Thursday February 05, 2009, 6:45 AM

The tax break was approved without dissent and came on a day in which Obama pushed back pointedly against Republican critics of the legislation even as he reached across party lines to consider a reduction in the spending it contains.

“Let’s not make the perfect the enemy of the essential,” Obama said as Senate Republicans stepped up their criticism of the bill’s spending and pressed for additional tax cuts and relief for homeowners. He warned that failure to act quickly “will turn crisis into a catastrophe and guarantee a longer recession.”

Democratic leaders have pledged to have legislation ready for Obama’s signature by the end of next week.

While they concede privately they will have to accept some spending reductions along the way, conservative Republicans failed in their initial attempts to force deep cuts in the bill.

On another contentious issue, the Senate upheld a labor-backed provision requiring that only U.S.-made iron or steel used in construction projects paid for in the bill. A move by Sen. John McCain, R-Ariz., to delete the so-called Buy American requirement failed, 31-65.

Sen. Johnny Isakson, R-Ga., who advanced the homebuyers tax break, said it was intended to help revive the housing industry, which has virtually collapsed in the wake of a credit crisis that began last fall.

The proposal would allow a tax credit of 10 percent of the value of new or existing residences, up to a $15,000 limit. Current law provides for a $7,500 tax break but only for first-time homebuyers.

Isakson’s office said the proposal would cost the government an estimated $19 billion.

Democrats readily agreed to the proposal, although it may be changed or even deleted as the stimulus measure makes its way through Congress over the next 10 days or so.

Other GOP attempts to change the measure went down to defeat. The most sweeping of them, by Sen. Jim DeMint, R-S.C., failed on a mostly party-line vote of 36-61. It would have replaced the White House-backed legislation with a series of tax cuts on personal and business income and capital gains at the same time it made cuts passed during the Bush administration permanent.

“This bill needs to be cut down,” Republican Mitch McConnell of Kentucky said on the Senate floor. He cited $524 million for a State Department program that he said envisions creating 388 jobs. “That comes to $1.35 million per job,” he added.

After days of absorbing rhetorical attacks, Obama and Senate Democrats mounted a counteroffensive against Republicans who say tax cuts alone can cure the economy.

Obama said the criticisms he has heard “echo the very same failed economic theories that led us into this crisis in the first place, the notion that tax cuts alone will solve all our problems.”

“I reject those theories, and so did the American people when they went to the polls in November and voted resoundingly for change,” said the president, who was elected with an Electoral College landslide last fall and enjoys high public approval ratings at the outset of his term.

Obama did not mention any Republicans by name, and most have signaled their support for varying amounts of new spending.

Even so, the president repeated his retort word for word in late afternoon, yet softened the partisan impact of his comments by meeting at the White House with senators often willing to cross party lines.

His first visitor was Sen. Olympia Snowe, R-Maine, a moderate GOP lawmaker. Later he met with Sens. Susan Collins, R-Maine, and Ben Nelson, D-Neb.

“I gave him a list of provisions” for possible deletion from the bill, Collins told reporters outside the White House. Among them were $8 billion to upgrade facilities and information technology at the State Department and funds for combatting a possible outbreak of pandemic flu and promoting cyber-security. The latter two items, she said, are “near and dear to her,” but belong in routine legislation and not an economic stimulus measure.

Collins and Nelson have been working on a list of possible spending cuts totaling roughly $50 billion, although they have yet to make details public.

First and foremost, industry specialists say, you should resist the natural human tendency to freeze up. Face the issue head on and prepare for days and weeks of making phone calls and corresponding with people who may be able to help.
“Don’t assume it’s too late to act,” said Ralph Roberts, a consumer advocate in Michigan and co-author of Foreclosure Self-Defense for Dummies. “As long as you are residing in the home, you probably have some opportunity to keep your home.”

Roberts, a Realtor who lost his home to foreclosure back in the 1970s, said people facing foreclosure have more avenues to pursue than they might realize-certainly more than the typical “pay up or move out” that many people think is their only choice.

Potential solutions include:

- Negotiating a modification of the loan.
- Refinancing the loan.
- Listing the home through an agent for a possible “short sale.”
- Selling the home to an investor on your own.
- Declaring bankruptcy.

Short sales-in which the lender agrees to take less than is owed on the home, writing off some or all of the loss to avoid the expense of a foreclosure-typically are handled by real estate agents, which at least takes some of the pressure off of a harried homeowner. Many professional real estate agents are working more short sales these days and have buyers lined up looking for bargains, though the process can be slow and frustrating.

“The banks are just not moving fast enough. They are sitting on these, and it’s outrageous. Something’s got to be done about that” at the national level, said Ernst Urbainczyk, a veteran agent with Keller Williams Heritage Realty in Lake Mary, Fla. Lenders may also reject short-sale offers, sometimes leaving the seller with little or no time to prevent the foreclosure.

Matthew Englett of Kaufman Englett & Lynd, an Altamonte Springs, Fla., law firm that specializes in foreclosure defense, real estate litigation and bankruptcy, said there are usually several different defenses a borrower can take to dispute a foreclosure, including “wrongful or misleading conduct on behalf of the lender or its agents.”

As the case moves forward, the law firm negotiates with the lender to try to get it to modify the mortgage with a lower interest rate and loan amount.

“In many cases, that would mean the principal would have to be reduced,” Englett said. The law firm charges a flat fee ranging from $1,750 to $2,500 for its foreclosure-defense cases.

© 2009, The Orlando Sentinel (Fla.).

Asking rents fell 0.1 percent from the previous quarter, to $1,052 on average, their first quarter-to-quarter decline in almost six years. Effective rents, what tenants actually paid, fell to an average $996 last quarter, down 0.4 percent from the prior quarter.Vacancy Rate

The vacancy rate rose to 6.6 percent in the fourth quarter from 6.2 percent in the third quarter and 5.7 percent at the end of 2007. The fourth quarter matched the vacancy rate in 2005’s first quarter and was the highest since the fourth quarter of 2004, when it was 6.7 percent, according to Reis.

Vacancies increased in 66 of the 79 cities measured by Reis and effective rents fell in 54 markets.

The net change in occupied space, a measure of leasing known as absorption, shrank by 13,283 units. ]]> http://www.superiorpropmgmt.com/blog/2009/01/rents-show-first-decline-in-over-five-years/feed 0 http://www.superiorpropmgmt.com/blog/2009/01/nonprofit-group-says-lenders-must-modify-loans http://www.superiorpropmgmt.com/blog/2009/01/nonprofit-group-says-lenders-must-modify-loans#comments Mon, 12 Jan 2009 20:27:16 +0000 admin http://www.superiorpropmgmt.com/blog/?p=110 In a report Thursday, the Center for Responsible Lending, a nonpartisan research firm, called on lenders to modify mortgage terms for subprime borrowers, saying the financial damage caused by subprime lending will fester without modifications.

The organization pointed out that 1.5 million families have lost their homes and another 2 million families are facing that fate.

“Because the foreclosure crisis is at the root of this recession, the continuing flood of foreclosures stymies any chance of real economic recovery,” says Center for Responsible Lending president Michael Calhoun. “Any economic stimulus would be a Band-aid solution unless we stop the hemorrhaging in our housing market.”

In its report, the group urges the Treasury to require recipients of funds from the governments’s Troubled Assets Relief Program to adopt streamlined modification programs and also guarantee sustainably modified mortgages against default.

The Center also says Congress should act fast to lift the ban on judicial loan modifications, which would prevent hundreds of thousands of foreclosures without requiring any taxpayer funding.

H.R. 384, The TARP Reform and Accountability Act, was offered by Rep. Barney Frank (D-Mass.), chair of the House Financial Services Committee. The bill would require the Treasury Department to develop a program, outside the Troubled Asset Relief Program, to stimulate demand for home purchases and lower property inventories, by making affordable mortgages available for qualified buyers through interest rate buydowns, a priority of the NATIONAL ASSOCIATION OF REALTORS®.

The measure would amend the TARP provisions of the Emergency Economic Stabilization Act of 2008 to make significant steps to reduce foreclosures, strengthen accountability and close loopholes. The Treasury could consider the impact of areas with the highest inventories of foreclosed properties.

NAR President Charles McMillan was heartened by the legislation that would move the housing market forward.

“The bill proposed by Chairman Frank is an important first step toward launching a real estate recovery. Housing has always led this country out of economic downturns, and this bill recognizes that the key to bolstering the overall economy is creating stability in the real estate markets. With foreclosure relief, improving the Hope for Homeowners Plan, and expanding TARP to support commercial real estate loans and commercial mortgage-backed securities, this legislation will help create housing stability.”

“By directing the Treasury Department to increase the availability of affordable mortgages rates for qualified home buyers and to offer reduced rate loans designed to stimulate demand for home purchases and clear inventory of properties, Chairman Frank has responded to the most critical issues facing potential homeowners,” McMillan said.

Foreclosure relief, using the second half of the $700 billion previously authorized by Congress, would be conditioned on stipulation that $50 billion be used for foreclosure mitigation and calls for a plan to be put into action by March 15. That would allow the Treasury to begin committing the remaining TARP funds for the plan no later than April 1.

The plan would require that foreclosure assistance must apply only to owner-occupied residences. Further, the bill would provide liability protection for loan servicers who engage in loan modifications. Such servicers would have to report regularly to the Treasury.

In addition, the Treasury would be authorized to provide support for commercial real estate loans and commercial mortgage-backed securities, an NAR priority.

NAR has been urging the incoming Obama administration, as well as Congress, to address critical housing needs.

“This legislation is a great beginning, but more needs to be done. We must continue to bring potential homebuyers into the market by ensuring low mortgage interest rates, making the higher 2008 conforming loan limits permanent, and applying the $7,500 tax credit to all homebuyers and making it non-repayable,” McMillan said.

Source: NAR

Here are four reasons why home-shoppers need the help of a real estate professional.

• Searching only online means shoppers can miss some of the best alternatives. Shoppers who limit themselves to only looking at real estate Web sites will overlook some very good properties, possibly one that is perfect for them, and they won’t get up-to-the minute information.

• Lookout for fake listings. People trying to collect page views so they can pump up their advertising returns can waste the time of real home shoppers. Using a professional to vet properties before spending a lot of time trying to track down these decoys will save time and ultimately money.

• Home value Web sites only go so far. Sites like Zillow.com and Cyberhomes.com put prices out there that may or may not be an accurate reflection of neighborhood or housing value. Working with a professional means the buyer gets the benefit of a broader range of knowledgeable resources.

• Understanding the process. Once they’ve found a property, working with a pro means they’ll follow the right path to close the deal. For anyone–but experienced investors–going it totally alone can be risky.

Source: US News & World Report, Matthew Badyk (01/07/09)

The suspension doesn’t include vacant single-family properties.

The extension will provide extra time to loan servicers to help troubled borrowers find alternatives to foreclosure. It will also allow extra time to implement the Streamlined Modification Program, which went into effect on Dec. 15, 2008, and sets out to expedite loan modifications for eligible borrowers who have missed three or more mortgage payments.

Source: Freddie Mac (01/08/09)

Property professionals initially had welcomed short sales but soon found the process to be a frustrating one–due to squabbling about the sale price and slow approval times by the mortgage companies–that often ended with no sale at all.

“Short sales have received such a bad reputation among real-estate agents that, as a portion of the overall mortgage market, they have gone down,” says Tom Popik of the research firm Campbell Communications, whose November survey of realty practitioners found that agents had to wait as long as 8.1 weeks to receive a response from the lender on a short sale. That was nearly double the 4.5 weeks the process took earlier in the year.

Fannie Mae’s pilot will focus on homes that are listed at less than the mortgage balance and carry a Fannie Mae-backed loan serviced by Countrywide Financial Corp.
If it proves successful, the concept could be expanded to other geographical areas and additional lenders. There are concerns, in the meantime, about the program’s success, with real estate agents noting that property prices could decline before the pre-approval is issued.

Source: The Wall Street Journal, Nick Timiraos (01/09/09)

“Interest rates for 30-year fixed-rate mortgages fell for the 10th week … due in part to the Federal Reserve’s recent purchases of mortgage-backed securities issued by Freddie Mac, Fannie Mae and Ginnie Mae,” says Freddie Mac Chief Economist Frank Nothaft.

Other rates also dropped for the week:

• 15-year fixed rates: dropped to 4.62 percent from 4.83 percent last week. Last year at this time 15-year mortgage rates averaged 5.43 percent.
• 5-year hybrid adjustable-rate mortgages averaged 5.49 percent, a drop from 5.57 percent last week.

The only slight increase in rates this week was in 1-year ARMs, which were 4.95 percent, up from 4.85 percent last week. Overall, 1-year ARMs were still down for the year from last year’s 5.37 percent.

Freddie Mac began tracking rates in 1971.

Source: The Wall Street Journal, Amy Hoak (1/09/09)

Regional mall vacancies rose to 7.1 percent last quarter from 6.6 percent in the third quarter. The vacancy rate at neighborhood and community shopping centers rose to 8.9 percent in the fourth quarter from 8.4 percent in the third quarter.

Asking rents at malls fell 0.2 percent from the third quarter, but rose 0.3 percent from a year earlier. Asking rents at shopping centers fell 0.3 percent from the third quarter and were up 0.4 percent from a year earlier.

Until the economy stabilizes, vacancies are likely to continue to increase, predicted Victor Calanog, director of research for Reis. “So much of consumer spending depends on the wealth effect,” he said.

In 2009, 12,000 retail stores will close, reported Howard Davidowitz, chair of retail consulting and investment-banking firm Davidowitz & Associates Inc.

Source: Bloomberg, Hui-yong Yu (01/07/2008)