June 2011 had the distinction of boasting the largest increase in applications for mortgages in the last three months. The MBA reports that record-low interest rates are to thank for this surge in mortgage applications. Their seasonally-adjusted index of application activity grew 13 percent for the week of June 10th, 2011. This was largest boost since March 2011. We must mention that most of this influx is for refinance applications, rising 16.5 percent from the week before. Purchase applications saw a small rise -- 4.5 percent. Michael Fratantoni, the Mortgage Bankers Association's vice president of research and economics, says about the boom, "Mortgage rates have declined for 8 of the past 9 weeks. Coming off of the Memorial Day holiday, refinance application volume increased significantly, as borrowers jumped to lock in the lowest mortgage rates since last November."

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There are many circumstances that will determine if a lender provides "Cash For Keys".

But in this particular case, the sellers did very well.  Beats foreclosure hands down.

6/24/11

Mark,

Thank you so much for all you did for us at a really stressful time.  You and Sam were on top of everything and had answers when we called you.  These are some important points that happened as we were going thru a short sale.

                Foreclosure sale date was postponed.

                Lender did not hold us responsible for the deficiency of the note.

                We received $23,000 at closing for participating in the short sale process.
                $3,000 from the HAFA Program and $20,000 from Chase.

If you know of others that are going thru the same circumstances they can call us if they would

like.  You have are numbers.

Sincerely,

Walt & Marlene Klein

photo credit: GoTRISI

The downfall of the housing industry brought on a trend of Americans who are very content just renting. As home prices continue to fall and rents begin to increase that may quickly change. As home prices plummeted it was easy to wonder if homeownership was all it's cracked up to be.

Financially it makes more sense in some US cities to rent than to buy, but that won't always hold true. During 2010 rents increased modestly by about 3 percent. That is in part due to homeowners who were foreclosed and forced to rent. According to Moody's Analytics, 39 US cities have rent ratios that indicate it is better to rent than to own in the current economic state of those cities.

Moody's chief economist Mark Zandi predicts that the trend of better to rent than own will reverse this year for many of the US cities. That would be a good sign, because a healthy housing market is one where renting and owning are equally attractive. Zandi predicts, "By mid 2011 and certainly by end of 2011, buying will be superior to renting in most parts of the country."

Factors that will impact this swing include, falling home prices, rising rents, unemployment rates, tight mortgage standards, and foreclosure rates. Falling home price will increase home affordability, hopefully spurring more home sales and helping to reduce all the extra supply the housing market just can't support. Rising rents will also encourage homeownership. Foreclosure rates increasing will also drive prices down and make homeownership more affordable.

Metropolitan areas where there are national and regional job centers will continue to be areas where it makes more financial sense to rent over own. These areas include New York, Omaha and Seattle. If unemployment rates don't improve that could hender a housing recovery. The tightened mortgage standards is another factor that could influence the housing recovery.

In Denver the Price-Rent ratio is 22.08 according to Moody's Analytics. Generally if the ratio is below 15 that indicates a good time to buy. If the ratio is over 20 then it's a good time to rent and anything between 15 and 20 favors renting.

For other city ratios and to read the entire story go to www.finance.fortune.cnn.com.

Homes are very affordable, home prices have declined and mortgage rates are at record lows. Yet, buyers continue to hold out for home prices to hit bottom. If you are trying to find the bottom of the market before you finally buy a home, here's some statistics you should consider.

The chance that home prices will fall any lower varies betweeen major cities throughout the US. Markets where the economy is more steady are less likely to experience more declines in home prices. The PMI Group took into account the incomes, economic growth, the number of defaults, inventory and employment statistics of cities across America to determine the risk of home prices declining more. They reported that 20 metro areas are past their price bottoms and beginning to recover.

The report showed Denver's risk of prices falling is 26.1 percent with a prediction that prices could fall 3.4 percent within one year and 2.3 percent within five years. Omaha's risk was only 3.1 percent while Miami's risk is at 99.9 percent.

Read the entire report at www.smartmoney.com

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Last June, the Federal Housing Administration (FHA) announced the condo approval guidelines. FHA changed the approval process and the requirements for FHA financing on condo purchases - making it even more difficult to obtain an FHA loan for a condo. The new condo approval guidelines went into effect October 1, 2009.

Lenders now have to complete a condo approval process making sure that the condominium complex and its homeowners' association (HOA) meets the new requirements. Loans will be denied for buyers if the condo is not approved under the new regulations. In November 2009, FHA made changes to the condominium approval process and even made temporary exceptions to the guidelines. The new process and guidelines applied to all case numbers which were assigned on or after December 7, 2009. The new process all called for all condo approvals to expire two years after being put on the approved condominums list. After a project's approval expires, it will need to be recertified. Here are some of the new requirements:

• Owner occupancy - at least 50 percent of the total units must be owner-occupied
• FHA concentration - no more than 30 percent of the total units in the complex encumbered with FHA insurance
• No more than 10 percent of the total units may be owned by one investor
• No more than 15 percent of the total units may be more than 30 days past due on their condominium assocation fee payment (HOA dues)
• Review of pending special assessments
• Review of pending legal action against the condominium association, or its offiers or directors
• Review of hazard, liability insurance and flood and fidelity insurance if applicable
• Review of the homeowners' association budget to see that it is adequate, there are sufficient funds to maintain and preserve all amenitites and features, funding of replacement reserves for capital expenditures and deferred maintenance in an account representing at least 10 percent of the budget, and adequate funding for insurance coverage and deductivles

The temporry guidelines FHA announced for condominum project approvals with case numbers assigned on or after December 7, 2009 through December 31, 2010 changed the FHA concentration to 50 percent.

Its now past December 7 and some condominiums are now ineligible for FHA financing. The National Association of Realtors (NAR) reported that 2,200 projects are now ineligibile. Buyers wanting to purchase a condo in those complexes will not be able to do so using FHA financing until the projects are recertified. NAR estimates that 25,000 condominum projects missed their cutoff date for renewing their approval. In response to projects not renewing, FHA extended the renewal deadline for some projects. The extensions are based on the initial condo approval dates. Use the HUD website to see a list of approved condo projects. Condominium projects approved between 1972 and 1985 will still expire December 31, 2010. Projects approved after 1985 will expire anywhere between March 31, 2011 and September 30, 2011, depending on the project's initial aproval date. Visit www.hud.gov for more information.

It's uncertain what kind of impact this will have on the condo market, but it could be very detrimental, since the condo market relies so heavily on FHA financing.