Woohoo 100 posts!

I just noticed that we have completed 100 posts on our blog. Now that is over the course of a year and averages about 2 per week. Not too bad, I often see real estate blogs that got off to a great start and slow down and die. Its not for lack of something to say or that the person is lazy. Its just that as commissioned sales people, we tend to focus on the things that earn us money quickly. So far this blog has earned zero; at least from my perspective. No one has mentioned the blog when they call or email, so I can only go by what I know. But I enjoy having a voice here and hopefully spreading news that is relevant to our business makes your day more interesting.

So for post 101. You are not alone in this foreclosure/short sale mess. The Boston Globe is reporting that the John Hancock Tower is in default with two of it's lenders. Hold on kids, its going to be a wild ride. See the article here.

Keeping our contractors busy

It appears that the construction trades will have a new project to work on and the elderly will have some more housing options. The Boston Business Journal reports that the Nuestra Comunidad Development Corp. has just received $5.3M to develop a parcel on the corner of Blue Hill Ave and Quincy Street in to affordable housing units for the elderly. The project is still awaiting approval from the city and will consist of 40 units and 5,000 sq ft of commercial space.

WHAT IS HOPE FOR HOMEOWNERS? (from FHA’s Website)

When the subprime mortgage crisis reached its peak in the fall of 2008, the federal government took steps to help stabilize the American housing market. The Emergency Economic Stabilization Act of 2008 was signed into law on October 3, 2008. Part of that new law includes a requirement to help qualified homeowners avoid foreclosure through federal loan guarantees and credit enhancements.

The HOPE for Homeowners act is designed to prevent qualified home owners from defaulting on their loans, and avert foreclosure. This is done through refinancing into affordable, fixed-rate mortgages.

If you are in danger of defaulting on your home loan, it's very important to contact your lender immediately and request an evaluation of your situation. If you are able to qualify, your loan officer can help you begin the paperwork to prevent foreclosure. If you are already in discussions with the bank, your loan officer may suggest HOPE for Homeowners as a way to proceed.

AM I ELIGIBLE?
Homeowners may be eligible for HOPE for Homeowners program if they meet the following criteria as specified in the HOPE for Homeowners act 2008:

• The original mortgage is dated on or before January 1, 2008
  
• The homeowner did not default on the original loan intentionally
  
• The homeowner is not invested in multiple home loans
  
• All information on the original mortgage is true (including income sources and job details)
  
• The homeowner has not been convicted of fraud
  

HOPE for Homeowners is not a simple refinancing program. While it does allow qualified borrowers who are stuck in variable-rate mortgages to refinance into affordable, fixed-rate mortgages, there is a trade-off known as equity sharing.

WHAT IS EQUITY SHARING?
Those who apply and are accepted for the HOPE program must agree to an equity sharing program. Equity is the difference between the amount of your original loan and the actual value of the home; if you sell or refinance your home after entering the HOPE program, under the terms of HOPE you are required to share any equity with the FHA. How much the government receives depends on how long you wait to sell or refinance. If you sell in the first year of your participation in HOPE, the government receives 100% of the equity. There is a sliding scale after the first year;

• Year two—homeowners can keep 10% of the equity, FHA gets 90%
  
• Year three—homeowners keep 20%, FHA gets 80%
  
• Year four—homeowners keep 30%, FHA gets 70%
  
• Year five—homeowners keep 40%, FHA gets 60%
  

After year five, homeowners split the equity from sale or refinancing 50/50 with the Federal Housing Administration. If there is no equity or negative equity at the time of sale or refinancing, the FHA receives nothing.

WHAT ARE THE BENEFITS OF HOPE?
The benefits of participating in HOPE for Homeowners include;

• Keeping your home
  
• Getting a 30-year fixed-rate mortgage (extendable to 40 years in some cases)
  
• Lower monthly mortgage payments which do not change
  

The 30-year loan is extendable in some situations. Extending the terms to 40 years is helpful in cases where the homeowner has a large amount of debt; the 40-year term reduces mortgage payments further. There are requirements and restrictions on these extended loans. Check with your lender to see if you qualify for the 40-year loan terms under the HOPE program.

The HOPE for Homeowners program runs until September 20, 2011

Small tid-bit

Every day I receive a newsletter containing real estate industry news. In this morning's newsletter there was an article about foreclosures, how agents can help those being foreclosed on and some tips for those in foreclosure. Most of it was sales pitchy and same-old, same-old.

But I did learn something. Buried in the end of the article there was a mention that many foreclosures are happening illegally because mortgage documents often have errors or looked-over provisions that the lender missed. Especially if the loan has changed hands several times and the servicing company has not kept up on it. The article suggests that one should contact an attorney that specializes in consumer law (but not a real estate attorney). The attorney may be able to find something in the document that the lender overlooked. And that may give a homeowner some time to sort it out with the lender before losing their home.

Market Snapshot

Here is a quick peak at the market. This represents all Multi-family properties sold within the past 90 days in Dorchester.

Price Range	# ofListings	Avg. Days on Market	Avg. Sale Price	Avg. List Price	Sale:List Ratio	Avg. Orig Price	Sale:Orig Ratio
$0 - $49,999	0	0	$0	$0	0	$0	0
$50,000 - $99,999	3	46	$86,333	$105,900	96	$127,567	85
$100,000 - $149,999	6	277	$138,108	$157,008	89	$228,750	66
$150,000 - $199,999	17	165	$165,891	$173,847	96	$245,763	76
$200,000 - $249,999	15	72	$229,046	$235,033	99	$255,013	93
$250,000 - $299,999	16	95	$265,709	$275,119	98	$310,419	90
$300,000 - $349,999	15	121	$313,433	$336,613	94	$359,313	90
$350,000 - $399,999	1	163	$380,000	$399,900	95	$429,900	88
$400,000 - $449,999	1	35	$445,000	$449,000	99	$469,000	95
$450,000 - $499,999	0	0	$0	$0	0	$0	0
$500,000 - $599,999	1	38	$500,000	$525,000	95	$525,000	95
$600,000 - $699,999	0	0	$0	$0	0	$0	0
$700,000 - $799,999	0	0	$0	$0	0	$0	0
$800,000 - $899,999	0	0	$0	$0	0	$0	0
$900,000 - $999,999	0	0	$0	$0	0	$0	0
$1,000,000 - $1,499,999	0	0	$0	$0	0	$0	0
$1,500,000 - $1,999,999	0	0	$0	$0	0	$0	0
$2,000,000 - $2,499,999	0	0	$0	$0	0	$0	0
$2,500,000 - $2,999,999	0	0	$0	$0	0	$0	0
$3,000,000 - $3,999,999	0	0	$0	$0	0	$0	0
$4,000,000 - $4,999,999	0	0	$0	$0	0	$0	0
$5,000,000 - $9,999,999	0	0	$0	$0	0	$0	0
$10,000,000 - $99,999,999	0	0	$0	$0	0	$0	0
Total Properties	75	Avg. 123	$234,951	$247,542	96	$287,182	86
Lowest Price: $75,000
Highest Price: $500,000
Median Price: $245,000
Average Price: $234,951
Total Market Volume: $17,621,345

Happy New Year!

Whew! 2008 was quite a year here are some of my predictions for 2009.

• Historically low mortgage rates will be available for certain borrowers in Q1
• Mortgage rates will increase as the year progresses getting close to 7%
• Foreclosure inventory will dwindle
• Prices will start to bottom out but certainly not increase.
• The rift between prices of REO and non-REO condos will continue. SF and MF prices will have less disparity between REO and non-REO.
• Location and condition will become more and more important factors in price.
• Rents will decline/remain flat as more rental units come into the market as foreclosed properties are renovated and condo owners decide to rent vs sell.
• Renters will dictate the fee structure and will demand a no-fee rental inventory.
• Foreclosures will continue but will slow down, not because of lack of properties but rather legal wranglings and procedures, bank mergers and forced borrower work-outs that will ultimately fail but in the meantime delay the inevitable.
• Short sales will become easier as lenders focus on this low-cost alternative to foreclosure.
• Local lenders will become the power players in the mortgage market, mortgage brokers will have a tough time competing against direct lenders.

Some of these are no-brainers some are certainly a hunch. Let's see in 2010 how we did.