FREDDIE MAC OFFICIALLY LAUNCHES REO RENTAL

INICIATIVE AFTER FORECLOSURE

Freddie Mac Continues Suspension of Evictions Through April 1, 2009

McLean, VA – Freddie Mac (NYSE: FRE) today announced the official launch of its new REO Rental Initiative giving qualified tenants and former owners the option to lease their recently foreclosed properties on a month-to-month basis. The REO Rental Initiative will be managed by HomeSteps®, Freddie Mac’s national real estate unit, and implemented through several national property management firms.

Freddie Mac also announced it will continue to suspend all eviction actions until April 1, 2009 to ensure there is ample time for current occupants to learn about the options available to them under the new initiative.

“Freddie Mac’s REO Rental Initiative can help ease a foreclosure’s impact by giving renters and former owners more time to determine what options are best for them and their families. At the same time, the REO Rental Initiative helps stabilize property values and local communities by keeping homes occupied and less vulnerable to vandalism,” said Ingrid Beckles, Senior Vice President, Default Asset Management at Freddie Mac.

Starting today the property management firms will begin the process of contacting occupants of foreclosed properties to determine their interest in staying in the home and their eligibility for a month-to-month lease. Occupants will be contacted only after the foreclosure gives Freddie Mac the legal authority to offer a lease.

To qualify for a lease, the tenant or former owner must occupy the property and show they have adequate income to pay the monthly rental amount established by the property management company based on market rents for the area in which the home is located. Occupants must agree to allow HomeSteps to show the home to potential buyers as it will be marketed for sale during the lease period.

Additionally the home must be in safe, habitable condition and meet all local codes for rental properties to qualify for the REO Rental Initiative.

If an occupant does not wish to lease the property, Freddie Mac will continue its current practice of offering relocation assistance. In addition, Freddie Mac will also explore available workout options with owner-occupants after Freddie Mac gains title to the property through foreclosure.

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

article taken out of the Freddie Mac webside

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Last year, before the subprime crisis hit, a home buyer was on the verge of purchasing his first home. His mortgage broker told him that qualifying for a mortgage would not be a problem.

After reviewing the numbers of an attractive teaser-rate adjustable, the buyer had second thoughts. He called a knowledgeable friend and asked her to review the loan documents with him. After fully understanding how much the loan would ultimately cost, he decided not to go through with the sale.

In the residential real estate business, a red flag refers to a condition affecting a property that might be a material fact that needs further investigation. A material fact is something that would affect the buyers’ decision to buy or the price they would be willing to pay. For example, a hole in the roof is a red flag that the roof might need replacing.

Although red flag is a concept commonly associated with the physical aspects of a property, it’s a valuable notion for home buyers to keep in mind throughout all aspects for their home search and purchase. If more buyers had raised questions about the mortgages they took out during the past several years when lending practices were lax, there would be fewer foreclosures today.

HOUSE HUNTING TIP: Home buying is an exciting experience. It can also be stressful. To ensure a satisfying home-buying experience, resolve to stay actively involved in the process. Commit to being hypervigilant. Watch out for red flags and investigate anything questionable.

Working with an excellent real estate agent will increase your confidence level. However, your agent acts on your behalf and should not make decisions for you. Always remember that you are in the driver’s seat. This applies to sellers as well.

Make sure that you work with quality professionals in your area. If your real estate agent or mortgage person doesn’t return your calls promptly, this could be a red flag this relationship won’t work well for you. Likewise, if your agent keeps showing you properties that don’t match your criteria, you could be in for a frustrating and time-consuming experience.

If you get conflicting information about a property, this could also be a red flag. It might indicate carelessness. Or, it could mean that someone is concealing a material fact. Follow through and find out answers to all your questions. There are no stupid questions when it comes to buying and selling real estate.

It’s a red flag if an inspector you hire to inspect the house you’re buying tells you that he already inspected the property for the seller, but you were never given a copy of the report.

Don’t make any assumptions without following through to verify that they are accurate. For instance, if there’s a downstairs living area with a second kitchen, don’t assume you can rent it to a tenant even if the seller has in the past.

If the property is located in a neighborhood zoned for single-family residences only, renting the downstairs might be a zoning violation. If you’re counting on income from the lower living area, you could find yourself in a house you can’t afford if the zoning regulations are enforced.

Don’t overlook upcoming changes in the neighborhood. For example, the seller should, but might not, tell you that a school is going to be built across the street. If you’re sensitive to noise, this could become a problem for you. Vacant land close to the property is a red flag.

THE CLOSING: Find out what will be built there before making a final decision.

California Association of Realtors

Housing News

What is a Mortgage?

A mortgage is a lien on a property/house that secures a loan and is paid in installments over a set period of time. The mortgage secures your promise that you’ll repay the money you’ve borrowed to buy your home. Mortgages come in many different shapes and sizes, each with its own advantages and disadvantages. Make sure you select the mortgage that is right for you, your future plans, and your financial situation.

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Article source Freddie Mac

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Lending a hand House

OKs bill for foreclosure relief

Click photo to enlarge

Three homes sit for sale in the Sierra Lakes community in… (Will Lester/Staff Photographer)

Help may be on the way for homeowners, banks and communities hit hard by the mortgage crisis after the House of Representatives approved a relief package on Wednesday.The bill gained traction after President Bush dropped his objections to it, including allocating $3.9 billion to bolster neighborhoods hit hard by foreclosures.

“Everyone’s goal is to help end the downward spiral of the housing market because that’s the threat to the health of our overall economy,” said Julie Senter, director of public affairs for the Building Industry Association for Southern California.

Most importantly, the bill, expected to be adopted by the Senate later this week, is expected to help boost the jittery financial markets.

“This will inject a degree of capital that will increase confidence in Freddie Mac, increase confidence in Fannie Mae, in banks and lending,” said Ira Jackson, dean of the Drucker School at Claremont Graduate University.

The bill passed 272-152, with all of California’s Democrats voting for approval.

Several area Republicans voted in favor of the bill, including Jerry Lewis, R-Redlands, David Dreier, R-San Dimas, and Mary Bono-Mack, R-Palm Springs.

The bill would let hundreds of thousands of homeowners, trapped in steep mortgages and plummeting home values to escape foreclosure by refinancing into more affordable, fixed-rate loans backed by the Federal Housing Administration.

As part of the bill, lenders would have to agree to take a substantial loss on the existing loans, and in return, they would walk away with at least some payoff and avoid the often-costly foreclosure process.

Jackson said the legislation simply slows down the housing calamity and will provide some stability to a very volatile market.

City officials around the region, however, are studying a provision that would provide $3.9 billion for local governments to buy and rehabilitate foreclosed homes.

Robb Steel, economic development director for Rialto, said the city is dealing with about 900 vacant homes and 200 more in early stages of foreclosure, numbers up from just a handful as recently as 2006.

“Hopefully, this legislation will come through and help turn off the spigot of new foreclosures,” Steel said.

Steel said the key to new legislation is how much money will become available to the city for preventive measures to stop the flow of fleeing homeowners.

Steel estimated that median prices in Rialto had plummeted about 40 percent since the 2006 peak. Similarly steep drops have occurred in Fontana, where a glut of newer homes have exacerbated the downturn.

“The boomtowns have really paid the price,” Steel said.

Don Gee, deputy director of the San Bernardino Economic Development Agency, said the crucial question is how federal aid would fit with measures at the state level to provide an array of resources and tools.

“We’re cautiously optimistic,” Gee said. “The city can benefit, and combined with state and local resources, this can make a difference.”

But Jackson said without the measure, mortgage rates would have continued to rise which in turn would have made it harder for homeowners to sell.

“If one property goes into foreclosure, then the homes (in the area) lose value and then the whole neighborhood starts to go,” Jackson said.

The plan also creates a new regulator with tighter controls for Fannie Mae and Freddie Mac and modernizes the FHA.

It includes about $15 billion in housing tax breaks, including a credit of up to $7,500 for first-time buyers who purchase homes between April 9, 2008, and July 1, 2009.

In Rancho Cucamonga, the housing crisis has resulted in fewer foreclosures and less neighborhood decay than in many surrounding cities, said city Redevelopment Director Linda Daniels.

With less pressure to slow the foreclosure rate and fewer residents teetering on the brink, Daniels is more hopeful about the new loan regulations and safeguards than prospects for direct financial aid.

Daniels said key provisions in the federal bill are those that tighten lending standards, which Daniels said could put in a system that limits the depth of future crises.

The bill sets a cap of $625,000 on the loans that Fannie Mae and Freddie Mac may buy and the FHA may insure.

Article taken out of the Daily Bulletin Ontario/Montclair

Liset Marquez, Staff Writer

Article Created: 07/23/2008 08:43:26 PM PDT

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Facing Foreclosure? Here’s where to get help!

Have you have suddenly found yourself in a situation where you can no longer afford to make your mortgage payments? Maybe you’ve lost your job, your monthly payment went way up, or you see it coming and want to be prepared. By seeking information, you’ve already taken the first step to find a solution. What you can do depends on your unique situation. Learn how to avoid falling into scams, know all your options, and make right decision for you and your family by arming yourself with information and resources. Below is a list of some organizations you can trust to assist you.

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Si usted tiene dificultades con pagar su hipoteca no esta solo. Talvez perdió su trabajo, subió su pago mensual, o por alguna razón anticipa tener problemas. Al estar aquí, ya tomo el primer paso. Es importante hablar con expertos que lo pueden ayudar a encontrar la mejor solución para usted y su familia. Aquí encontrara una lista de algunas organizaciones de confianza que lo pueden aconsejar.

Resources / Recursos

Welcome to Azucena Rodriguez’s Blog! This blog will provide you with valuable information, tips, and general insight into the real estate market in Rancho Cucamonga.