Foreclosure in Fremont>Question Details

Barry Ripp, Real Estate Pro in 94536

What's going on with foreclosures?

Asked by Barry Ripp, 94536 Wed Nov 26, 2008

I heard something about a temporary freeze on foreclosures, but they still seem to be everywhere. Can someone enlighten me?

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Well Bob,
There are a lot of foreclosures still in the pipe-line. However,there is some good news. On Thursday Nov. 20th, both Fannie Mae and Freddie Mac issued press releases stating they would suspend the eviction of occupants and the sale of properties financed with mortgages in foreclosure until January 2009. That will be a big relief for those who need to find new housing.

According to Fannie Mae, the halt in foreclosure sales is to allow its mortgage modification program, scheduled to launch on Dec. 15, to take effect. The program is designed to create work-out options for borrowers who are in default. Suspension of foreclosure sales activity will begin Nov. 26 and end Jan. 9, 2009.

Let me know if you would like more detailed information about this topic. As a long-time Realtor, I try to keep current on these events and information. I am happy to help.

Thanks,
Barry Ripp
510-386-5066
Real Estate Broker
Web Reference: http://www.barryripp.com
2 votes Thank Flag Link Wed Nov 26, 2008
Hi Bob, there are many answers to your question. Since you are asking about the "freeze" I'll address the "big picture." If you are looking for a more local focus please contract me offline.

As Barry points out below, Fannie/Freddie are freezing foreclosure activities starting on Thanksgiving and ending on 1/9/09. Note that this will have no effect on jumbo loan amounts as Fannie/Freddie securitize conforming loans (about 43% of the 12 trillion in outstanding mortgage loans were securitized by Fannie/Freddie) This particular "time out" is being provided to give servicers (the people we send our mortgage payments to) more time to implement the HOPE Now loan modification program for struggling borrowers [see: http://www.hopenow.com ] For more details on the "time out" visit the link provided below.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYq9…

Aside from the article, FHFA, the regulator of Fannie Mae and Freddie Mac, requested that over 40 servicers and trustees of private-label mortgage securities adopt their streamlined loan modification program. The specific instructions come out on December 15th, but the program’s goal is to identify and then help seriously delinquent borrowers avoid preventable foreclosures. Servicers will receive an $800 payment for each modification.

Now let's pull back from the microscope lens to see the bigger picture:

Remember that Fannie/Freddie were placed under federal control 9/6/08, so now they are a part of the Federal economic recovery chessboard. You may have heard of the term "Black Friday." Sounds pretty ominous. In actuality, this term defines the period that runs from the day after thanksgiving to the end of the holiday buying season. It's called "Black Friday" because this is the period in which 30-40% of retailer profits are made. I believe this foreclosure freeze is an effort to not only help homeowners avoid foreclosure during this time, but also to help retailers by not having foreclosure stories hitting the airwaves as people decide Holiday gift budgets.

There's another news story even more important than the foreclosure "time out" announced by Fannie/Freddie (as Charo adds, but the most important aspect being the following):

On 11/25/08 the Federal Reserve announced it will purchase up to $500 billion in mortgage backed securities that have been backed by Fannie/Freddie, and their step-sister Ginnie Mae, along with buying another $100 billion in direct debt issued by those entities. The fact that they will now buy mortgage-backed securities is HUGE. As a Realtor and Mortgage Banker I can tell you that this announcement is SIGNIFICANTLY reducing mortgage rates immediately! Lower rates coupled with modification programs will be a direct help to housing, one of the main areas of economic weakness, by reducing the rate of foreclosures. Before this announcement mortgage rates were artificially high, showing historically wide yield gaps from US Treasury Bonds, because Investors did not trust banks, banks didn't trust borrowers, and mortgage companies didn't trust homebuyers. With the new Fed guarantees the “health” of these interdependent relationships will improve mortgage rates -- housing supply should start to tighten and foreclosures should start wane.

Hope this helps.

Best Regards,

Steven A. Ornellas, GRI, ABR, e-PRO, CMPS, RE Masters, MBA
REALTOR® / Mortgage Banker-Broker / Certified Mortgage Planning Specialist

Steven Anthony Real Estate & Financial Services
Expect Excellence. Get What You Expect.â„¢
Cell: 510.461.6011
http://www.Steven-Anthony.com SteveO@Steven-Anthony.com
0 votes Thank Flag Link Wed Nov 26, 2008
Bob,

Barry gave the right answer, Fannie and Freddie has suspended the foreclosure until January 2009 and the bank will also try to work out with home owners to modify their loan, if possible so that they can keep their home. This way, most of the homeowners will get a chance to work with their lenders and save their house from foreclosure, which I think is pretty good deal.

But what you are seeing on the market, has already been foreclosed and listed by REO agents, so the new rule is only apply for those homeowners which are in foreclosure process.

If I can help you with buying or selling your house, please let me know, I would be glad to assist you.

Blaison Samuel
Certified Short Sale Expert
510-366-9405
0 votes Thank Flag Link Wed Nov 26, 2008
Hi Bob,

Please read the article below..
I hope it helps understand what's going on with foreclosures!

Paulson Unveils $800 Billion Plan to Ease Credit Crunch


“A very strong statement of support for the housing market”
By David Lightman


Treasury Secretary Henry Paulson, warning that “millions of Americans cannot find affordable financing for basic credit needs,” announced a major expansion of the federal bailout on today as much as $800 billion to make mortgages and consumer credit more available and affordable.

The government will buy up to $600 billion in mortgage-backed assets, and, in a separate action, lend up to $200 billion to investors who have bought securities backed by consumer loans such as credit cards, auto and student loans, in a bid to free up consumer credit.

Paulson, speaking at a Washington news conference, hailed the housing aid as “a very strong statement of support for the housing market. … Mortgage spreads have … not come down as much as they might, but I would say mortgage financing has remained … available and it has not risen nearly as fast as the cost of other credit.”

The latest expansion of the federal bailout came as new data underscored how shaky the U.S. economy is.

The Standard&Poor’s/Case-Shiller national home price sales index dropped 16.6 percent in the third quarter. The Gross Domestic Product, the value of the nation’s goods and services, shrank 0.5 percent from July through September, the Commerce Department reported Tuesday, revising its initial 0.3 percent shrinkage estimate downward.

Under the plan announced Tuesday, the Federal Reserve plans to buy up to $100 billion in direct obligations from mortgage finance giants Fannie Mae and Freddie Mac and the Federal Home Loan Banks.

It also will purchase another $500 billion in mortgage-backed securities, which consist of mortgage loans that are packaged together and sold to investors. These securities, viewed as toxic now because so many mortgages are going unpaid, are at the heart of what’s weighing down troubled banks. Purchasing them is intended to free up bank lending, which would spur the economy.

In addition, Paulson said Treasury will provide $20 billion of credit protection to the Fed from last month’s $700 billion financial rescue package. The protection will be part of a new Fed program that could lend as much as $200 billion to investors in securities backed by credit card, auto and other loans.

Paulson noted that “credit market stresses led to a steep decline in the third quarter of 2008, and the market essentially came to a halt in October.”

Compounding the problem, he said, was that “credit card rates are climbing, making it more expensive for families to finance everyday purchases. This lack of affordable consumer credit undermines consumer spending (and) as a result weakens our economy.”

The new fund aimed at freeing up credit, Paulson said, “will enable a broad range of institutions to step up their lending, enabling borrowers to have access to lower cost consumer financing and small business loans.”

Paulson said he worked closely on Tuesday’s plans with Treasury Secretary-designate Timothy Geithner, currently president of the New York Federal Reserve Bank. President-elect Barack Obama nominated Geithner to the post on Monday.

Paulson called Geithner “very well positioned” to oversee the economic relief effort, “because he understands everything we have in place today, and participated very actively in helping put it in place.”

Paulson also issued a plea for patience: “The fact is, we now have the tools and the capacity to stabilize the system and work to get credit flowing again-and it will take awhile to do that.”

© 2008, McClatchy-Tribune Information Services.

If you are in market to buy REO, foreclosures or short sale feel free to call me at
my cell phone 510-381-2105 or email me at CharoBhatt@gmail.com
It will be my pleaseure help you find some good deals in the market place today

Good luck to you

Charo Bhatt
510-381-2105
http://www.HomesByCharo.com
0 votes Thank Flag Link Wed Nov 26, 2008
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