BIRMINGHAM, Ala. - April 15, 2010 - Prior to purchase, a vast majority of first-time homebuyers (88 percent) believe that they have accounted for all expenses related to owning a home.

Seemingly contradicting that notion, among those who had purchased a home in the past 12 months, just over half indicate that the expenses were more than they had calculated, causing a change in lifestyle.

The information comes from the BBVA Compass First Time Home Buyers Online Survey, which polled American consumers about the thoughts, emotions and hurdles related to owning and enjoying a first home.

Key first-time homebuyer findings include:

• Nearly one third have anxiety over the affordability of owning a home.

• 7 in 10 indicate that the first-time homebuyer's tax credit has not truly factored into the timing of when they decide to purchase a home.

• 92 percent of respondents indicate that having additional time before their first payment due date would be helpful.

Regarding first-time homebuyers who have purchased a home in the previous 12 months, key findings included:

• 51 percent indicated that the monthly expense of owning a home was more than they calculated.

• Although 7 in 10 respondents said that the unexpected expenditures leveled out over time, another 87 percent said that they changed their lifestyle as a result of the additional expenses.

• Nearly one third indicated that they paid for these unexpected expenditures with a mixture of cash and credit, perhaps indicating a lack of liquid funds.

Both segments of first-time homebuyers were also overwhelmingly in favor of mortgages that allow breathing room between closing and the due date of the first payment. With this financial cushion, the First Time Home Buyer indicated that they would be in a better position to pay off credit cards and other bills, as well as make some of those unexpected purchases (household items and improvements) that come along with owning a home.

Research firm Qualtrics conducted the online survey of 300 first-time homebuyers between Feb. 21, 2010 and Feb. 25, 2010.

MIAMI - April 1, 2010 - The Neighborhood Assistance Corporation of America is heading back to South Florida after drawing more than 24,000 desperate homeowners to a February mortgage-modification marathon in West Palm Beach.

The nonprofit group, which offers free counseling and face-to-face contact with lender representatives, will be in Miami Beach for five days beginning April 15.

As with the Save the Dream event at the Palm Beach County Convention Center, the program at the Miami Beach Convention Center will run 24 hours a day. It will be NACA's 14th event around the country.

"We saw the demand is there," said NACA spokesman Darren Duarte about South Florida. "We had people at the end of the West Palm Beach event who didn't get to meet with a counselor and that tells us there is a need."

The group receives government grants for its work, but also earns up to $500 from lenders for successful modifications that result in at least three on-time mortgage payments.

NACA events draw people from all over the country who hope to get same-day help through the federal Making Home Affordable program, or plans offered by individual banks.

Most successful modifications include a lower interest rate or principal forbearance. New programs recently announced by Bank of America and the federal government also offer principal forgiveness in some cases.

In West Palm Beach, borrowers came from as far away as California to meet with counselors from the Boston-based group.

During the five days, counselors worked with people on about 24,330 loans, and completed 7,547 same-day payment reductions.

Workshops to prepare borrowers for the event will be conducted throughout South Florida, including at the Wellington Community Center and Royal Palm Beach Cultural Center.

Homeowners are encouraged to register for the event at www.NACA.com.
 
Copyright © 2010 The Palm Beach Post, Fla., Kimberly Miller. Distributed by McClatchy-Tribune Information Services.

Don't foreclose! Do a short sale

NEW YORK (CNNMoney.com) -- Short sales are the hottest thing going in the distressed-property market, and the trend is expected to get even hotter in coming weeks, when the government starts handing out cash to encourage lenders to close these deals.

"Banks have ramped up short sale approvals," said Duane Legate of House Buyer Network, which connects short sellers with buyers. "They're hiring a lot of the people who once worked in the mortgage-lending industry and moved them over to short sales."

These transactions, where lenders allow homeowners to sell their houses for less than they owe, accounted for 17% of all residential real estate sales in February, up from nearly 13% in November, according to a monthly real estate market survey by Campbell/Inside Mortgage Finance.

And Bank of America (BAC, Fortune 500), the country's largest mortgage servicer, has more than doubled the number of short sales it processed in recent months.

Elizabeth Weintraub, a Sacramento, Calif.-area real estate agent who handles many short sales, was amazed at how quickly a recent deal went through. "Bank of America approved it in 24 days," she said. "That flipped me out."

This is a huge change from even just six months ago when the short-sale market was stalled and most people would describe the process has real estate hell. Because lenders stand to lose so much on these transactions, they have been reluctant to make short sales happen, often waiting months before getting back to potential buyers.

Beware: You lost your house but still have to pay

"In the past, many short sales would never come to fruition and the ones that did averaged over half a year to complete," said Chris Saitta, CEO of Equator, which produces short sale software.

"Things would just fall into a black hole and not come out again," added Weintraub.

And even when banks did agree to the sale, the process could be further complicated if the original owner had a second mortgage.

In most cases, the first lender is repaid in full before any money flows to a second-lein holder. And because most distressed borrowers are severely underwater, there's usually nothing left to send on. As a result, second-lein holders are left holding the bag and have been killing many deals.

But that has been changing. For one thing, banks realize that they make out far better financially with a short sale than a foreclosure. "The lenders lose 50% on a foreclosure and only 30% on a short sale," said Glenn Kelman, founder of the real estate Web site Redfin. "And short sales offer a way to get distressed properties off their books quickly."

And on April 5, lenders and mortgage investors will have even more incentives to offer troubled borrowers short sales instead of foreclosing.

Under the new Home Affordable Foreclosure Alternatives program, borrowers will earn a $3,000 "relocation incentive" and servicers will get $1,500 for handling a short sale.

The investors who actually own the mortgage notes will get $2,000 in exchange for sharing proceeds of the short sales with any second-lien holders. And, finally, those second lien holders will receive up to $6,000 for releasing their claims.

Lenders participating in the program must also determine the market values of properties early on and inform the owners of just what price they're willing to accept. Then, if owners come back to the lenders with bonafide offers, they have to be accepted within 10 days.

Equator's Saiita anticipates a short sale explosion in response to the new program. "The challenge will be handling all the volume," he said.

The company has already tweaked its software, which 58 servicers use, to handle the new HAFA rules. And that should help reduce the time it takes to execute a sale, which currently averages 88 days.

The boom in short sales may accelerate the end to the foreclosure crisis by cleaning out the overhang of borrowers in distress and replacing them with more stable homeowners.

Plus, these sales are better for distressed borrowers because their credit scores suffer less. Going through a foreclosure can knock 200 points off a FICO score, twice as much as the penalty for a short sale.  

By Les Christie, staff writerMarch 29, 2010:

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