Two positive items came across my desk this week;  The first is that the rate of foreclosures in Rhode Island has started to slow down, according to RealtyTrac, an Irvine California company that tracks foreclosures.  Nearly 1,600 foreclosure filings were made during the 3rd quarter, up 33% from the same period last year, but down 3.7% from the second quarter. Our decline in recent foreclosures may be related to the increase in short sales, 27% of all single family homes that closed in August were short sales or foreclosures, according to the Rhode Island Association of Realtors.

The National Association of Realtors also reported on Friday that sales of existing homes rose by 5.5 % in September compared to August, the best increase since July 2003. Even with the gain in sales, prices kept falling. The median sales price dropped to $191,600, down 9 %. Lawrence Yun, chief economist for NAR, said a sales turnaround first seen in California was beginning to broaden to other regions of the country including Colorado, Kansas, Minnesota, Missouri and Rhode Island.

The bad news is unemployment continues to rise, putting more downward pressure on sales and prices.  With the post-boom demise of the no doc “liar’s loans”, jobs are once again a requisite for home purchases. And while this might seem like a no brainer, with stricter lending guidelines, more buyers should be able to fulfill their obligations, resulting in fewer foreclosures, and further stabilization in the market.

This Week’s Real Estate Insight:

Will someone create some jobs so I can sell some houses!!!

 

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 HUD officials have compiled a list of lenders participating in the Hope for Homeowners program, which  could help homeowners refinance problem loans into new 30-year fixed-rate mortgages insured by the FHA.
There are four ways that a distressed homeowner could pursue participation in the HOPE for Homeowners program

• Homeowners may contact their existing lender and/or a new lender to discuss how to qualify and their eligibility for this program. 
• Servicers working with troubled homeowners may determine that the best solution for avoiding foreclosure is to refinance the homeowner into a HOPE for Homeowners loan. 
• Originating lenders who are looking for ways to refinance potential customers out from under their high-cost loans and/or who are willing to work with servicers to assist distressed homeowners.  
• Counselors who are working with troubled homeowners and their lenders to reach a mutually agreeable solution for avoiding foreclosure

This Week’s Real Estate Insight:

Borrowers need the cooperation of their existing lender or loan servicer, as the program will only provide loans equal to 90 percent of a home’s current appraised value. The holder of the existing mortgage may choose to foreclose on a troubled borrower or offer them a workout or loan modification rather than accept the losses associated with declining property values.

 

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