42% felt the government should NOT provide financial help.
25% felt the government should provide financial help

The poll went on to ask who’s responsible for the mortgage quagmire:

52% said it was mortgage lenders and brokers.
21% fingered government regulators
16% faulted home buyers themselves.
11% blamed someone else.

Of note is that nearly half (48%)feel Direct Lenders are most responsible for making sure borrowers are able to pay their mortgages and should be required to modify loan terms for mortgage holders who couldn’t afford their current terms.

“Even though the sub-prime crisis directly affects only a small proportion of Americans, the damage to Americans’ trust of direct mortgage lenders is widespread and may long outlast this crisis. Direct lenders should reach out to their customers and potential customers now to begin to restore their trust,” commented Harris Interactive’s financial services Sr. VP, Peggy Lebenson.

From where I sit I must say I'm not shocked by the survey results. Caveat Emptor seems to be the prevailing sentiment. But that doesn't temper my sadness for those who are loosing their houses due to poor decisions they made regarding financing, decisions in MY opinion which were largely based upon recommendations from a loan professional who they put their trust and faith in to guide them in making good decisions. Shame on them.

Sure, there were some buyers who knew better and who were looking to make a fast buck while the market was heading for the stratosphere, and for them I have no pity, but unfortunately those who didn't know better are now being punished pretty severely.

Let's just hope that a BIG lesson is learned from this and remembered the next time we enter a real estate market with high demand, low inventory, and home lenders whose main criteria of qualification is fogging a mirror...

You can read the entire survey here

The National Association of Realtors is among those saluting the president's action, calling it "an issue of fairness and not kicking people when they are down."

Read more here.

According to a report just released by the Associated Press U.S. home prices fell in October for the 10th consecutive month, posting their largest drop since early 1991.

The record 6.7 percent slide in the Standard & Poor’s/Case-Shiller home price index also marked the 23rd consecutive month that prices either fell or grew more slowly than the month prior.

“No matter how you look at these data, it is obvious that the current state of the single-family housing market remains grim,” said Robert Shiller, who helped create the index, in a statement.

To read the entire release click here.

Now reconcile that with these housing-related gems hitting the wires this week:

* Existing Homes Sales dipped to 4.97 million in October, the lowest since 1999
*New Homes Sales counted 728,000, just off its 12-year lows
*The supply of homes on the market is now at 10.8 months

Somewhere, there is a disconnect.

However, you can put me in the camp of "now is a good time to buy". But not for reasons you would expect.

Yes, home values are relatively low and so are mortgage rates. But, with mortgage guidelines getting more airtight with each passing week, I am concerned that even strong credit borrowers will have financing difficulty as soon as six weeks from now.

Now is a good time to buy because getting financing may be too challenging for some people very, very soon.

(Image courtesy: Wall Street Journal Online)

Under terms of an agreement hammered out between the administration and lenders, interest rates would be frozen for five years on certain subprime mortgages, congressional aides said.

To read the entire article click here.

“Financing issues have dogged entry-level buyers since early 2007, but they spilled over into the middle and upper-tier markets in the last few months,” said C.A.R. President William E. Brown. “The decline in sales at the upper end of the market contributed to a significant decline in the statewide median price as even well-qualified borrowers had difficulty securing financing.”

Closed escrow sales of existing, single-family detached homes in California totaled 265,030 in October at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity decreased 40.2 percent from the 443,320 sales pace recorded in October 2006.

To read the entire article click here.

H.R. 3648 would remove taxes from mortgage cancellation relief provided on a mortgage on a primary residence. The tax relief would apply only to the original purchase price, plus personal improvements of a primary residence, and would not cover any amount over the original purchase price if a loan has been refinanced with a “cash out” option.

H.R. 3648 was marked up to cost $2 billion over 10 years. Under the 110th Congress’ Pay As You Go rules, and in order to offset this loss in revenue, H.R. 3648 made changes to corporate estimated tax rates and to rules governing second homes that are converted into primary residences.

H.R. 3648 passed through the House Ways & Means Committee on September 26 by a unanimous voice vote and will now head to the full House for a vote.

To learn what NAR found out about buyers, their motivations, and what they're looking for in a home click here.

Bernanke proposed that so-called “government sponsored entities” like Freddie Mac and Fannie Mae pay mortgage insurance fees to the federal government. These GSEs would then guarantee loans that are larger than the current $417,000 limit on so-called “conforming” mortgages

Read the entire story here.

Here are a few ways strategic thinkers prepare to sell their homes:

– Pre-Sale Home Inspections. These inspections allow sellers to identify and repair problems rather than lose money during the sale. Statistics show that for every $1 of identified repairs, the buyer would ask for double that in a price reduction. Paying $5,000 to repair a roof is far more enticing than losing $10,000 in the sale.

– Neighborhood Environmental Reports. These reports provide important information on known and potential contamination that may exist on or in the vicinity of a property. The seller could use this information to ensure buyers that the home is in an environmentally safe neighborhood.

– An overview of the neighborhood’s assets. A list of the neighborhood’s assets can help sellers market the area’s positive attributes along with those of the home. Nearby schools, parks, community pools or other features can add value for a buyer.

– Minor interior cosmetic enhancements. Upgrading or enhancing elements in a home gives potential buyers the feeling that they can move in and feel comfortable in the home right away. Besides making kitchen and bathroom upgrades and cleaning floors and windows, the entry way should be well lit, clean and uncluttered, as it’s the first room a potential buyer evaluates.

– Minor exterior cosmetic enhances, curb appeal. Establish the right first impression by making a home’s exterior more appealing. Make certain the lawn is green and mowed. Evaluate any stone walkways to be certain they’re even. Plant flowers to add color and vibrancy.

"We have not yet seen fully the impact of the credit shock to the U.S. and world economies, and the severity of that impact will depend on how long it takes for the markets to return to normal functioning and where credit spreads ultimately settle," MBA chief economist Doug Duncan told reporters in a preview of his Wednesday convention speech.

The MBA expects sales to hit bottom in the third quarter of next year, after existing-home sales decline a projected 12 percent this year to 5.72 million units sold. Existing-home sales are expected to decline a further 10 percent next year before growing by 5 percent in 2009.

The MBA forecasts a 2 percent home price decline both this year and next year, with prices flattening out in 2009.

With the current glut of homes for sale, "any significant increase in homebuilding is probably years off," Duncan said.

You would think that would make you a good candidate for a loan modification, a change in the terms of your mortgage that would result in a payment you can afford. But you could be in for a surprise.

Lenders may actually be quicker to foreclose on your home than they would on that of your neighbor, who put no money down and owes more than the home is worth!

Why? Lenders would rather foreclose when they believe they can sell the home and recover out-of-pocket expenses, principal and interest and fees. If you have substantial equity in your home, the chances the lender can sell and recoup the entire mortgage balance are much greater.

Although it seems counterintuitive, you might have a better chance at negotiating a loan modification if you start letting your payments lapse. A missed loan payment can strengthen your case.

If you do seek a loan modification, expect to feel like you’re beating your head against a brick wall. But don’t give up. Too many people do. This is a problem that will not go away by itself. It will result in a sheriff’s sale, foreclosure and eviction.
Loan modification is “not a panacea. There’s just not a perfect solution to these problems. Typically, servicers will insist upon accrued interest.

This generally means that a modification will lower your monthly mortgage payment or let you skip a few payments, but the term of your loan will be extended. Bottom line: You’re paying off at least the same amount of debt and sometimes more.

Expect frustration

To get the process started, it’s always best to ask for a lender’s “loan mitigation department” or the “real estate owned (REO) department.” Still, getting a modification can prove frustrating.
I can tell you the process takes a few hours a day regularly — for anywhere from four to eight weeks. Some servicers have set up call centers in India.

Expect documents and records to get lost as they’re faxed back and forth. Get a supervisor’s name, and expect the process to repeat itself. It can be a tough task if you have to work for a living.
The key is to prepare in advance, and let your lender know up front, with complete documentation, what kind of payment you can afford.
This involves some homework before getting on the phone. Round up recent pay stubs, current or prior year W-2 forms, bank statements, property tax bills and insurance bills. If possible, obtain appraisal information for your home. Many property assessors’ offices will have data online or you can obtain an estimate of value on real estate Web sites, although those are often inaccurate.

Have you already tried unsuccessfully to sell your home? Have copies of your property listing agreement with the real estate agent. This way, you can demonstrate, for example, that you owe $200,000 on the mortgage and you haven’t received a single offer on your $180,000 listing price in three months.

Calculate your debt-to-income ratio in advance. This can be key to determining what kind of payment you can afford. A number of online calculators can help with this calculation.

Make a point of showing and documenting to people you communicate with that there’s no possibility I can afford the debts exceeding monthly income. I need to cut my payment to X dollars per month to make mortgage payments.

Credit dings

Always keep in mind that the lender and servicer don’t want to go through the expense of evicting you. They prefer the option makes them more money or costs the least. Present your solution with that in mind.

Remember that interest-rate reductions don’t show up on credit reports. But expect any payment modification to show up on your credit report and hurt your future efforts to obtain loans. Don’t expect a loan modification to necessarily get you out of debt either. A loan modification may be faster and more lucrative than attempting to sue your lender for predatory lending violations, if you think your jump in payment is abusive.

Simply because a mortgage is facing an interest rate reset doesn’t mean a homeowner was a victim of predatory lending. Those that buy mortgages look over the paperwork carefully for loans written in violation of predatory lending laws.

The contracts have been trading since May 2006, but last month were modified so that traders could bet on prices as long as 60 months into the future. The trading, which has been fairly light so far, is based on expected movements in the S&P/Case-Shiller house price indexes.

Here are the expected four-year changes in average home prices for selected metro areas, based on the futures contracts:

All 10 metro areas: -10.2 percent
Chicago: -6.6
New York: -12.1
Washington, D.C.: -13.3
Boston: -13.8
Denver: -14.4
Los Angeles: -15.0
Las Vegas: -18.1
San Diego: -18.6
San Francisco: -25.9
Miami: -27.9

Source: The Wall Street Journal, James R. Hagerty (10/04/2007)

To read the entire article click here.

At the first of several fall forecasts that look ahead to next year, new home builders were told to expect months more of the slowed sales and heavy discounting that have marked 2007. The session came a day after the Federal Reserve made significant cuts in interest rates and triggered hopes among builders of improved consumer confidence.

"By and large, we're of the view that next year is not a recovering year," said Jim Goodchild, chief lending officer of Houston-based RBC Builder Finance, which loans money to home builders and land developers. "We're looking at next year as, finally, the year we bottom out."

To read the entire article click here.