Revamped Home Affordability Refinance Program (HARP)
Troubled homeownwers get a life line
In the latest attempt to address the ailing housing market, the government on Monday announced changes to a federal program that will make it easier for struggling homeowners to refinance to today’s near-record low rates.
Under the new program, homeowners who owe more on their homes than they are worth will be able to refinance no matter how much they are underwater, as long as they are current on their payments.
More than 1 million homeowners could get cheaper mortgages as a result, officials estimated.
The revamped Home Affordable Refinance Program (HARP) will also streamline the refinancing process, doing away with certain types of appraisals and underwriting requirements, and reducing or eliminating fees that prevented homeowners from refinancing in the past.
More than 890,000 homeowners have already refinanced under HARP, which is available to borrowers with loans backed by Fannie Mae and Freddie Mac originated before May 31, 2009.
But hundreds of thousands more could not qualify — mainly because of the previous 125% loan-to-value limit on the program or because banks would not take on the risk.
The 4% mortgage — good luck getting one
“We know there are many homeowners who are eligible to refinance under HARP and those are the borrowers we want to reach,” said Edward DeMarco, acting director for the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae and Freddie Mac.
Currently, about 11 million borrowers are underwater on their mortgages, with about 4.7 million of those loans meeting or exceeding the 125% loan-to-value limit, according to CoreLogic, a financial analytics company.
By the time HARP expires in 2013, the federal housing agency estimates, up to 1 million more borrowers may benefit from the new regulations.
Many of those borrowers will be from states like Florida, California, Nevada and Arizona where home values have been hit the hardest. In metro areas like Las Vegas, for example, prices have plunged nearly 60% from their early-2006 peak
The new rules and other details have yet to be finalized, but FHFA said that should all be worked out by Nov. 15. Banks may be able to start issuing refinanced loans by Dec. 1.
Lifting the loan-to-value restrictions may still only help a limited number of borrowers, according to Jaret Seiberg, an analyst for MF Global Inc.’s Washington Research Group, which analyzes public policy for institutional investors.
The problem: Mortgage holders still must be current on their payments for the past six months — with no more than one missed payment in the past 12 months –and they also must be able to qualify for a new loan.
However, Seiberg believes, the changes should allow banks to refinance loans without worrying that Fannie Mae (FNMA, Fortune 500) and Freddie Mac (FMCC, Fortune 500) will force them to repurchase the loans if the borrower defaults.
In the past, banks have been reluctant to refinance loans because they didn’t want to take on that liability, explained Shaun Donovan, the secretary of the U.S. Department of Housing and Urban Development. By doing away with that liability, more lenders will compete to refinance the loans, which he believes will make them more affordable for borrowers.
That should help remove one of the biggest barriers to refinancing through HARP, said Gene Sperling, director of the National Economic Council.
What about us? Responsible homeowners get left out in the cold
Under the newly-revamped program, Fannie and Freddie will also reduce the fees they have charged in the past in order to enable borrowers to better afford the new loans.
Among the fees that may be reduced or eliminated are those for loan level price adjustments. Going forward, borrowers may not be penalized for less-than-perfect credit scores, for example.
Fees will also be waived for some underwater borrowers who refinance into 20-year or other, shorter-term loans. By doing so, it could help homeowners get above water faster.
A homeowner who has a $200,000 balance on a 30-year mortgage with a 6.5% rate and a home value of $160,000, for example, currently makes payments of $1,264 a month.
If they refinance into a 20-year fixed-rate loan at 4.25%, it will reduce monthly payments to $1,238 and slash the balance to $160,000 in just five-and-a-half years. If they refinance to a 30-year loan at 4.5%, however, their monthly payments will be much lower, $1,038, but it will take 10 years to reach $160,000.
“It’s an opportunity for borrowers to improve their household balance sheets by repaying their mortgages much quicker,” said DeMarco.
Article from CNN Money-first published Oct. 24,2011
South Lake Tahoe Market Update Oct.1-31,2011
Currently there are 342 Active listings (single family and condo). 40 of which are short sales and 44 are REO(bank-owned) listings. There are currently 112 Active Pending (in escrow) listings in South Lake Tahoe. 44 of which are short sales and 21 are REO listings.
There were 59 properties (single family and condo) that sold in the city and county neighborhoods of South Lake Tahoe October 1-31. 18 (31%) of the sales comprised of REO(bank owned)or short sales. The lowest priced property sold was a 841 SF condo located in the Y area with 2 bedrooms and 1 bath. This was a short sale and the property sold for $45,000. The highest priced property was a 1898 SF lakefront cabin located in the Stateline area with 3 bedrooms and 2 baths. This property sold for $4,200,000.
Avg. List Price $437,322
Avg. Sold Price $418,327
Avg. DOM(Days on Market) 198
Avg. SF (Sq. feet) 1661
% of Sold Price to List Price-
1-30 DOM- 94.10%
31-60 DOM- 98.65%
61-90 DOM- 94.39%
91-120 DOM- 94.20%
120+days- 96.79%
Median List Price $244,900
Median Sold Price $229,000
1308 Angora Lake Road South Lake Tahoe
Family, friends and relatives fit nicely in this spacious newer construction home centrally located one mile from the shores of Lake Tahoe, Heavenly Ski Resort, and minutes from shopping, restaurants and casinos. This 5 bedroom, 4 bath home with nearly 3,000 square feet features two fireplaces, alder doors, baseboards and cabinetry, natural tile flooring, granite slab countertops, Hunter Douglas window coverings, security system and bearbox. Downstairs you will find an open great room with breakfast nook, a bedroom, bath, and a separate living room and formal dining room. Upstairs there are 3 generously sized bedrooms, 2 baths, laundry room and the large master bedroom and bath complete with a jetted tub and steam shower. The property is situated on a large flat lot in a peaceful neighborhood. The backyard is fully fenced with a park like setting complete with horseshoe pit and numerous maple and aspen trees. This home would make a wonderful family home or vacation getaway.
Offered at $679,000
Watch the video
South Lake Tahoe Market Update June 1st-30th, 2011
As of June 30th, 2011, the South Tahoe Association of Realtors Multiple Listing Service reported there were 444 Active Listings and 42 homes went into escrow in the City and County neighborhoods of South Lake Tahoe during the month of June. Of those 42 homes that went into escrow 11 were REO (bank owned) and 1 was a short sale. 56 homes were sold from June 1st-30th. The median home price of these homes was $280,500 and the average home price among these homes sold was $383,337. The year before, during the same time period, 57 properties closed escrow. In 2009 there were 45 closed escrows. Of the 56 homes sold in the month of June, 3 were in the Al Tahoe neighborhood, 10 were in the Bijou neighborhood, 3 in the Black Bart neighborhood, 4 in the Christmas Valley neighborhood, 2 in the Country Club Estates neighborhood, 3 in the Gardner Mountain neighborhood, 5 in the Heavenly Valley neighborhood, 2 in the Highland Woods neighborhood, 1 in the Meyers neighborhood, 2 in the Montgomery Estates neighborhood, 2 in the North Upper Truckee neighborhood, 2 in the Pioneer Viilage neighborhood, 4 in the Sierra Tract neighborhood, 1 in the Tahoe Island Drive, 2 in the Tahoe Island Park neighborhood, and 4 in the Tahoe Keys neighborhood. The lowest sale price of these homes was $70,000 for 923 James Ave., a 2 bedroom, 1 bath, with 468 square feet. The highest sale price was $680,000 for 483 Lido Dr., a 3 bedroom, 2.5 bath with 2270 square feet.
During the month of June, 117 homes were listed for sale, 13 of which are bank owned and 17 of which were short sales. The lowest price property, listed at $99,000, is a 1 bedroom, 1 bath home with 528 square feet located at 3721 Spruce Ave. in the Bijou neighborhood. The highest price property, listed at $1,400,000, is a studio home with 2 baths that is situated on a 2 acre lot located at 1721 Sawmill Rd. in the Country Club Estates neighborhood.
South Lake Tahoe Market Update May 15th-21st, 2011
As of May 21st, 2011, the South Tahoe Association of Realtors Multiple Listing Service reported there were 335 Active Listings and 11 homes went into escrow in the City and County neighborhoods of South Lake Tahoe during the period of May 15th-21st. Of those 11 homes that went into escrow 1 was a short sale and 4 were REO (bank owned) properties. 7 homes were sold during the week of May 15th-21st. The median price among these homes was $295,000 and the average home price among these homes sold was $361,000. The year before, during the same time period, 16 properties closed escrow. In 2009 there were 6 closed escrows. Of the homes sold from May 15th-21st, 2 were in the Meyers neighborhood, 2 in the Bijou neighborhood, 2 in the Tahoe Keys neighborhood, and 1 in the North Upper Truckee neighborhood. The lowest sale price of these homes was $161,000 for 1977 Washoe St., a 3 bedroom, 1.75 bath, with 1292 square feet. The highest sale price was $605,000 for 2075 Slalom Ct., a 4 bedroom, 3 bath with 2085 square feet.
Between May 15th and 21st, 21 homes were listed for sale, 3 of which are bank owned and 4 of which were short sales. The lowest price property, listed at $102,800, is a 3 bedroom, 2 bath home with 1262 square feet located at 1666 Arapahoe St. in the Tahoe Paradise neighborhood. The highest price property, listed at $2,200,000, is a 3 bedroom, 2 bath property with 1558 square feet located at 336 Ala Wai Blvd. #271 located in the Tahoe Keys neighborhood.
