-A smaller percentage of mortgages
were delinquent and the rate of those entering the foreclosure process
slowed in the fourth quarter of 2009, possible signs that the
foreclosure crisis that has gripped many of the nation’s housing markets
is finally starting to ease, a trade group has reported.

“We are likely seeing the beginning of the end of the unprecedented wave
of mortgage delinquencies and foreclosures that started with the
subprime defaults in early 2007,” said Jay Brinkmann, chief economist of
the Mortgage Bankers Association, in a written statement.

The delinquency rate for mortgages on one- to four-unit residential
properties was a seasonally adjusted 9.47% of all mortgages outstanding
in the fourth quarter, down from 9.64% in the third quarter and up from
7.88% in the fourth quarter of 2008, according to the MBA’s quarterly
delinquency survey.

Delinquencies include mortgages that are at least one payment or more
past due but not yet in foreclosure.

Meanwhile, 1.2% of outstanding mortgages entered the foreclosure process
in the fourth quarter, down from 1.42% in the third quarter and up from
1.08% in the fourth quarter of 2008. The percentage of mortgages at some
point in the foreclosure process at the end of the fourth quarter was
4.58%, up from 4.47% in the third quarter and 3.3% in the fourth quarter
of 2008.

The MBA survey covers about 44.4 million loans on one- to four-unit
residential properties, or about 85% of all first-lien residential
mortgage loans that are outstanding in the country. No doubt, the
foreclosure nightmare isn’t over yet.

The percentages of loans 90 days or more past due and loans in
foreclosure process set record highs in the fourth quarter, according to
the report. Many of those loans more than 90 days past due are in loan
modification programs, and some of them have been seriously delinquent
for months waiting for modifications to get finalized.

But the good news is there are fewer problem loans actually entering
delinquency—likely a result of fewer layoffs, Brinkmann said. “We
normally see a large spike in short-term mortgage delinquencies at the
end of the year due to heating bills, Christmas expenditures and other
seasonal factors. Not only did we not see that spike but the 30-day
delinquencies actually fell by 16 basis points from 3.79% to 3.63%,” he
said. He added that the non-seasonally adjusted 30-day delinquency rate
has only dropped three times in the past between the third and fourth
quarter—”and never by this magnitude.”

Depending on the fate of seriously delinquent mortgages—whether they
are cured with modifications or ultimately enter foreclosure—the
percentage of mortgages somewhere in the foreclosure process could start
to see a gradual decline in the second half of the year, he said during
a conference call with reporters.

If normal seasonal patterns hold, there could be a bigger drop in the
30-day delinquency rate in the first quarter of 2010, Brinkmann said.
That would be a positive sign for the months and years ahead. “The
continued and sizable drop in the 30-day delinquency rate is a concrete
sign that the end may be in sight,” he said. “With fewer new loans going
bad, the pool of seriously delinquent loans and foreclosures will
eventually begin to shrink once the rate at which these problems are
resolved exceeds the rate at which new problems come in. “It also gives
us growing confidence that the size of the problem now is about as bad
as it will get,” he said.

According to the MBA data, Florida was the most problematic state, in
terms of delinquencies. Twenty-six percent of Florida mortgages were one
payment or more past due at the end of the year, and 20.4% of mortgages
in the state were 90 days or more past due or already in the foreclosure
process.

In a housing market where tighter lending requirements have made FHA financing the only option for some buyers, this 90-day policy has (1) kept some homebuyers from being able to purchase affordable homes and (2) prevented the quick resale of foreclosed properties, which affects the ability of communities to stabilize and rebuild.

Research has shown that the buying, fixing, and reselling of foreclosed properties is often achieved in less than three months time.

The temporary waiver, which will expand access to FHA mortgage insurance to many, will be in effect for a period of one year, unless extended or withdrawn by the FHA. With this in mind, now may be an excellent time to contact clients who have recently purchased a foreclosed property and those who may be on the fence about purchasing a foreclosure as a short-term investment.

“FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties,” said FHA Commissioner David H. Stevens. “This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity.”

To ensure FHA borrowers are protected from inflated prices, the policy has certain restrictions, including:

• All transactions must be arms-length and there can be no identity of interest between the buyer and seller.
• If the sales price of the property is 20 percent or more above the seller’s acquisition cost, the lender must meet specific conditions for the waiver to apply.
• The waiver is limited to forward mortgages, and cannot be used under the Home Equity Conversion Mortgage (HECM) purchase program.

You can read the full text of the waiver on HUD.gov.

Sincerely,

Michelle Wickett
Evergreen Home Loans
(360) 791 – 0513
mwickett@evergreenhomeloans.com

In the previous article, which can be read here: http://rismedia.com/2009-08-06/for-your-clients-series-10-ways-to-sell-a-home-with-a-wet-basement/, we focused on how homeowners could prevent basement flooding using a patented interior drainage system. Installing a sump pump system with a battery back-up is another key method to sell a home with previous signs of water seepage.

Sump pumps can quickly and easily remove water from a basement then flush it outside and away from a house. Although sump pump systems are an effective way to keep water out of a basement, all systems are not created equal. That’s why it’s important for a homeowner to have the best protection available and pass its warranty on to the new homeowner once they sell.

Investing in a sump pump system with a battery back-up pump before the home is listed is a smart investment. The new homebuyers will be more inclined to buy a home with a guaranteed dry basement. Basement Systems offers the UltraSump battery back-up sump pump system, which is engineered to offer extra protection to homeowners. In the event of a power outage or a sump pump failure, the battery back-up pump takes over to keep the basement dry.

Check back soon for step #3: Preventing water from leaking in through cracks in the walls.

Daniel F. Fitzgerald III is director of marketing for Basement Systems Inc. & Total Basement Finishing. For more information, or a free estimate on a property with a wet basement or to finish a basement, call 1-877-850-4446 or visit www.profitablebasements.com.
Read more: http://rismedia.com/2009-11-28/%E2%80%98for-your-clients-series-10-ways-to-sell-a-home-with-a-wet-basement/#ixzz0YNbYanZZ