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WHO QUALIFIES FOR FRESH START™

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For information about San Diego homes in La Jolla and Mission Beach, luxury Los Angeles real estate, Orange County CA homes and California waterfront properties, call Bob Cumming of Keystone Group Properties at 310-496-8122. Keystone Group Properties services buyers and sellers of Southern California coastal luxury homes from Malibu and Santa Monica to Newport Beach real estate, and distinctive homes in Beverly Hills.

WHO QUALIFIES FOR FRESH START™

Keep in mind that in order to qualify for FRESH START™ there are some very important guidelines, which must be followed.  Below is a brief list of the primary underwriting guidelines.

  •  Homeowner must have verifiable income; all income will be verified to guidelines.  Temporary income such as Unemployment, Short Term Disability, etc. will not be allowed.
  • The homeowner’s income must have a Front End Debt Ratio of no greater than 40%.   This is the homeowner’s gross household income versus the new rental payment.
  • Primary Residences only, no rental or income producing properties allowed.  1-­‐4 unit properties are permitted; however the owner must reside in at least one of the units.
  • Property must be in Marketable Condition.  Marketable condition is defined, as there are no deferred maintenance issues such as leaking roofs, missing siding, etc. There are also no functional obsolesce of the subject property such a missing or non-working A/C Units, missing water heaters, sinks, tubs, toilets, countertops, etc…
  • The client-­‐homeowners property must be valued at least 20% less than what is owed on the 1st mortgage. In example someone who has a home valued at $100,000.00 must have a mortgage owing on the1stmortgage of at least $120,000.00.
  • The home must be 2 or more payments past due. Under no circumstance should anyone encourage a homeowner to skip or miss payments to their mortgage(s). If a homeowner is capable of making their mortgage payment(s) they should do so.
  • FRESH START™ does not provide services for stopping or delaying Foreclosures or Trustee sales;should the client be in such a position the client-­‐homeowners should seek the services of someone skilled and licensed in these areas.
  • Bankruptcies:Homeowner may not be in active bankruptcy of any type at application or during the lease period.

Information by FRESH START™ Housing Program – 4029 Westerly Place, Suite 201, Newport Beach, CA 92660

Newport Beach Real Estate for sale

Introducing the FRESH START Housing Program for California Real Estate

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Keystone Group Properties services discriminating buyers and sellers of Southern CA luxury homes—properties from Newport Beach real estate and Marina del Rey homes to real estate in Pacific Palisades, Venice, Malibu, Santa Monica, and Beverly Hills real estate.
For the latest information about Fresh Start Short Sale options for coastal Los Angeles real estate, Orange County homes for sale and beach real estate in San Diego, call Bob Cumming, Keystone Group Properties, at 310-496-8122.

Introducing the FRESH START Housing Program for California Real Estate

Struggling with your current mortgage payments? You may qualify for the FRESH START Housing program.

Using the US Treasury’s HAFA Short Sale your mortgage company may be willing to forgive a significant portion of your mortgage debt, then allow you to rent back your home while re-establishing ability to repurchase your home back at today’s market value.

So if you are behind on your mortgage, I’d like to share more with you about the FRESH START Housing Program.

  1. FRESH START homeowners receive the mortgage debt forgiveness they need.
  2. Assist homeowners so they can stay in their homes.
  3. Rescue homeowners from public foreclosure.

I am your local FRESH START Certified agent, please be aware that not all real estate agents are certified to offer the FRESH START housing program.  Currently, my team is FRESH STARTing hundreds of homeowners receive the debt forgiveness they need to stop a potential public foreclosure!

Now if you’re like me, you’re skeptical when someone claims to offer something that sounds too good to be true. These days, most people claiming to FRESH START cannot offer a real solution. Well I’m pleased to inform you that this is not the case with the FRESH START Housing Program.

We are currently able to FRESH START homeowners in California, Arizona and Nevada.

Homeowners must meet minimum requirements. To learn more, call for a confidential consultation right away.  Please be aware that there is no charge for your enrollment into the FRESH START Housing Program.

We cannot emphasize enough that time is of the essence.The longer you wait the less likely I can FRESH START you!
–Taken from information by Fresh Start:  A Non-Profit Housing Initiative

Newport Beach real estate for sale

Recovery Roadblock? Mortgage Burdens Keep Job Seekers from Moving

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Call Bob Cumming of Keystone Group Properties at 310-496-8122 for the latest information about coastal Los Angeles real estate, Orange County homes for sale and beach real estate in San Diego.  Keystone Group Properties services discriminating buyers and sellers of Southern CA luxury homes.

Recovery Roadblock? Mortgage Burdens Keep Job Seekers from Moving

In what could end up becoming a vicious cycle of economic hurt, struggling homeowners who aren’t relocating for new jobs may stymie employers’ long-range growth.

So says a report from outplacement consultancy Challenger, Gray & Christmas Inc., which finds that about 7.5% of job hunters who found new positions ended up moving to a new home for work in the latter half of 2011.

Since the end of 2009, the quarterly relocation rate has averaged around 7.9%. That’s half the pre-recession rate of 15.7% and lower than the 13.2% of candidates willing to uproot during the recession.

With masses of homeowners still bound to mortgages or trapped in underwater homes, those also applying for jobs are increasingly inclined to stay put rather than abandon their properties.

“Picking up stakes remains a last resort for the majority of job seekers, many of whom are unwilling to take a loss on the sale of a home for a position that may or may not last,” said John A. Challenger, chief executive of the consultancy, in a statement. “For now, many people are stuck.”

And with most employers declining to cover employees’ relocation costs, and even fewer chipping in to lessen the impact of selling an undervalued home, there’s even less incentive for job seekers to take a chance on a new locale.

The lack of mobility, Challenger claims, could be “one of the biggest obstacles to economic recovery.”

“Eventually, as the economy continues to improve, employers will exhaust the local talent pool,” he said. “If job seekers are still unable or unwilling to move at that point, it is likely to stall companies’ expansion plans and ultimately stall economic growth.”

Los Angeles Times, January 26, 2012

Bel Air CA homes for sale

 

Sales Stir Hope for Housing Market

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For information about high-end Los Angeles County Southern California luxury real estate and luxury homes in coastal Orange County and San Diego, call Bob Cumming of Keystone Group Properties at 310-496-8122. Keystone Group Properties serves discriminating buyers and sellers of exclusive So Cal real estate from Newport Beach, Dana Point, and Coto de Caza; to Marina Del Rey, Hermosa Beach, and Ladera Ranch; to Pacific Palisades, Rancho Margarita, Santa Monica, Malibu, and Irvine, and inland to Beverly Hills California real estate.

Sales Stir Hope for Housing Market

Sales of previously owned homes rose in December for the third straight month, bringing the supply of homes listed for sale to the lowest level since 2006 and offering a glimmer of hope that the housing market could be starting to climb out of a profound downturn.

Existing-home sales increased 5% in December from a month earlier, to a seasonally adjusted annual rate of 4.61 million units, the National Association of Realtors said Friday. Lawrence Yun, the Realtors’ chief economist, called the December gain “a good finish to a very tough year.”

Southern California Real EstateMany economists had predicted that 2011 would be the worst year on record for existing home sales, but the year ended with 4.26 million sales, about 1.6% higher than the 4.19 million existing homes sold in 2010. Market-watchers attributed this to a minor surge in sales at year-end, driven by historically low mortgage rates, falling prices, active investor-buyers and increasing consumer confidence.

Still, economists cautioned that it’s too early to assume that the market is recovering. “These were positive numbers, but that doesn’t mean the market is getting better. Lenders have been trying to get rid of distressed homes, and investors been snapping them up,” said Patrick Newport, chief economist at IHS Global Insight. According to the Realtors report, investors purchased 21% of all homes in December, up from 19% in November.

The inventory of homes for sale declined in December to 2.38 million, the equivalent of a 6.2-month supply, assuming the pace of sales remain at December’s level. A six-month supply of homes typically is considered healthy, although NAR’s numbers don’t take into account the “shadow inventory” of homes that are either in foreclosure or on bank balance sheets and not yet listed for sale.

Prices, meanwhile, continue to fall. The median price in December was $164,500, down 2.5% from a year earlier. Prices were down in all regions except the West, where prices rose slightly, compared with a year ago. For all of 2011, the median was $166,100, the lowest since 2002.

“What you really want to see is sales going up, inventories going down, and prices going up, not down,” said David Semmens, an economist with Standard Chartered. “People still feel they can hold off buying a house because the recovery won’t be that aggressive. It’s still very much a buyer’s market.”

That buyer’s market allowed Andrew Gonzales, a 24-year-old police officer in Santa Fe, N.M., to be picky about price when looking for a home for himself and his three-year-old daughter. He closed last month on a $132,000, three-bedroom home in Rio Rancho, a suburb of Albuquerque, after the price was cut twice. Just before closing, the home was appraised for $18,000 higher than the sales price, at $150,000, by a private appraiser.

“I got tired of paying rent, and I’m a single father, so I wanted a home for my daughter,” he said. “I was just waiting for the price to come down.”
Article courtesy of The Wall Street Journal, January 21, 2012

Hermosa Beach Properties for Sale

Interest rates should stay low until late 2014

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For information about luxury Los Angeles real estate, Orange County CA homes, and coastal San Diego homes in coastal areas of Southern California, call Bob Cumming of Keystone Group Properties at 310-496-8122.  Keystone Group Properties services buyers and sellers of exclusive Southern California homes—Newport Beach and Laguna Beach to San Juan Capistrano and Marina Del Rey, Malibu, and Irvine as well as exclusive Beverly Hills real estate and distinguished Bel Air and Beverly Glen homes.

Interest rates should stay low until late 2014

The Federal Reserve signaled Wednesday that a full economic recovery could take nearly three more years, and it went further than ever to assure consumers and businesses that they will be able to borrow cheaply well into the future.

The central bank said it would probably not increase its benchmark interest rate until late 2014 at the earliest — a year and a half later than it had previously said.

The new timetable showed the Fed is concerned that the recovery remains stubbornly slow. But it also thinks inflation will stay tame enough for rates to remain at record lows without igniting price increases.

Chairman Ben Bernanke cautioned that late 2014 is merely its “best guess.” The Fed can shift that plan if the economic picture changes. But he cast doubt on whether that would be necessary.

“Unless there is a substantial strengthening of the economy in the near term, it’s a pretty good guess we will be keeping rates low for some time,” he said.

The Fed has kept its key rate at a record low near zero for about three years. Its new time frame suggests the rate will stay there for roughly an additional three years.

The bank’s tepid outlook also suggests it’s prepared to do more to help the economy. One possibility is a third bond-buying program that would seek to further drive down rates on mortgages and other loans to embolden consumers and businesses to borrow and spend more

In a statement after   a two-day policy meeting, the Fed said it stands ready to adjust its “holdings as appropriate to promote a stronger economic recovery in the context of price stability.”

Treasury yields fell after the midday announcement. But yields stopped falling after the bank later issued forecasts for the economy and interest rates. They showed that while some members foresee super-low rates beyond 2014, six of the 17 members forecast a rate increase as early as this year or next.

It was the first time the Fed had released interest-rate forecasts from its committee members. It will now do so four times a year, when it also updates its economic outlook.

The rate forecasts are an effort to provide more explicit clues about the Fed’s plans. They also coincide with a broader Fed effort to make its communications with the public more open.

Lower yields on bonds tend to encourage investors to shift money into stocks, which can boost wealth and spur more spending.

Stocks, which had traded lower before the Fed’s announcement, quickly recovered their losses. The Dow Jones industrial average closed at 12,756.96, its highest close in more than eight months.

Some economists said the new late-2014 target may foreshadow further Fed action to try to invigorate the economy.

Julie Coronado, an economist at BNP Paribas, said she thought the Fed was indicating that it will step up its purchases of bonds and other assets if economic growth fails to accelerate — even if it doesn’t slow.

That is a “very low bar indeed,” she wrote in a note to clients.

Other analysts fear that the Fed’s longer-term timetable for a rate increase could hamstring it, even though Bernanke stressed the Fed’s ability to adjust rates as it sees fit.

Dana Saporta, an economist at Credit Suisse, worried that the much-longer timetable would compromise the Fed’s credibility if it must raise rates sooner because of unexpectedly strong growth and inflation.

“It’s striking that the Fed would make an implicit commitment for almost three years,” Saporta said. “It seems like an awfully long time to make such a statement. Given that no one knows what will happen … the (Fed) may eventually regret this.”

The central bank slightly reduced its outlook for growth this year, from as much as 2.9 percent forecast in November down to 2.7 percent. For the first time, the Fed provided an official target for inflation — 2 percent — in a statement of its long-term policy goals.

The bank sees unemployment falling as low as 8.2 percent this year, better than its earlier forecast of 8.5 percent. December’s unemployment rate was 8.5 percent.

Those rates are still far higher than normal. The Fed didn’t set a formal target for unemployment, but it said a rate between 5.2 and 6 percent would be consistent with a healthy economy.

Bernanke noted that the Fed expects only moderate growth over the next year. He pointed to the persistently depressed housing market and continued tight credit for many consumers and companies.

But for now, the American economy is looking a little better. Companies are hiring more, the stock market is rising, factories are busy and more people are buying cars. Even the home market is showing slight gains after three dismal years.

Associated Press, January 25, 2012

Irvine CA Homes for Sale

Calif. House Price Drop 7th Biggest in U.S.

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For information about luxury real estate in Southern California from Los Angeles County to coastal Orange County and San Diego homes, call Bob Cumming of Keystone Group Properties at 310-496-8122. Keystone Group Properties serves discriminating buyers and sellers of exclusive California properties—Newport Beach and Marina Del Rey homes; Manhattan Beach to Pacific Palisades real estate; Redondo Beach, Santa Monica, Malibu beach property to exclusive Los Angeles homes in Beverly Hills and Beverly Glen California.

Calif. House Price Drop 7th Biggest in U.S.

Real Estate for Sale

Core Logic Chart

California house prices had the seventh-biggest price drop among U.S. states in November, falling 5.9% from year-ago levels, according to Santa Ana-based data firm CoreLogic.

When distressed houses — bank-owned properties and homes selling for less than their mortgages — are removed from the mix, prices were down 0.9% from the previous November.

On the one hand, California no longer ranks among the top five states with the biggest price drops. But six years into the housing market crash, it’s still in the top 10 (See chart at right).

By comparison, the national average price drop was 4.3% including all single-family houses in the nation, and 0.6% when distressed housing was excluded.

Said Mark Fleming, CoreLogic’s chief economist:

“With one month of data left to report, it appears that the healthy, non-distressed market will be very modestly down in 2011. Distressed sales continue to put downward pressure on prices, and is a factor that must be addressed in 2012 for a housing recovery to become a reality.”

In addition, CoreLogic’s latest Home Price Index (HPI) shows …
•    In Orange County, single-family house prices fell 4.9% from November 2010. That compares to a 4.7% decrease year-over-year in October.
•    Excluding distressed houses, O.C.’s prices were down 2.5% (compared to 3.2% in October).
•    Nationwide, home prices declined 1.4% from October to November, the fourth consecutive month-to-month decrease.
•    U.S. home prices were 32.8% below the peak of the housing bubble in April 2006; non-distressed house prices were down 23.1% from the market peak.
•    Nevada had the nation’s biggest price drops in November: Down 11.2% for all houses and down 8.8% excluding distressed properties.
•    Vermont had the nation’s biggest price gain: Up 4.3% including distressed housing and up 1.5% without it.
•    Of the 50 states, prices were up in just nine and in Washington, D.C.; they were down in 38 states and unchanged in three.
•    Of the 100 biggest metro areas, 77 showed year-over-year price declines.
•    Among the biggest metro areas, Chicago had the biggest price drop: Down 10.5% and down 1.9% excluding distressed houses.
•    New York City and environs had the biggest gain: Up 1.3% and up 1.9% excluding distressed houses.
•    Prices were down 5.7% in Los Angeles County and in the Inland Empire.

Posted by Jeff Collins on January 10, 2012 in Lansner on Real Estate

Pacific Palisades real estate for sale

Fannie Mae Outlook for Home Prices Rises Again

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For information about distinguished Southern California luxury real estate in Los Angeles County, as well as coastal Orange County homes and San Diego homes, call Bob Cumming of Keystone Group Properties at 310-496-8122. Keystone Group Properties serves discriminating buyers and sellers of exclusive real estate in Newport Beach and Marina Del Rey, Manhattan Beach, Hermosa Beach, and San Juan Capistrano; Pacific Palisades, Mission Viejo, Rancho Margarita, San Clemente, Redondo Beach, Malibu, Irvine, and upscale Los Angeles homes in Bel Air, Beverly Hills, and Beverly Glen.

Fannie Mae Outlook for Home Prices Rises Again

The consumer outlook for U.S. home prices improved again in January, extending a recent upward trend in housing market sentiment, according to mortgage market firm Fannie Mae.

For its monthly reading, Fannie Mae said respondents in its January survey predicted home prices will rise by 1% over the next year, up from the 0.8% gain forecast in December.

Views on the direction of the U.S. economy also continued to improve. According to the respondents, 30% said they believe the U.S. economy is on the right track, up from 22% with that view in December. The percentage who said the economy is headed in the wrong direction fell to 63% of respondents, marking a 6 percentage point decline from the previous month.

Fannie Mae Chief Economist Doug Duncan pointed to a slowly improving U.S. job market as one cause for rising confidence in the long-battered housing market. ”The strengthening employment picture last Friday provides encouragement that the improving trend in consumer confidence will continue and will at some point be reflected in a firming up of consumer spending,” Duncan said.

A report last week from the U.S. Labor Department showed non-farm payrolls grew 243,000 last month, the largest gain since April. The jobless rate fell from 8.5% to 8.3%, the lowest it has been since February 2009.

Fannie Mae’s January survey also found 44% of respondents expect their personal financial situation to improve over the next year, up from 40% with that view in December.

The survey is based upon a monthly poll of roughly 1,000 adults and has a margin of error of plus or minus 3.1%.

Wall Street Journal, February 7, 2012

Pacific Palisades CA Homes for Sale

A Reprieve for Unemployed Borrowers

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For interest in Southern California luxury real estate in Los Angeles County, as well as coastal Orange County homes and San Diego homes, call Bob Cumming of Keystone Group Properties at 310-496-8122. Keystone Group Properties serves discriminating buyers and sellers of high-end La Jolla California real estate and properties from Newport Beach, Dana Point and Laguna Beach to Palos Verdes and Palos Verdes Estates, Mission Viejo, Redondo Beach, Santa Monica, and Malibu.We also present exclusive Los Angeles CA homes in Beverly Hills, Bel Air, and Beverly Glen California.

A Reprieve for Unemployed Borrowers

The New York Times

Fannie Mae and Freddie Mac recently extended their foreclosure forbearance programs to give short-term aid to unemployed homeowners, but housing counselors warn that these borrowers will need to look at longer-term solutions.
Making sense of the story

  • In a forbearance program, a lender agrees not to foreclose on a property and gives the borrower several months’ grace from or reduction in monthly mortgage payments.  The programs work best for temporary setbacks, like job loss, health problems, or natural disasters.
  • There are drawbacks to the forbearances though. The most-significant drawback is a larger total debt from the smaller payments.  The unpaid balance continues to increase during this time.
  • The new temporary mortgage payment is often set to 31 percent of the household income; in some cases lenders agree to accept no payments.  Fannie Mae’s extended unemployment program, first offered in the fall of 2010, limits any nonpayment or other forbearance plans to one year, with the second six months requiring approval by both Fannie Mae and the lender.
  • However, even with the program in place, the lender could still report a mortgage as delinquent, which could adversely affect the borrower’s credit score.
  • Because some agreements add onerous term and conditions, homeowners should also consult with a housing counselor certified by the Dept. of Housing and Urban Development.
  • In a forbearance program, a lender agrees not to foreclose on a property and gives a borrower several months’ grace from or reduction in monthly mortgage payments. The programs work best for temporary setbacks, like job loss, health problems or natural disasters.
  • Along with the reprieve come drawbacks — most significantly a larger total debt from the smaller payments. “Your unpaid balance keeps getting higher and higher and higher,” said Jennifer Murphy, the director of lender-servicer relations for the nonprofit Center for New York City Neighborhoods.
  • The new temporary mortgage payment is often set to 31 percent of your household income; in some cases lenders agree to accept no payments. Fannie Mae’s extended unemployment program, first offered in the fall of 2010, limits any nonpayment or other forbearance plans to one year, with the second six months requiring its approval as well as the lender’s.

But even with the program in place, your lender could still report a mortgage as delinquent, which would adversely affect your credit, so ask about its policy, said Martha Cedeno-Ross, a foreclosure assistance counselor with Neighborhood Housing Services of Waterbury, Conn. Because some agreements may add onerous terms and conditions, homeowners should also consult with a real estate lawyer, or a housing counselor certified by the Department of Housing and Urban Some 26,801 homeowners completed Fannie Mae loan forbearance and repayment plans in the first nine months of 2011, up 13 percent from the same period in 2010. By comparison, the total for all of 2008 was 7,892, according to Fannie Mae’s financial filings with the Securities and Exchange Commission.

To qualify, borrowers must be unemployed, which means not working at all, though a co-borrower could still be employed, said Brad German, a Freddie Mac spokesman.

To get started, gather up your financial information and consider writing a “hardship letter,” an overview that clearly states what happened and when, Ms. Cedeno-Ross said. The letter could also serve as a starting point for a loan modification and other programs. Give details about your previous salary, severance payments and unemployment benefits; if you have had job interviews, include those details, she said.

You will need to fill out the four-page uniform borrower assistance form used by both Freddie and Fannie, Mr. German said. It is also good for government mortgage assistance programs like Making Home Affordable — http://www.makinghomeaffordable.gov — and Knowyouroptions.com.

Be sure to plan an “end strategy” well before the forbearance agreement runs out.

“The big question every homeowner should find out: Where will this forbearance lead me?” said Charles Das, a housing counselor for Brooklyn Housing and Family Services. Homeowners usually get a repayment plan or a loan modification, he said, but he has seen some denied the modification because of low income.

Ms. Murphy says homeowners should use the 6 to 12 months of reduced payments to work with a financial or housing counselor, and if possible, save money and pay off secured debts.

Sometimes borrowers may determine after counseling that they cannot afford the home, said John Walsh, the president of Total Mortgage Services of Milford, Conn. They may then need to sell the home or arrange for “a graceful exit” — for instance, agreeing to give up the deed in lieu of foreclosure, or pursuing a short sale, in which the lender agrees to accept less than the mortgage balance.

To get started, gather up your financial information and consider writing a “hardship letter,” an overview that clearly states what happened and when, Ms. Cedeno-Ross said. The letter could also serve as a starting point for a loan modification and other programs. Give details about your previous salary, severance payments and unemployment benefits; if you have had job interviews, include those details, she said.

You will need to fill out the four-page uniform borrower assistance form used by both Freddie and Fannie, Mr. German said. It is also good for government mortgage assistance programs like Making Home Affordable — http://www.makinghomeaffordable.gov — andKnowyouroptions.com.

Be sure to plan an “end strategy” well before the forbearance agreement runs out.

“The big question every homeowner should find out: Where will this forbearance lead me?” said Charles Das, a housing counselor for Brooklyn Housing and Family Services. Homeowners usually get a repayment plan or a loan modification, he said, but he has seen some denied the modification because of low income.

Ms. Murphy says homeowners should use the 6 to 12 months of reduced payments to work with a financial or housing counselor, and if possible, save money and pay off secured debts.

Sometimes borrowers may determine after counseling that they cannot afford the home, said John Walsh, the president of Total Mortgage Services of Milford, Conn. They may then need to sell the home or arrange for “a graceful exit” — for instance, agreeing to give up the deed in lieu of foreclosure, or pursuing a short sale, in which the lender agrees to accept less than the mortgage balance.

By VICKIE ELMER, The New York Times
Published: Monday, January 23, 2012

La Jolla CA Homes for Sale

More mortgage relief from White House, Congressional OK doubtful

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For information about coastal Los Angeles real estate and Orange County CA homes as well as San Diego homes in La Jolla and Mission Beach, call Bob Cumming of Keystone Group Properties at 310-496-8122. Keystone Group Properties services discriminating buyers and sellers of Southern California coastal luxury homes, including properties from Newport Beach homes and Marina del Rey CA real estate to San Juan Capistrano and Pacific Palisades, Venice, Malibu, and others in addition to inland areas such as exclusive Beverly Hills real estate.

More mortgage relief from the White House — but congressional OK doubtful

President Barack Obama on Wednesday announced a sweeping plan to help underwater homeowners refinance into lower-interest loans, but funding for the proposal must be approved by a combative Congress, lowering the possibility that it will help anyone soon.

The refinancing program would be a major source of relief for the many Bay Area homeowners whose loans are for amounts higher than the value of the home but are not held by two government-sponsored entities — Fannie Mae and Freddie Mac.

Operated by the Federal Housing Administration, the plan would allow underwater homeowners to refinance into cheaper federally insured loans up to $729,750 — the FHA’s conforming loan limit in the Bay Area. Borrowers with good credit who are current on their loan payments are eligible.

Since a highly partisan Congress must approve $5 billion to $10 billion in funding, housing experts were skeptical about it passing this year, but they praised its objectives.

“We’re supporting it because it will help to stabilize an already difficult housing market,” said LeFrancis Arnold, president of the California Association of Realtors.

“It is a big deal for homeowners here who can’t qualify under normal criteria,” said Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley. “A lot of people would take advantage of this if it were up and running.”

The measure also streamlines the process of refinancing an underwater mortgage, eliminating the need for an appraisal or submitting a new tax return.

Obama announced the plan in a speech in Fairfax, Va., saying it would save an average $3,000 a year per borrower. “No more red tape,” Obama said. “No more runaround from the banks. And a small fee on the largest financial institutions will make sure that it doesn’t add to the deficit.”

The plan will help “millions of responsible homeowners,” Obama continued. “If you’re ineligible for refinancing just because you’re underwater on your mortgage, this plan changes that. You’ll be able to refinance at a lower rate, saving hundreds of dollars a month you can put back in your pocket.”

To qualify, borrowers must be current on their mortgage, have a minimum credit score of 580, and they must be refinancing a loan on a single-family, owner-occupied principal residence. Lenders only need to confirm that the borrower is employed. Loans that are more than 140 percent of the home value probably would not qualify until banks wrote down part of the balance.

Under the administration’s Home Affordable Refinance Program, more than 900,000 underwater homeowners whose loans are held by Fannie Mae or Freddie Mac already have refinanced their mortgages. That is fewer than the administration hoped, and a revision to the program was announced recently that removed limits on the size of the loan relative to the value of the house.

“There are so many people that could be helped” by the new plan, said Cathy Warshawsky, a San Jose mortgage broker and officer in the California Association of Mortgage Professionals. “They are people who are making lots and lots of money, who purchased homes that are now upside-down. They are making enough money to be able to pay their mortgages, but nobody will refinance them. If we drop their mortgage payment, they are going to go out there and spend money, buy cars and washing machines.”

Mortgage market and housing analysts were doubtful that the plan will become a reality this year.

“The goal of the program is good,” said Kevin Stein of the California Reinvestment Coalition who is also concerned about Congress. “Whether they can reach the goal is another question.”

Dustin Hobbs of the California Mortgage Bankers Association called the plan “a positive sign,” but added that “the proposal is a long way from being a reality, so at this point it’s tough to say what the end result would be.”

The proposal to pay for the program with a tax on large banks will likely be dead on arrival at a fiercely partisan Congress in an election year, noted Ed Mills, a financial policy analyst with FBR Capital Markets in Washington, D.C.

“It sounds great, but in an election year, unfortunately, it has little to no chance of ever coming into reality,” Mills said. “This is likely to be another mortgage program that comes out with great fanfare, overpromises and underdelivers.”

Underscoring that prediction, a leading House Republican released a statement blasting the plan.

Rep. Scott Garrett, R-N.J., head of the House finance subcommittee that oversees Fannie Mae and Freddie Mac, called the plan the “latest salvo of the federal government’s unprecedented expansion into our nation’s housing market.”

The White House also announced several other measures to shore up the housing market, several of which were announced by Obama in his State of the Union address. The measures include a “homeowner bill of rights” to protect borrowers from hidden fees and penalties and provide an appeal process for families fighting “inappropriate” foreclosure; a pilot program to transition foreclosures into rental housing and a program to rehabilitate neighborhoods hit by foreclosures.

Marina del Rey CA real estate for Sale

Mortgage Deal Could Bring Billions in Relief

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For information about luxury Los Angeles real estate, Orange County CA homes, and coastal San Diego homes in Southern California, call Bob Cumming of Keystone Group Properties at 310-496-8122.  Keystone Group Properties services buyers and sellers of Southern California real estate from Newport Beach and Hermosa Beach, to San Juan Capistrano and Marina del Rey, Santa Monica, and Irvine as well as exclusive Beverly Hills real estate and Bel Air luxury homes.  Ask us about coastal Southern CA homes for sale in Los Angeles, Orange, and San Diego counties.

Mortgage Deal Could Bring Billions in Relief

WASHINGTON (CNNMoney) — In the largest deal to date aimed at addressing the housing meltdown, federal and state officials on Thursday, February 8, 2012  announced a $26 billion foreclosure settlement with five of the largest home lenders.

The deal settles potential state charges about allegations of improper foreclosures based on robosigning, seizures made without proper paperwork.

The settlement includes the Justice Department and the U.S. Department of Housing and Urban Development, as well as 49 state attorneys general — all but Oklahoma.

“We are using this opportunity to fix a broken system,” said U.S. Attorney General Eric Holder at the news conference announcing the settlement.

The settlement sets up a federal monitor to oversee the process and try to prevent roadblocks and red tape that tripped many homeowners seeking help in earlier programs designed to address the housing crisis.

President Obama said the settlement will “begin to turn the page on an era of recklessness that has left so much damage in its wake.”

“No action, no matter how meaningful, is going to by itself entirely heal the housing market,” he said in separate remarks. “But this settlement is a start.”

Most of the relief will go to those who owe far more than their homes are worth, known as being underwater on the loans. That relief will come over the course of the next three years, with the banks having incentives to provide most of the relief in the next 12 months.

“This settlement is about homeowners, homeowners in distress,” said Iowa Attorney General Tom Miller at the news conference with state and federal officials.

Most of the relief will go to those who owe far more than their homes are worth, known as being underwater on the loans. That relief will come over the course of the next three years, with the banks having incentives to provide most of the relief in the next 12 months.

“This settlement is about homeowners, homeowners in distress,” said Iowa Attorney General Tom Miller at the news conference with state and federal officials.

What the settlement means to you

Principal reduction: At least $17 billion will go to reducing the principal owed by homeowners who are both underwater and behind on their mortgages.

The agreement calls for principal reduction for as many as 1 million people. But it’s unlikely the money will go that far, because many people need more than the $17,000 average reduction that would result if the money is split among 1 million homeowners.

At the same time, total principal reduction could go higher — to as much as $34 billion — since the agreement requires deeper principal reductions for the most troubled loans.

Refinancing: Officials say up to 750,000 other underwater homeowners who are current on their mortgages will be able to refinance their current loans at lower rates. They will not receive a reduction in principal, but with mortgage rates now near record lows, they could receive substantial savings on their monthly payments.

The settlement sets aside $3 billion to account for the reduced interest payments the banks will receive after the refinancing.

Robosigning payments: About $1.5 billion of the settlement will go to homeowners who had their homes foreclosed upon between Jan. 1, 2008 and Dec. 31, 2011, and who meet other criteria. They will receive up to $2,000 each.

Accepting that payment does not preclude homeowners who lost their home in an improper foreclosure from suing the bank to recover damages, Donovan said.

Federal officials say negotiations are underway to expand the settlement to nine other major servicers, which would raise the overall value of the settlement to $30 billion.

Related settlements: The deal spurred pacts between the authorities and banks in similar cases.

Oklahoma Attorney General Scott Pruitt announced a separate $18.6 million settlement that addressed homeowners whose homes were foreclosed through improper means, but did not provide help to those whose mortgages were underwater. He said he believes the broader agreement “overreached” the authority of both federal and state governments.

“We had concerns that what started as an effort to correct specific practices harmful to consumers, morphed into an attempt by President Obama to … fundamentally restructure the mortgage industry in the United States,” Pruitt said.

The Federal Reserve said it had reached an agreement with the five banks to pay $766.5 million in sanctions related to their servicing practices.

And Loretta Lynch, the U.S. Attorney in Brooklyn, N.Y., announced a $1 billion settlement with Bank of America to resolve claims of underwriting and mortgage origination fraud by B of A and mortgage lender Countrywide Financial, which B of A bought in 2008.

The bigger foreclosure problem: The $26 billion deal announced Thursday is the second biggest settlement ever involving states. It trails only the $206 billion pact in 1998 with the tobacco industry.

And it dwarfs any settlements that major Wall Street firms have reached to resolve other allegations of misdeeds related to the financial markets meltdown and the Great Recession.

Still it only will help a faction of those homeowners who are struggling with mortgages. The relief would not be available to those homeowners whose mortgages have been sold to the government-sponsored mortgage guarantors Fannie Mae and Freddie Mac.

There are 1.5 million homeowners who are 90 days or more delinquent on their mortgages but not yet in foreclosure, according to the most recent estimate from the Mortgage Bankers Association. An additional 1.9 million are in the foreclosure process. And Core Logic estimates that 11 million homeowners are underwater on their mortgages.

Obama proposes new home refinancing plan

The settlement does not preclude criminal prosecutions from being pursued. It also doesn’t stop investigations into other allegations of misdoings, such as the process of bundling loans into mortgage-backed securities and selling them to investors.

“It wasn’t the servicing practices that created the bubble nor caused the collapse,” said Donovan. “It was the origination and the securitization of these horrendous products. We will be aggressive about going after those claims.”

The deal is supposed to protect consumers when it comes to robosigning, and ensure that mortgage servicers agree to communicate better, avoid delays and give homeowners who are late on mortgage payments a fairer shake.

New York’s participation had been shaky this week, because some of the banks involved in the multi-state deal had also been sued by Attorney General Eric Schneiderman last week. Those banks — Bank of America, Wells Fargo and JPMorgan Chase — had also asked for a legal pass from Schneiderman’s lawsuit, which accuses them of deceptive foreclosure practices for relying on the Mortgage Electronic Registration System.

The big question throughout the negotiations was how much money would be available to help homeowners, which depended on how many states agreed to the deal. California’s participation raises the total settlement value by several billion dollars.

At least one consumer advocacy group, the Center for Responsible Lending, has said the deal — while “no silver bullet” — leaves room to hold banks accountable in other mortgage probes, said Kathleen Day, a spokeswoman for the nonprofit.

But other left-leaning groups, including Move On and the New Bottom Line, are continuing to urge states to hold out for a big criminal investigation and a $300 billion settlement award.

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