Obama’s Refi Initiative: What’s It All About?

We are seeing a lot of homes that are "Under Water" in Lake County Illinois. This is not pointing out any specific towns, it is relevant to all areas and all price ranges. Unfortunately, the Home Values are dropping below what is owed on these Homes. Below is an article that might shine a little light on the "New HARP" Program.


Obama’s Refi Initiative: What’s It All About?
On October 25, 2011, in Breaking News, Economics, Mortgage Financing, Politics & Government. By Robert Freedman, Senior Editor, REALTOR® Magazine

The administration yesterday rolled out an initiative to boost refinancing so struggling underwater borrowers can take advantage of today’s historically low interest rates. The effort is being called HARP 2, with “HARP” standing for Home Affordable Refinance Program and “2” standing for the fact that the first iteration of the program, rolled out two years ago, hasn’t attracted the volume of refis that’s needed to match the scale of the problem.



Under the new version of the program, lenders process refi applications for borrowers no matter how deeply they’re underwater. Previously, the limit was set at borrowers whose loan-to-value ratio was no more than 125 percent. Even so, the program isn’t intended for all underwater borrowers; just those who have been conscientious in making their payments despite having to pay on a mortgage that’s larger than the value of their home. Those who have stopped making payments or who have a checkered history of making payments can’t apply.

For eligible borrowers, the refi option is available to them without the lender having to order a new appraisal, which saves them several hundred dollars, and they get a waiver on fees that Fannie Mae and Freddie Mac would otherwise charge them because they’re high risk (that is, they’re underwater). Lenders, in turn, get relief from having to make representations and warranties that would otherwise hold them liable for losses on defective loans.

There are other important pieces to the initiative, including a requirement in some cases for borrowers to refi into a shorter-term loan to get all of the benefits.

It’s too soon to know how much the initiative will help borrowers. Some of the provisions require federal guidance, so lenders can’t start processing applications right away. And Fannie Mae and Freddie Mac still have to do some updating of their automated underwriting programs, and lenders, in turn, have to update their underwriting procedures. In short, you can expect little to happen before the first part of next year.

The Federal Housing Finance Agency, which oversees Fannie and Freddie as their conservator, is the main agency behind the initiative. You can read all the program details at its Web site.

For you, as a real estate agent, the benefit of a successful HARP 2 will be mainly on a macro level. The improved financial condition of participating households will lessen the chance of them defaulting on their payments and forcing the lender to foreclose on their mortgage. That will help reduce the number of foreclosures coming onto the market, which will help curb further price declines. It will also help give these borrowers some financial breathing room, so they might start spending again, which is something the economy needs to help it sustain its growth. All of these are big ifs, but the initiative at least shows the federal government understands housing is at the core of the country’s economic doldrums and it’s starting to look for ways to give it a boost.

As it looks for more ideas, it can start with NAR’s five-point housing plan, which calls for the federal government to stop doing harm to the market by talking about changes to the mortgage interest deduction, lowering FHA and conforming loan limits, and proposing a 20-percent down requirement. Those and other pieces of the plan are outlined in plain language online.

For all the focus on HARP and HARP 2, it’s worth noting that the lion’s share of refis since the downturn have been done outside the HARP structure and that will continue to be the case. (See below. HARP refis are shown in grey; regular refis are shown in blue.)

For borrowers who aren’t underwater or who don’t have a Fannie Mae or Freddie Mac loan, their ability to refinance is dependent solely on lender policies. NAR continues to urge lenders to dial back their underwriting requirements to the sound policies that were in place prior to the housing boom. To the extent lenders replace overly tight standards with prior sound policies, borrowers will be able to take advantage of today’s low interest rates, and that will certainly help the economy.

Big Four Set to Participate in HARP 2.0

Here is an Article that anyone who owns a home should read! This article is from DSNEWS.com

Big Four Set to Participate in HARP 2.0

10/27/2011 BY: CARRIE BAY

The industry’s four largest mortgage servicers all say they will be taking part in the revamped Home Affordable Refinance Program (HARP).

Bank of America, Chase, Citigroup, and Wells Fargo have each expressed their support of the program and the changes that will allow more underwater homeowners to refinance at today’s lower interest rates.
Government officials expect the program’s revisions – particularly the GSEs’ waiver on representations and warranties – to increase competition for mortgage refinancing.
An executive with JPMorgan Chase told the company’s investors this week that HARP 2.0 will facilitate “cross-servicing refinancing” because with the rep and warranty waiver, the new lender is not required to assume responsibility for underwriting deficiencies that may have occurred with the original loan.
Chase explains that HARP may be used to replace an adjustable-rate or interest-only loan with a standard fixed interest rate loan, and typically reduces the borrower’s monthly payment.
Frank Bisignano, CEO of mortgage banking at Chase, estimates that with the new HARP guidelines, thousands of Chase customers could lower their mortgage payments by an average of $2,500 a year.
Citi said in an emailed statement that it “supports the program and expects to participate.”
Wells Fargo, likewise, said in a statement that it “welcomes the addition of the new HARP features.”
Veronica Clemons, a spokesperson for Wells Fargo Home Mortgage, says the company is waiting for specific guidelines and requirements from Fannie Mae and Freddie Mac in order to put the changes into practice.
She adds that once the company’s mortgage servicing team has the guidelines in hand, “it will take us some time – depending on the complexity of the guidelines – to make the necessary systems changes to begin offering the new enhancements to our customers.”
The GSEs’ regulator, the Federal Housing Finance Agency (FHFA), says Fannie and Freddie plan to issue guidance with operational details about the HARP changes by November 15th.
“Since industry participation in HARP is not mandatory, implementation schedules will vary as individual lenders, mortgage insurers, and other market participants modify their processes,” FHFA said.
Bank of America says it will participate in the enhanced Home Affordable Refinance Program announced by the administration, and it expects the new guidelines and eligibility criteria to go into effect after December 1st.
“Despite ongoing economic challenges, nearly 90 percent of our customers remain current on their mortgage,” BofA spokesperson Rick Simon said. “HARP helps these homeowners who remain current on their mortgage with options to lower their monthly payment when, otherwise, conventional funding options are limited.”
The GSEs have removed the 125 percent loan-to-value (LTV) cap under the program. Now any borrower with an LTV ratio above 80 percent is eligible for a HARP refinance, as long as the loan was sold to Fannie or Freddie prior to May 31, 2009, and the borrower is not delinquent on their payments.
Since HARP was launched in 2009, nearly 900,000 loans have been refinanced through the program. Government officials estimate that an additional 1 million homeowners will receive assistance under the new guidelines.
In its announcement of the program changes, FHFA encouraged borrowers to “contact their existing lender or any other mortgage lender offering HARP refinances.”

Trend Watch: Luxurious Bathrooms Don’t Always Need a Fancy Tub?

I am seeing "some" truth to this trend. We are located in the Lake County IL Market, based in Mundelein, Illinois. Please let me know what your thoughts and preferences are regarding this article and Trend!

Trend Watch: Luxurious Bathrooms Don’t Always Need a Fancy Tub

On October 11, 2011, in Home Trends, by Melissa Tracey

By Melissa Dittmann Tracey, REALTOR® Magazine

Home owners may be starting to rethink what all makes up a luxurious, spa-like bathroom. Whirlpool tubs for several years have been on the wish-lists of many home buyers, but now some buyers are starting to show a change in preferences, swapping larger showers or extra storage space for that oversized bathtub or whirlpool, some designers say.

Many home owners may have once been swayed into adding an oversized bathtub in their master suite for resale value, but now some real estate agents and designers say that as long as you have at least one bathtub in the home, a missing massive tub in the master suite won’t likely dampen your chances at resale.

Home owners had complained that the oversized tub was taking up too much space and becoming a “dust magnet” that hardly got used, noted an article earlier this year by the Charlotte Observer, Goodbye Whirlpool Tub; Hello Luxury Shower.

In that article, Patricia Dunlop, a spokeswoman for the American Society of Interior Designers, said that many home owners are now opting for an extra vanity, shower and storage space in lieu of the whirlpool tub. Plus, home owners are instead wanting to spend money on upgrading to a larger shower with extra amenities, such as multiple shower heads, benches, or even steam showers.

It’s a trend that AVID Ratings Co., which conducts annual surveys on must-have home features, has been picking up on. In 2010, AVID Ratings reported that while whirlpool tubs were still desirable to many home buyers, they “clearly went down a notch” while oversized showers were moving up in popularity.

Chimney Maintenance for Warmth and Safety

Cold Weather is coming soon to Northern Illinois and Lake County Area. Before you get ready to use your Fireplace, make sure it's ready to use. There are some great tips in this article!!

Chimney Maintenance for Warmth and Safety

By: Wendy Paris

Published: August 31, 2009

Chimney maintenance and a fireplace inspection can make the difference between warm safety and drafty danger.


Annual inspections keep flames burning right

Creosote—combustible, tar-like droplets—is a natural byproduct of burning wood. The more wood you burn, the wetter or greener the wood, and the more often you restrict airflow by keeping your fireplace doors closed or your damper barely open, the more creosote is produced.

Soot build-up, while not flammable, can hamper venting. One half-inch of soot can restrict airflow 17% in a masonry chimney and 30% in a factory-built unit, according to the CSIA. Soot is also aggressively acidic and can damage the inside of your chimney.

The more creosote and soot, the more likely you are to see signs of chimney fire—loud popping, dense smoke, or even flames shooting out the top of your chimney into the sky. Chimney fires damage the structure of your chimney and can provide a route for the fire to jump to the frame of your house.

"If the chimney is properly maintained, you'll never have a chimney fire," says Ashley Eldridge, the education director of the CSIA.

The best way to ensure your chimney isn't an oil slick waiting to ignite? Get it inspected.

Three inspection levels let you choose what you need

A level-one inspection includes a visual check of the fireplace and chimney without any special equipment or climbing up on the roof. The inspector comes to your house with a flashlight, looks for damage, obstructions, creosote build-up, and soot, and tells you if you need a sweep. If so, he'll grab his brushes, extension poles, and vacuum, and do it on the spot.

"You should have it inspected every year to determine if it needs to be swept. An annual inspection will also cover you if the neighbor's children have thrown a basketball in it, or a bird has built a nest," says Eldridge.

A level one typically runs about $125. Add a sweep, and you're talking another $80, or about $205 for both services, according to CSIA.

Consider a level-two inspection if you've experienced a dramatic weather event, like a tornado or hurricane; if you've made a major change to your fireplace; or bought a new house. This includes a level-one investigation, plus the inspector's time to visit the roof, attic, and crawl space in search of disrepair. It concludes with a sweep, if necessary, and information on what repair is needed. The price will depend on the situation.

A level three inspection is considered "destructive and intrusive" and can resemble a demolition job. It may involve tearing down and rebuilding walls and your chimney, and is usually done after a chimney fire. The cost will depend on the situation.

Small steps can improve your fireplace's efficiency

Besides the annual sweep, improve your fireplace's functioning with responsible use.
Only burn dry, cured wood—logs that have been split, stacked, and dried for eight to 12 months. Cover your log pile on top, but leave the sides open for air flow. Hardwoods such as hickory, white oak, beech, sugar maple, and white ash burn longest, though dry firewood is more important than the species. Less dense woods like spruce or white pine burn well if sufficiently dry, but you'll need to add more wood to your fire more often, according to CSIA.
Wood, only wood! Crates, lumber, construction scraps, painted wood, or other treated wood releases chemicals into your home, compromising your air quality. Log starters are fine for getting your fire going, but they burn very hot; generally only use one at a time.
Close your damper when not using the fireplace to prevent warm indoor air—and the dollars you're spending to heat it—from rushing up the chimney.
On a factory-built, prefab wood-burning fireplace, keep bifold glass doors open when burning a fire to allow heat to get into the room.
Have a chimney cap installed to prevent objects, rain, and snow from falling into your chimney and to reduce downdrafts. The caps have side vents so smoke escapes. A chimney sweep usually provides and can install a stainless steel cap, which is better than a galvanized metal one available at most home improvement retailers because it won't rust, says Anthony Drago, manager of Ashleigh's Hearth and Home in Poughkeepsie, N.Y.
Replace a poorly sealing damper to prevent heat loss. "You can get a top-mounted damper that functions as a rain cap, too, an improvement over the traditional damper because it provides a tighter closure," says CSIA's Eldridge.
Install carbon monoxide detectors and smoke detectors in your house—near the fireplace as well as in bedroom areas.
If you burn more than three cords of wood annually, get your chimney cleaned twice a year. A cord is 4-feet high, by 4-feet wide, by 8-feet long, or the amount that would fill two full-size pick-up trucks.
To burn fire safely, build it slowly, adding more wood as it heats and keeping your damper completely open to increase draw in the early stages. Burn the fire hot, at least occasionally—with the damper all the way open to help prevent smoke from lingering the fireplace and creosote from developing.

By the way, fireplaces aren't officially rated for energy efficiency because they're so varied. Depending on the source of information, they can be 10% to 30% efficient in converting fuel to heat.

No inspection will turn a masonry or factory-built fireplace into a furnace, but it can improve efficiency somewhat, decrease the amount of heating dollars you're sending up the chimney, and increase your enjoyment of your hearth time by reducing smoke. If a sweeping prevents a chimney fire, you're talking about the difference between another ordinary January day, and the potential loss of your home, or even life.

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Essential Heating System Maintenance

It's starting get Colder Outside and Now is the Time to think about keeping your Home warm! Here's an article on Heating Maintenance that is good for you and your home!

Essential Heating System Maintenance

By: Oliver Marks

Published: September 24, 2009

Getting your home's heating system professionally serviced every year will keep it running smoothly and help keep heating costs under control.

Who does the job?

The simplest way to get the work done is to hire your fuel company to do it. Oil companies and gas utilities usually provide this service, or you can hire the contractor who installed the equipment. Also, some plumbers handle heating systems.

What is involved?

The technician will clean soot and corrosion out of the combustion chamber where the fuel is burned, and check it for leaks or damage. He'll inspect the flue pipe for open seams, clogs, or corrosion that could cause carbon monoxide to backdraft into the house. He'll replace the filters on oil and forced-air systems. Finally, he'll test the exhaust from your cleaned machine and use the information to adjust the burner for maximum efficiency.

How much will it cost?

You'll pay between $100 and $180 for the service, depending largely on whether you have a gas system, which is easier to maintain, or oil, which requires a fair amount of soot removal. Usually the cost is covered by an annual maintenance contract that also provides 24-hour emergency service. While the technician is there, he should also service your water heater, assuming it has a separate oil or gas burner.

When is the best time to do the work?

Ideally, have your system tuned up in the fall so it's in top shape for the start of the heating season. Of course, that's when technicians are the busiest, so if you can't do it when you want, do it when you can—as long as your system is serviced once a year. And don't expect your provider to call to remind you that it's time. Even if you subscribe to an annual service plan, you still need to call to make an appointment. Call in the spring or summer to be sure of getting on the schedule in the fall.

Illinois Housing Stats

Market Stats and Research

Illinois Home Sales Rise 25.9% in August
Statewide home sales totaled 10,622 in August, a 25.9 percent increase from a year ago, according to the latest IAR report. The statewide median price in August was $149,000, down 5.4 percent from $157,500 in August 2010. Looking ahead, home sales in Illinois and the nine-county Chicago region should see positive year-to-year gains in September, October and November, according to the University of Illinois REAL forecast. Find the forecast, county-by-county statistics and talking points in Members Only Market Stats (login required). Nationally, August existing home sales were up strongly from a year ago.

IAR in The News
IAR's August home sales report garnered favorable media coverage including: "Local home sales jump for second straight month," "Home sales in Illinois up 25.9 Percent," and "Another positive report on county housing market." IAR President Sheryl Grider Whitehurst was interviewed by Chicago's WGN and WBEZ radio stations and IAR President-Elect Loretta Alonzo was quoted in the front page Daily Herald article, "Number of homes sold here increases in August."

First-time Buyers Tired of Short Sales
A survey by Campbell/Inside Mortgage Finance found first-time homebuyer interest in short sales waning due to several factors slowing down the process, HousingWire reports.

Article is Courtesy of "The Illinois REALTOR® Weekly Connection" - IAR

A Great Home in Mundelein

This is a Beautiful Home in Mundelein's "Fields of Ambria" that has it all. You'll Love the Wide Open Floor Plan, Huge Kitchen for Entertaining, Wonderful Master Suite, Finished Basement, the 3 Season Room with Deck that Overlooks a Tranquil Nature Area.



Take a Look at this home and You will be impressed! Call me, or e-mail me for your Private Showing!

Stimulus Package - 1st Time Home Buyers!!

Well, Accountants, Attorneys, Lenders and Realtors® are doing a lot of reading. The Stimulus Package is over 1000 pages. From what I can see and have been told, 1st Time Home Buyers seem to fair pretty well on this Bill. A 1st Time Home Buyer is someone who hasn't owned a home in 3 Years. This Bill is geared to your Primary Residence only. Qualified 1st Time Home Buyers can be eligible for up to an $8000 Refundable Tax Credit. Qualifications are based on being a 1st Time Home Buyer and your Income. Yes. Full $8000 credit is available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). The Credit phases out above those caps ($95,000 and $170,000). The Home must be Purchased on or after January 1, 2009 and before December 1, 2009. This credit DOES NOT require repayment. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.

For the 1st Time Home Buyer who is sitting on the Fence, this along with Low Home Prices, Low Interest Rates and a lot to Choose From should be what it takes to knock you off of that Fence. Whether it is the Real Estate Market, or the Stock Market it is hard, if not near impossible, to "Time The Market". Sitting and Waiting for Better Prices, or Better Loan Rates could cost you Dollars and the Opportunity to own your 1st Home - or to Buy More Home than you will be able to later, if you miss this "Window of Opportunity".

My Office is in Mundelein Illinois, in the Heart of Lake County, we are starting to see activity pick-up and even Multiple Offers. Never fails, when you like something a lot, someone else probably does, too. Waiting and getting into Multiple Offers can cost you more money also. If you have been kicking around the idea of Buying your 1st Home, Don't Wait - the situation is Great for You Now!!