Revisions to the Home Affordable Refinance Program could help some homeowners regain equity, but they may not affect the housing market significantly.
Changes to the Home Affordable Refinance Program announced today are designed to help underwater borrowers, or those who owe more on their home than their home is worth, refinance their home loans even if they don't have equity.
Previous incarnations of the 2.5-year-old program only allowed borrowers who owed less than 125% of the value of their home to refinance — and that barrier was raised from those owing 80%.
Fewer than 900,000 borrowers have refinanced through HARP since it began, a far cry from the estimated 5 million it was designed to aid. The Federal Housing Finance Agency, conservator of government-sponsored enterprises Fannie Mae and Freddie Mac, says the rule changes could open the program to another million homeowners. Analysts at Barclay Capital say that number could grow as high as 3.1 million, according to Dow Jones.
Interest rates on 30-year mortgages have hit record lows in recent weeks, per MSN Money. But with home values and prices falling, refinancing activity hasn't seen a huge boost. President Barack Obama says this makes HARP "critically important for a place like Las Vegas," where he outlined the plan's details at a residence earlier today. CoreLogic says that about 58% of Nevada homeowners have underwater mortgages, with Arizona (49%) and Florida (43%) close behind.
Considering HARP's track record and what the rules actually change, however, some analysts question just how big an impact the changes may have.
Sales decreased 3% from August but show substantial gain from September 2010.
A somewhat surprising jump in home sales in August didn't carry over to September, as sales of existing homes nationwide fell 3% month to month. They did measure an 11.3% gain from September 2010, however, according to the National Association of Realtors.
The seasonally adjusted annual rate of 4.91 million home sales matched the sales volume for 2010. Unfortunately, 2010 was the worst year for sales of previously owned homes since 1997.
Overall, the housing market's outlook remains the same.
"It's in a holding pattern," Lawrence Yun, the NAR's chief economist, said in a news release. "When it does break out, it will break out upward, but it hasn't broken out yet."
Led by apartment construction, housing starts had their best showing in 15 months in September. But analysts say they're not enough to pull the industry out of its slump.
After August's 5% decline in housing starts from the previous month, one economist told Bloomberg that she saw "no real signs of a turnaround." That may have changed, albeit slightly: New-home construction increased 15% in September from August, the Commerce Department reported earlier today. Housing starts also showed a 10.2% gain from September 2010.
The annual housing-start rate of 658,000 homes is the largest such rate since April 2010.
Call it a comeback? Not quite: The number of building permits issued fell 5%, after August's 3.2% gain, according to The Associated Press, per MSN Money. Construction of single-family homes also showed just a modest 1.7% month-to-month increase in September. And overall, signs still point to this year's new-home sales hitting their lowest level since record-keeping began in 1963.
For apartment buildings, however, the picture was brighter. Multifamily construction jumped 51.3%.
"The overall result is favorable," Decision Economics analyst Pierre Ellis told The AP. "But greater optimism would have been prompted if single-family starts had increased — suggesting that builders were seeing a better market ahead."
Chris Tucker faces foreclosure and $11.5 million tax lien. He owes $4.4 million on a house he bought for $6 million that is now worth less than $2 million.
Comedian Chris Tucker, in foreclosure and on the hook to the Internal Revenue Service for more than $11.5 million, is drawing material from his financial woes for his act.
He might as well laugh, because his real-estate situation is enough to make anyone cry.
In June 2007, Tucker bought an 8,861-square-foot house on a lake in a new golf-course community in central Florida for $6 million.
At the time, lots in the supposedly exclusive subdivision 25 miles from Orlando were selling for as much as $1 million, The Orlando Sentinel reports. The development was featured in a 2006 Street of Dreams event, the largest and most expensive homes for Street of Dreams to that date. Tucker apparently bought one of the models shown at the event.
In the end, only about 40 of the 800 planned homes were built, The Sentinel reported.
Tucker, who owes more than $4.4 million on his mortgage, was left with a house worth only $1.65 million, according to the local property appraiser, which is supposed to tax homes at current market value. In addition to the mortgage, Tucker has a tax lien against the house for $11.5 million.
Index of builder sentiment rises, though the 'optimism' is relative. More builders see conditions as fair rather than poor, but few see a good market.
Builders of new homes are feeling a little more optimistic, buoyed by signs that "pockets of recovery" are emerging throughout the country.
The National Association of Home Builders/Wells Fargo Housing Market Index increased to 18 in October from 14 in September, a significant increase in confidence in market conditions. It was the highest level reported since May 2010. However, 18 is still far below 50, the number that indicates neutral market feeling. The index last reached that point in April 2006.
"This latest boost in builder confidence is a good sign that some pockets of recovery are starting to emerge across the country as extremely favorable interest rates and prices catch consumers' attention," NAHB chief economist David Crowe said in a news release. "However, it's worth noting that while some builders have shifted their assessment of market conditions from 'poor' to 'fair,' relatively few have shifted their assessments from 'fair' to 'good.'"
The number of homes for sale is down 20% from last year. Would-be buyers are finding themselves in bidding wars, if they can find a house in good condition at all.
You may think that this would be the perfect time to find the home of your dreams, and that in this buyers market, you can easily pick up a move-in-ready home at a bargain price.
You'd be wrong. As many would-be buyers are discovering, in many areas, few nice houses are on the market. Not only can you not get a deal on a house in good condition, you may not be able to get a house in good condition at all.
"As weak as demand is, inventory has been weaker," Glenn Kelman, chief executive of the brokerage firm Redfin Corp., told The Wall Street Journal. "Right now, the absence of inventory is the limiting factor on sales volume."
The Journal interviewed Ross Kutash, a lawyer in Los Angeles, who has looked at more than 36 houses in various Los Angeles suburbs, in a vain attempt to find a home for himself, his wife and their baby.
"On paper, all of the conditions are great for buying, but the reality doesn't seem to match that," Kutash said to the WSJ. "I wouldn't describe it as a buyers market so much as no market at all."
A new report by Realtor.com shows that inventory of homes for sale, including condos and town homes, is down more than 20% since last year. Inventory declined in all but two of the 146 markets analyzed by Realtor.com. Inventory declines were greater in some areas: 49.3% in Miami, 47.54% in Phoenix and 45.6% in Orlando, Fla., for example.
Iglesia ni Cristo hasn't revealed its plans for the boarded-up town, other than to say it will reopen the gas station. No word yet on the fate of the World Famous Longhorn Saloon.
Remember that Wild West town we wrote about that was for sale?
It may be considerably less wild in the future. The town of Scenic, S.D., was bought by a Filipino Christian church.
No one knows what the Iglesia ni Cristo (Church of Christ, in Tagalog) has planned for the 59 acres near the Badlands. Church representatives have not responded to media requests, and David Olsen, the real-estate agent who represented the seller, signed a nondisclosure agreement.
Final price was $700,000, according to the Rapid City (S.D.) Journal, citing public records. The deal includes 59 parcels of land, which hold a gas station and convenience store, the World Famous Longhorn Saloon, a museum, two houses and two jails.
Buying a new home and letting the old one go into foreclosure, or doing a short sale, appeals to some homeowners. It's not easy, but some can do it. Should they?
It's hard to live in a house with a $500,000 mortgage you're struggling to pay and see someone buy the same house for $250,000 across the street.
So you fantasize about getting rid of your house with the giant underwater mortgage and buying another house — bigger or smaller, but definitely cheaper. "Getting rid of" your house, of course, is likely to involve letting it go into foreclosure or working with your bank on a short sale.
It's a strategic-default tactic known as "buy and bail," and it's controversial.
Most people struggling to pay an underwater mortgage are in no position to buy and bail because they couldn't even qualify for their existing mortgage these days, let alone for the mortgage on two homes.