Should FHA home loans be more expensive?

This could trigger a whole lot more REO's and Short Sales...

FROM CNN.com: Should FHA home loans be more expensive?

NEW YORK (CNNMoney.com) -- Should it be more expensive to get a mortgage insured by the Federal Housing Administration?

That is the question the House Financial Services Committee examined on Wednesday afternoon.

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.

Keep this in mind as you list REOs and List Short Sales

Home Buyer Tax Credits

Here's a great FAQ on Home Buyer Tax Credits. Follow the link for detailed answers:

Frequently Asked Questions
About the Move-Up/Repeat Home Buyer Tax Credit

The Worker, Homeownership, and Business Assistance Act of 2009 has established a tax credit of up to $6,500 for qualified move-up/repeat home buyers (existing home owners) purchasing a principal residence after November 6, 2009 and on or before April 30, 2010 (or purchased by June 30, 2010 with a binding sales contract signed by April 30, 2010).

The following questions and answers provide basic information about the tax credit. If you have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.

Short Sales are Going to Be Around for a LONG, LONG TIME

From MSNBC.com: Updated: Mortgage delinquencies hit record high

WASHINGTON - More than 14 percent of American homeowners with a mortgage were either behind on their payments or in foreclosure at the end of September, a record-high for the ninth straight quarter and a problem that could threaten the economic recovery.

The Mortgage Bankers Association's report Thursday adds to fears that the housing market and broader recovery could be thwarted by the continuing surge in home loan defaults, especially as the unemployment rate keeps rising. Lost jobs, rather than the shady loans made during the housing boom, are now the main reason homeowners fall behind on their mortgages.
Read it all.

Mortgage-Delinquency Rate Rose to New High in 3rd Quarter

If you can't list short sales, you're missing out on plenty of business.

From the WSL.com:

Mortgage-Delinquency Rate Rose to New High in 3rd Quarter

Mortgage delinquencies rose for the 11th straight time to a new high in the third quarter, although the rate of increase again relaxed a bit, credit information company TransUnion reported Tuesday.

"Until the housing market can consistently demonstrate several months of home value appreciation and the unemployment rate improves, mortgage delinquency will likely continue to rise," said F.J. Guarrera, vice president of TransUnion's financial services division.

Short Sales are Better Option for Most Homeowners in Trouble

From MSNBC.com:

Pace of mortgage help rising but still slow

PLANO, Texas - Shontaye Edwards spends her day in a gray cubicle at a Bank of America call center in this Dallas suburb. On the other end of the phone line are homeowners — tense, exasperated and looking for help.

They often call with questions about the Obama administration's plan to help borrowers modify their mortgages, but many simply don't qualify. They make too much money, or too little. They have too much debt. They don't actually live in the home.

Lots of opportunity out there...

If Only 20% Take Loan Modificatosn, 80% Need Short Sales

Lots of people out there need to Short Sale Agents. Are you ready to help them?

From CNNMoney.com:

Obama home rescue: 650,000 get help
Latest report shows that 20% of eligible borrowers have gotten trial modifications under administration's $75 billion mortgage relief plan.

NEW YORK (CNNMoney.com) -- Some 650,000 troubled borrowers have been put into trial loan modifications under the president's foreclosure rescue plan, the Treasury Department said Tuesday.

That number represents 20% of eligible homeowners at least 60 days behind in their payments, according to the Treasury report. This is up from 16% a month earlier.

Despite the progress, housing counselors say the number of people falling into foreclosure vastly exceeds the ranks getting assistance. The number of filings hit a record high of 937,840 in the third quarter, according to RealtyTrac, an online marketer of foreclosed homes. That's a 5% increase from the second quarter and a 23% jump over the third quarter of 2008.

This is going to keep the SHort Sale Listings Coming...

From WSJ.com:

Seller-Funded Down Payments Still Plague FHA

Seller-funded down payment “gifts” appear to be of the sort that keep on giving.

It was a little over a year ago that FHA finally prevailed in a years-long effort to rid itself of gift programs that allowed home sellers to fund 3% down payments for borrowers who took out FHA-backed home loans. But the recently released independent audit for the FHA, which shows that the agency’s reserves for unexpected losses have fallen to razor thin levels, shows that seller-funded down payments continue to account for an outsized share of losses.

From 2002-2008, these gift programs essentially allowed folks to buy homes with no money down. Nonprofit agencies provided the required down payments to home buyers, and the sellers typically made a donation to the nonprofits. (See any one of three Page One stories that the Journal did over the years: U.S. Backed Mortgage Program Fuels Risks, Scrutiny of Down-Payment Gifts Threatens Charitable Movement, and Home Buyers’ Down Payments Are Now Paid by Some Builders.)

The problem with the loans, of course, is that buyers who have no skin-in-the-game are more likely to default on their mortgage. “Those facilities created too many homeowners in the FHA portfolio that were not equipped for the financial responsibilities of homeownership,” the agency said in its report to Congress.

The FHA said on Thursday that it’s now badly depleted reserves would be more than $10 billion higher without them—enough to put the agency’s capital reserve ratio at the minimum 2% required by law…