New Math Equation: HAMP + HARP + TARP = DUD

I recently read this great article on It took a look at the Making Home Affordable programs and how they were intended to help millions of struggling homeowners. The only thing it appears it has done is spend hundreds of billions of tax payers money and frustrate thousands of people. What are your thoughts on the Making Home Affordable Program? Has it helped you?

It seems all that these programs are doing is spending money and delaying the inevitable…a giant wave of foreclosures.

Earlier this year, the Making Home Affordable program was unveiled to help 3.2 million struggling homeowners stay in their homes either through a loan modification or a refinance. Program names with easy-to-remember acronyms were created:

* HAMP — Home Affordable Modification Program. This is for people who are having a tough time paying their mortgage, perhaps because their interest rate has increased or they have less income.

* HARP — Home Affordable Refinance Program
. This is for people who pay their mortgages on time but are not able to refinance through conventional means and therefore, cannot take advantage of today’s lower mortgage rates perhaps due to a decrease in the value of their home.

To help support HAMP and HARP, TARP was created. The Troubled Asset Relief Program, or TARP, is a huge $700 billion bailout plan in which Congress infuses banks with hundreds of millions of dollars with the idea that banks will use these funds to do HAMP and HARP loans. Sounds easy enough.

So, what’s the problem?

Simply, it’s not working.  This week, government officials reported to the House Financial Services Committee that 70 percent of borrowers who have signed up are not getting help. Reasons?

* J.P. Morgan Chase says 29 percent of borrowers it signed up for the program did not make their new, cheaper mortgage payments.
* Bank of America said that about 65,000 of the borrowers it has helped made initial payments as required, but 50,000 of them have either not submitted all of the required paperwork or show some discrepancy in the information — putting them at risk of losing the aid.

So, it sounds like borrowers are not getting their act together, right? Wrong, according to Richard H. Neiman, New York’s top bank regulator and a member of the Congressional Oversight Panel, who said:

“We have anecdotal evidence that consumers continue to face major issues with servicers such as JPMorgan Chase and Bank of America losing their documentation or not clearly explaining the modification process to begin with.”

Or, perhaps there’s some other reason lenders won’t modify your loan.

What’s next?

Some ideas tossed about include:

* Offering a program similar to one in Pennsylvania in which unemployed workers are given low-interest loans to pay their mortgages. Eligible borrowers can get loans up to $60,000 that can be repaid over an extended period with payments as low as $25 a month.
* Continue working to get borrowers out of trial modifications and into permanent modifications.
* Streamline the documentation process and create an online portal for tracking and submitting documents.
* Pass a mortgage “cram-down” bill that stalled in Congress earlier this year which would let federal judges lengthen mortgage terms, cut interest rates and reduce loan balances for homeowners in bankruptcy court, even if the lender objects. (Or, get really crazy and do something like this judge did in Long Island).

Unfortunately, time is ticking and these ideas cannot be implemented quickly enough to keep up with the looming deadlines for these trial modifications, the increasing unemployment rate and rise in foreclosures.

If you are a troubled landowner, or have a family member or friend facing foreclosure, please give us a call for a confidential consultation about the possibility of a short sale.  Call Craig Baranowski at 850.259.1788 or email  us @ Team Baranowski has a 100% success rate for all of our short sales for 2009!

This site, Craig Baranowski or Keller Williams Realty is not providing legal or tax advice. The information provided is for educational and informational purposes only. It is recommended that sellers considering a short sale should consult an independent legal and tax adviser for more information.

IndyMac Approves Freeport Short Sale in 48 Days

It has been a very long year of negotiating short sales. It seems my days mostly consist of keeping buyers and sellers happy while the lender with the short sale package allows it to age like a fine wine. Except there is nothing fine about aging a short sale package. We employ every trick and tactic there is to speed up the short sale process and keep the files moving. 2009 has been a good year with every short sale eventually ending in a positive outcome for both the buyer and seller. It is always a great feeling helping a homeowner prevent a foreclosure.

Freeport Short Sale

This wonderful home in Freeport Florida just closed as a short sale.

Lender: IndyMac

Sale Price: $125,000

Short Sale Package Sent: September 17th

Short Sale Approved: November 5th

Approval Time: 48 Days

Prommissory Note: None

Cash Contribution: None

Buyer and seller and very happy!

If you are a troubled homeowner, or have a family member or friend facing foreclosure, please give us a call for a confidential consultation about the possibility of a short sale.  Call Craig Baranowski at 850.259.1788 or email  us @ Team Baranowski has a 100% success rate for all of our short sales for 2009!

Is a Next Wave of Foreclosure on the Horizon?

Industry experts have been closely monitoring and trying to predict if and when the next wave of foreclosure will hit. Many fear that a second wave of foreclosures is poised to hit the market and potentially undermine much of the housing recovery efforts as more homes add to the glut of inventory and drive down prices.

Many of the housing recovery efforts by the Obama administration have targeted homeowners in financial distress. The Making Home Affordable program was intended to have hundreds of thousands of financially devastated homeowners stay in their homes via a mortgage modification or avoid foreclosure by doing a short sale. These housing recovery efforts have delayed thousands of foreclosures.

It is estimated that  about 7 million properties are destined to go into foreclosure in 2010 compared to 1.27 million properties in early 2005, according to a September study by Amherst Securities Group.

There is a significant lag time between a borrower going deliquent and the bank taking the home via foreclosure. Here’s why:

1. Moratoriums. New state laws imposing short-term moratoriums have slowed the timeline from delinquency to foreclosure.

2. Overwhelmed lenders. Banks dealing with a surge in refinancing, mortgage modifications and defaults are overwhelmed with demand, so it can take longer to initiate a foreclosure sale.

3. Modifications. Many loans now are first examined to see if they might qualify for a modification. This drags out the timeline and means it is taking longer for homes to go into foreclosure.

4. Asset write-downs. Banks may in part be waiting to liquidate homes through foreclosure because they don’t want to write down the value of the asset. Lenders can keep homes on the books at a higher value until they are sold at foreclosure.

If the projections are correct this could have a significant impact on home prices across the country. We will keep an eye on how this will impact Walton, Okaloosa and Bay Counties.

Florida's Consumer Confidence Drops

Florida’s consumer confidence fell three points in June to 68. The index components were mixed, however, with perceptions of personal finances now compared with a year ago up three points from a revised May reading. All other components of the index were lower than or the same as last month. Perceptions of personal finances a year from now fell six points to 84, and perceptions of U.S. economic conditions over the next year fell seven points to 65. Perceptions as to whether it is a good time to buy big-ticket items fell nine points to 67. Finally, perceptions of U.S. economic conditions over the next five years remained unchanged at 80.

“In the previous two releases we had suggested the possibility of a small decline in confidence in June, which seems to have been the case,” says Chris McCarty, director of UF’s Survey Research Center at the Bureau of Economic and Business Research. “This is most likely a combination of the fallout from the Florida state budget, which includes several new and increased fees, as well as the bankruptcy of GM.” Another factor affecting the decline is the increase in Florida’s unemployment rate. A previous unemployment release from the Agency for Workforce Innovation showed a slight decline, but that has since been erased by an increase into double-digit unemployment. Florida’s seasonally adjusted unemployment rate for May 2009 was 10.2 percent. The economic landscape in Florida remains mixed.

On the positive side, the Florida Association of Realtors® May report again showed signs that the median price of existing homes is stabilizing. Since January, the median price has fluctuated in a narrow range and is now up for the year at $144,400. It is increasingly likely that Florida has taken most of its knocks to housing value, even as other states continue to decline. On the negative side is high unemployment and continued foreclosures, although the rate of foreclosures in Florida may already have peaked.

Florida Supreme Court Looking for Foreclosure Info – Anonymous Survey

The Florida Supreme Court is looking for foreclosure info. The Florida Supreme Court Task Force on Residential Foreclosures, a panel created by Chief Justice Peggy Quince to study the foreclosure problem, is looking for information from anyone embroiled in the crisis. This panel is considering what changes to the legal process might be warranted, and wants to hear about the experiences of borrowers, mortgage holders and attorneys in the process.

To take the anonymous foreclosure survey click here.

Clean The Ways of Messy Neighbors

The South Walton and Panama City Beach Area are experiencing a high number of foreclosures and abandoned property. A recent article by the Florida Association of Realtors reports that a “neighbor from hell” can reduce the value of your property by as much as 20 percent. Here are some suggestions to fixing the problem:

1.     Reason with the neighbor and engage in a positive discussion about fixing the issue.

2.     Suggest the neighbor to do the work themselves. This works for abandoned properties or because owners are unable to do the work or can not afford to do the work.

3.     Have your realtor help mediate and be a third party to the discussion.

4.     Communities have mediation services that can resolve the problem harmoniously.

Don’t let an abandoned property affect your homes property values. If you or someone you know is looking at buying or selling distressed property…rely on the experts, The Distressed Property Experts of Team Baranowski!
Note: The information provided is for informational purposes. No legal advise is given or implied. Please check with a qualified attorney in your area.

Foreclosure Program Gets Another $3.1 Billion to Help Modify Mortgages

On Wednesday it was announced that the government will provide another $3.1 billion to a group of mortgage servicing companies as an incentive to modify loans to combat record levels of foreclosures. The modifications, which included reductions in projected payments for some companies, pushed the total amount for the program to $18.3 billion, from $15.2 billion. The biggest adjustment was made for Countrywide Home Loans Servicing LP, part of Bank of America Corp., which received an increase of $3.3 billion, bringing its total to $5.2 billion. Treasury spokeswoman Meg Reilly said the original estimates were based on publicly available information. The revised estimates were calculated using more accurate data supplied by the companies. Further adjustments in the amounts available to the companies will be made on a quarterly basis, she said. The administration announced in March that it would provide $50 billion from the $700 billion financial rescue fund as an incentive for the mortgage industry to modify loans at lower monthly payments. The effectiveness of the relief plan remains in doubt, with questions lingering about how much the lending industry is cooperating. Many housing counselors say it hasn’t made much of a difference. The administration last month expanded the program to provide incentives for lenders who streamline short sales which is the process of selling a home that is worth less than the mortgage, or a deed in lieu that transfers ownership of a home to the lender. Both options will still ding the homeowner’s credit score, but less than a foreclosure.

If you or someone you know is looking at buying or selling distressed property…rely on the experts, The Distressed Property Experts of Team Baranowski!
Note: The information provided is for informational purposes. No legal advise is given or implied. Please check with a qualified attorney in your area

Podcast- 30A Radio Real Estate Round Up: Short Sales, May 22 2009

30aradio_real_estate_roundup_podcast_small1Podcast #1 of Real Estate Round Up South Walton’s Real Estate News hosted by Craig and Tracy Baranowski on 30A Radio. The weekly broadcast is at 9am CST on 107.1FM in beautiful Seaside Florida, visit for a complete program guide. This show covers short sales, foreclosure data, current real estate market in South Walton, Obama Administration Making Home Affordable program, South Walton Luxury Home news and much more.

Obama Administration announces uniform Short-Sale Guidelines

Daily Real Estate News | May 15, 2009 |

Uniform Short-Sales Guidelines in the Works
Extensive delays in the short-sale process has caused many buyers to go elsewhere and have left would-be sellers with no option but foreclosure. But the picture is improving.

This week the U.S. Treasury announced that it would be providing incentives for borrowers and mortgage services to pursue short sales and other foreclosure alternatives. The program includes a standard short-sales process flow, minimum performance timeframes, and standard documentation, the U.S. Treasury says.

(More information is available on the Treasury Web site and in this PDF document.

The incentives and process guidelines are part of a larger initiative called Making Home Affordable, which helps home owners refinance to avoid losing their home.

“NAR is pleased that the government is stepping in to help prevent foreclosures by streamlining the short-sale and deeds-in-lieu process,” NATIONAL ASSOCIATION OF REALTORS® President Charles McMillan said in a statement. “NAR has been calling for uniform short sales procedures and other initiatives that will help today’s home owners in challenging economy.”

More Collaboration Needed

A panel of experts at the 2009 REALTORS® Midyear Legislative Meetings this week agreed with NAR’s position that more needs to be done to streamline short sales.

“It’s hard to find the right person to talk to, you send in multiple forms multiple times, you’re not sure if the forms were received or processed correctly,” said Marcel Bryar, deputy general counsel and vice president at Fannie Mae.

To reach a set of standards that suits everyone, the government should collaborate with lenders, the real estate industry, and advocacy groups, he said.

“The process is going to take a while,” said David Knight, head of the short sales division at Wells Fargo. “Getting them all to understand what we can all live and deal with is not going to be easy, but that is exactly what’s going to have to happen.”

Panel participants applauded the Obama administration’s efforts to streamline the short sales process, and encouraged the real estate industry to get more involved in formulating this standard.

“It’s going to take some thorough intervention,” said Boyd Campbell, a Washington, D.C.-area REALTOR®. “That’s why I think it’s so important for RPAC to get involved and make sure NAR has the resources to go in and help resolve this problem. This doesn’t just impact us as practitioners. It also impacts all of our homes and communities.”

-Brian Summerfield, REALTOR® Magazine
If you or someone you know is looking at buying or selling distressed property…rely on the experts, The Distressed Property Experts of Team Baranowski!
Note: The information provided is for informational purposes. No legal advise is given or implied. Please check with a qualified attorney in your area.

Distressed Property Alert! – Absolute Auction at Island Reserve in Panama City Beach

Excellent Distressed Property Opportunity in Panama City Beach! Roebuck Auctions, a national real estate auction marketing firm, was selected to auction 257 condos and town homes in the luxury resort community of Island Reserve in Panama City Beach. At least 100 units will be sold Absolute and will sell to the highest bidders regardless of price. The auction is scheduled to take place on Saturday May 16 at noon at Island Reserve located at 8700 Front Beach Road.
Island Reserve Resort Community consists of one to three bedroom condominiums as well as three and four bedroom town homes. All the units are serene and spacious with luxurious features like bamboo floors, gourmet kitchens, terra stone tiles, soaring ceilings, crown molding, and stylish lighting. The beautiful emerald coast inspired the exterior colors that seamlessly flow into the lush landscaped courtyards. Whether this is a vacation home or your new private residence, you can enjoy resort amenities in this upscale brand new resort community.
Each condo includes two reserved parking spaces in the attached parking garage with direct access to each floor and the townhomes each have a two-car attached garage. This gated community features a one acre resort style lagoon pool with rock waterfall, lap pool, children’s play area, restroom facility and plenty of lounge area. There is also a clubhouse equipped with a state-of-the-art fitness facility, a half-court indoor basketball, volleyball and aerobic court, a billiard/game room and a media center with 100” theater screen. Between the buildings you will find courtyards with fountains, lush landscaping, walking paths and benches. Island Reserve is located close to shopping, restaurants and the beach.
There will be a pre-auction preview party from 3 to 7 p.m. May 9 with live music, food and giveaways. There will also be an inspection period on May 9 starting at 10 a.m. and continuing through the preview party. Representatives from the auction company will be available to answer any questions regarding the property, available units and the auction process. There will also be an opportunity to pre-register for the auction at this time.

If you are interested in registering for the auction please call Craig Baranowski with Team Baranowski @ 850-259-1788. All registration forms must be in by Thursday May 13th, 2009. This is an excellent opportunity to purchase some distressed property in Panama City Beach.

Unwinding the Data, A Look at Foreclosures Nationally for the First Quarter 2009

I get asked every day when we are going to see the bottom of the market and how foreclosures and short sales are affecting prices. Predicting the bottom of the market is a very difficult question to answer especially if you are trying to decode National and local real estate trends. It does not take a crystal ball to know that this is absolutely the best time to buy real estate. Mortgage rates are at an all time low and housing and land prices are at lows that still surprise me every day.

Trying to track foreclosure data and predict trends is very complex, especially when we add a volitile mix of negative job data, excessively negative media coverage, complex stimulus packages and foreclosure moratoriums. What we do know is that lenders opened the foreclosure floodgates by lifting the moratorium on foreclosures in March, resulting in a record number of foreclosures nationally. This has sent a flurry of negative media coverage regarding the real estate market.

The U.S. Foreclosure Index rose 44 percent in March as 175,199 homes were lost to foreclosure, up from 121,756 in February, reported.

Nevada ranks No. 8 in foreclosures nationwide with 26,760 real estate-owned — bank-owned — properties over the past six months. California is first with 130,855 REOs, followed by Florida, 77,542, and Arizona, 53,928.

“Hopefully, this is a short-term surge caused by months of delayed foreclosures,” said Alexis McGee, president of “This is a very troubling turn after seeing some bright spots earlier this year.”

Several banks had agreed to suspend foreclosures while the Obama administration crafted a plan to modify home mortgages for troubled borrowers. They included Citigroup, JPMorgan Chase, Bank of America, Morgan Stanley and Wells Fargo & Co.

Fannie Mae and Freddie Mac, government-controlled mortgage finance companies, suspended all foreclosure sales involving occupied single-family homes and two- to four-unit properties through March 6 to give troubled borrowers more time to negotiate with their loan services.

McGee said that a backlog of properties in the system exists and that the backlog is going to take a couple of months to work its way through the process.

The Obama administration’s Making Home Affordable Plan is intended to help promote loan modifications by bringing debt-to-gross income ratios down to 31 percent. In short, that would allow homeowners to only spend 31 percent of their income on the mortgage, including taxes. With such low payment levels – compared to 50 percent payments as the recent norm of banks – people who get their loans modified under the new plan will be far more likely to remain in their home. With President Barack Obama’s loan modification plan now in effect, the hope is that pre-foreclosure filings will decline, which will help stabilize the housing market, she said.

“I really think at some point that will take hold,” she said. “In the beginning, lenders are having trouble keeping up with demand. If a homeowner was denied (modification) in the past, they need to go back and ask for it again.”

California led the nation in number of foreclosures last month – 38,318, up more than 59 percent from February, the report shows. “But the state also is a leader in the housing recovery,” says Ms. McGee, “and mixes the good with the troubling news. It’s indicative of what’s beginning to happen in states across the country.”  The report ranks Florida No. 2 nationally in March foreclosure numbers, with 18,946 foreclosures, up 33 percent from February.

Nationally, the number of properties in the pre-foreclosure process climbed slightly to 225,131 in March, up 5.8 percent from February’s 212,703, according to the report.

For the quarter, 604,590 pre-foreclosure filings occurred nationwide, up 14.5 percent from 528,241 in the fourth quarter of 2008 and up 17.3 percent from 515,411 in the first quarter of 2008. The quarterly pre-foreclosure filings are also the highest quarterly numbers since the foreclosure crisis began.

Annualizing that number, the U.S. is on track to top 2.4 million pre-foreclosure filings before year-end.

California had the most pre-foreclosure filings, followed closely by Florida, in March. Over the last six months, however, Florida has had the most pre-foreclosure filings, followed by California, Arizona, Illinois and Nevada.

Foreclosures account for roughly 80 percent of homes sales in Las Vegas as investors have returned to the market to snap up deals.

Something to watch closely at the National level which I found interesting…

“As an aside, if one were to look at the dark side, should housing decline and the foreclosure rate continue at current levels or increase, FHA could be the next major bailout and could be the mental straw that drives the taxpayer nuts,” said home financing expert Fred Claridge.

Las Vegas business advisory firm Applied Analysis reported that new foreclosures, or homes that transferred title back to banks, remained elevated at 2,381 in March, a 70.8 percent increase from a year ago. That is about 77 home take-backs every day.

Foreclosure levels reflect the latest market dynamics, Applied Analysis principal Jeremy Aguero said. Pricing in the residential sector has continued to erode, placing an increasing number of homeowners in a situation where they owe more on their mortgage than their home is worth.

“While a portion of foreclosures are the result of borrowers’ inability to make necessary payments due to job loss or other factors, many are facing the psychological dilemma of servicing an obligation with a cavernous disconnect between debt and equity,” Aguero said.

There is some good news. Heavily hit markets are seeing a flurry of sales. I recently read some statistics on my Twitter feed regarding their market statistics. The numbers are looking positive:

  • The current AZ MLS inventory is 43,976 which is a drop of about 20% or over 10,000 properties since January of this year.
  • Of the houses currently on the market 42% of those are lender owned or short sale properties.
  • Currently there are 15,707 homes in pending which is one of the highest numbers anyone remembers seeing for AZ MLS. Of those 15k homes, 78% of those are bank owned or short sales properties.
  • Closed homes YTD is 20,003 and half of those home sales in Phoenix have come since March 1st.
  • Of the Phoenix area homes that have closed in 2009 75%, or 15,019, were lender owned or short sales.  Of that 75%, 88%, or 13,234, were lender owned.
  • In 2009 will should see a stabilization of foreclosures and eventually the real estate market will settle back into equilibrium.

    If you or someone you know is looking at buying or selling distressed property…rely on the experts, The Distressed Property Experts!
    Note: The information provided is for informational purposes. No legal advise is given or implied. Please check with a qualified attorney in your area.