HARP 2.0: Modest Changes but Helpful.

HARP 2.0: Modest Changes, reports are saying not a game changer, but every little bit helps.

The Obama Administration has announced a series of changes to the Home Affordable Refinance Program (HARP) earlier this week, and from what I'm reading so far, the changes could be available for lenders to implement in about 2 weeks. But I don't see this as a game changer. Here is essentially what the changes are to the government mortgage refinancing program:

HARP 2.0, the media's tag for the new program, will help, but it is very limited and it will have little or no impact on foreclosures, or the estimated 6.4 million homeowners nationwide who are behind on their mortgage payments. The new HARP does expand the number of homeowners that would be eligible from the original plan.

HARP began in 2009 to help borrowers whose loans were backed by Fannie Mae, Freddie Mac or the FHA, but did not have enough equity or negative equity to refinance to interest rates that were dropping. Under the original version of HARP, borrowers who were current on their payments and owed up to 125 percent of the current value of their homes could refinance their mortgage to the lower rates.

HARP has fallen short of expectations over the past two and a half years and earlier this year many in Congress were seeking to end it. So far only approximately 838,000 homeowners have benefited from the program. And, many of these are now back to looking at a short sale or foreclosure. The loan modification programs with lenders have been a very difficult process to get through to actually obtain your loan modification/refinance. And, the loan modifications have been so slight that if the homeowner faces any additional challenges with a pay cut, or if one person in the household loses their job, they are right back to not being able to make the payment. The new HARP is widening the base with looser eligibility requirements. But I still question the modifications to the loan.  The loans need be modified enough for homeowners to withstand life changes (changes that didn't come into play with lower unemployment and a booming economy), so that homeowners won't be back to square one. Let's be honest, the economy is too fragile not to expect changes in the lives of the people that live behind the doors of these homes. 

Borrowers with FHA, Fannie Mae or Freddie Mac mortgages that were sold to Fannie or Freddie before May 31, 2009,  will be able to refinance, no matter how far underwater they are. Banks will only have to verify that borrowers have made their last six payments, that they’ve haven’t missed more than one payment over the past year, and that they have a job or another source of regular income.

Other key changes:

• Appraisals are no longer required if there is a reliable automated valuation model (AVM)–a significant hurdle in the previous plan.
• Risk-based fees have been eliminated for borrowers who refinance to 15-year mortgages.
• Existing mortgage insurance coverage can be transferred much easier than under the original HARP.

The new HARP won’t help homeowners who are behind on their payments and at risk for foreclosure, however, it is great news for homeowners who have not been able to refinance because they owe more on their mortgage than their home is worth, and at the same time, don’t qualify for a short sale or a loan mod because they are current on their payments and still have income and assets.

The goal of HARP is to keep putting money back into the pockets of this segment of homeowners so it will mean more dollars going back into the economy, potentially heading off strategic defaults and keeping and lessen the amount of homes entering the foreclosure pipeline.


This is my radical opinion (sarcasm here, my ideas are not radical, just common sense) is that we are really making all of this too difficult. We all know that loans need to be repaid. We all agreed to repay them when we signed for them. What we didn't know was the economy would falter and that housing values would decline, but this is affecting everyone, not just a few. We also know the economy is fragile. We need change that allows homeowners to extend their mortgage length and lowers the rate to make it possible to live and spend money in their community as we rebuild the American economy to a sustainable pace. As the housing market improves, homeowners can sell their home and pay off the mortgage, or go back to paying more on their notes for a shorter term as incomes stabilize and rise with the economy.  Homeowners that need to sell for better jobs in different markets should be able to get a loan for their deficit amount on the mortgage at a long term and low rate so they can purchase a home in the market they are moving to....allowing them to help improve the housing market in the community they are moving to and still afford to spend their dollars and keep the economy moving. They too could pay down the notes faster as their incomes improve with the economy...saving them money on the interest they won't pay. And yes a small percentage of people will take advantage of the new offerings. But this has always been the case, even when home values were rising there was still a small percetage of homes that were foreclosed on. The majority of homeowners want to stay in their homes, and they want to meet their obligations. By foreclosing on homes and letting them sit for years, isn't improving home values in communities, and it isn't helping the economy.  I believe we need to provide a program for the American people—all Americans—that allows them to continue working and living in communities while banks and investors are receiving payments on the debts owed to them. 

 IF YOU HAVE QUESTIONS ABOUT  SELLING YOUR HOME OR BUYING A NEW ONE, DON'T HESITATE TO CALL, TEXT OR EMAIL ME.

My promise to my clients: I try to always remember what it is like to walk into this incredibly complex world of buying and selling with little or no knowledge of how the process works. I know that behind the door of your home and in your life there is much more going on than just your real estate transaction. I work with each person, not the house, and with the whole person, not just the issues surrounding the transaction. When I attempt to put myself in your shoes and contemplate what you are dealing with I am most effective.

The Benadum Team

Amy Bumpus

Straight Talk—Always

We need solutions....are they coming?

Banks and short sales....wow does anyone have any common sense out there!?!?!?
Yes, I do! So, call, text or email me anytime to talk, we can work together and find solutions that you need.

Let's be honest, most home owners that need to sell right now, due to the decline in market value—yes even in Central Ohio our values are down along with the rest of the country, although 2% less than most areas according to a recent report—are going to have a deficit at the time of closing, in other words the money obtained from the buyer isn't enough to pay off the note owed to the bank. So in short, my plea here is for more common sense and some real solutions for honest Americans from our government and the banks!

It is frustrating to hear people in the community chatter on about the fact that "people just shouldn't have gotten themselves into this situation." But, I'm here to tell you that out of all of the short sales that I've completed in the past few years, only one was due to poor decisions made by the owner. The rest, well they are simply victims of the times. All have jobs and are working hard and bought into the American Dream based on their current financial situation. They had only known home values to rise, so they bought homes, as we all do knowing their job is not guaranteed, but all seems to be going well (too bad FDR's wish to have a second bill of rights that included American's having a right to a job wasn't fulfilled before his death). But, the wheels fell off, unemployment has sky rocketed and home values—GASP—have fallen. And believe me, my clients want to do the right thing but there are few options for them—read the government officials (both parties) can't stop arguing long enough to help the people that elected them. So due clients' losing jobs, taking new jobs at lower pay, taking a pay cut to retain their current position is causing a wave a short sales because they now can't afford the payment they once made easily. That combined with a drop in value, double whammy. Also, being transferred to another market, or losing a job and only finding one in another market, is forcing some people that have been paying on-time and with no problem, to sell and move....they may have been making the payments here just fine, but due to the value decline and their job being across the county......well, it is very difficult for most Americans to bring amounts like $15,000, $25,000, or more to the closing table to move. And, the banks, well they offer very little in the way of working out a solution--very frustrated since we taxpayers bailed them out. But if your new job is across the country, selling is what you need to do in order to keep paying the bills. 

So, I'll keep working to stay on top of what options are available to help you and working to provide the best solutions possible. I'm confident that we will work through this, but we must all work together and stop blaming—We need to get to solutions. And, let's get started today!

Here is guest article from Scott Stevenson of Northwest Title....

Dances with Bulls – Home Ownership in the 21st Century

Right now, the Occupy Wall Street movement is igniting protests in major cities around the country. Thousands of people are rallying against corporate greed. The cry for “people before profits” was a shot heard around the world. Some are there because they want to topple the mortgage lending “establishment” that has evicted hundreds of thousands of out-of-work people from their homes. A small contingent of Columbus residents have recently joined in.

While they deal, rather boisterously, with the major structures of credit, Wall Street aloofness and corporate influence on American government policy, back home in our communities, people are grappling with how to recover the foreclosure swoon. There aren’t any TV cameras anymore picking up on the stories of people’s ongoing private pains.

While it’s going to take years for us to truly pull out of the mess, there is light at the end of the tunnel. The pressure to install Richard Cordray as the leader of the CFPB and the efforts the CFPB is making to streamline lending practices will go a long way toward making more informed consumers. As well, while it may not continue forever, right now there are programs in place that are working to help people keep their homes and avoid foreclosure, or, when it’s the better choice, find a short sale solution that works.

One of the biggest concerns in our area is unfinished subdivisions. I have a friend who just got a home for hundreds of thousands less than he would have in a different market. While he may have to face some rising Homeowner’s Association costs and may not see the value of the home increase to the point it started at, he has a fine home in a nice location that he may not have otherwise been able to – or wanted to – afford.

In Closing –

The Occupy movement is a good thing for one big reason: it’s driving conversation about what needs to be fixed, and conversation is something that can lead to new ideas, better solutions, and an awareness of the issues. And right now, if you are looking for a home, you might be able to upgrade the size without having to upgrade the price. Just be sure you go into it with your eyes open and don’t expect the house to triple in value any time soon.

Scott Stevenson joined Northwest Title in 1995 as General Counsel and was appointed President of the company in 2008.

 If you have questions about short sales or just about selling your home or buying a new one, don't hesitate to call, text or email me.

My promise to my clients: I try to always remember what it is like to walk into this incredibly complex world of buying and selling with little or no knowledge of how the process works. I know that behind the door of your home and in your life there is much more going on than just your real estate transaction. I work with each person, not the house, and with the whole person, not just the issues surrounding the transaction. When I attempt to put myself in your shoes and contemplate what you are dealing with I am most effective.

The Benadum Team

Amy Bumpus

Straight Talk—Always

Correcting the Housing Market

Correcting the Housing Market--Is it possible?

Yes. We can turn this ship around. My favorite quote by Oliver Hazard Perry is the famous battle cry in the War of 1812 ....."Don't Give Up the Ship!" We must continue to work together to improve our nation. It was true in 1812 and it is true in 2011!


We have all heard a lot of talk about correcting the housing market from Capital Hill to Pennsylvania Avenue, from Wall Street to the News Media. But so far all we have is talk, well, I wish it were only talk, the squabbling has to STOP. 


Two policy think tanks, the Progressive Policy Institute and Economic Policies for the 21st Century, hosted a conference on October 11th to find ideas and solutions to the housing crisis. It included policy- and law-makers from both parties (Democrats and Republicans), along with president and CEO of national real estate brokerage giant Realogy Corp., the NAR President (National Association of Realtors), other industry leaders and strategists.


The report at the end of the day: Yes, the housing market is going to take some time to recover. But let's start today.


The amount of time bantered about is five to seven years. But we have to start somewhere and we need to start —not a year from now. This isn't about winning your election, it is about helping the Americans you promised to serve from your public office or your corporate seat at the helm of real estate companies. We have to start restoring the faith of Americans in order to stabilize and improve the housing market. . Don't let policymakers continue with the "talk" and "positioning" for their next election. We need solutions to start now.


A few of the ideas that came out of the day-long meeting were to call for the government to intervene in smart ways, like:


• allowing underwater home owners to use money from their retirement accounts to help them stay in their home rather than lose it to foreclosure


• have lenders refinance mortgages of troubled home owners without requiring an appraisal


•  create a share equity program 


• make federally backed mortgages assumable


The attendees believe the market is capable of self-correcting but it needs two things. It needs the federal government to stop intervening (or threatening to intervene) in the market in the wrong way, like:


• by imposing a 20 percent down requirement in the qualified residential mortgage (QRM) rule


• threatening to reduce or eliminate the mortgage interest deduction (MID) which is key component of the benefits to home ownership and will not hinder financial growth for the country


• Piecemeal federal intervention in foreclosure processing isn’t helping, either. (for example, allowing banks to foreclose while homeowners are trying to participate in HARP-the government program for loan modifications & short-sales that have government back benefits-for a loan modification or short-sale)


I have heard many reasonable proposals over the past year from various sources. We don't have a shortage of ideas to help stabilize the housing market, but we need a plan. We have to start somewhere and there is no reason to postpone starting. What we need is leadership...We’ve had plenty of talking about blame. We need to get to solutions.


So tell both parties (or all parties!) to get working! Email your representatives and vote in November!

My promise to my clients: I try to always remember what it is like to walk into this incredibly complex world of buying and selling with little or no knowledge of how the process works. I know that behind the door of your home and in your life there is much more going on than just your real estate transaction. I work with each person, not the house, and with the whole person, not just the issues surrounding the transaction. When I attempt to put myself in your shoes and contemplate what you are dealing with I am most effective.

The Benadum Team

Amy Bumpus

Straight Talk—Always

Open Houses—the real truth.

Open Houses...the debate.

Agents may love open houses, but not because they move their properties. The real reason to hold homes open is because they bring an opportunity for more business. Open houses have always been better for agents then for the sellers. Or so it was before the internet. With over 77% of buyers shopping online, your home's online photos and the availability of your realtor to respond to inquiries and show the home when called are more important than open houses. Less than 2-4% of homes sell nationwide from an open houses and with many of the open houses not obtaining any visitors! So I don't think in our new market place the open is effective for sellers or their agent.

Effectiveness?
Most sales come from agent contacts (past clients, blogs, other agent networking) and from the multiple listing service (MLS), so the best strategy to sell your home is a well planned pricing strategy. 

I consider open houses to be a waste of time and a security threat. I prefer that my sellers only open their doors to serious buyers that are being escorted by me, or another licensed agent.

Many of my sellers are leery of having an open house because of having to prepare their home when there may be no one attending, or no one that is serious about a home purchase attending.It isn't wise to let complete strangers roam freely through your house, with access to electronics, jewelry, prescription drugs and personal information. Even though an agent tries to keep an eye on those in the house, if there is more than one group, you can't follow them all, and recent scams involve a person to distract the agent. And, some just don't want their neighbors and a host of other so-called "looky-loos" wasting their time just for a look at their décor.

My reason for not holding opens involves my seller's security but also mine! As a number of Realtors have been attacked, and some even killed, as they sat in an empty house alone and vulnerable.

And timely enough...here is a link to a recent scam in our local market! Even the thieves have caught on that open houses don't have enough traffic for them to easily steal and so they need an accomplice to distract the realtor!

2 Burglars Charged With Stealing From Open Houses!

I advise my clients to place their house for sale on the local MLS and a host of other Web sites (I place my listings on various sites) with professional photos. I send out e-mail flyers to area agents and past clients, when there is a change in the listing, I send out updates. I try to give my listings as much exposure as possible, but exposure to professionals with qualified buyers.

Solid Pricing is your best strategy.

Nationwide, home sales are expected to continue drop this year, and sellers in many markets are already dropping their prices. Your best strategy to sell your home is to find a professional agent that will complete an accurate and honest market analysis for your home. I'll say it again, accurately price your home to sell. Statically, your home will sell for the most amount of money if you price it well and sells in the first 30-45 days. Continued price drops give buyers the feeling of "blood in the water" and result in lower offers. And, with the market still declining, you will find as you drop your price is still too high as you are chasing a downward trending market. I'm not saying price it low and "give it away," but review the comps and be realistic about the value of your home so you can select the most appropriate selling price and then base your list on this. Accurate pricing will obtain the highest price possible.
Amy's Take-Best Strategy to Sell Your Home

Addtional Advice.

It is a buyers market and buyers are very selective right now. Homes that need work or give the impression they need work are not first on most buyers lists. So, one measure that may be helpful in this market is consulting with a professional stager to make your home more appealing by showing its best features and not your personal belongings. You love your home and its memories, but when you are ready to sell, it is time to make the home the most appealing it can be to the buyers that are in search of their next home to love.  So make sure to highlight the features of your home that made it most appealing when you selected it. For example, if you are moving due to having outgrown the space...well, you are going to be moving anyway, so pack up what you can and place it in storage, ready to move to your next home.  This will prevent buyers from the feeling that this home will be quickly outgrown or that it is already too small!  Having a fresh eye help remind you of what buyers will love about your home is important. I always do a walk through with my sellers and make suggestions that can do easily to improve the home for showings.  Sometimes it is good to get additional help from a pro that can help us really highlight your home's best qualities. 

Happy Selling and Buying!

The Benadum Team

Amy Bumpus

Straight Talk—Always