KeNo's Housing and Economic Portal: Friday September 24 Housing and Economic stories

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Fannie Mae to Sell Foreclosed Houses With Subprime Lending Terms - (www.housingwatch.com) Thought those great low down-payment deals were gone? Think again. If you're willing to buy a home foreclosed by Fannie Mae through the new HomePath program, you may be able to purchase one with as little as 3 percent down. Even better, that 3 percent can be a gift from a family member or other third party, or a loan from a nonprofit, or a state or local government. Sound a lot like those subprime loans that started this housing mess? The terms are similar, but the big difference now is that to qualify for those favorable terms in the HomePath program, you must choose one of Fannie Mae's foreclosed homes, and you must buy it "as is." Here are the terms you can expect:

· Low down-payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only).

· You may qualify even if your credit is less than perfect, as low as 660, when most lenders want a minimum of 700.

· You can qualify as an investor or owner-occupant.

· Down payment must be at least 3 percent for an owner-occupant, but it must be funded by your own savings or by a gift, a grant or a loan from an employer, a nonprofit organization, or a state or local government. Investors must come up with 10 percent down.

· No appraisal is required.

· No mortgage insurance is required, but the terms of the loan may not be as favorable. You need to look at the options with your lender.

'Pain comes roaring back' on foreclosure front - (www.southcoasttoday.com) Foreclosure numbers continued their steady climb last month, according to numbers released Tuesday by real estate data firm The Warren Group. In Bristol County, completed foreclosures more than doubled in July, jumping from 58 in July 2009 to 121. The region has been experiencing growth in foreclosures since December. Foreclosure numbers "got better last year because there were an awful lot of programs and laws ... that encouraged them to slow down," said Vincent Valvo, editor-in-chief of Banker and Tradesman, a publication of The Warren Group. "But it's an awful lot like taking aspirin when you've got a toothache: It makes it feel better for a little while, but then the pain comes roaring back." Plymouth County saw 114 foreclosures in July, up 70 percent from the July 2009 total of 67. The number of completed foreclosures in the area began rising in March. On Cape Cod, the number of foreclosure deeds filed in July was 144 percent higher than during the same month last year, jumping from 27 in July 2009 to 66 last month. This increase marks the eighth straight month in which foreclosure numbers in Barnstable County have exceeded the previous year's total after several months of declining foreclosure levels.

Fed sees weakened Western housing - (www.ocregister.com) Fed’s San Francisco unit says Western housing “weakened somewhat” this summer in the 6th version of the “Beige Book” report for 2010. This is a Federal Reserve Board summary on regional economic conditions that’s done eight times a year. This summer admission of regional housing malaise is a stark contrast from relatively upbeat asessmenst we saw in the spring. We note that the Fed researchers found enough housing angst in the western U.S. 12th District for their July report to say demand for housing “appeared to deteriorate somewhat” vs. “largely stable” in April and “little changed” in June.

Federal aid coming to underwater debtors, to harm buyers - (www.heraldnet.com) The Obama administration is trying to jump-start its sputtering attempts to tackle the foreclosure crisis with an effort to assist homeowners who owe more on their properties than their homes are worth. On Tuesday, the Federal Housing Administration agreed that lenders can give these borrowers refinanced loans backed by the government. The lenders will be required to forgive at least 10 percent of the original mortgage amount. Investors who have control over the mortgages as part of their large portfolios will select which borrowers are invited to participate. The plan was first announced in March. Its rollout represents the latest of numerous efforts by the administration to address the housing bust. So far, the government has only nibbled around the edges of the crisis, as its programs have run into numerous problems. The lending industry was ill-prepared for a crush of distressed homeowners, the economy worsened and millions of homeowners had taken on so much debt that their financial woes have been nearly impossible to resolve. Nearly half of the 1.3 million homeowners who have enrolled in the Obama administration's main mortgage-relief program -- overseen by the Treasury Department -- have already fallen out over the past year.

How house prices and debts build ugly tensions between parents and children - (www.blogs.telegraph.co.uk) The gap between baby boomers, who continue to enjoy the wealth-enhancing effects of decades of house price inflation, and their adult children, who are burdened with soaring debts and the worst financial crisis since the 1930s, is growing wider. Several independent reports published today suggest these macroeconomic trends are creating ugly tensions in millions of homes and there may be trouble ahead for many parents and their grown-up children. First, and most encouragingly for those of us of a certain age who bought our homes more than a couple of decades ago, there is research based on Land Registry and Office for National Statistics figures which shows that Britain’s pensioners own property worth an eye-stretching total of £775bn. Better still, despite the recent mortgage famine causing prices to fall at the first-time buyer end of the housing market, pensioners – who tend to own their homes outright – continued to enjoy property price rises in most regions of the country. As a result, according to Key Retirement Solutions, homeowners aged over 65 saw their wealth in bricks and mortar rise by an average of more than £1,700 during the last three months alone. As you would expect, these riches are distributed very unevenly; nearly a third of all the country’s property wealth is owned by pensioners in London and the South East. They own housing, unencumbered by mortgages, with a market value of £250bn.