The proposal – which would sell foreclosure homes, often in bulk, to private investors from government inventory – is set to go live in the “near term”, according to the Federal Housing Finance Agency. According to reports, the two government-sponsored enterprises will allow pre-qualification for investors and third parties who want to bid on foreclosure properties owned by the government. This effectively opens the doors for foreclosure investors to get in line for bidding and save time before the full allotment of government foreclosure listings becomes available.

Government foreclosures come from several sources, most notably Department of Housing and Urban Development (HUD homes) and the Department of Veterans Affairs (VA homes). These homes come under government ownership when the federal government – due to its role as the guarantor of the mortgage secured by the property in question – takes possession of the home due to the homeowner’s default.

The hope is that investors and private equity firms will want to capitalize on a large inventory of cheap residential real estate properties that can be converted into income-generating rental properties – which are in high demand and have been for the past two years from previous homeowners, those looking to avoid buying a house in this climate, and those relocating for jobs.

As it stands now, the rental market suffers from a lack of supply while the housing market suffers from a glut of supply – a glut that has kept prices going down more and more with each quarter.

Already several major private equity firms have thrown their hat into the ring and announced intentions to actively participate in the government program. Some estimate that the foreclosure-into-rental market could be worth billions in the long run, and could deliver economic benefits to the economy as a whole beyond the profits obtained by investors if mass purchases cause home values to rise throughout the country.

The timeline for the full implementation of the program is still unclear, but the FHFA is seeking to make this a reality sooner than later – especially given the political pressure from the White House to bring stability to the housing market before presidential elections in November. Chances are the housing market will be a key issue.

Federal Foreclosure-into-Rental Program Picks Up Steam is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

You just have to know where to look.

Numbers released today, for example, show how the loan guaranty program run by the Department of Veterans Affairs is outperforming virtually every other loan or loan guaranty program in the country – even big-name, prime loan programs with strict credit requirements.

A VA loan is available to any veteran or eligible family member and offers the chance to purchase a home with no money down. This is contrast to the FHA loan program, which has a down payment of 3.5%, and conventional programs, which now almost-universally require 20% down.

One would think that a program that doesn’t require a down payment and is less strict than most programs out there today would be awash in foreclosures, but the 90-day delinquency rate is just 2.2% – compared to 4.5% for FHA. Part of the success stems from the close involvement in each loan from the agency itself, which considers itself as the ultimate advocate for its constituency: veterans.

That kind of notion – advocacy and representation in housing – is being attempted in at least two major cities. This week, the mayors of Chicago and Los Angeles – Rahm Emanuel and Anthony Villaraigosa – have announced developments in their cities’ efforts to purchase foreclosures in hard-hit neighborhoods, rehabilitate them, and sell them on the market.

Villaraigosa’s program in particular has already been underway and is steadily working to restore a few foreclosure-heavy neighborhoods in South Los Angeles. Emanuel’s program has not yet begun, but will aim to do virtually the same thing in Chicago.

Stabilization is the name of the game, both at the federal level and at the city level. More active intervention in the foreclosure market is required, as well as more of a relationship between the homeowner and the government – especially if the government is taking an active role in either guaranteeing the loan or developing the property.

Green Real Estate Shoots: What is Actually Working in the Foreclosure Market is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

The main point of the plan designed to address problems of bank and federal foreclosures requires the government to take a smaller role in the housing industry and limit the amount of loans that will be backed by government sponsored entities Freddie Mac and Fannie Mae. The reduction in the role of the government is reportedly meant to pave the way for private capital to enter the fray.

Other solutions that were offered in the plan involve short term options that will give equal share of market responsibility to the government-supported mortgage industry and the private industry. These options were also meant to reduce the mortgage portfolios handled by Freddie and Fannie. According to housing experts, the whole housing industry, even those properties lost to bank owned home lists and foreclosures, is almost entirely supported by the government, and this is what the proposal is said to be trying to change.

Analysts differ in their views with regards to the proposal. According to some, the plan will raise the costs of borrowing for consumers, which will make them even more reluctant to enter the homeownership market. They argued that homebuyers are needed to cut down the number of foreclosure homes in the country and, if costs of borrowing will increase, these homebuyers might end up staying away from the market altogether.

If this happens, analysts assert that lists of repo homes for sale will expand and prices will decline further. Another key point in the proposal identified by analysts was the suggestion to privatize home finance and just limit government backing to Federal Housing Administration programs and other efforts aimed at borrowers who belong to low and middle income households.

With foreclosure homes still at almost record highs in the whole country, government officials stated that the plan might take seven years to a full decade before it can be fully implemented and desired results become evident.

U.S. Reveals Plan for Addressing Foreclosure Homes Problems is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

Freddie Mac and Fannie Mae announced two weeks ago that it was looking into offering mortgage servicers more incentives. The two refinancing giants will need to change the existing compensation models in order to achieve said plan.

Based on the current model, mortgage servicers will not be able to receive much incentive. The said model was also not designed to meet current market conditions wherein the number of homes in Freddie Mac listings has reached record high levels.

To change the present compensation model in order to address the ballooning repo house listings and save more homes from foreclosure will require the cooperation of both the Federal Housing Finance Agency and the HUD. An investigation to determine what compensation or incentive is suited for the current housing market conditions.

The objective behind initiative is for the further exploration of better incentive models which will help address the needs and preferences of the troubled homeowners, originators, servicers, guarantors, and investors. If the government saves homes from foreclosure through this program, then sale of distressed houses will no longer be a burden.

Based on the research of Inside Mortgage Finance, the four top mortgage servicers are Wells Fargo, Bank of America, Citigroup, and JPMorgan Chase & Co.

At present, the incentives received by these mortgage servicers will more likely result to the home ending up in repo house listings, because they can easily recover their losses by collecting it from the other existing loans in the securities pool that come with each foreclosed loan.

More Incentive Pushed To Save Homes From Foreclosure is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

The Center is one of a handful of agencies supported by federal government funds designed to help homeowners avoid bank foreclosures. The agency is financed under the National Foreclosure Mitigation Counseling Program of the U.S. government. According to agency officials, the Center will run out of funds for counseling troubled homeowners by the end of January 2011.

The funds are issued by the U.S. Congress-authorized NeighborWorks America, the administrator of money to all counseling agencies designed to help prevent residential properties from falling into bank owned foreclosures in the country. However, whether the administrator can issue the necessary funding will still depend on whether legislators will be able to reach a budget agreement with the White House.

According to officials from the HomeOwnership Center, they are nearing that point when they might not be able to schedule appointments with homeowners who are on the verge of having their homes included in foreclosed property listings. Officials also added that it might sound dramatic, but the operations of agencies such as theirs always depend on what the Congress is willing to give.

Officials from the agency stated that it will be the worst time to lose financial support since a big number of local homeowners are already in danger of getting their homes sold at foreclosure auctions. They reported that, in Montgomery County alone, the number of new foreclosures filed in the courts in 2010 reached almost 5,000; a number that is already considered massive in the area, considering its size and number of residents.

Meanwhile, the housing market of Dayton is in for another grueling period as the number of unsold properties in the area continued to rise during the last month of 2010. In December of last year, a total of 1,379 units were included in the single family housing listings of the area. These are added to the already high level of unsold properties in the region, with foreclosed property listings also reaching almost record levels last year.

Counselors for Owners of Foreclosed Property Listings Seek Funds is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

The program aims to reduce the number of foreclosure properties that has been glutting the housing market in Tarrant County, Texas and to boost affordable housing.

Additionally, county officials hoped that the program would also improve neighborhoods that were badly affected by the growing foreclosure crisis. The Wells Fargo money will help the nonprofit administer the federal neighborhood stabilization program.

The nonprofit organization has been instrumental in efforts to revitalize neighborhoods troubled by high foreclosure rates and to increase the number of affordable housing in the county and Fort Worth.

According to industry experts, the nonprofit is the only organization in Fort Worth to have received the priority markets fund from Wells Fargo. They said that the funds will be used to hire a grant compliance manager and construction manager.

Tarrant County and Forest Hills officials have toured already some homes on foreclosure listings service that will be included in the program. Officials acknowledge the help given by Wells Fargo, adding that it would come a long way in helping stabilize communities severely affected by the recession and the foreclosure crisis.

Industry analysts said that recession has impaired efforts to boost access to affordable single-family houses and the recovery of the languishing housing market in the region. They believe that the region just needed some significant help to overcome the impact of the foreclosure problem.

According to officials of Forest Hills, where the first property to be acquired using the Wells Fargo grant is located, the rehabilitated houses will be returned to the market for sale to low income, moderate income and first-time homebuyers.

Forest Hills is just one of the eight cities in the county targeted to receive funds under the U.S. Department of Housing and Urban Development’s (HUD) Neighborhood Stabilization Program. Other cities that will receive federal funding are Crowley, Haltom, Hurst, NorthRichland Hills, Mansfield and Saginaw.

Industry experts said that local officials want foreclosed houses to become owner-occupied homes and not rental properties.

The Tarrant County Housing Partnership has received $4 million courtesy of the Texas Department of Housing and Community Affairs and $4 million also from the HUD to buy homes on foreclosure listings service and repair them.

Grant to Buy Homes on Foreclosure Listings Service for Rehab is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

The grant will also help homeowners who are facing the risk of losing their properties to foreclosures and those who are seeking affordable houses to rent. Industry experts said that it is important that Americans learn how to manage their finances, go through the home buying process and financially secure their future.

They explained that the funding will provide support to housing counseling organizations to allow them to continue providing assistance to families and individuals in making informed choices when buying a house and counseling homeowners who are facing foreclosure.

The housing counseling funds will help first-time buyers find foreclosure listings and purchase houses and also help homeowners remain in their properties. According to industry experts, HUD-certified counseling agencies provide homeownership counseling as well as financial management education and training to homeless families and individuals and renters.

The West Virginia funding is part of the HUD’s $60 million housing counseling grants across the country. The nationwide grant program supports the delivery of housing counseling assistance and services by 5 state organizations, 24 regional and national organization and 463 housing counseling agencies in various states and municipalities.

Additionally, three national organizations will receive about $5 million from HUD to conduct training on 4,400 counselors. These counselors will receive the necessary instructions and certifications that they will use to provide assistance to families and individuals with housing needs.

Generally, the function of regional and national agencies is to distribute the HUD housing counseling grant to community-based organizations and agencies that provide free advice and assistance to low income and moderate income families who are want to improve their living and housing conditions.

About $8 million will be used by counseling agencies to provide assistance to senior citizens who are seeking Home Equity Conversion Mortgages (HECM). They will provide housing counseling and services to the rapidly increasing number of older homeowners who want to convert their home equity into funds that they can use to pay for medical costs, home improvements and various living expenses.

Organizations and agencies that provide financial and housing counseling assistance and services help people find foreclosure listings to buy distressed homes, find rental houses and transitional housing to homeless people.

First-Time Buyers Receive Help to Find Foreclosure Listings is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

Whether you are buying for investment or for personal use, the first thing you are going to look at is your finances. Examine your monthly income, profits from investments, total savings, monthly mortgage payments, household expenses, credit card debts, personal loans, payables and receivables in the near future.

If you are buying your first house, computations are simpler because this means you are not paying any monthly mortgage payment currently. You just compute how much you can afford to allot for monthly home loan payments without affecting your other monthly bills.

As a first time home buyer, you can take advantage of current programs offered by your state or city, the Federal Housing Administration and other federal agencies so you do not have to spend at lot for down payment and closing costs.

If you are thinking about how to buy houses in foreclosure because you are thinking of rental investments, your calculations would be more complex and thorough. It is best if you first ask advice from a real estate consultant or make your investment research first online.

The next thing that would direct your search for a foreclosure is your targeted location. If you are determined to buy a foreclosure in your neighborhood, research local news, online foreclosure listings, neighborhood newsletters or simply drive around your neighborhood.

If you are targeting a place in another state or another city, you can again use online foreclosure listings or search listings in state or city newspapers. You can also visit the web sites of residential real estate firms specializing in foreclosures.

To help you with your search, ask around or within your network for a broker or agent specializing in foreclosures. Make sure the agent you hire is licensed and certified in the state you are targeting and has access to multiple listing services.

While you are looking for a foreclosure, start looking for an experienced contractor that can perform a home inspection for you. This is one of the most important decisions in your home buying process. Most problems arise from major defects in foreclosures that buyers only discover after having paid large amounts of money.

Be well informed. There are a lot of information freely available on the Internet about how to buy houses in foreclosure, but be smart also to be able to filter the information you get.

Learn How to Buy Houses in Foreclosure is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

But critics argued that the program is an expensive, temporary fix to the foreclosure problem. So far, everything works in favor of supporters of the federal tax credit. The U.S. Congress is reviewing proposals to expand the tax credit offered to first-time homebuyers to include everybody except wealthy homebuyers.

Supporters of the federal tax credit said that expanding the initiative would help boost home sales across the country, stabilize and strengthen housing prices and values and generate much needed jobs.

On the other hand, opponents of the tax credit program said that expanding it is just a waste of taxpayers’ money and will only provide a temporary solution to the problem of declining prices. The tax credit is available to prospective buyers who have not owned a property for at least three years. They should also complete the process of buying foreclosed houses on or before November 30 if they want to use the federal tax credit.

Aside from extending the deadline of the federal tax credit program, some lawmakers are contemplating making the initiative available to buyers who meet the income requirements. Others want to raise the tax credit amount to $15,000 from the current $8,000.

Under the current program, first-time homebuyers can avail of the full $8,000 credit if they purchase a property and make it their primary residence. They should also earn not more than $75,000 or $150,000 for couples. For prospective buyers who are earning not less than $75,000 and not more than $95,000, a partial tax credit is available. For joint filers, they should earn not less than $150,000 and not more than $170,000.

As of middle of September, nearly 1.4 million taxpayers qualified for the credit. It is expected that before the November deadline, the tax credit will have been taken advantage of by about 1.8 million buyers.

Some industry experts favor extending the tax credit program until the first of June 2010. They prefer the program to help homebuyers from all walks of life in buying foreclosed houses.

Debate Over Expanded Tax Credit for Buying Foreclosed Houses is a post from: Foreclosure Magazine - Read more about how does foreclosure work.

Because of the success of the Residential Abandoned Property Program, the League of California Cities decided to bestow an award on the city to recognize its efforts to alleviate the effects of the foreclosure crisis.

The program involves requiring lenders to register and maintain properties they have foreclosed to neighborhood standards. The maintenance includes cleaning and keeping the lawns green, locking fences and doors and repairing windows that have been broken.

The city government wants lenders to make the homes foreclosed for sale similar to non-foreclosed houses in the neighborhoods so that nobody would know that they are unoccupied and thus, prevent any possibility of break-ins.

Manager of the code enforcement division of Chula Vista, Doug Leeper explained that the program, which he helped develop, is designed to be a preventive measure. He said that he does not want new houses to become blighted due to the growing number of repo homes.

Under the program, lenders are required to register properties that are vacant, in default or have been foreclosed, with the city. The registration fee amounted to $70. In some cases, foreclosed properties were not registered until after the local government receives complaints that the properties are becoming dilapidated.

Jim Sandoval, city manager, said that the initiative has made a big difference and significant impact on Chula Vista and other cities across the country. He added that Chula Vista is one of the cities across the country that has been severely affected by the foreclosure crisis.

Leeper said that he relished the award received by Chula Vista because it is not often that the California League of Cities would recognize a code enforcement program.

Since 2007, the city posted almost 9,000 foreclosures requiring the local government to hire more employees to handle the growing number of homes foreclosed for sale. So far, 2,600 vacant and foreclosed properties have been registered in the city, generating $183,000 fees.

City’s Homes Foreclosed for Sale Prevention Program Awarded is a post from: Foreclosure Magazine - Read more about how does foreclosure work.