To Buy or Sell Think “Gail” For all your Real Estate Needs
February 2011 On a personal note:
Well, the balloon festival was a success, even with the high winds most of the week end, Saturday morning was really spectacular and I got some photo shots from my front office door. On a sadder note, the lenders on the English Village are taking back the property, just another indicator of our economic conditions. The company plans to remove the current parking fee, good news for us locals. The visitor’s center cheered with this news.Winter Fest was great this year and the weather was great, unlike last year when it got rained out.
Enjoy this month’s news and Make it a great Life! Gail Francis
The new tax bills are out & you should be seeing a decrease in property values again, at least that’s what the newspaper stated. However, in talking with folks around town there values seem to have gone up. If not you need to contest the property tax value, you should have received by mail; you can go to the Mohave county web site to see what your options are.
www.co.mohave.az.us If you feel the value is too high I can do a property CMA that you can attach to your claim notice. There is a dead line so the sooner the better.
‘Anti-Flipping’ Waiver Extension
In 2003 the Federal Housing Administration (FHA) feared that flipping homes was the cause of the skyrocketing home prices throughout individual neighborhoods. Because of this, the FHA no longer approved property loans that were resold within 90 days of the original purchase, with the exception of foreclosures owned by government sponsored enterprises (GSEs) such as FHA, Fannie Mae, and Freddie Mac. The anti-flipping rule is designed to help protect the FHA’s mortgage insurance program and federally chartered financial institutions from losses.
In February 2010, the FHA initiated a one-year suspension on the regulation that prevented “flippers” from purchasing single-family homes and releasing them into the market within 90 days. Since then, the FHA says it has insured 21,000 loans that had exchanged hands within the previous 90 days. The loans are worth more than $3.6 billion and would not have qualified for financing before suspension. An analysis of these loans suggests they do not present a greater credit risk than other loans, which lent support to the suspension’s extension.
The government sent a notice to banks in mid-January of 2011 in which it announced the extension of the waiver through the end of the year. According to FHA Commissioner David Stevens, the purpose of the extension was to accelerate the resale of REO properties in neighborhoods where there is a high rate of foreclosure. This will facilitate the purchase of homes that have recently been “flipped.” As a result, foreclosed properties will be moved off the market faster, reducing the amount of vacant homes in neighborhoods throughout the United States.
Limitations considered by the FHA consist of the following:
- 20% Rule. If resale is higher than 20% of the original price, one must show proof of justified price. For example, if a $200,000 house is purchased and the resell price is $245,000, the house must undergo additional underwriting guidelines, which is considered a double appraisal.
- Title Hold. No simultaneous closings are allowed when the seller holds a property. In other words, back-to-back, same-day closing to an FHA end-buyer is prohibited.
- Short-term Funding. Investors must come up with short-term funding of the 30-to-60-day variety if their desire is to buy/fund and in order to sell to an FHA end-buyer.
- Previous Flips. A property cannot show signs of prior flipping activity. If so, the FHA has the right to object.
- Transactions at Arm’s Length. Transactions must show no identity of interest between the buyer and the seller or other parties that participate in the sale of a property.
Overall, this will help lower holding costs for investors/flippers allowing them to continue flipping more properties. In return, this will help bring more desirable homes to the market for first-time home buyers.
Shadow' real estate inventory may take 4 years to clear
S&P: Slower liquidation rates to blame
February 02, 2011
It may take more than four years to clear the "shadow inventory" of distressed homes lurking on the sidelines in the U.S., a factor that's likely to undermine real estate prices as the backlog clears, analysts at Standard & Poor's Ratings Services say.
At 49 months, the estimated time needed to clear shadow inventory at the end of the fourth quarter of 2010 was up 11 percent from the previous quarter and 40 percent from a year ago. With the lone exception of Miami, the months' supply of shadow inventory grew in almost all of the nation's 20 largest metro markets.
But much of the increase in the estimated months needed to clear shadow inventory is due to the fact that it's taking longer for lenders to liquidate distressed homes -- not because the number of distressed properties is growing, analysts said. Standard & Poor's defines shadow inventory as properties with borrowers who are 90 days or more delinquent on their mortgage payments, properties currently or recently in foreclosure, or properties that are real estate owned (REOs).
Although shadow inventory peaked in the first quarter of 2008, loans that are 90-plus-days delinquent and foreclosed properties are taking longer to become REOs. That's once again lengthening the overall timeline for resolving troubled assets, Standard & Poor's analysts said.
Lake Havasu City Properties
Cell: (928) 486-9179 Office: (888) 854-7210
Fax: (928) 854-7211
2167 Birch Square Lake Havasu City, AZ 86403 Broker: Dean Baker