The Lawhead Team would like to share a recent article from Realtor.com about Fannie and Freddie’s foreclosure free holiday:

Fannie, Freddie Gift a Foreclosure-Free Holiday

Daily Real Estate News | Wednesday, December 10, 2014

Fannie Mae and Freddie Mac announced they plan to suspend evictions on foreclosed single-family properties nationwide during the holidays, from Dec. 17, 2014 through Jan. 2, 2015.

Legal and administrative proceedings for evictions may continue, as well as pre-foreclosure activities, but families who are living in foreclosed homes will be allowed to remain in their homes during that time.

Freddie Mac says that the foreclosure moratorium applies to all foreclosed occupied single-family homes as well as properties with two to four units that have mortgages owned or guaranteed by Freddie Mac.

“Today’s announcement will bring some holiday relief to borrowers who went through foreclosure and were preparing to move,” Chris Bowden, senior vice president of REO at Freddie Mac, said in a statement. “We strongly urge home owners with financial challenges to start the New Year by calling their mortgage servicer to explore one of the Freddie Mac workout options that have prevented over 1 million foreclosures since 2009.”

The foreclosure moratorium has become a holiday tradition, which Freddie Mac and Fannie Mae both have extended the past few holidays.

“As in previous years, we believe it is important to extend the timeline of help for struggling borrowers during the holidays,” says Joy Cianci, senior vice president of credit portfolio management for Fannie Mae. “If you are in trouble or facing foreclosure, reach out to Fannie Mae or your servicer today to get help. There are more options than ever before to avoid foreclosure. We want to help struggling borrowers whenever possible.”

Fannie Mae reports that it has completed more than 1.6 million loan workout solutions to help distressed families avoid foreclosure since 2009.

Source: Freddie Mac and Fannie Mae

Just yesterday we received a letter from the California Association of Realtors (C.A.R.) announcing new Fannie Mae and Freddie Mac Short Sale Guidelines.  See below:

Over the course of the past year and a half, C.A.R. has been working vigorously to address your concerns related to short sale transactions.  As a direct result of our efforts, we have made significant improvements through discussions with legislators, housing regulators, and lenders.

C.A.R. has long advocated for a streamlined, standardized short sale process, and I’m happy to inform you of changes announced today by the Federal Housing Finance Agency (FHFA) that will align guidelines for Fannie Mae and Freddie Mac short sales and allow lenders and servicers to quickly and more easily qualify borrowers for a short sale. 

Here are some specific changes that are effective Nov. 1, 2012:

• Eliminates current Fannie Mae and Freddie Mac short sale programs and creates a single standard short sale process for both entities (Fannie and Freddie HAFA programs will expire at the end of the year).
• Enables servicers to quickly and easily qualify certain borrowers who are current on their mortgages for short sales without waiting for an approval from Fannie Mae or Freddie Mac
• Offers special treatment for military personnel with Permanent Change of Station (PCS) orders.
• Standardizes and clarifies foreclosure suspensions on a property with an approved short sale.
• May pay borrowers up to $3,000 in relocation assistance.
• Fannie Mae and Freddie Mac will offer up to $6,000 to subordinate lien holders to expedite a short sale.

Additionally, FHFA clarified that a borrower experiencing a hardship must wait at least two years before becoming eligible for a Fannie Mae or Freddie Mac loan.

These changes follow FHFA’s announcement in June that established strict timelines for servicers to respond to short sales within 30 days of receipt of a short sale offer, provide weekly status updates to the borrower, and communicate a final decision to the borrower within 60 days of receipt of the offer.

For details of Fannie Mae’s new short sale guidelines.
For details of Freddie Mac’s new short sale guidelines.

The Lawhead Team came across a very interesting survey done by Fannie Mae about what exactly motivates consumers to own their home vs. rent.  Even the deepest housing crisis since the Great Depression wasn’t enough to dampen Americans’ desire to own their homes.

A recent study by Fannie Mae came to that conclusion and tried to answer some major questions: What influences consumers’ current home ownership status? What would motivate people to buy versus rent in the future? And are we influenced by unconscious biases that lead us to make less than ideal choices, such as buying too much house, or others that might prevent a well-qualified renter from buying at all?

Naturally, Fannie Mae — the government-owned housing agency — has a reason for investigating: the answers to these questions have implications for housing policy makers and the industry. And the survey found that home ownership still appealed to the majority of Americans: 85 percent said owning makes more sense than renting over the long term, and 64 percent of those polled said that they would buy a home if they were going to move.

The survey, which analyzed Fannie’s monthly housing survey data for all of 2011, looked at three different groups of consumers: renters, homeowners with a mortgage, and those who own their homes outright. (The Fannie Mae National Housing Survey polls 1,000 adults each month across the United States with more than 100 questions about the economy, household finances and owning and renting; this study’s full-year data includes information from more than 12,000 people.)

Researchers found that demographics — including income, age, marital status and employment status — were the primary drivers behind individuals’ current home ownership status, as well as what influenced outright homeowners’ future intentions to own or rent. And perhaps not surprisingly (particularly when mortgage underwriting is tighter) homeowners with mortgages were more likely to be middle-aged, married and employed full time with higher incomes, whereas the converse was true for renters. Outright owners tended to be older, more likely to be retired, widowed and past their peak earnings years, the study said.

But the intentions of renters and people with mortgages to buy or rent as their next move were largely driven by their financial and housing attitudes, the study said. The most influential belief was whether they thought “owning or renting makes sense financially over the long term,” which influenced all three groups, and especially renters. The perceived ease or difficulty of getting a mortgage influenced the intention of homeowners with mortgages, the study said, but wasn’t as big a factor for renters.

Meanwhile, the Fannie Mae study results also found that once consumers buy a home, get a mortgage and have a positive experience owning, they wanted to continue to own. But concerns about affordability — both for the home purchase itself and upkeep — was a major factor that discouraged renters from taking the plunge.

“For renters and mortgage-owners, aspirations for and belief in home ownership play a major role in decision-making, possibly forming a ‘home ownership optimism’ in determining whether they expect to own or rent in the future,” the Fannie Mae study said.

“It is possible that many of these drivers, especially the attitudinal ones, act as automatic or unconscious biases that lead consumers to less fulfilling and less successful housing choices,” the researchers said, adding that further research is necessary.

The Fannie Mae researchers also found that exposure to default, perceived appreciation or depreciation in home value, and self-reported underwater status had only a minimal effect on predicting whether a consumer intended to buy or rent for their next move.

The Lawhead Team would like you to share with us what has influenced your decision to buy or rent.  Has the recent housing crisis altered your views on home ownership?