commonly known as a FICO, or Fair Isaac & Co., score. Each of the three major credit bureaus

(TransUnion, Experian and Equifax) have assigned a score that shows how likely you are to pay back a loan on time -

the higher the score, the lower your presumed risk of default. By law, you may obtain one free report annually from each

bureau online at www.AnnualCreditReport.com. By accessing your credit information one agency at a time, you can get

a free credit report three times a year Once you know your FICO score, you can work toward

improving it. But improving your credit score can require time and commitment. Here are some valuable tips to get you started:

- Pay your bills on time. Your payment history, including late payments and foreclosures, can count for one-third of your credit score. Accounts more than 60 days past due

will be indicated on your credit report.

- Check your credit report for errors. Removing errors, especially those negatively reflecting late payments or unpaid credit, is one of the easiest ways to improve a

credit score.

- Reduce your balances. One-third of your FICO score depends on the total amount of balances you owe versus your total credit limit. Try to keep your balances less than

80% of your credit limit to maximize your score benefit.

- Keep older credit lines open. Having a long history of active accounts indicated to lenders that you are a good credit risk. It also accounts for 10% of your credit score.

- Use credit - but use it responsibly. This includes having credit cards and installment loans with timely payments. Accounting for 15% of your score, a balanced account

including a mortgage payment can help homeowners boost their score.

- Avoid new credit. Opening new credit will lower your average account age. In addition, the number of new applications counts for 10% of your score. Under the Fair

Credit Reporting Act, you may limit “prescreened” offers by removing your name from nationwide lists.

- Check regularly for identity theft. Agencies may only provide your information to those with a valid need, such as a creditor or insurer.

http://rismedia.com/wp/2008-09-15/tips-for-helping-your-clients-boost-creditscores-strengthen-financial-footing/

Good news in a bad housing market!

Wed, 08 Oct 2008 10:35:00 GMT

Check out this article, it gives some good insight on current market conditions. To discuss this article and find out how much your home is worth, call the Jesse Herfel Group anytime at 602-565-2424.

Good news in market gone bad

http://www.azcentral.com/php-bin/clicktrack/email.php/8371629

8 Reasons your home hasn't sold yet

Tue, 30 Sep 2008 16:48:00 GMT

8 Reasons Your Home Hasn’t Sold Yet- Advice for Frustrated Clients

By Kathleen Lynn

RISMEDIA, August 18, 2008-(MCT)-In October 2005, David Raimondi put his 100-year-old Allendale, N.J., house and barn on the market, asking $525,000. It’s been almost three years, and the property has still not sold.

Raimondi, a housepainter who wants to move to a less expensive area, is one of the growing ranks of frustrated sellers whose homes have been on the market for more than a year. Though most sellers don’t stay on the market for years, Realtors say the average time between listing and sale has stretched out during the housing slump.

These sellers’ experiences show just how tough the market is. Still, real estate agents say, there are buyers out there, and it’s possible to sell a property if you take the right steps. Interviews with real estate experts, along with a closer look at Raimondi’s story, offer these lessons for sellers:

1. The First Offer is Often the Best Offer. There’s a reason this is a real estate cliché. Within a week or two after Raimondi first listed his house in October 2005, he got an offer for $495,000–$30,000 less than his asking price. He turned it down, convinced he could do better. But the real estate market began to slide in late 2005 and has not recovered yet.

“Back then, things were selling quickly; who knew we were going to come into a slump like this?” Raimondi said.

The lesson: “If you get an offer in today’s market, you’d better try to make the best of it and live with it if you can, because there isn’t another one waiting in the wings,” said Jay Bouton of Coldwell Banker in Allendale, who was Raimondi’s first agent.

2. Be Realistic About Price. “Probably half of the houses on the market are overpriced for what people are willing to pay for them,” Bouton said. Pricing was Raimondi’s key error, according to another of his former agents, Kristin Gildea of Marron & Gildea in Ridgewood, N.J.

“He priced it way too high from the get-go,” she said. “Even though he was adjusting his price and coming down, he was doing it too late, and chasing the market down.”

Even today, Raimondi insists his house is worth $450,000-after all, it is in Allendale, an upscale town with fine schools. In addition, the property is 200 feet deep and includes the barn.

“The real estate agents wanted me to give my house away so they could make a sale; that’s how I looked at it,” said Raimondi, who paid $230,000 for the property in 1999. “I wanted to make a sale, too, but at the right price, not a giveaway.”

Recently, he’s gotten several offers around $350,000. That’s a sign, Gildea said.

“If you’ve gotten two or three offers at the same number, that’s where the market is,” she said.

Bouton agreed: “If it was worth $450,000, it would be selling for that.”

3. Listen to the Experts. Raimondi has worked with six real estate agents since 2005.

“He picked everybody’s brain, and we were more than willing to give him advice, if he would listen to it,” Bouton said.

He didn’t always listen.

“They told me if you want to sell this house, you’ve got to take the carpet up,” Raimondi recalled. Many buyers prefer hardwood floors, but Raimondi didn’t want to pull up wall-to-wall carpet that was less than 10 years old and still in pretty good shape.

“You’re paying agents for their advice, and then you’re disregarding that advice,” said Elizabeth Razzi, author of “The Fearless Home Seller” (Stewart, Tabori & Chang, $16.95).

Now Raimondi’s pulling up the carpet.

4. Beware of Getting Stale. The longer a house is on the market, the less attractive it appears. Razzi said buyers think, “If nobody else has snapped up this house in 12 months or longer, what’s going to make me want it?”

Homeowners sometimes try to get around this problem by allowing a listing to lapse, then relisting the house to start the clock again. The multiple listing service’s computer will classify it as a new listing-but real estate agents who know the area will usually recognize that it’s the same old house, warned Randy Douglass of ERA Douglass Realtors in Montvale, N.J.

“You’re not going to fool a lot of people,” Douglass said. Better to avoid getting stale in the first place. To do that, you have to-you guessed it-price it right. “It’s all about the price,” Douglass said.

5. Go For the Pottery Barn Look. Raimondi thinks potential buyers of starter homes expect too much.

“They want perfection in an old house, and that’s not going to happen,” Raimondi said. His home has six small rooms. Though the kitchen was updated in the 1990s, it has vinyl floors instead of ceramic tile, and laminate counters instead of granite.

“An older home at a start-up price is not going to be modern like those home design shows,” he said.

Fair enough. But even people who don’t watch HGTV get Pottery Barn catalogs in the mail, Razzi pointed out. That shapes their expectations.

That doesn’t necessarily mean you have to put in granite countertops, though that’s not a bad idea, she said. But you’ve got to clear the clutter and make the place spiffy.

“Smart sellers are painting their walls that taupe-y color and putting bowls around and taking other stuff out,” Razzi said. “Get the old drain board off the kitchen counter and put out a bowl of oranges.”

6. Understand Buyer Psychology. “A lot of sellers right now think buyers are being greedy,” Razzi said. But she believes something else is going on.

“Buyers are very frightened,” she said. “They’re afraid they’re going to buy a house and have its value decline after they move in. They’re afraid they’re going to get stuck in that neighborhood.

“They’re not going to have the courage to buy that house unless it’s better than the other competition on the market and it’s irresistible to them,” she continued.

7. Don’t Expect Buyers to Renovate. Yes, there are do-it-yourselfers who love to spend their weekends painting walls, building decks and laying tile. But most buyers want to move in and not face any task more challenging than unpacking their boxes.

“Even in a good market, fixer-uppers attract only limited offers because people just don’t have the time,” Razzi said. “And people who do have the time expect a really low price.”

8. Play to Your Home’s Strengths. Raimondi’s house is on busy Franklin Turnpike, and another busy road, Crescent Avenue, runs along the rear of the property. Some agents say that’s a turnoff.

Maybe so, said Razzi. But there’s an upside.

“If you’re on a busy street, you get a lot of attention from passers-by,” she said. That means Raimondi should focus on his home’s landscaping, wraparound front porch, and overall curb appeal.

Similarly, the age of the house can be turned to a seller’s advantage.

“You can’t make an old house a brand new house without a massive infusion of money,” Razzi said. But you can make it as “charming and quaint and appealing” as possible.

If it’s small, she added, “decorate it so it looks cozy.”

For now, Raimondi’s house is off the market again. He can afford to wait because he hasn’t found another house. He hopes that by 2009, buyers will begin returning to the market, and he’ll put the house up for sale again then.

“I’m not going to give it away,” he said. “I’ve waited a long time. I’ll wait a little more.”