Saturday, June 2, 2012

Reagor: Housing questions remain for many

Home prices are rising in metro Phoenix, foreclosures are falling and a growing number of homeowners are able to refinance with the federal Housing Affordable Refinance Program, HARP 2.0.

Still, questions abound about the region's housing market. Home values have climbed 25 percent already in the past year. Will the price-recovery trend continue? Are the bidding wars, created because of the small number of homes for sale, healthy for the market? How effective have the federal programs been so far?

Here are some comments on the topic from metro Phoenix homeowners who contacted me after recent stories and during an online chat Friday over lunch. The entire chat can be read at

Question: Our daughter has an FHA loan with Wells Fargo, I don't believe the new HARP program works with FHA. Are you aware of any program that would modify her interest rate? -- Cal Christensen

Response: The FHA will begin a similar streamlined refinancing program like HARP on June 11.

Question: Should qualified buyers be jumping at the chance to invest? -- Jim T

Response: Investing in metro-Phoenix homes is very competitive now. Experienced investors with millions of dollars and property-management firms have been buying for the past few years. It's a business not for the weak of heart, to quote one of the buyers on the Maricopa County Courthouse steps bidding on foreclosure homes. Also, the number of foreclosures and short sales is dropping, so there are fewer bargain homes to purchase.

Observation: Prices are going to continue to climb until we get some influx of inventory. Once "normal" owners see and understand that prices are up 25 percent, they will jump on board, thus helping us return to a more normal market, or at least one step closer to one. -- Matthew Coates

Response: Many housing analysts agree. It will take regular homeowners selling to stabilize the market.

Question: Does your mortgage need to be financed through Fannie or Freddie in order to refinance through the HARP 2 program? -- Erik

Response: Yes, Fannie Mae or Freddie Mac must hold your loan. But the FHA is launching a streamlined refinancing program next week similar to HARP. The federal government and the Arizona Department of Housing also are trying to find a way to encourage/force investors who hold mortgages to approve streamlined refinancings for homeowners who are underwater but continue to pay their mortgages.

Question: We recently had our home on the market for a price we thought was at a good range for our location. We are two blocks south of ASU in an older, established neighborhood around campus. We did not receive any bids on our house -- lots of showings but no bids. The Realtor encouraged us to drop the price, but we weren't willing to compromise on what we wanted out of the house with regard to equity. When do you feel will be the rebound on housing prices? How many years before it comes back? I see the stories about the home prices rising in the Valley. Will it take a year before the market is stabilized and prices are up, or longer? I'm taking advantage of the HARP 2 program and am happy to stay for a while. -- Donna

Response: Home prices are up 25 percent from a year ago. You live in an area that has retained a lot of its value. The forecast is for prices to continue to climb, but the problem is metro Phoenix's housing market is running out of supply. Homeowners like you being able to sell for a profit will signal a true stabilization of the market.

Here's one final comment, from John Steiner, and it's one that might inspire many Phoenix-area homeowners:

"We have just signed closing documents on a Fannie Mae DU Refi Plus (under HARP 2). We had been with Ditech/GMAC, but their loan officer was not very forthcoming with information. A Wells Fargo mortgage specialist was quite helpful. Since our loan was current and had never been delinquent, we qualified for the (refi) program. We were 25 to 40 percent underwater. Our loan did not require an appraisal, saving money. Bottom line is we went from a 5.25 percent, 15-year loan to a 3.75 percent, 15-year loan. I am passing this on because it may help others with a Fannie Mae loan."

by Catherine Reagor - Jun. 1, 2012 03:25 PM The Republic |

Reagor: Housing questions remain for many

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