Assist2Sell

According to Fannie Mae’s latest quarterly report, as of June 30, 2010, the company was holding 129,310 single-family REO properties. In an effort to increase sales of its foreclosed inventory and get these properties – and the costs associated with carrying them – off its books, Fannie Mae is offering additional incentives to buyers and sellers of its REO homes.

On Thursday, the GSE announced a seller assistance incentive for properties listed on the company’s REO website,HomePath.com. Fannie is also expanding the initiative to offer an incentive to real estate agents and brokers.

Qualified homebuyers who will be owner-occupants can receive up to 3.5 percent of the final sales price that can be used toward closing cost assistance, including a home warranty, if available. In addition, selling agents representing owner-occupants will receive a $1,500 bonus.

Eligible offers must be submitted on or after September 23, 2010, and must close by December 31, 2010. The sale must close within 60 days of the offer being accepted.

WASHINGTON - The pending sales index of existing U.S. homes fell 2.6 percent to 75.7 in June, partly reflecting the end of a federal tax credit for first-time buyers of up to $8,000. The temporary tax credit originally expired June 30, but the federal government extended it to Sept. 30 for buyers who had already signed a contract and were unable to close the sale in time. Closings usually take a month or two after a contract is signed, but the rush of buyers caused additional delays. The pending sales index totaled 77.7 in May and 110.9 in April, when buyers sought to take advantage of the tax credit. The index's current level is 18.6% below June 2009, when it stood at 93.0.

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Foreclosures accounted for a third of all sales -- and sold at a nearly 30% discount -- during the first three months of 2010. According to a new report from RealtyTrac, the marketer of foreclosed properties, 31% of all sales were foreclosures. And homebuyers purchasing those properties paid a whopping 27% less, on average, compared to sales of non-distressed homes. These foreclosure sales include properties sold in short sales or after a bank repossession, known as REOs in industry terms. It does not include transfers from borrowers to banks, as in a sheriff's auction. Foreclosures have become a dominant feature of many real estate markets, finding willing buyers among young bargain hunters and savvy housing market veterans. Foreclosure sales were highest, expectedly in the bubble states of Nevada, Massachusetts, Rhode Island and Florida. Lenders have been trying to manage their inventories of foreclosed homes to prevent them from flooding the market and dragging down prices. The impact of foreclosure sales on the home sales market can have a depreciating effect on the entire inventory out there.

Pending home sales have risen for three consecutive months, reflecting the broad impact of the home buyer tax credit and favorable housing affordability conditions, according to the National Association of Realtors®. The Pending Home Sales Index, a forward-looking indicator, rose 6.0 percent to 110.9 based on contracts signed in April, from an upwardly revised 104.6 in March, and is 22.4 percent higher than April 2009 when it was 90.6. That follows gains of 7.1 percent in March and 8.3 percent in February. The data reflects contracts and not closings, which usually occur with a lag time of one or two months. Lawrence Yun, NAR chief economist, said “The housing market has to get back on its own feet and now appears to be in a good position to return to sustainable levels even without government stimulus, provided the economy continues to add jobs. A big concern surfacing recently is insufficient time to close the deal at the settlement table. However, the recent housing cycle has brought long delays related to the short sales approval process by banks, and from ongoing appraisal issues.”

According to him, homebuyers who responded to tax credits may encounter problems meeting the settlement deadline by June 30.  Because of these market challenges, NAR has asked Congress to provide flexibility on the deadline for closing.

Freddie Mac said Tuesday that its home price index for conventional mortgages it purchased last year registered a 0.4 percent decline from the fourth quarter of 2008 to the fourth quarter of 2009.

The GSE was quick to point out that this was a much smaller decline than the 9.5 percent drop in home prices recorded in 2008, perhaps signaling much needed stabilization in the marketplace. In the final quarter of 2009, the index was down 1.4 percent relative to the third quarter, on a non-seasonally adjusted basis.

“We normally see a seasonal effect in the fourth quarter price index that reduces its value. A year-over-year comparison largely controls for this,” said Frank Nothaft, Freddie Mac’s chief economist and VP. “Over 2009, the national index dipped slightly – -0.4 percent – and four-of-nine regions posted price gains.”

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