October 24, 2012 by Jim McCormack

Waiting Periods to Buy a Home After Foreclosure, Deed-in-Lieu, Short Sale and Bankruptcy

Waiting Periods to Buy a Home After Foreclosure, Deed-in-Lieu, Short Sale and Bankruptcy
Buying a Home and Getting a Mortgage Loan After Foreclosure, Deed-in-Lieu, Short Sale and Bankruptcy
(Updated 10/24/2014)

Many financially distressed homeowners who are facing foreclosure and considering a deed-in-lieu of foreclosure, short sale or even bankruptcy have asked me how long they will need to wait to buy a home after foreclosure, short sale or bankruptcy. Since the answers are found in multiple places, I decided to compile a complete list and cross reference them for accuracy. In order to accomplish that task and compile the Waiting Periods to Buy a Home After Foreclosure, Deed-in-Lieu, Short Sale and Bankruptcy below, I utilized the following sources:

Waiting Periods to Buy a Home After Foreclosure, Deed-in-Lieu, Short Sale and Bankruptcy

Federal Housing Administration (FHA) Insured Loan
FHA Extenuating Circumstances: “Serious illness or death of a wage earner. Divorce and the inability to sell a property due to a job transfer or relocation does not qualify as an acceptable extenuating circumstance.”

Minimum Waiting Period Under The New FHA Back To Work Program – Under the new FHA “Back to Work – Extenuating Circumstances” Program, if you have had a foreclosure, short sale, deed-in-lieu of foreclosure, or have filed bankruptcy you may qualify for a new home loan if you are back to work and can document the extenuating circumstances. You must have a 12 month record of on-time rental housing payments with no delinquencies and not have been 30 days late on more than one non-housing loan payment. If there are still any open collection or judgment accounts, then those will have to factored into your debt calculations for the new loan.
Foreclosure – 3 years from the date foreclosure completed and property transferred back to the bank. Less than 2 years, but not less than 12 months from the date foreclosure completed and property transferred back to the bank may be possible with acceptable “extenuating circumstances”.
Deed-in Lieu – Same as Foreclosure.
Short Sale – 3 years from the date sale closed and transferred to the new owner. No waiting period if seller/borrower had no late payments on any mortgages and consumer debts within the 12 month period preceding the short sale AND seller/borrower was not taking advantage of declining market conditions.
Bankruptcy (Chapter 7) – 2 years from date of bankruptcy discharge with re-established credit paid as agreed or no new credit obligations incurred. Less than 2 years, but not less than 12 months from the date of bankruptcy discharge may be possible with acceptable “extenuating circumstances” AND borrower has since exhibited a documented ability to manage financial affairs in a responsible manner.
Bankruptcy (Chapter 13) – 1 year from the start date of the bankruptcy re-payment period has elapsed and the borrower’s payment performance has been satisfactory and all required payments made on time.

Veterans Administration (VA) Guaranteed Loan
VA Extenuating Circumstances: “Unemployment, prolonged strikes medical bills not covered by insurance, etc. Divorce is not viewed as beyond the control of the borrower and/or spouse.”

Foreclosure – 2 years from the date foreclosure completed and property transferred back to the bank. Less than 2 years, but not less than 12 months from the date foreclosure completed and property transferred back to the bank may be possible if credit re-established and paid as agreed and with acceptable “extenuating circumstances”.
Deed-in Lieu – Same as Foreclosure.
Short Sale – 2 years from the date sale closed and transferred to the new owner. No waiting period if seller/borrower had no late payments on any mortgages and consumer debts within the 12 month period preceding the short sale AND seller/borrower was not taking advantage of declining market conditions.
Bankruptcy (Chapter 7) – 2 years from date of bankruptcy discharge. Less than 2 years, but not less than 12 months from the date of bankruptcy discharge may be possible if credit re-established and paid as agreed and with acceptable “extenuating circumstances”.
Bankruptcy (Chapter 13) – 1 year from the start date of the bankruptcy re-payment period has elapsed and the borrower’s payment performance has been satisfactory and all required payments made on time.

United States Department of Agriculture (USDA) Rural Housing Loan
USDA Extenuating Circumstances: “Loss of job; delay or reduction in government benefits or other loss of income; increased expenses due to illness, death, etc. Circumstances surrounding the adverse information must have been temporary in nature, and beyond the applicant’s control, and have been removed so their reoccurrence is unlikely or the adverse action or delinquency was the result of a refusal to make full payment because of defective goods or services or as a result of some other justifiable dispute relating to the goods or services purchased or contracted for.”

Foreclosure – 3 years from the date foreclosure completed and property transferred back to the bank. Less than 3 years from the date foreclosure completed and property transferred back to the bank may be possible with acceptable “extenuating circumstances”.
Deed-in Lieu – Same as Foreclosure.
Short Sale – Same as Foreclosure.
Bankruptcy (Chapter 7 or 11) – 3 years from date of bankruptcy discharge. Less than 3 years from the date of bankruptcy discharge may be possible with acceptable “extenuating circumstances”.
Bankruptcy (Chapter 13) – 1 year from date repayment was completed and bankruptcy discharge. Less than 1 year from the date of bankruptcy discharge may be possible with acceptable “extenuating circumstances”.

Conventional Conforming Mortgage Loan (meets Fannie Mae (FNMA) and Freddie Mac (FHLMC) Loan Purchasing Guidelines)
Conventional Extenuating Circumstances: “Nonrecurring events that are beyond the borrower’s control that result in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations.”

Foreclosure – 7 years from the date foreclosure completed and property transferred back to the bank if there are no acceptable “extenuating circumstances”. 3 years from the date foreclosure completed and property transferred back to the bank with acceptable “extenuating circumstances” AND at least 10% Down Payment. Primary home purchase and rate/term refinance only (non-owner occupied and second homes not allowed).
Deed-in Lieu – NEW = 2 years from completion of a DIL. OLD = 7 years from the date sale closed and transferred to the new owner or foreclosure completed and property transferred back to the bank with less than 10% Down Payment. 4 years from the date sale closed and transferred to the new owner or foreclosure completed and property transferred back to the bank with 10% Down Payment. 2 years from the date sale closed and transferred to the new owner or foreclosure completed and property transferred back to the bank with 20% Down Payment. 2 years from the date sale closed and transferred to the new owner or foreclosure completed and property transferred back to the bank with 10% Down Payment and acceptable “extenuating circumstances”.
Short Sale – NEW = 2 years from completion of a short sale.
Bankruptcy (Chapter 7 or 11) – NEW = 2 years from date of bankruptcy discharge. OLD = 4 years from date of bankruptcy discharge. 2 years from the date of bankruptcy discharge may be possible with acceptable “extenuating circumstances”.
Bankruptcy (Chapter 13) – 2 years from date of bankruptcy discharge. 4 years from date of bankruptcy dismissal.

As you can see by the information above and the lesser credit damage caused by a short sale (versus a deed-in-lieu, foreclosure or bankruptcy), a short sale is generally the best option for a financially distressed homeowner who is facing foreclosure or who cannot afford to pay their mortgage. You should contact a foreclosure defense and/or bankruptcy attorney, a short sale real estate specialist like myself, or a legitimate mortgage loan counselor to evaluate all of your options. Please just do not let the bank foreclose on you without trying to prevent foreclosure. If you have a mortgage loan with Wells Fargo, Bank of America (BAC Home Loans or Countrywide Mortgage), CitiMortgage, Chase (JPMorgan Chase), America’s Servicing Company (ASC), GMAC, a Fannie Mae owned loan, a Freddie Mac owned loan, an FHA insured mortgage loan, a THDA mortgage loan, or any type mortgage loan, and you have missed mortgage payments, or will miss mortgage payments and live in the Nashville Tennessee area (Nashville, Brentwood, Franklin, Nolensville, Spring Hill, Thompson’s Station, Murfreesboro, Smyrna, LaVergne, Antioch, Columbia, Mt. Juliet, Springfield, Gallatin, Hermitage and Hendersonville), please contact Nashville Tennessee Short Sales and Foreclosures Expert for a free no obligation consultation to discuss your foreclosure prevention options including a short sale or short sales (if you have multiple properties).

______________________________________________

Jim McCormack is a Nashville Real Estate Broker who provides Expert Real Estate Solutions for for Nashville, Brentwood, Franklin, Nolensville, Spring Hill, Thompson’s Station, Murfreesboro, Smyrna, LaVergne (La Vergne), Antioch, Columbia, Mt. Juliet (Mount Juliet), Springfield, Gallatin, Hermitage, Hendersonville, Clarksville and Middle Tennessee (Davidson, Maury, Montgomery, Robertson, Rutherford, Sumner, Williamson and Wilson Counties) Homeowners and Real Estate Investors Facing Foreclosure and Needing to Short Sell Their Homes and/or Investment Properties. Jim Specializes in Short Sales and Foreclosures and Providing Sellers Short Sale Help and Foreclosure Help. Jim’s Help is Free to Nashville TN Short Sale Sellers. Jim Helps Sellers Stop Bank and Mortgage Foreclosure with a Short Sale, or a Fast Cash Offer. Avoid Foreclosure by Working Directly with a Nashville Tennessee Real Estate Expert and Investor who is Uniquely Skilled, Honest, Compassionate, Caring and Exceptionally responsive to the needs of his clients. Jim Encourages You to See What His Clients Say About Him. For Buyers, Jim understands the Various Nashville Tennessee Housing and Investment Real Estate Markets Extremely Well and is Particularly Skilled at Assisting Buyers with Determining the Market Values of Homes and Investment Properties. Due to that Real Estate Valuation Expertise, Jim can Help Nashville Home and Investment Property Buyers Get Fantastic Deals on Their Nashville Area Real Estate Purchases.

March 7, 2011 by Jim McCormack

Mortgage Banking Official Says Loan Modifications Virtually Impossible

Mortgage Banking Official Says Loan Modifications Virtually Impossible
Homeowners Facing Foreclosure Have Almost No Chance of Getting Their Payment Lowered

According to this article in The Salt Lake Tribune, Bankers: Modifying Utah mortgages unrealistic, Howard Headlee, president of the Utah Bankers Association, said “It is virtually impossible for homeowners trapped in a foreclosure process to try to renegotiate the terms of their loans.” The article goes on to say that Mr. Headlee described the loan modification process for homeowners and borrowers facing foreclosure with the statement “It’s kind of like unscrambling an egg.” as a result of the fact that most mortgage loans are sold several times and/or broken up into mortgage loan backed securities. As a result, in most cases there is no single loan owner who can decided on if or how to modify the loan. The unfortunate outcome of this reality is that homeowners and borrowers who can’t afford their current mortgage payment, but who could pay a reasonably reduced mortgage payment will not get help and financial assistance they need. In short, they are doomed from the start. Therefore, the only truly viable options for financially distressed homeowners and borrowers are short sale, bankruptcy and foreclosure. Since foreclosure is the worst possible outcome (and really the result of taking no action), financially distressed homeowners and borrowers should pursue short sale and bankruptcy options thoroughly before considering letting the mortgage company or bank foreclose on their home.

Free* Short Sale and Foreclosure Help and Assistance for Nashville, Brentwood, Franklin, Nolensville, Spring Hill, Murfreesboro, Smyrna, La Vergne, Columbia, Mt. Juliet, Springfield, Gallatin and Middle Tennessee Financially Distressed Homeowners and Property Owners. Stop the Bank from Foreclosing with a Quick Cash Offer or Short Sale. If you are a Nashville Tennessee, Franklin Tennessee, Brentwood Tennessee, Nolensville Tennessee, Spring Hill Tennessee, Murfreesboro Tennessee, Smyrna Tennessee or La Vergne Tennessee homeowner, property owner, condo owner, real estate investor, home builder or real estate developer who cannot pay your mortgage payments (due to losing your job, having your income reduced, illness, health problems, adverse business conditions, slow sales, loss of investment property tenants, vacancy issues, lack of funds to complete the project, feuding business partners, etc.), know that you will not be able to pay your mortgage, have defaulted on your mortgage, are already in foreclosure, or owe more than your home is worth, please contact Jim to discuss a short sale (when the real estate sale proceeds are not sufficient to pay off the mortgages and liens on the property). Jim helps sellers (homeowners, property owners, condo owners, owners of high end homes and properties (estate homes, luxury homes and executive homes), real estate investors, home builders and real estate developers) of distressed real estate, short sales, pre-foreclosures, foreclosures, investment properties, failed new construction projects and struggling commercial real estate developments located in any Middle TN County (Rutherford, Williamson, Davidson, Maury, Sumner & Robertson). If you need to short sell your house or property, or you need a quick sale to stop a foreclosure sale, you can Get Free* Short Sale and Foreclosure Help and Assistance from a Nashville Tennessee and Middle Tennessee Short Sale and Foreclosure REALTOR, Real Estate Expert and Real Estate Investor. (*Free: In a real estate short sale, the bank or mortgage company usually approves and pays all of Jim’s commissions and fees.)

February 23, 2011 by Jim McCormack

Brentwood Governors Club Seeing More Distress Sales

Brentwood Governors Club Seeing More Distress Sales
Well Known Gated Brentwood Tennessee Neighborhood Experiencing Increased Short Sale and Foreclosure Activity

Per my previous blog posts, Financial Distress Hitting Affluent Towns and Neighborhoods, Brentwood Distressed Sales Activity Increasing and Franklin Distressed Sales Activity Increasing, it is clear that exclusive, affluent, executive, luxury, gated, high-end and golf course neighborhoods are experiencing increased levels of Distress Sales (short sales and foreclosures). However, even with this information it is still surprising to such a prominent Brentwood Tennessee neighborhood like the Governors Club be hit with so many distress sales. Please consider the following sales figures which I obtained from the Middle Tennessee RealTracs MLS:

There are currently 35 Active Listings (i.e. homes that are actively being marketed for sale) in the Governors Club. Out of those 35 Active Listings 4 are Distress Sales (i.e. short sales and foreclosures account for over 11% of the Active Listings in the Governors Club).
There are currently 4 Pending Sales (i.e. homes that are under contract with buyers and are probable to close) in the Governors Club. Out of those 4 Pending Sales, 1 is a Distress Sale (i.e. short sales and foreclosures account for 25% of the Pending Sales in the Governors Club).
Since 1/1/2010 there have been 31 Closed Sales in the Governors Club. Out of those 31 Closed Sales, 4 were Distress Sales (i.e. short sales and foreclosures account for almost 13% of the Closed Sales in the Governors Club).

While the numbers above are not staggering when compared to other parts of the country and even other parts of the Nashville Tennessee, for a neighborhood like the Brentwood Governors Club to have 11%+ distress sales in every sales category is really bad. It is clear that even ultra exclusive, affluent, executive, luxury, gated, high-end and golf course neighborhoods are not immune to the economic and housing market collapse, and, as a result are seeing increased levels of short sales and foreclosures. I highly recommend that these homeowners seek qualified professional real estate, legal and financial advice right away to avoid foreclosure. Since I understand that many homeowners do not want their neighbors to know about their financial hardship, I generally do not use For Sale signs on my listings. I also use short sale pre-qualification techniques to minimize the marketing period of my short sale listings by thoroughly researching the financially distressed homeowners’ loan type and actual lender (i.e. the loan owner or loan investor) and communicate with my clients via their cell phone (calls and text messages) and personal email to avoid embarrassment. In short, I market my listings as the “Discreet Short Sale and Foreclosure REALTOR and Real Estate Expert”.

February 22, 2011 by Jim McCormack

Law Professor Advocates Strategic Mortgage Loan Default

Law Professor Advocates Strategic Mortgage Loan Default

Per this academic law paper, Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis, the author, Brent T. White (a law professor at The University of Arizona James E. Rogers College of Law) advocates strategic mortgage loan default as a very viable option for both financially distressed and non-financially distressed underwater homeowners (i.e. the mortgage balance(s) exceeds the value of their home – there is negative equity). The major issues addressed in this paper include the following:

Part I: Most underwater homeowners are not walking away from their homes (i.e. strategically defaulting on their mortgages).
Part II: From a purely financial standpoint “many more homeowners should be strategically defaulting.”
Part III: Homeowner and borrower “emotions such as shame, guilt, and fear play the largest role in homeowner decisions” to keep paying on their mortgage loans even though they are financial black holes and the most rational action would be to strategically default.
Part IV: The “government, the media, and the financial industry” and expected credit score damage combine to pressure underwater homeowners to keep paying on underwater mortgages even though strategic default would be the best financial option.
Part V: Substantial differences in behavioral norms between underwater homeowners (borrowers) and banks give the banks substantial artificial leverage over the homeowners. In other words, the banks regularly fail as evidenced by the TARP bank bailouts and all the other unprecedented government actions to artificially prop up the banks so the banks clearly have no shame in threatening to default and close their doors in order to get money from the government (i.e. morality has nothing to do with their decision making), yet those very same banks pressure underwater homeowners to pay their mortgages by playing the “moral card”. According to the author, this situation has “created an imbalance in which individual homeowners have borne a disproportionate financial burden from the housing collapse.”
Part VI: Government policy should seek out ways to level the playing field between underwater homeowners and banks so that given the circumstances mutually beneficial outcomes can be reached.

My view is that after seeking proper real estate (i.e. from me), legal and financial advice, underwater homeowners should consider “walking away” from their homes only as a last resort. In almost all cases, underwater homeowners should attempt the following loss mitigation actions (listed in order):

Short Sale.
Deed-in-Lieu of Foreclosure.
Strategic Default (i.e. walking away).

February 21, 2011 by Jim McCormack

Financial Distress Hitting Affluent Towns and Neighborhoods

Financial Distress Hitting Affluent Towns and Neighborhoods

Per my previous blog posts, Brentwood Distressed Sales Activity Increasing and Franklin Distressed Sales Activity Increasing, there are now larger numbers of short sales and foreclosures in wealthy areas as such as Brentwood Tennessee and Franklin Tennessee (both are located in Williamson County Tennessee). Both of these affluent towns were previously immune to the effects of the failing economy and housing market decline. The primary cause of these increased real estate distress sales are homeowners suffering from financial distress (i.e. job layoffs, and long-term unemployment). Recently, I have been contacted by two financially distressed homeowners who previously were earning in excess of $100,000 per year working in the health care industry. I say “previously” since both homeowners were recently laid off from their high paying jobs in an industry that was once thought of as a safe haven for employees. This is proof that almost no job is really “safe”.

I think many financially distressed homeowners who are well educated and were formerly high income earners try to handle their mortgage delinquencies without the help of a real estate professional since they think that the bank will work with them at first. Of course, many will find out the unfortunate truth about how little the banks will do for them despite their once stellar payment history and credit. I think embarrassment is another reason why financially distressed homeowners who live in executive, luxury or otherwise high-end towns and neighborhoods delay seeking out professional real estate assistance from a short sale expert. In short, they do not want their neighbors to know about their financial hardship. This desire for discretion is fully understandable. The good news is that I am keenly aware of this concern. For example, several short sale sellers have asked me not to use a For Sale on their home. As a result, I don’t use For Sale signs on my short sale listings. I also use short sale pre-qualification techniques to minimize the marketing period of their home by thoroughly researching their loan type and lender. Another way I keep the circumstances of my financially distressed seller clients as quiet as possible is communicate with these clients via their cell phone (calls and text messages) and personal email. In short, you can call me the “Discreet Short Sale and Foreclosure REALTOR and Real Estate Expert”.

February 21, 2011 by Jim McCormack

Franklin TN Distressed Sales Activity Increasing

Franklin TN Distressed Sales Activity Increasing
Short Sales and Foreclosures Increasing Their Market Share

Compared to late 2009, the percentage of Distressed Sales Activity (i.e. Short Sales and Foreclosures) is increasing. In late 2009, distress sales (i.e. Short Sales and Foreclosures) accounted for over 5% of all Active Listings and just under 6% of all Pending Sales. Currently, distress sales account for over 7% of Active Listings and just under 8% of Pending Sales.

February 21, 2011 by Jim McCormack

Brentwood TN Distressed Sales Activity Increasing

Brentwood TN Distressed Sales Activity Increasing
Short Sales and Foreclosures Increasing Their Market Share

Compared to late 2009, the percentage of Distressed Sales Activity (i.e. Short Sales and Foreclosures) is increasing. In late 2009, distress sales (i.e. Short Sales and Foreclosures) accounted for under 6% of all Active Listings and 0% of all Pending Sales. Currently, distress sales account for over 7% of Active Listings and over 7% of Pending Sales.

February 21, 2011 by Jim McCormack

LaVergne TN Distressed Sales Activity Increasing

LaVergne TN Distressed Sales Activity Increasing
Short Sales and Foreclosures Increasing Their Market Share

Compared to late 2009, the percentage of Distressed Sales Activity (i.e. Short Sales and Foreclosures) is increasing. In late 2009, distress sales (i.e. Short Sales and Foreclosures) accounted for over 22% of all Active Listings and over 55% of all Pending Sales. Currently, distress sales account for just over 32% of Active Listings and over 71% of Pending Sales.

February 21, 2011 by Jim McCormack

Smyrna TN Distressed Sales Activity Increasing

Smyrna TN Distressed Sales Activity Increasing
Short Sales and Foreclosures Increasing Their Market Share

Compared to late 2009, the percentage of Distressed Sales Activity (i.e. Short Sales and Foreclosures) is increasing. In late 2009, distress sales (i.e. Short Sales and Foreclosures) accounted for under 15% of all Active Listings and just under 22% of all Pending Sales. Currently, distress sales account for nearly 18% of Active Listings and 33% of Pending Sales.

October 9, 2010 by Jim McCormack

Who Owns My Mortgage Loan?

Who Owns My Mortgage Loan?
How to Lookup the Actual Owner of Your Mortgage Loan

Most people would be surprised to learn that it is likely that the bank or mortgage company they send their monthly mortgage payment to does not actually own their loan. That bank or mortgage company is very often just servicing the mortgage loan on behalf of the owner (referred to as the “Investor” in the mortgage industry). If the loan was conventional (i.e. 20% down including so-called 80/20 loans with a 1st and 2nd mortgage loan), or subprime, the Investor on the mortgage loan is probably another financial institution, or more likely Fannie Mae (Federal National Mortgage Association) or Freddie Mac (Federal Home Loan Mortgage Corporation). It is important to know who owns your mortgage loan since it impacts your loan modification, foreclosure prevention and short sale options. For example, currently Fannie Mae and Freddie Mac do not pursue deficiency balances (the amount of the mortgage loan remaining unpaid after the closing of a short sale). This is very important since it will allow borrowers to walk away after a short sale closing without having to worry about Fannie Mae or Freddie Mac pursuing them for the unpaid loan balance. Below are a few ways you can find out who owns your conventional or subprime loan (not every loan will be found):

Mortgage Electronic Registration System (MERS®) Servicer Identification System – According to the MERS website, “MERS was created by the mortgage banking industry to streamline the mortgage process by using electronic commerce to eliminate paper. Our mission is to register every mortgage loan in the United States on the MERS® System. Beneficiaries of MERS include mortgage originators, servicers, warehouse lenders, wholesale lenders, retail lenders, document custodians, settlement agents, title companies, insurers, investors, county recorders and consumers. MERS acts as nominee in the county land records for the lender and servicer. Any loan registered on the MERS® System is inoculated against future assignments because MERS remains the nominal mortgagee no matter how many times servicing is traded. MERS as original mortgagee (MOM) is approved by Fannie Mae, Freddie Mac, Ginnie Mae, FHA and VA, California and Utah Housing Finance Agencies, as well as all of the major Wall Street rating agencies. “
Fannie Mae Loan Lookup – Collectively, Fannie Mae and Freddie Mac own in excess of 50% of all the mortgage loans in the US so this is a good place to lookup your loan.
Freddie Mac Loan Lookup – Collectively, Freddie Mac and Fannie Mae own in excess of 50% of all the mortgage loans in the US so this is a good place to lookup your loan.

If you have an FHA (Federal Housing Administration) mortgage loan, a Tennessee Housing Development Agency (THDA) mortgage loan, or a USDA Rural Development loan then you will need to contact your loan servicer with questions regarding a loan modification, foreclosure prevention, or a short sale. If your loan servicer is not responsive, or not helpful then I recommend that you contact the Tennessee Housing Development Agency (THDA) or the USDA Rural Development Housing & Community Facilities Programs, whichever is applicable.

Short Sale and Foreclosure Help and Assistance for Homeowners and Property Owners in Nashville and Middle Tennessee. If you are a Nashville Tennessee, Franklin Tennessee, Brentwood Tennessee, Nolensville Tennessee, Spring Hill Tennessee, Murfreesboro Tennessee, Smyrna Tennessee, La Vergne Tennessee, or Middle Tennessee homeowner, property owner, condo owner, real estate investor, home builder or real estate developer who cannot pay your mortgage payments (due to losing your job, having your income reduced, illness, health problems, adverse business conditions, slow sales, loss of investment property tenants, vacancy issues, lack of funds to complete the project, feuding business partners, etc.), know that you will not be able to pay your mortgage, have defaulted on your mortgage, are already in foreclosure, or owe more than your home is worth, please contact me to discuss your options including a loan modification and a short sale (a real estate short sale occurs when the sale proceeds are not sufficient to pay off all the mortgages and liens on the property/home). I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR, Expert and Real Estate Investor. I primarily help sellers (homeowners, property owners, condo owners, owners of high end homes and properties (estate homes, luxury homes and executive homes), real estate investors, home builders and real estate developers) of distressed real estate, short sales, pre-foreclosures, foreclosures, investment properties, failed new construction projects and struggling commercial real estate developments located in Middle Tennessee (Rutherford County TN, Williamson County TN, Davidson County TN, Robertson County TN, Maury County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN, Belle Meade TN, Nolensville TN, Spring Hill TN, Gallatin TN, Springfield TN and Mt. Juliet TN). If you do need to short sell your home or property, or you need a quick sale due to being in foreclosure, you can request short sale and foreclosure help and assistance on my website at Get Short Sale and Foreclosure Help and Assistance from a Nashville Tennessee and Middle Tennessee Short Sale and Foreclosure REALTOR, Real Estate Expert and Real Estate Investor.

September 20, 2010 by Jim McCormack

The Truth About Home Prices

The Truth About Home Prices
Median Single Family Home Price to Median Family Income Ratio Over Time (1/1989 to Present)

As you can see on the graph below, Median Single Family Home Price to Median Family Income Ratio Over Time (1/1989 to Present), the current Median Single Family Home Price to Median Family Income Ratio (“Ratio”) is higher than at any point during the entire period evaluated except for the 2002-2008 housing bubble. The problem is that unemployment is higher that any time except for the prior few months. The question is : How can home prices, per the Ratio, be relatively higher than any non-bubble period when unemployment is extremely high and foreclosures are at record levels? The answer is: artificial government housing market propping. Once this market propping is over the organic (and true) housing market will become clear. That clarity will show that housing prices will decline as soon as this artificial government market propping ends see my previous blog post: Home Prices Headed Down.

In short, housing prices will continue to decline because current housing prices still do not reflect the current economic reality: the economy is poor, but housing prices remain “average”. This simply does not make sense. This is not my opinion, but, rather, is proven by the facts. I analyzed the data in the NAR Home Affordability Index (HAI) from 1/1989 through 7/2010 and found that the Median of the Ratio of Median Home Price to Family Income is 2.92 and the Average of the Ratio of Median Home Price to Family Income is 3.07. Over this same period, the lowest reading occurred in 12/1990 at 2.654. Therefore, it is safe to say that from an historical perspective the typical price of a median home should be about 3 times the median family income. The 7/2010 reading was over 3 at 3.032 (i.e. over 4% higher than the historical median and about the same as the historical average). The problem is that we are not in a “typical” economic environment – we have record foreclosures that seem to persist and near 10% unemployment. Given that the lowest reading of 2.654 occurred in 12/1990 and that our current economic conditions are far worse than 12/1990, it is logical to conclude that the Median Home Price to Family Income Ratio should be below 2.654. If the ratio declines to 2.5, home prices will decline by over 21%. If the ratio declines to 2.5 and family incomes decline by just 5%, home prices will decline by nearly 28%. Given that personal incomes are declining and that a 2.5 ratio is probably a bit optimistic, I believe it is very feasible that home prices will decline by an additional 30%. As a result, there will be more short sales and foreclosures. See the graph below for a representation of the Ratio of Median Home Price to Family Income Over Time and how it compares to the Average and Median of that same Ratio.

The graph shows that houses are still overpriced when compared to incomes. Keeping homes overpriced by artificially allowing more home buyers into the market and encouraging other home buyers to purchase more expensive homes (because of artificially cheap money) is completely irresponsible. Why should Americans be happy about being forced to overpay for homes (due to having to compete with home buyers who should not be home buyers, but only are do to the “government housing stimulus” described above) – that only leaves less money available for saving, investment, non-debt spending, etc. In short, it makes it harder and harder to get by on their current incomes. The American Dream is being killed by unnaturally high home prices, which are made possible by irresponsible government housing market propping. The government should just let home prices fall to where they should naturally be given the current economic situation (i.e. a lot lower than they are right now).

Short Sale and Foreclosure Help and Assistance for Homeowners and Property Owners in Nashville TN and Middle TN. If you are a Nashville Tennessee, Franklin Tennessee, Brentwood Tennessee, Nolensville Tennessee, Spring Hill Tennessee, Murfreesboro Tennessee, Smyrna Tennessee, La Vergne Tennessee, or Middle Tennessee homeowner, property owner, condo owner, real estate investor, home builder or real estate developer who cannot pay your mortgage payments (due to losing your job, having your income reduced, illness, health problems, adverse business conditions, slow sales, loss of investment property tenants, vacancy issues, lack of funds to complete the project, feuding business partners, etc.), know that you will not be able to pay your mortgage, have defaulted on your mortgage, are already in foreclosure, or owe more than your home is worth, please contact me to discuss your options including a loan modification and a short sale (a real estate short sale occurs when the sale proceeds are not sufficient to pay off all the mortgages and liens on the property/home). I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR, Expert and Real Estate Investor. I primarily help sellers (homeowners, property owners, condo owners, owners of high end homes and properties (estate homes, luxury homes and executive homes), real estate investors, home builders and real estate developers) of distressed real estate, short sales, pre-foreclosures, foreclosures, investment properties, failed new construction projects and struggling commercial real estate developments located in Middle Tennessee (Rutherford County TN, Williamson County TN, Davidson County TN, Robertson County TN, Maury County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN, Belle Meade TN, Nolensville TN, Spring Hill TN, Gallatin TN, Springfield TN and Mt. Juliet TN). If you do need to short sell your home or property, or you need a quick sale due to being in foreclosure, you can request short sale and foreclosure help and assistance on my website at Get Short Sale and Foreclosure Help and Assistance from a Nashville Tennessee and Middle Tennessee Short Sale and Foreclosure REALTOR, Real Estate Expert and Real Estate Investor.

August 24, 2010 by Jim McCormack

Home Prices Headed Down

Home Prices Headed Down

The situation is really sad and infuriating at the same time. I think we can all agree that artificially cheap and easy money (i.e. excessive lending) is what got us into this housing bubble (really a debt/lending bubble) mess to begin with. Therefore, it is incredibly foolish and irresponsible that the federal government (and some states such as CA) is trying to “solve” the problem by artificially propping up demand for homes by pushing the banks to lend more, bailing out banks, guaranteeing the trillions (yes TRILLIONS) in losses that will ultimately come from Fannie Mae and Freddie Mac, artificially keeping interest rates low by buying over $1.25 trillion in mortgage securities in order to encourage more borrowing, expanding FHA lending dramatically, giving out $8,000 tax credits to first time home buyers, etc. Homes are still overpriced when compared to incomes (see my personal research below). Keeping homes overpriced by artificially allowing more home buyers into the market and encouraging other home buyers to purchase more expensive homes (because the “money is so cheap”) is completely irresponsible. Why should Americans be happy about being forced to overpay for homes (due to having to compete with home buyers who should not be home buyers, but only are do to the “government housing stimulus” described above) – that only leaves less money available for saving, investment, non-debt spending, etc. In short, it makes it harder and harder to get by on their current incomes. The American Dream is being killed by excessively high home prices and our all knowing and caring government is causing this!. Let me say this clearly: YOU CANNOT SOLVE A PROBLEM CAUSED BY TOO MUCH DEBT BY TAKING ON MORE DEBT. It is impossible. Instead, the government should just let home prices fall to where they should naturally be given the current economic situation (i.e. a lot lower than they are right now).

The housing market is headed down as soon as the foolish government market propping ends. There is 0% chance that any market is actually “stabilizing” since that implies an actual free market. “Temporarily Artificially Propped” is a more accurate description of our current real estate market. See my blog post from November 2009 (I correctly detailed the current state of the real estate market and accurately predicted what would happen after the tax credit and other government market propping expired): Our Phony Real Estate Market. Also, see my personal research below.

There is no way that home prices have reached a bottom. I analyzed the data in the NAR Home Affordability Index (HAI) from 1/1989 through 6/2010 and found that the Median of the Ratio of Median Home Price to Family Income is 2.92 and the Average of the Ratio of Median Home Price to Family Income is 3.07. Over this same period, the lowest reading occurred in 12/1990 at 2.654. Therefore, it is safe to say that from an historical perspective the typical price of a median home should be about 3 times the median family income. The 6/2010 reading was over 3 at 3.045 (i.e. over 4% higher than the historical median and about the same as the historical average). The problem is that we are not in a “typical” economic environment – we have record foreclosures that seem to persist and 10% unemployment. Given that the lowest reading of 2.654 occurred in 12/1990 and that our current economic conditions are far worse than 12/1990, it is logical to conclude that the Median Home Price to Family Income Ratio should be below 2.654. If the ratio declines to 2.5, home prices will decline by nearly 22%. If the ratio declines to 2.5 and family incomes decline by 5%, home prices will decline by over 28%. Given that personal incomes are declining and that a 2.5 ratio is probably a bit optimistic, I believe it is very feasible that home prices will decline by an additional 30%. As a result, there will be more short sales and foreclosures. See the graph below for a representation of the Ratio of Median Home Price to Family Income Over Time and how it compares to the Average and Median of that same Ratio.

April 22, 2010 by Jim McCormack

Short Sales Will Increase

Short Sales Will Increase

According to this Diana Olick CNBC article, Let the Short Sales Begin, the Obama Administration’s Home Affordable Foreclosure Alternatives Plan (aka HAFA) (effective April 5, 2010), which is offering financial “incentives to borrowers, servicers, investors and second lien holders” to encourage short sales, plus the coming wave of foreclosures (shadow foreclosures, Option ARM and related foreclosures) will result in a substantial increase in the number of short sales. I absolutely agree. The question is whether the increase will be enough. The article goes on to state that the “Administration increased the incentives such as “doubling the amount of cash to $3000 offered as borrower “relocation expenses” and juicing the payoffs to the others as well. Of course they want to push short sales because of course they know that their modification program isn’t working as planned.” That is no surprise. Very few people I talk to are granted loan modifications and even the ones that are know that the loan modification it is a band-aid, not a solution.

Short Sale and Foreclosure Help and Assistance for Real Estate Investors, Home Builders and Developers in Nashville TN and Middle TN. If you are a Nashville Tennessee, Franklin Tennessee, Brentwood Tennessee, Nolensville Tennessee, Spring Hill Tennessee, Murfreesboro Tennessee, Smyrna Tennessee, La Vergne Tennessee, or Middle Tennessee real estate investor, home builder, condo developer or real estate developer who cannot pay the property/project mortgage payments (due to the poor economy, adverse financing conditions, slow sales, loss of investment property tenants, vacancy issues, lack of funds to complete the project, feuding business partners, etc.), have already defaulted on the mortgage, or are already in foreclosure, or owe more than the property/project is worth, please contact me to discuss your options including a short sale (a real estate short sale occurs when the sale proceeds are not sufficient to pay off all the mortgages and liens on the property/project). I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR and Expert. I primarily help sellers (property owners, real estate investors, home builders and real estate developers) of distressed real estate, short sales, pre-foreclosures, foreclosures, investment properties, failed new construction projects and struggling commercial real estate developments located in Middle Tennessee (Rutherford County TN, Williamson County TN, Davidson County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN, Belle Meade TN, Nolensville TN, Springfield TN, Gallatin TN and Mt. Juliet TN). If you do need to short sell your home or property, or you need a quick sale due to being in foreclosure, you can request short sale and foreclosure help and assistance on my website at Get Short Sale and Foreclosure Help and Assistance from a Nashville Tennessee and Middle Tennessee Short Sale and Foreclosure REALTOR, Real Estate Expert and Real Estate Investor.

April 5, 2010 by Jim McCormack

How To Stop Foreclosure

How To Stop Foreclosure

Homeowners and real estate owners who are in foreclosure, or who have received a letter from their mortgage lender’s attorney stating that the foreclosure process will begin, or have received a notice of default frequently ask me how they can stop the foreclosure. Therefore, I listed the best ways to stop a foreclosure action below depending on whether you want to keep your home or investment property.

Options if you want to keep your home or investment property:

Mortgage Refinance – If you have not missed a payment yet you still may be able to refinance into a more affordable loan. You should investigate this option as soon as you know that there may be financial trouble as this option will only remain viable for a short period of time. If your home is worth substantially less than the mortgage(s) you need to refinance this option will not work.
Loan Modification – Contact your mortgage lender as soon as you miss a mortgage payment and ask about their loan modification options. Don’t expect much help, though, as most loan modification requests are not approved.
Loan Forbearance – If you are denied for a loan modification due to your financial issue being temporary you may be able to get a loan forbearance agreement with your lender. Basically, forbearance is a temporary reduction in your mortgage payment (usually 3-6 months) where the part of the payments that you did not make (i.e. the difference between the normal payments and the reduced payments) is added to the final forbearance payment. Due to the large final payment, this option most likely only a temporary way to stop foreclosure. However, getting the foreclosure stopped is absolutely necessary so that you can review other options (see below).

Options if you do not want to (or or not able to) keep your home or investment property:

Short Sale – A short sale is a sale of real estate where the sale proceeds are not sufficient to pay off the liens on the real estate (usually the mortgage(s), tax liens and unpaid HOA and condo fees). This is the best way to proceed in that you can frequently, but not always, get the mortgage debt(s) fully satisfied and get released from any future obligations. A short sale is also less damaging to your credit than the other options. If you decide that a short sale is your best option I highly recommend that you chose a REALTOR who specializes in short sales (i.e. not a traditional REALTOR, or neighborhood expert), or a short sale investor. In either case, you need someone who knows how to close short sales since they are very different than regular real estate sales.
Bankruptcy – If you have a lot of unsecured debt (i.e. personal loans, credit cards, unpaid bills, collection accounts, etc.) and just need to buy time to evaluate other options a bankruptcy could work for you. Please know that bankruptcy will not save your home. It will only delay the foreclosure unless the lender wants to work with you. Due to the complex laws which regulate personal bankruptcy, you will need to contact a bankruptcy attorney.
Deed in Lieu of Foreclosure – Basically, a Deed in Lieu of Foreclosure is where you deed your home directly to your mortgage lender in exchange for them stopping the foreclosure. While this option is better than foreclosure, at least from a credit score standpoint, it will usually not get you released from the debt and probably will not work if you have other mortgages on the property.

Please note that all the options above will be slightly more difficult for real estate investors than they are for homeowners.

Short Sale and Foreclosure Help and Assistance for Homeowners and Property Owners in Nashville TN and Middle TN. If you are a Nashville Tennessee, Franklin Tennessee, Brentwood Tennessee, Nolensville Tennessee, Spring Hill Tennessee, Murfreesboro Tennessee, Smyrna Tennessee, La Vergne Tennessee, or Middle Tennessee homeowner, property owner, condo owner, real estate investor, home builder or real estate developer who cannot pay your mortgage payments (due to losing your job, having your income reduced, illness, health problems, adverse business conditions, slow sales, loss of investment property tenants, vacancy issues, lack of funds to complete the project, feuding business partners, etc.), know that you will not be able to pay your mortgage, have defaulted on your mortgage, are already in foreclosure, or owe more than your home is worth, please contact me to discuss your options including a loan modification and a short sale (a real estate short sale occurs when the sale proceeds are not sufficient to pay off all the mortgages and liens on the property/home). I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR and Expert. I primarily help sellers (homeowners, property owners, condo owners, owners of high end homes and properties (estate homes, luxury homes and executive homes), real estate investors, home builders and real estate developers) of distressed real estate, short sales, pre-foreclosures, foreclosures, investment properties, failed new construction projects and struggling commercial real estate developments located in Middle Tennessee (Rutherford County TN, Williamson County TN, Davidson County TN, Robertson County TN, Maury County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN, Belle Meade TN, Nolensville TN, Spring Hill TN, Gallatin TN, Springfield TN and Mt. Juliet TN). If you do need to short sell your home or property, or you need a quick sale due to being in foreclosure, you can request short sale and foreclosure help and assistance on my website at Get Short Sale and Foreclosure Help and Assistance from a Nashville Tennessee and Middle Tennessee Short Sale and Foreclosure REALTOR and Real Estate Expert.

April 5, 2010 by Jim McCormack

Housing Headed For Trouble

Housing Headed For Trouble

As a short sale specialist, my listings usually sell very quickly. However, since March 2010 began my short sale listings are selling more slowly than they did previously. I attribute this to the first-time home buyer tax credit since those buyers were the primary buyer pool in my market Middle Tennessee. I think this is particularly true for most markets in the US where the tax credit had a substantial short term impact (particularly in lower priced markets where the $8,000 tax credit is a fairly substantial percentage of the sale prices). Now that the first time home buyer tax credit is nearing expiration, those tax credit buyers are, apparently, not willing to buy new short sale listings (they will still buy pre-approved short sales that can be closed in 30-45 days with a reasonable degree of certainty) since there is no guarantee that they will be able to close by 6/30/2010 (the expiration of the tax credit). Therefore, the only way to sell these short sale listings is to lower the price. These increasingly lower priced short sale and pre-foreclosure listings will put downward pressure on new construction and other retail priced listings.

The next phase of the great real estate meltdown is beginning to unfold as I predicted it would over 1 year ago (see my blog post from 11/2009 for a detailed breakdown of the drivers of the real estate market: Our Phony Real Estate Market). Unfortunately, the tax credit was nothing more than a temporary band-aid solution (really a gimmick) that will ultimately result in the tax credit buyers ending up in foreclosure at a very high rate since they are underwater the moment of closing (most put little to nothing down and have very little cash reserves) and will be even more so as the market declines. The buyers who purchased short sales and foreclosures as substantial discounts will likely be fine. That is why I only sell those types of properties. Unfortunately, home buyers who purchased new construction or other retail priced listings will be in trouble in the next few years. The main problem is that the entire US economy was built on debt. Consumer spending, which was 70%+/- of the entire US economy, was built largely on consumer debt (think credit cards, home equity loans, HELOC’s, personal loans, etc.). Without this debt there can be little to no growth in consumer spending, and by extension, little to no growth in the US economy, until personal incomes increase at least enough to pay down current debt and still leave enough to spend more. Given that unemployment still hovers near 10% (the real number is about 16%) this will not happen anytime soon. It is just a matter of simple accounting. In addition to the end of the tax credit buyer ear there is the Option ARM foreclosure wave coming. As a result, there will lots of foreclosures and short sales over the next 5-10 years.

April 2, 2010 by Jim McCormack

Housing Prices Declining Again

Housing Prices Declining Again

According to this Real Estate Economy Watch article, Fear Seen Driving Prices Lower than Last 20 Years, the housing markets in most US cities “will see prices fall below the lowest levels of the last 20 years” according to the House Price Forecast from University Financial Associates (UFA) in Ann Arbor Michigan.

The article quotes Dennis Capozza, the Dykema Professor of Business Administration in the Ross School of Business at the University of Michigan, and a founding principal of UFA, as saying the “Detroit metro was the canary in the coal mine this cycle, with falling house prices arriving earlier than in other metros. Other metros that have already or will soon converge to pre-bubble real prices include Las Vegas, Phoenix, the inland California metros and many south Florida metros.”

Overall, the UFA’s forecast “would take the national median price of a home in most markets below $101,000, the national median in 1990, according to the Census Bureau.” This prediction comes after other recent data which shows that housing prices are headed downward again. This will result in more short sales and foreclosures as underwater homeowners and real estate investors walk away from their upside down (i.e. negative equity) homes and properties.

April 2, 2010 by Jim McCormack

White House Admits Housing Will Not Recover Anytime Soon

White House Admits Housing Will Not Recover Anytime Soon

I read this Economy Watch article about the March 2010 US Unemployment Rate in which the White House basically admits (at least in a round about way) that the US housing market cannot rebound to anywhere near peak 2005-2007 (depending on the market) price levels until at least 2017. The article doesn’t actually say this, but it states “The White House does not expect the rate to return to its healthy-economy level of 5 percent until at least 2017.” Based on the fact that a healthy (i.e. low) unemployment rate is required to drive housing (employment has long been one of the major drivers of housing), one can only logically conclude that housing prices cannot improve to peak levels until unemployment also does the same. Therefore, the White House’s 2017 “healthy-economy” unemployment rate prediction is also basically a prediction for the housing market as well. Given that political predictions usually appear to be “spun” for political gain I a guessing that 2017 is an optimistic estimate.

There are those like myself that remain “bearish” on the economy for the next several years. However, despite this many people are still “bullish” on the US economy due to the “economy always having bounced back.” Unfortunately, I believe that this time is different (in a bad way) due to the following:

Absurdly high levels of private and public debt that is near peak levels.
Ill advised government deficit spending that is only adding to the already enormous debt. Think healthcare (aka Obamacare), Cap and Trade (aka Cap and Tax), etc.
The US’s rapid movement toward socialism.
Unlike previous recessions, US manufacturing is basically dead and not likely to come back.

The issues above (i.e. combination of the huge debt, accelerated deficit spending and movement to socialism) will result in the US government having to hike taxes significantly, which will in turn reduce the incentive and ability to earn a profit so businesses will hire less workers, fewer business will be started, fewer businesses will be expanded and more businesses will close or merge resulting in less jobs.

I think many people will be “surprised” and “shocked” when all of this ends badly. They will then be “uncertain” about the future, etc. However, my view is that the near future (unforseen natural disasters, etc. aside) is little more than a small extension of the past and present, and, as a result is already set to a large degree based on the events and actions in the past and recent past. Given that I am reasonably sure that the short term future is very dim for the US economy, housing and more. As a result there will be many more foreclosures and short sales over the next 5-10 years.

February 8, 2010 by Jim McCormack

7.2 Million Delinquent Mortgages As Of December 2009

7.2 Million Delinquent Mortgages As Of December 2009
7.2 Million Mortgage Loans In Default With An Estimated 1.0 Million REO’s

According to this LPS Mortgage Monitor (a mortgage industry performance report provided by LPS Applied Analytics), LPS Mortgage Monitor: January 2010 Mortgage Performance Observations: Data as of December 31, 2009 Month-end and the Executive Summary, in December 2009 mortgage loan delinquencies and defaults increased significantly and foreclosures (REO’s or bank owned properties) reached the one million mark. The Executive Summary noted the following:

Delinquency rates have surpassed the 10% level; factoring in foreclosures, the total non-current rate sits at 13.3%.
Industry extrapolations indicate that over 7.2 million loans are currently behind on payments with an estimated nearly 1 million properties in REO status.
Average number of days delinquent for loans in foreclosure has increased 63 percent from January 2008 to December 2009, rising from 249 to 406 days delinquent.
Prime loans have experienced a worse pace of deterioration on a relative basis than subprime, FHA and all loans as a whole. Within prime loans, those with current unpaid principal balances between $417,000 and $600,000 have performed the worst.
The percent of “new” serious delinquencies (from the population of loans that were current as of year-end 2008) sits at 4.64%, higher than any other year analyzed for the same period. Extrapolated counts result in approximately 2.3 million “new” 60-day delinquent loans from December 2008 to year-end 2009.
Roll rates show the largest percentage increase in loans improving since the same period in 2008.
2009 marks the only time during the last five years that the six-month deterioration ratio has dropped from September to December.
Foreclosure starts increased slightly in December – still the second lowest month in 2009 based on volume. Foreclosure sales were stable month over month and remain at relatively low levels.
2009 vintage loans are performing better than loans from any of the prior five years and have been steadily improving as more origination months are added to the loan pool. However, more restrictive underwriting is driving this behavior rather than actual improved consumer behavior. Liquidity is still not available where it is needed most.

My opinion of the above information is as follows:

Most of the information above shows that mortgage loan delinquencies, and therefore, foreclosures, are getting much worse. For example, the total percentage of delinquencies at 13.3%, the average number of days per delinquent loan, the continued deterioration of prime loans and the new mortgage loans serious delinquent rate of 4.64% are reasons to believe that things are getting much worse.
The information which shows a positive trend is, for the most part, artificially and temporarily skewed. For example, the improved roll rates, the 6 month deterioration ratio showing improvement and the 2009 vintage loans performing better are all skewed by the fact that most of these new loans are made to buyers/borrowers who perceive that their home or real estate purchase was a “good deal”. Since most of these buyers/borrowers used FHA/VA/USDA Rural Housing loan programs (see my blog post Our Phony Real Estate Market) they have little to no initial equity. Due to the continued housing market decline, huge numbers of these buyers/borrowers will soon be in negative equity positions, which will result in increasing mortgage loan default rates among these buyers/borrowers in the near future. In addition to that the relatively low foreclosure starts in December 2009 were artificially held down by government mandated loan modification and foreclosure moratoria, which will go end soon with the result of foreclosures increasing again.

If you are a Middle TN homeowner, property owner, condo owner, real estate investor, home builder or real estate developer who cannot pay your mortgage payments (due to losing your job, having your income reduced, illness, health problems, adverse business conditions, slow sales, loss of investment property tenants, vacancy issues, lack of funds to complete the project, feuding business partners, etc.), know that you will not be able to pay your mortgage, have defaulted on your mortgage, are already in foreclosure, or owe more than your home is worth, please contact me to discuss your options including a loan modification and a short sale (a real estate short sale occurs when the sale proceeds are not sufficient to pay off all the mortgages and liens on the property/home). I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR and Expert. I primarily help sellers (homeowners, property owners, condo owners, owners of high end homes and properties (estate homes, luxury homes and executive homes), real estate investors, home builders and real estate developers) of distressed real estate, short sales, pre-foreclosures, foreclosures, investment properties, failed new construction projects and struggling commercial real estate developments located in Middle Tennessee (Rutherford County TN, Williamson County TN, Davidson County TN, Robertson County TN, Maury County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN, Belle Meade TN, Nolensville TN, Spring Hill TN, Gallatin TN, Springfield TN and Mt. Juliet TN). If you do need to short sell your home or property, or you need a quick sale due to being in foreclosure, you can request short sale and foreclosure help and assistance on my website at Get Short Sale and Foreclosure Help and Assistance from a Nashville Tennessee and Middle Tennessee Short Sale and Foreclosure REALTOR and Real Estate Expert.

January 25, 2010 by Jim McCormack

Homes Sales Plunge In December 2009

Homes Sales Plunge In December 2009

According to this MSNBC article, Home sales tumble as first-time buyers back off – December’s drop is largest in more than 40 years, sales of existing (previously occupied) homes declined by almost 17% in December 2009, which is the largest such drop in over 40 years. 2009 overall saw home sales increase for the first time in 4 years (about 5% over 2008 home sales figures), but this came at a cost – home prices declined by over 12% in 2009, the worst such decline since the Great Depression. Apparently, the December 2009 sales figures are 21% higher than the sales volume bottom of December 2008, but 25% lower than the December 2005 peak. The article goes on to state that the housing market could worsen this spring when the the Federal Reserve ends its mortgage securities purchasing program, which has been artificially keeping interest rates low. In addition to that the home buyer tax credit expires this spring (4/30/2010 to be exact). According to the National Association of REALTORS (NAR), first-time buyers accounted for about 50% of all home sales in November 2009, but only 43% in December 2009. Given this information, I think the ending of the home buyer tax credit this spring is a legitimate housing market concern. The article states “December’s sales fell 16.7 percent to a seasonally adjusted annual rate of 5.45 million, from an unchanged pace of 6.54 million in November, the National Association of Realtors said Monday. Sales had been expected to fall by about 10 percent, according to economists surveyed by Thomson Reuters.” I guess the proper technical term for this would be “oops”. In addition to the end of the mortgage securities purchasing program and the home buyer tax credit the problems of ever increasing foreclosures and 10%+ unemployment practically guarantee that housing prices will decrease in 2010.

Below are a few other highlights from the article:

Anna Piretti, senior economist at BNP Paribas, said “The numbers clearly indicate that the rebound in housing demand observed so far has been largely supported by government programs.” I agree, but I predicted this months ago – see my blog post Our Phony Real Estate Market.
Paul Dales, U.S. economist with Capital Economics, said “The report places a large question mark over whether the recovery can be sustained when the extended tax credit expires.” To me there is no “question mark” – there will not be a housing recovery any time soon.
Lawrence Yun, chief economist of NAR, “cautioned that the (housing) recovery will depend on whether the economy starts adding jobs in the second half of the year.” Really!? While I have always known that jobs spur housing, this is the first time I have heard Yun say this. See my blog post Real Estate Fiction where I quote Yun as saying “With home sales heading up and inventories shrinking, prices are stabilizing. These are the key conditions needed for housing to lead the economy into growth mode. Once that happens, jobs will follow.” This does not match Yun’s latest statement that the housing market depends on jobs. Which one is it Lawrence?
“The inventory of unsold homes on the market fell about 7 percent to 3.3 million. That’s a 7.2 month supply at the current sales pace, close to a healthy level of about six months.” While this sounds reasonably positive it does not factor in all the “shadow inventory” that is lurking in the near future. See my blog post Experts: More Rough Times Ahead for U.S. Economy to get a better idea of what I mean.

My conclusion remains the same: housing prices will continue to decline due to poor market conditions and lots of distress sales (short sales and foreclosures). Real estate and housing are simply showing the symptoms of the real problem: debt (more specifically – too much debt).

Short Sale and Foreclosure Help and Assistance in Middle Tennessee. If you are a Nashville Tennessee, Franklin Tennessee, Brentwood Tennessee, Nolensville Tennessee, Spring Hill Tennessee, Murfreesboro Tennessee, Smyrna Tennessee or La Vergne Tennessee homeowner, property owner, condo owner, real estate investor, home builder or real estate developer who cannot pay your mortgage payments (due to losing your job, having your income reduced, illness, health problems, adverse business conditions, slow sales, loss of investment property tenants, vacancy issues, lack of funds to complete the project, feuding business partners, etc.), know that you will not be able to pay your mortgage, have defaulted on your mortgage, are already in foreclosure, or owe more than your home is worth, please contact me to discuss your options including a loan modification and a short sale (a real estate short sale occurs when the sale proceeds are not sufficient to pay off all the mortgages and liens on the property/home). I am a Middle Tennessee distressed real estate, short sale, pre-foreclosure (preforeclosure) and foreclosure REALTOR and Expert. I primarily help sellers (homeowners, property owners, condo owners, owners of high end homes and properties (estate homes, luxury homes and executive homes), real estate investors, home builders and real estate developers) of distressed real estate, short sales, pre-foreclosures, foreclosures, investment properties, failed new construction projects and struggling commercial real estate developments located in Middle Tennessee (Rutherford County TN, Williamson County TN, Davidson County TN, Robertson County TN, Maury County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN, Belle Meade TN, Nolensville TN, Spring Hill TN, Gallatin TN, Springfield TN and Mt. Juliet TN). If you do need to short sell your home or property, or you need a quick sale due to being in foreclosure, you can request short sale and foreclosure help and assistance on my website at Get Short Sale and Foreclosure Help and Assistance from a Middle Tennessee Short Sale and Foreclosure REALTOR and Real Estate Expert.

January 22, 2010 by Jim McCormack

Tennessee Unemployment Rises Again – US Unemployment Rises Again – Housing Slumps Again

Tennessee Unemployment Rises Again – US Unemployment Rises Again – Housing Slumps Again

According to this Tennessean article, TN jobless rate rises unexpectedly, the Tennessee unemployment rate spiked to 10.9% in December 2009 from 10.2% in November 2009. During this time the US unemployment rate also increased. According to the article the GM layoffs, sluggish holiday hiring and continued losses in construction and transportation jobs were the main causes of the spike in unemployment. The article quotes Bill Fox, an economist at the University of Tennessee-Knoxville, as saying “Those are big losses in industries that had already experienced big losses. Bad weather and a weaker-than-expected housing market may explain the construction losses.” This is all good information, but I fail to see how the spike in unemployment and weakening housing market were “unexpected”. The economy is not recovering – there is no such thing as a “jobless recovery”. There will be more foreclosures and short sales, which will be factors in pushing housing prices down further.

Nashville Tennessee Foreclosure Help

Nashville | Murfreesboro | Franklin | Short Sale REALTOR | Foreclosure Help | Stop Foreclosure | Jim McCormack | 615-796-6898

Short Sale and Foreclosure Help and Information

Waiting Periods to Buy a Home After Foreclosure, Deed-in-Lieu, Short Sale and Bankruptcy

Mortgage Banking Official Says Loan Modifications Virtually Impossible

Brentwood Governors Club Seeing More Distress Sales

Law Professor Advocates Strategic Mortgage Loan Default

Financial Distress Hitting Affluent Towns and Neighborhoods

Franklin TN Distressed Sales Activity Increasing

Brentwood TN Distressed Sales Activity Increasing

LaVergne TN Distressed Sales Activity Increasing

Smyrna TN Distressed Sales Activity Increasing

Who Owns My Mortgage Loan?

The Truth About Home Prices

Home Prices Headed Down

Short Sales Will Increase

How To Stop Foreclosure

Housing Headed For Trouble

Housing Prices Declining Again

White House Admits Housing Will Not Recover Anytime Soon

7.2 Million Delinquent Mortgages As Of December 2009

Homes Sales Plunge In December 2009

Tennessee Unemployment Rises Again – US Unemployment Rises Again – Housing Slumps Again