Financing | Sun Valley Idaho’s Best, Most Experienced Real Estate Marketing Expert – George Martin, Jr.


Having trouble paying your mortgage? What if you got an ad in the mail asking you to join in a lawsuit against your lender? The ad looks like a government form and claims you can get large principal reductions or other monetary relief by joining the suit.

Bad news: Idaho State Attorney General Lawrence Wasden is warning consumers that .

“The scam is a pretext to collect an unlawful $5,000 upfront fee from homeowners,” Wasden says. “The representations in the solicitations are false and are designed to prey on vulnerable homeowners. My office is currently investigating this company.”

The company named in the AG’s press release is Corvus Law Group.

Here’s a copy of the letter.

The ads, which appear to be “notices,” may be mailed to homeowners or posted on their doors. Typically, the business asks for a “retainer fee” and may ask homeowners for their credit card numbers or offer to set up a weekly payment plan.

State and federal laws prohibit companies from charging upfront fees for foreclosure rescue or mortgage modification services.

Beginning September 1, .

“I encourage homeowners who have lost money to this business or other mortgage rescue companies to file complaints with my Consumer Protection Division,” Wasden said. Complaint forms are available at

or by calling (208) 334-2424.

The Attorney General’s Office recently updated its consumer education manuals regarding home buying and foreclosure prevention. The manuals are available at.

Homeowners who are having difficulties paying their mortgage loans may qualify for a mortgage modification and can visit the federal government’s website at for an application packet. Idaho homeowners who are having difficulties communicating with their mortgage loan servicers about their loans can call the Idaho Attorney General’s housing specialist at (208) 334-4536 for assistance.

The US Department of Housing and Urban Development (HUD) also offers help to people having trouble paying their mortgage. For an office nearest you, go to Menu options at this time are placed on the left side of the page and include Avoid Foreclosure, Learn about Reverse Mortgages for Seniors, and Talk to a Housing Counselor.


U.S. home prices will stagnate through next year and only start recovering in 2013, according to economists polled by Reuters who also felt the stimulus options being floated will not do much to reinvigorate the market.

The housing market, considered by many as critical to any meaningful economic recovery, is still struggling to find its footing after collapsing by a third over the past several years, leaving many owing more than their homes are worth.

The poll of 27 analysts taken Nov. 17-22 was more downbeat than a survey taken two months ago, which predicted small home prices rises next year of less than 1 percent on average.

[pullquote_right]“Unless there is principal reduction, the only cure for the housing market is time — lots of it” [/pullquote_right]With an excess of unsold homes holding prices down and more foreclosures expected, lawmakers and experts have floated various options for propping up the market until the economy improves and Americans start buying homes again.

But most of the economists polled were sharply critical of two of the main proposals: more purchases of mortgage-backed securities by the U.S. Federal Reserve; and a reduction in loan principal for struggling homeowners.

“We see little prospect that any policy action will meaningfully impact the housing outlook over the next year,” said Sam Bullard, senior economist at Wells Fargo.

“Unfortunately, a sustained improvement in housing will not likely get underway until the mountain of foreclosures is cleared and the price discovery process plays out.”

The Fed, which has effectively run out of interest rates to cut, has already bought more than $2 trillion in long-term securities to keep rates low. It has said it is considering the possibility of additional MBS purchases.

Economists said another round of such purchases from the central bank would be limited as already low mortgage rates have done little to spur home buying.

Just seven analysts said more MBS purchases would make a material difference, while 20 said they would not.

As well, 19 out of 26 who replied said prices could eventually recover without a major program to write down principal payments.

Opponents of such a scheme argue it would come with a hefty price tag, and such a measure would likely be politically sensitive heading into an election year.

Advocates say it’s the only way to head off another wave of foreclosures by keeping underwater borrowers in their homes and will speed up the recovery. Seven economists said house prices would not recover without a writedown plan.

“Unless there is principal reduction, the only cure for the housing market is time — lots of it,” said Paul Dales, senior U.S. economist at Capital Economics. “It will take years of modest house price appreciation for households to climb out of negative equity. Until that happens, demand will remain weak.”

Home prices as measured by the S&P/Case-Shiller home price index are expected to finish out this year down 3.3 percent compared with the 3.8 percent decline forecast in the September’s poll.

But prices are seen slipping 0.3 percent next year compared to September’s forecast for a 0.8 percent gain. Prices are expected to rise a meagre 1.5 percent in 2013.

Eighteen economists said they see prices bottoming in 2012, with 12 of those expecting it will happen in the first half of the year. Just one economist each said a bottom won’t be found until 2013 and 2014, while 7 said it has already happened.

Expectations for existing home sales were unchanged at 4.95 million homes for the fourth quarter, while analysts modestly lowered their forecasts for the first quarter to an average annualized rate of 5.03 million homes from an earlier forecast of 5.10 million homes.

SOURCE: US Business News – CNBC


HomeSteps, the real estate sales unit of Freddie Mac, is launching a nationwide winter sales promotion for its inventory of foreclosed homes in select locations starting today.

News Facts

For HomeSteps Winter Sales Promotion details and conditions, visit

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

SOURCE Freddie Mac


A new report on still-falling home prices today highlights the fact that the lower those prices go, the more American borrowers fall into an negative equity position; that is, they owe more on their mortgages than their homes are worth.

Most analysts will tell you that negative equity is the number one problem in the housing market today, even worse than foreclosures, because it causes foreclosures, stymies consumer spending and traps potential home buyers and sellers in place.

Negative equity rose to 28.6 percent of single-family homes with mortgages in the third quarter of this year, according to Zillow. That’s up from 26.8 percent in the second quarter. In real terms, that’s 14.6 million borrowers.

Many of those borrowers are already behind on their mortgage payments, and some are likely already in the foreclosure process. The rest of them are in danger of defaulting, not because they can’t pay their mortgages, but because they either won’t want to (seeing as they will never see any real appreciation in their investment) or because any change in their economic or personal situation might force them into default (change of job, divorce).

While 14.6 million might seem like a lot, it’s not the real number when you consider negative equity in housing’s recovery. That’s because it doesn’t factor in “effective” negative equity, which is borrowers who have so little equity in their homes that they cannot afford to move.

Consider the following from mortgage analyst Mark Hanson:

On US totals, if you figure average house prices use conforming loan balances, then a repeat buyer has to have roughly 10 percent down to buy in addition to the 6 percent Realtor fee to sell. Thus, the effective negative equity target would be 85%. You also have to factor in secondary financing, which most measures leave out.

Based on that, over 50 percent of all mortgaged households in the US are effectively underwater — unable to sell for enough to pay a Realtor and put a down payment on a new purchase without coming out of pocket. Because repeat buyers have always carried the market as the foundation, this is why demand has not come back. It’s as if half the potential buyers in America died over a two-year period of time.

The foreclosure crisis grabs most of the media attention these days, but in order for housing to recover, the market needs to see activity.

It’s as simple as buying and selling. Negative and effective negative equity are causing stagnation, which may in the end be far more detrimental than foreclosures. The argument to solve this problem is principal forgiveness, and it is gaining traction politically and somewhat less in the banking sector.

Principal forgiveness, or lowering the balance of a large chunk of the nation’s mortgages, would be costly at best but could be catastrophic at worst. “Those thinking principal reductions are a panacea have never originated a loan, done the street level re, and do not really know the borrowers behind their data,” argues Hanson. “More than likely it would create a far greater number of new strategic defaulters than the number it would legitimately save from Foreclosure.”

SOURCE: CNBC Realty Check

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