| 7 tips for buying foreclosures and Obama ups pressure on banks to help homeowners |
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--(www.FinancialNewsUSA.com)-- 12/18/2009 - Real Estate news provided by Financial News USA. Just because prices are low doesn't mean you should make snap decisions or buy something that isn't right. Here are 7 tips for making sure you don't get taken for a ride. "Everybody and their grandmas are trying to buy foreclosures," said Glenn Kelman, CEO of Redfin, an online, discount broker. But that doesn't mean you should lose your head. Banks put repossessed homes back on the market at cut-rate prices because quick sales help avoid the expense of upkeep, such as property taxes, insurance, heat and electricity. Those lowball prices represent golden opportunities, but they also attract dozens of buyers who may bid until homes are no longer bargains. Don't get caught up in a bidding war. Instead, carefully calculate what you want to spend and do not exceed that price. Smart buyers establish relations with asset managers at banks. This may reward them with inside information or first crack at new foreclosures hitting the market. [Read the full article] NEW YORK (CNNMoney.com) -- Looking to jumpstart its foreclosure prevention plan, the Obama administration announced new steps Monday to pressure loan servicers to help homeowners long term. Responding to complaints that too many borrowers are stuck in trial adjustments, administration officials said they will now focus more heavily on getting borrowers into permanent modifications. Government swat teams will go to the institutions to see what the holdup is and banks will have to submit progress reports twice a day during December. "Now it's up to the banks to do their part to covert borrowers to permanent modifications," said Michael Barr, an assistant Treasury secretary. "Servicers to date have not done a good enough job." Only a tiny percentage of troubled homeowners have received permanent modifications, raising concerns about the effectiveness of the $75 billion effort. [Read the full article] In October the National Association of Realtors recorded an unprecedented ninth consecutive month of increases in the number of signed contracts. Although these are not closed sales, and some deals can fall through, signed contracts are a good indicator of where the housing market is headed. Between September and October NAR's Pending Home Sales Index rose 3.7% to 114.1 from 110 in October. But the index is 31.8% higher than a year ago, when it was 86.6. That's the biggest year-over-year gain in the history of the index. The PHSI is also at its highest level since March 2006, and the rise confounded expert expectations. A panel of industry analysts put together by Briefing.com had forecast a 1% drop in new contracts. NAR's chief economist, Lawrence Yun, gives much of the credit for increased sales to the homebuyer's tax credit, which first-time homebuyers could claim to reduce their taxes by up to $8,000. [Read the full article] Currently, FHA loans comprise more than 30% of the entire home-loan market. But as some of those insured loans have defaulted, the FHA loan-guarantee fund has slipped below the Congressionally mandated 2% level. As a result, some lawmakers are suggesting that FHA loans need to be more expensive to obtain. In fact, a House bill, the FHA Taxpayer Protection Act of 2009, would increase the minimum down payment required to obtain an FHA loan to 5% from 3.5%. That, sponsor Rep. Scott Garrett, R, N.J., believes, would make borrowers more committed to maintaining their mortgages. Almost 90% of FHA purchase loans issued between January and August 2009 had loan-to-value (LTV) ratios of 96 or higher, according to written testimony from Robert Story, chairman of the Mortgage Bankers Association. That amounts to a very small commitment on the parts of buyers. [Read the full article] About Financial News USAFinancial News USA is a Next Generation Financial Communications firm focused on the distribution of market moving news. Financial News USA has developed leading edge e-publishing tools including programming proprietary RSS feeds and enabling open source press release publishing across its network. Financial News USA has been aggressively expanding its news distribution network by targeting direct feeds to financial news and data providers such as FinancialContent, Yahoo (NASDAQ: YHOO), among others. Financial News USA offers a free news feed available online (www.financialnewsusa.com) to websites and financial services looking for content and for individual investors looking to stay informed on the financial markets. Financial News USA and its affiliates charge each client cash for news distribution and may take an equity position in the companies mentioned herein, please visit the disclaimer at www.financialnewsusa.com. 
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