Fannie and Freddie Set Timeline Requirements for Short Sales


Beginning June 15, real estate agents working with distressed homeowners whose loans are backed by Fannie Mae and Freddie Mac should expect to receive a decision on a short sale offer within 30-60 days.

The GSEs issued new guidelines Tuesday that fall under the Servicing Alignment Initiative rolled out last fall and aim to bring greater transparency to the short sale process and expedite decisions related to these pre-foreclosure sales.

Not only is a short sale an effective foreclosure alternative when home retention is no longer an option, but it keeps homes occupied and helps to maintain stable communities, according to the Federal Housing Finance Agency (FHFA).

Addressing real estate practitioners’ No. 1 complaint about short sales, FHFA directed Fannie Mae and Freddie Mac to establish a new uniform set of minimum response times that servicers must follow in order to facilitate more efficient short sale transactions.

The GSEs’ new short sale timelines require servicers to make a decision within 30 days of receiving either an offer on a property under the companies’ traditional short sale programs or a completed Borrower Response Package (BRP) requesting short sale consideration, whether it’s through the federal government’s Home Affordable Foreclosure Alternative (HAFA) program or a GSE program.

If more than 30 days are needed, servicers must provide the borrower with weekly status updates and come to a decision no later than 60 days from the date the BRP or offer was received.

According to the GSEs, this 30-day add-on will provide some leeway for servicers who may need more time to obtain a broker price opinion (BPO) or a private mortgage insurer’s approval for a short sale. All decisions must be made within 60 days.

In the event a servicer makes a counteroffer, the borrower is expected to respond within five business days. The servicer must then respond within 10 business days of receiving the borrower’s response.

The GSEs plan to use the new short sale timelines to evaluate servicer compliance with the Servicing Alignment Initiative.

Edward DeMarco, acting director of the FHFA, says the GSEs new borrower communication and timeline requirements for short sales “set minimum standards and provide clear expectations regarding these important foreclosure alternatives.”

GSE servicers must comply with the new minimum communication time frames for all short sale evaluations conducted on or after June 15, 2012, although servicers are encouraged to begin implementing the new requirements sooner.

“I applaud Fannie and Freddie for finally coming out with real guidance with real world timelines for their servicers,” commented Anthony Lamacchia, broker/owner of McGeough Lamacchia Realty Inc., which specializes in short sales. “There is no question that this will help short sales and the market as a whole.”

Last year Freddie Mac completed 45,623 short sales, a 140 percent increase since 2009. Fannie Mae’s short sale completions shot up by 101 percent over the same period, totaling around 79,800 in 2011.


Original article at

White House proposes aid for underwater homeowners

Kathleen Pender
Thursday, February 2, 2012

The Obama administration on Wednesday detailed its new proposal to let some homeowners with mortgages not owned by Fannie Mae or Freddie Mac refinance into a new loan backed by the Federal Housing Administration, even if they are underwater and have low credit scores.

The proposal, if approved by Congress, would slap a government guarantee on a lot of risky mortgages that are not government-guaranteed today. The White House says it would impose a “small” fee on large financial institutions to cover the cost of the program, which it estimates at $5 billon to $10 billion. Continue reading “White House proposes aid for underwater homeowners”

C.A.R.-Sponsored Bills, 2011

July 11, 2011

AB 278 (Hill) DRE Citation and Fine Authority – Currently, real estate licensees subject to discipline for any violation must go through the Department of Real Estate’s (DRE) administrative hearing process. Notice of discipline, no matter how minor the infraction, is published in the DRE bulletin, widely circulated among real estate agents. AB 278 would allow the DRE to issue a “civil citation” with a maximum fine of $1,000 for minor infractions. Licensees would be permitted to contest the citation through the current hearing process if they wish. The action would not be published in the DRE bulletin, unless there is a contested hearing and judgment, although it could still be discovered in the public record. Continue reading “C.A.R.-Sponsored Bills, 2011”

Rebates – Up To $4000 for making your home more energy efficient

Ever stepped back and looked at your SDGE bill, wishing that you could do something to lower your monthly bill, or wanted to take steps to make your home more energy efficient? SDG&E has a program that will work with you to do just this. Take advantage of their programs, and receive up to $4,000 in rebates just for making your home more energy efficient! While most of these programs are from SDG&E, I should mention that there are rebates from many of the water suppliers in San Diego as well.

Upgrading an existing home is an ideal way to save energy, money and conserve natural resources. And now, through Energy Upgrade California, SDG&E® customers can receive incentives along the smart energy journey.

Property owners of single-family homes are eligible for incentives of up to $4,000 for installing energy-efficient measures in their homes. Property owners can choose between two paths for participation.

– Energy Upgrade California Website

However, this program is not just for homeowners, renters can take advantage of many of this programs savings as well!

Their two largest rebate programs consist of a package of measures to decrease your energy consumption by 10-40% with measures that includes air sealing, attic insulation, duct sealing, insulation of hot water pipes, thermostatic shower-start devices, carbon monoxide detectors and combustion safety testing.

While I could easily spend the next 10,000 words describing some of their rebate programs, it may be easier to just take a look here for more information about rebate programs here in San Diego County by clicking here.


If you have used any of these programs before, please comment below to help out others who are looking into these programs! Please share your experience.


How Do We Love Real Estate Benefits?

Let us count the ways…

By Mike Cotter | Email the author | April 8, 2011


Owning real estate has benefits unlike any other investment.  Sure, there is no guarantee that real property will automatically begin to appreciate the minute we close escrow, but no investment has such guarantee. Even so called risk-less U.S. Treasury obligations are subject to market value fluctuations before maturity and are usually subject to risks of inflation. So we invest our money as we choose.

But the advantages of a real estate investment are unique and sizable.

First of all, we all have to live somewhere, and shelter is not cheap.  Investing in a home allows us to live in our investment.  Over a long period of time, this usually results not only in a positive return on our capital, but also is “free rent” while we live there.  That’s huge.

Of course, if we have to borrow money to buy a home, the monthly interest payments on the debt can be substantial.  But we get an incredibly low interest rate compared to other sources of credit. Where else can we borrow money for 30 years at an annual fixed rate of less than 5 percent?

Also, taxpayers can deduct from their income home mortgage interest up to $1 million annually.  This benefit alone often makes the monthly cost of owning a home with a mortgage less expensive than the nondeductible monthly rent of a similar home.

As for annual California property taxes, they can be substantial for new homeowners—at about 1 percent of the market price paid for the property.  But over time,  Proposition 13 allows the tax bill to grow at no more than 2 percent per year.  So, as property values rise and inflation erodes the dollar, the property tax bill becomes a relatively minor consideration.

Owners of historic properties can apply for a Mills Act agreement with their city that can cut their property tax by 60 percent in some cases—if they agree to preserve the properties.  San Clemente has such a program with 65 of the city’s 206 historic properties participating.

Adding frosting to the cake:  If we sell a home and trade down to a less expensive home after reaching age 55, Propositions 60 and 90 often allow us a one-time opportunity to transfer our relatively low existing tax bill to our new home.  That’s huge.

When we sell most investments at a gain, we usually have to pay capital gains tax.  Not so with real estate used as our primary residence.  A federal law passed a few years ago allows up to $250,000 in capital gains tax forgiveness for each property owner. So a married couple can get a $500,000 capital gain on their home without paying any capital gains tax. That’s huge.

But, let’s say our property investment doesn’t turn out very well.  For one reason or another we end up defaulting on the loan we obtained to purchase our home.  Unlike with other investments, lenders generally have no recourse other than repossessing the real estate in collecting the bad debt.  California home lenders usually have to forgive any deficiency they suffer in collecting the original “purchase money” loan.  That’s huge.

Further, while a forgiven loan has always been considered taxable income in the past by the IRS, current law in most cases prevents federal and state taxation of a forgiven home loan, at least through 2012.  That’s really huge.

Disclaimer:  I’m not an attorney.  This is a very general and incomplete review of some of the benefits of owning real estate.  Always consult with your tax attorney and CPA when making decisions with respect to real estate.

For more of the latest market news and statistics on San Clemente real estate, visit my blog or

Original article at


House votes to kill Obama mortgage plan

By Jennifer Liberto, senior writer
March 29, 2011: 8:21 PM ET

WASHINGTON (CNNMoney) — The House passed a bill Tuesday to kill a signature Obama administration program that helps homeowners stay in their homes but has faced criticism as ineffective.

The House voted 252 to 170 to stop any new funding for the Home Affordable Modification Program (HAMP). Eleven Democrats joined Republicans to defund the program.

The program taps the federal bailout that saved the big banks, providing incentives to mortgage servicers to modify mortgages for borrowers behind on their payments.

“To many struggling Americans seeking permanent mortgage relief, HAMP offered little more than false hope. More homeowners have been kicked out of the program than have received permanent relief,” Rep. Darrell Issa, the California Republican who chairs the House Oversight Committee, said in a statement.

The bill’s path in the Senate is uncertain. President Obama has vowed to veto it.

Already, House Republicans have passed three other smaller programs designed to help families and neighborhoods dealing with foreclosure. What makes the HAMP program different is the widespread criticism it has received, from both Republicans and Democrats, for being ineffective.

“It would put an end to the poster child for failed federal foreclosure programs,” said Rep. Judy Biggert, an Illinois Republican.

On Tuesday, 50 House Democrats wrote Treasury Secretary Tim Geithner a letter, urging him to reform the program, saying “HAMP must change to meet its potential.”

“Yes, the HAMP program has a lot of problems,” said Rep. Barney Frank, a Massachusetts Democrat, on the House floor. “But, the absence of any program leaves homeowners worse off.”

The outgoing special investigator general for the Troubled Asset Relief Program called HAMP a “failure,” in an interview with CNN on Friday. He said it was supposed to help 3 to 4 million underwater homeowners stay in their homes. But so far, it has only managed to help about 500,0000 homeowners.

“It’s really one of the deep failures of TARP,” said Neil Barofsky, the special investigator general. “TARP wasn’t supposed to just help the banks return to profitability, it was supposed to help people stay in their homes.”

Treasury has pointed out, on several occasions, that while the HAMP program could be better, it’s the only federal program spurring mortgage servicers to help homeowners.

“This is a very difficult housing market to fix, and this program, is at least helping fix it,” Timothy Massad, the Treasury acting assistant secretary who is overseeing HAMP, said recently to a Senate Banking panel. “It’s not enough. But it needs to be continued so we can try to ease the pain for millions of American families.”

The GOP proposal would stop Treasury from being able to help 100,0000 new troubled homeowners, according to the Congressional Budget Office. Treasury spends about $13,000 per homeowner on the program, CBO said.

It would also cut federal deficits, saving a minimal amount, $1.3 billion over the next five years.

Massad said in a statement released late Tuesday that the House move will “make it harder to prevent unnecessary foreclosures and for our country to recover from this housing crisis.”

Original article at

Home prices near 2009 lows — and may fall more

By Les Christie, staff writerFebruary 22, 2011: 2:02 PM ET

NEW YORK (CNNMoney) — Home prices took a big hit at the end of 2010, even as the rest of the economy gained steam.

National home prices fell 4.1% during the last three months of 2010, compared with 12 months earlier, according to the latest report from the S&P/Case-Shiller home price index, a closely watched indicator of market trends. They were down 1.9% compared with three months earlier.

“Despite improvements in the overall economy, housing continues to drift lower and weaker,” said David Blitzer, spokesman for S&P.

And things may get a lot worse, said Robert Shiller, a Yale economist and half of the Case-Shiller team, in a web conference after the report’s release.

“There’s a substantial risk of home prices falling another 15%, 20% or 25% more,” he said.

Shiller cited a few reasons for his bearish stance. The government is expected to reduce the presence of Fannie Mae and Freddie Mac in the housing market. These agencies currently provide loan guarantees for about two-thirds of mortgages. If they fade away, private mortgage money will have to fill the gap and the cost of mortgage borrowing will surely rise. That will hurt home prices.

There’s also talk of possibly ending the mortgage interest tax deduction for many homeowners. Meanwhile, the weak economic recovery may be threatened by higher oil prices as a result of turmoil in the Mideast.

At the web conference, Shiller’s index partner Karl Case wasn’t much more optimistic.

“I see [the market] bouncing along the bottom with a slight negative trend,” said Case, an economics professor emeritus at Wellesley College.

A widespread drop

On a seasonally adjusted basis, the national index surpassed the low it hit in the first quarter of 2009.

The decline was widespread, with 18 of the 20 large cities covered by a separate S&P/Case-Shiller index recording losses for the year. The only gains were posted by Washington, which was up 4.1%, and San Diego, which saw prices climb 1.7%.

The biggest loser for the year was Detroit, where prices dropped 9.1%.

“We’re really close to being at the bottom again,” said S&P’s Maureen Maitland. “Last year’s gains came courtesy of the tax incentives and the market is not holding up on its own.”

The impact of homebuyer tax credits ended back last spring, and the two quarters of data since then reflect that. Prices fell steeply during the third quarter, down 3.3%. When the credit was in effect, prices rose consistently, up four out of five quarters starting in the second quarter of 2009.

S&P reported that both the company’s 10- and 20-city indexes also fell month over month. In three cities, Detroit, Cleveland and Las Vegas, home prices have dropped below their January 2000 levels — yes, you’d have to go back to the past millennium to find lower prices there.

Eleven markets, including New York and Chicago, have reached their lowest levels since home prices peaked in 2006 and 2007.

The losses were not unexpected, according to Brad Hunter, chief economist for Metrostudy, a housing market research firm.

“It’s clear now that, going back to last fall, the apparent strength was a false strength,” he said. “Now that the tax credits are gone, we’re back to where the training wheels are off, to normal consumer demand.”

He expects home prices to decline gradually throughout 2011, with markets picking up only when hiring increases substantially.

Original article at

Top 10 Cities with Climbing Home Prices

Daily Real Estate News  | February 25, 2010

Top 10 Cities with Climbing Home Prices
Home prices aren’t tanking everywhere. In some cities they have bounced pretty high off the bottom, according to a report in Forbes magazine.

Altos Research examined data for every U.S. city with at least 100 homes on the market – about 8,000 cities. It identified these 10 cities as having the biggest price increases from the previous year.
Continue reading “Top 10 Cities with Climbing Home Prices”