Freddie Mac, one of the two big mortgage finance companies taken over by the government, announced earnings today. It reported a net loss of $6.5 billion, which is great compared to a net loss of $23.9 billion in the same quarter a year ago, but a loss is a loss. So we’re talking semantics when a $6.5 billion loss is an improvement.

For the full year, Freddie Mac posted a $21.6 billion loss, less than half the $50.1 billion in lost in 2008.

Freddie Mac (NYSE: FRE) says it ended the quarter with a net worth of $4.5 billion and, as a result, did not require additional funding from the Treasury Department. It was the third straight quarter Freddie Mac did not need to tap the Treasury Department’s lifeline.

But all may not be well in Smallville. Freddie Mac CEO Charles Haldeman Jr. pointed out the risk of a potential large wave of foreclosures on the horizon.

The likelilhood of a rise in foreclosures is a very real issue and as loan modifications continue to have almost no impact, the only likely solution will be more short sales. If you find yourself in need of assistance, our team of Certified Distressed Property Experts are here to assist you. Be sure to contact us for assistance. This is a very real problem and we’re here to help.

Forecasts are coming in, that despite mortgage foreclosure filings in the country dropping in January, projecting  a surge in foreclosures due to the ongoing impact from unemployment rates and uncertainty over the economy.

One in every 409 U.S. housing units received a foreclosure filing in January, Irvine, California-based RealtyTrac said in its January 2010 U.S. Foreclosure Market Report.

Foreclosures are definitely the biggest threat U.S. housing market recovery.

Many lawmakers, advocacy groups and housing experts say the government’s Home Affordable Modification Program, or HAMP, has fallen short because of its failure to adequately address negative equity, or “underwater” mortgages.

Negative equity has been one of the biggest banes of many homeowners, making many unqualified for home loan refinancing and preventing some from selling their homes. Borrowers in negative equity are more prone to defaults and foreclosures.

Slowing the foreclosure rate is a key step in the recovery of the real estate market and the overall economy. The foreclosure crisis forced the federal government and several states to come up with plans to prevent or delay the process to help delinquent borrowers.

With continued high unemployment and depressed home prices, expect to see foreclosures continue to rise in 2010. A record 3 million U.S. homes are projected to be repossessed by lenders this year.

In 2009, there were 2.8 million foreclosures according to RealtyTrac and 4.5 million foreclosure filings ares projected for this year. There were 3.96 million filings in 2009.

Many are projecting this year to be the peak in the foreclosure wave. Despite efforts by lenders and pressure by the government, initiatives to keep people in their homes has failed.

As reported previoulsy, lenders have permanently modified such a small number of home mortgages, that the total is less than 1% of the 4 million loans targeted under the Obama administration’s foreclosure prevention plan through November, the U.S. Treasury Department said last month.

Fewer than half of the 3.2 million homeowners estimated as eligible for mortgage relief by the Treasury actually qualify, according to Herb Allison, assistant secretary for financial stability.

Besides pressuring lenders to do more loan modifications or accept short sales, the government has also attempted to stimulate the housing market with the extension of the $8,000 tax credit and the expansion for repeat home buyers worth a $6,500 tax credit.

This tax credit is due to expire on April 30th, which is about the same time that it in anticipated that the Fed will run out of funds to continue their purchase of mortgage bonds (which has held mortgage rates at very attractive, historically low levels). This is likely to add additional pressure to the market.

Georgia had the seventh-highest rate in the US at 2.68 percent of households receiving a foreclosure filing, which equated to 106,110 filings.

If you’re delinquent on your mortgage payments, contact us today to discuss alternatives to foreclosure. We are a team of Certified Distressed Property Experts and are trained to assist you with your needs.

With homebuyers rushing to complete their home purchase before the first time home buyer tax credit expires, a report Friday is expected to show strong September sales.

Home resales are expected to show an almost 5 percent increase to a seasonally adjusted annual rate of 5.35 million, up from 5.1 million in August, according to economists polled by Thomson Reuters. If the report meets forecasts it would be the best month for home sales in more than two years.

The National Association of Realtors’ report is scheduled for 10 a.m. EDT.

First time homebuyers and investors both are taking advantage of the low mortgage rates, short sales, foreclosures, and overall discounted homes.  The buyers are also eligible to take advantage of the tax credit of 10 percent of the sales price, up to $8,000 so long as the sale closes by November 30, 2009.

With concerns about the housing market still prominent, Congress is considering several proposals to extend the tax credit for first-time buyers. Senators Johnny Isakson, R-Ga., and Christopher Dodd, D-Conn., want to extend it through June 30, and expand it to include all home buyers, at an estimated cost of $16.7 billion.

One potential roadblock, however, emerged this week. There are concerns that some of the 1.5 million applications for the tax credit are fraudulent.

At a hearing before a House subcommittee Thursday, J. Russell George, the Treasury Department’s inspector general for taxes, questioned the legitimacy of some 100,000 claims for the credit, potentially including some illegal immigrants and 580 people under 18. The youngest taxpayers to apply for the credit were 4 years old, his office said.

While the program has widespread support in Congress, there are growing concerns about the costs. The cause, said Sen. Jack Reed, D-R.I., “is a worthy one.” But “I hope we can find ways to pay for it.”

Georgia’s unemployment remains higher than the national average of 9.7 percent for the 22nd consecutive month.  The state’s current unemployment rate is 10.2 percent.  Last year in August the state’s rate was 6.4 percent.

According to the Georgia Department of Labor, Georgia’s work force has shrunk by 79,039 to 4.74 million people since last December.  The number of unemployed workers has doubled to 481,488 from 244,962.  The number of jobs has declined by 314,100 to 3.87 million.

Health care and private educational services improved, adding a combined 13,400 jobs.

Until the unemployment rate starts to improve we will continue to see a plethora of short sales, foreclosures, and REOs.  With mortgage rates extremely low and homeowner’s and bank’s willing to negotiate now is the time to purchase a home for investment purposes as well as primary residence.  Contact us if you would like to learn more about the available distressed homes on the market.

What’s a Foreclosure

Foreclosure is the process whereby the lender takes possession of the property.  A foreclosure terminates all rights of the homeowner covered by a mortgage.  Foreclosure is the process in which the estate becomes the absolute property of the lending institution.

When a homeowner fails to make the payments on their mortgage, the lender can begin foreclosure proceedings. This is a very specific legal process with set timelines and outcomes. In a Short Sale situation, the home owner’s name is still on title of the property and they are the official owners who are trying to sell the property. In a foreclosure, the lender takes possession of the house and as a result, the homeowner is no longer a party in the sale.

Foreclosure my pose potential problems such as: Title problems, Superior loan pay offs, IRS liens, tenants or owners still occupying the property, and/or structural problems.

What’s a Short Sale

Short sales occur when the current value of the home is less than the debt owed to the lender.  It occurs when a lender agrees to take less than the full loan payoff from the homeowner. The seller must demonstrate to the lender that they have a financial hardship and are unable to fulfill their mortgage repayment obligation.  In most cases, the owner is in default and is not making their payments for whatever reason.

Short sales, in most circumstances, are the first step to avoid foreclosure. Although the lender(s) will recover less than the total loan amount in a short sale, they may prefer this in lieu of foreclosure. The costs of foreclosing on a property may be more than the bank’s loss by taking a short sale. Also, the property may not sell at auction and then the bank would be forced to take it back as an REO (Real Estate Owned) property, which then they would have to maintain, list and sell themselves.

Something to keep in mind, the lender is under no obligation to grant a homeowner a short sale and in most cases it can be a frustrating process to get approved for one.  A Certified Distressed Property Expert, however is trained to help you with the process.

Banks are overwhelmed with short sale requests and the approval process can take months. Each bank evaluates each individual request on a case by case basis. Many times there is more than one lender involved. Not only do the banks consider the borrower’s personal and financial situation, but they also consider an appraisal of the property, market conditions, the banks financial situation, their current portfolio and in many cases have to consult with an outside investor who purchased the loan at some point. Given all of these varying circumstances, you can imagine why this process takes so long.