One of the biggest sticking points is the issue of who will ultimately fund this.  Since roughly half of all mortgage loans are held by non-government entities (i.e. big banks), the push is to have them foot the bill.  Since they have already been heavily penalized, there is a fair amount of push-back taking place.  In addition, this pending legislation is weighing on the stock prices of most of the big banks.  This, in turn weighs on the Dow Jones Average, which in turn affects almost everyone’s bank account — A complicated issue to say the least.

This latest proposal is going to be aimed at people who have paid their mortgage bills on time and who are not in danger of foreclosure.  This is another sticking point.  By not directly helping those who are in immediate danger of foreclosure, there is concern that the plan won’t really provide appreciable help to those who need it most and the overall housing market.

Another issue that the Obama Administration is pushing for is the simplification of the mortgage paperwork process.  Three-pages is Obama’s goal.  This may result in less confusion for the borrower and more efficiency in the entire mortgage process.

As the details unfold, we will keep you updated on this matter.

A few short years ago, it was relatively easy to get approved for a mortgage loan with as little as 3 – 5 % down (sometimes even “zero”-down).  But, the times – they certainly have changed!

Generally speaking, the typical home loan applicant should anticipate putting 20% down in today’s lending climate.  This 20% figure means 20% of the true market appraisal value.  For example, if you are purchasing a house with an official appraisal of $200,000, then you should plan on bringing $40,000 (plus closing costs) to the table.

There is no question that the days of the low-doc or no-doc loans and putting a few thousand dollars down are essentially over.   It is time for everyone to get back to basics.  There are no quick and easy mortgage deals to be had at the moment.  Proper documentation and cold hard cash are the name of the game in today’s market.  In fact, because of the fallout of the latest mortgage loan scandals, the way that mortgages are written and issued has forever changed.

While the extra paperwork and extra down payments are certainly more of a challenge, it is better for your own financial situation and the country’s housing market as a whole.  Buying within your means and being prudent with your budget will pay dividends in the long-run — the days of the quick and easy “buy and flip” housing market have crashed and burned.  It wasn’t a sustainable situation anyway, and it’s obvious that almost everyone realizes that now.

Because supply is so strong, the challenge for real estate sellers is to set their home apart from other competition.  Homes that are staged to sell demand the best possible prices.

By staging, the seller tidies up the basement and garage and allows the buyer to see how much space is available.  In these areas as well as in the living areas of the home, all clutter must go.

Open the windows.  Welcome the sun and use favorable lighting. More excess clothing to a storage facility. Make every closet and every room say “welcome.”  Staging is absolutely necessary for the day when the multiple listing service videos your home.

Statistics verify that 70 percent of all real estate homes are sold to buyers who first viewed the property on the Internet. For actual showings, some homeowners have gone as far as having something appetizing baking in the oven, such as cookies or pie.  Flowers are also an added delight.  Remember that entrances and exits create a lasting first impression.

The bottom line is that home staging not only provides a solid REO (return on investment), it may me absolutely necessary to get your house sold.

The term REO is an acronym for real estate owned.  REO’s are properties to which the bank has taken title. These properties have all cleared the foreclosure auction.

Because banks are not in the business of owning or maintaining residential properties, REO’s usually represent great opportunities for experienced investors who have excellent credit and the capability to maintain properties.

Here is some advice and tips for buying an REO property:

One drawback for REO acquisitions is that the investor cannot expect a quick turnover.  It is likely that REO’s will not increase in value until the housing market achieves more stability and a balance between supply and demand.

However, many banks know certain investors who prefer certain guidelines. These banks have the means to offer investors favorable pricing.  Sometimes, the bank will also provide financing but usually REO’s are financed with other lenders.

Investors of REO’s are extended the opportunity to inspect property. Usually a general contractor accompanies the investor.  However, under no condition will the bank sell the property in anything other than “as is” condition.  The contractor’s report only serves to advise the investor of what repairs will be necessary.

If you are like many homeowners, you are in a quandary about the market value of your home. Housing prices reflect the amount of supply and the level of demand.  When there are many homes on the market, supply is strong and prices decline.  Likewise, when the supply is low and the demand great, prices rise.

In most areas, the supply of available housing has soared.  Thus, prices are low.  In very few communities, prices have been able to sustain their pre-recession values.

The distressed real estate market has pressured many homeowners and all banks that now hold mortgages that exceed the property’s market value. Other factors that have contributed to a down real estate market include high unemployment and the number of short sales and foreclosures in every real estate marketplace.

Short sales and foreclosures in your community greatly affect the market value of your property.  The selling prices of short sales the prices that banks sell foreclosed homes in your area create a pricing trend that will take years to reverse.

The foreclosure process can be overwhelming both emotionally and financially.  If you act in the pre-foreclosure stage, you may well be able to stay in your home and suffer minimal damage to your credit.

Due to the recession, millions of American homeowners have been foreclosed upon and millions more are in the pre-foreclosure process.  In accordance with the terms of your mortgage, if you are more than 30 days late on your monthly mortgage payment, you are technically in default and therefore in pre-foreclosure.

The lender will send collection letters and may call you to discuss your tardiness.  If your account is not brought current, the lender will send a demand letter.  This letter will present you with an opportunity to retire the principal balance of the mortgage and any late fees.  If you are unable to retire the loan and take no action to remedy the delinquency, the lender will move to foreclose.

You are considered in pre-foreclosure until the actual foreclosure sale. At that point you will be required to leave the premises. If you fail to vacate, you will be evicted.

The good news is that you have options.  If you are delinquent or about to become delinquent, the time to act is now, before the foreclosure.

In response to a difficult housing market, The National Association of Realtors (NAR) has taken steps to help homeowners navigate through a difficult market and difficult economic times.  The NAR is the largest trade organization in the country.

Many real estate agents, who have been in the business for years, never completed or presented a short sale prior to the recession.  At the outset of the recession, the NAR quickly launched short sale awareness programs.  The initiatives were designed to instruct agents in a marketplace where underwater and unemployed or under-employed workers could not make mortgage payments.

Because foreclosure is usually the outcome of last resort, the NAR offered continuing educational courses about the short sale process.  Agents who took these courses have been able to help many homeowners escape the underwater dilemma with minimal damage to the borrower’s credit rating.

Agents who have taken the short sale educational and training courses know how to navigate through the seemingly confusing short sale process.

Today, there are even some realtors that will buy your house from you if it doesn’t sell in an appropriate amount of time.

The housing market has caused a huge number of homes to be available for purchase.  While this is an extremely difficult market for sellers, it is a great time for real estate investment.

Market conditions reflect an abundance of supply and limited demand.  Furthermore, interest rates are at historically low levels and are available for fixed rate mortgages up to 30 years. These conditions have presented investors with rare opportunities to purchase low in the present and sell high when the market rebounds.

Investors are active in the short sale marketplace as well as in foreclosure auctions and in negotiating with banks to acquire Real Estate Owned (REO). All these venues provide excellent opportunities in the one unit or multi-unit market.

Investors in the sale of distressed assets must understand that distressed real estate sales are in “as is” condition.  The old adage “let the buyer beware” is the standard for distressed assets sales.

If your mortgage loan has Fannie Mae or Freddie Mac guarantees, the Obama Administration has offered borrowers and lenders a valuable tool to prevent foreclosure.  Under the Home Affordable Mortgage Program (HAMP), borrowers can apply with the lender for loan modification of the existing mortgage.

Lenders have incentives to modify loans rather than foreclose. Lenders must do what is best for the bank’s shareholders but loan modifications are less expensive than foreclosure.

Many banks agree to longer terms and lower interest rates to bring the modification into acceptable guidelines. In some cases, the lender has agreed to reduce the principal balance of the mortgage.

HAMP will assist borrowers with closing costs and will pay lenders a cash bonus for every year the modification is in compliance up to 3 years.  The bank will require a hardship letter and proof that the homeowner can afford the new monthly payment.  All things considered, this is a much better option than foreclosure or short sale.  In fact, if the borrower has not applied for a loan modification, the bank may not accept the application for short sale.

The hardship letter is a necessary component for a loan modification or a short sale.  Ironically, the existence of an upside down mortgage has little to do with the lender’s decision to extend a loan modification or accept a short sale.

Banks are not in the business of accepting losses. The bank that accepts losses is accountable to shareholders. The hardship letter is an important document that when coupled with an upside down mortgage will pave the way for serious consideration by the lender.

Although loss of employment or loss of income are the two of the most common causes for hardship, there are others.  Long-term illness, divorce and death are viable causes of hardship.

If you apply for a loan modification or for a short sale, you must attach a one-page hardship letter.  If possible, any documentation verifying the hardship will help.  Remember, the purpose of the hardship letter is to give the banker a reason to consider your application.