McCall Idaho Real Estate

Home staging is about illusions. It’s beyond decorating and cleaning. It’s about perfecting the art of creating moods. Staging makes your house look bigger, brighter, cleaner, warmer, more loving and, best of all, it makes home buyers want to buy it.

Contrary to what you might think, it’s about more than preparing the house for sale, it is what you do after you’ve cleaned, de-cluttered, painted, made minor repairs; it’s all about dressing the house for sale.

It’s about adding the small details: the lipstick, mascara and, for simplicity, a stunning, single strand of Tahitian pearls.

What is a Professional Home Stager?

Cabin McCall before staging

Professional stagers are highly skilled artists. They can take a blank canvas and paint a sensuous portrait without ever lifting a paint brush. Stagers possess the skills of a top-level designer and they create dramatic scenery that appeals to all five senses. Here are some of their secrets:

• Arrange sparse pieces of furniture in an appealing grouping known as a vignette
• Showcase a generous usage of soft fabrics such as silk, lambswool, satin
• Display unusual knickknacks in units of 1, 3 or 5
• Drape window coverings with simple lines
• Add unique elements to shelving, bookcases and fireplace mantels, which draw attention to predetermined areas

What Accessories Does a Stager Use?

Stagers bring in a vast array of items to spruce up the house. Here is a small sampling of items professional stagers often use to dress each room. How they are utilized is limited only by the creativity and vision of the stager. 

McCall cabin after staging

• Mirrors
• Plants
• Silk Flowers
• Floor & Table Lamps,
• Area and Throw Rugs
• Small Love Seats
• Ottomans
• Afghans
• Pillows
• Inflatable Queen-Size Beds
• Baskets
• Plastic Tables & Chairs

Professional Staging Tricks & Tips

An artist for 35 years, Dawna Johnson, is an Accredited Staging Professional Master (ASP) and owner of Sacramento Staging Solutions. She says the idea behind staging is to allow rooms to show themselves. “If your home is vacant, it’s soulless,” Dawna warns. “Without staging, it will probably remain on the market for many months.” She calls the kitchen the “heart of the home,” and offers this practical advice for making that space sparkle:

• Apply orange oil to cabinets that appear dry, which will renew their original luster
• Put out large bowls of fruit such as polished apples, bright oranges, luscious grapes
• Arrange colorful and fun cookbooks on the counters

Dawna believes in bringing the outdoors inside through the use of greenery and plants; in creating clean, crisp spaces and arranging furniture with plenty of room to walk around. She says bathrooms are essential to dress well. “Bathrooms should look open, airy and delightful,” says Dawna. One of her favorite tricks is to add baskets filled with spa treatments such as:

• Towels, tied with ribbons
• Scented soaps
• Creamy lotions
• Moisturizing & Facial jars

The back yard needs staging, too. For patios and decks, Dawna brings in plants and potted flowers, and adds additional color by setting the picnic table with bright, plastic dinner plates.

How Much Does it Cost?

Prices vary depending on where you live and the local demand for professional home staging . Coastal areas and large metropolitan cities where home staging has been prevalent for years command higher prices. Some real estate agents help sellers Stage^® the home themselves. Most listing agents agree, however, that vacant homes show better with staging and will encourage sellers to hire a professional stager. Fees range from $500 to $5,000 or more, depending on square footage and the number of rooms staged.

Five to 10 years ago, lenders passed out mortgages as eagerly as parents hiding Easter eggs for the first time. “Money was free. Anybody could play. Mortgage applications? “You could write one from the grave!  Hyperbole, sure, but sowed with a grain of truth. It was a different time.

Now, several years after the housing bubble burst, the pendulum has made a full swing. Lenders say their customers are often caught off guard by a mortgage application process made more rigorous by federal regulations.

Here are some of the hoops you have to jump through before you get the golden egg, er, mortgage – and offer some suggestions that might improve your chances.

HOOP #1: DOWN PAYMENT

Five to 10 years ago, it was far easier to qualify for a loan without contributing a down payment, several lenders said.It’s still possible, but it’s not as common. Loans backed by the Department of Veterans Affairs and a couple of other programs don’t require a down payment, but borrowers have to meet guidelines to qualify.  Mortgages through the Federal Housing Administration used to allow down payments of 3 percent or less, but the minimum now is 3.5 percent.

And conventional loans – which made up the lion’s share of mortgages during the housing boom – typically require 5 to 20 percent down.    Gifts from parents or others can be used toward down payments – as long as the applicant provides documentation detailing the relationship with the gift-giver and exactly where the money came from.

HOOP #2: DEBT-TO-INCOME RATIO

Imagine income as a pie.   The bigger the slice that’s earmarked for debt, the less money that’s available for savings. And with less money in the bank account, families found themselves struggling to pay off their loans once the housing bubble burst.

During the days of lax standards, families commonly qualified for mortgages when 60 percent of their income would be used for paying off various debts. There were even some cases when 70 percent debt-to-income ratios were approved, now the standard for debt to income is around 43 percent.

Loan officers will dig to find out whether applicants rely on overtime pay to boost their incomes, and if an applicant receives child support or alimony, lenders will take notice if the extra income will disappear within a few years as teenagers leave the home.

HOOP #3: DOCUMENTATION

Lenders have to ask a lot of questions borrowers aren’t eager to answer, but the game has changed, and everything has to be documented.

Gone are the days of the no-income, no-asset, no-job, no-questions-asked loan.  Lenders approach you as guilty until you prove yourself innocent.

Lenders conduct a thorough analysis of borrowers’ tax returns, bank statements, names, Social Security numbers and addresses. Plus they get copies of returns directly from the IRS to verify the accuracy of the documents submitted by their customers.

If customers’ deposits seem to be excessive compared with their income, mortgage lenders have to have documentation to explain where the extra money is coming from – a challenge in the days of paperless transactions and frequent shredding.

Older customers are more defensive throughout the process,  while younger clients are more compliant with requests for documentation.

Cabin for Sale in McCall

Getting a mortgage requires a tremendous amount of patience today.  Lenders are going to come back to you and say, ‘You missed page 3 of the bank statement,’ and you are going to say, ‘Page 3 only has the bank address. Are you kidding?’ and they will say have to have or no loan.

 It doesn’t matter how wealthy you are, how much money you have in the bank, how high your credit score is You have to provide the documentation.

HOOP #4: CREDIT SCORES

If consumers have any control over the mortgage process, it lies within their credit scores.  The first step borrowers should take is to look at their credit scores and then visit a loan officer and get prequalified so that you aren’t surprised after you make an offer on a house.

In the past, borrowers with scores as low as 580 were qualified for loans, and now the low end now hovers around 620 to 640, and the average has increased from 720 during the boom to about 765 now.

Borrowers  needs to understand how that credit score affects the cost of their financing If you have a good credit score, you can pay a quarter to a half a percent less in an interest rate. That adds up over 15 to 30 years.

The mortgage experts urge consumers to pay their bills on time, not to max out their credit cards and avoid situations in which a creditor would turn to a collection agency – even on medical bills.

Many experts recommend applying an even amount of debt across multiple credit cards rather than maxing out a single card.   Having a mixture of debt – a mortgage, car loans, credit card debt – helps boost credit scores.  Also, credit card holders should not close their accounts because that shortens their credit history with the bureaus that calculate scores.   Even if a card has no balance, keep it open.

The bureaus – Experian, Trans­Union and Equifax – give credit to borrowers who pay off their debts early, We live in a country that was built on debt, they want you in debt – just not too much debt – and they want you to be responsible with your payments

Credit scores get checked again right before the closing papers are signed, Curtis said, so consumers should avoid opening new lines of credit during the application process.

“There’s a message here: Don’t do anything, don’t change anything from the time you apply for your loan until the day you close.  So do not go out and buy a refrigerator or a washer and dryer. If you do that, tell your lender so you can deal with it upfront instead of the day of closing.

BACK TO THE FUTURE FOR THE MORTGAGE INDUSTRY

The mortgage business has come full circle.

Lenders stuck by a set of strict guidelines a couple of decades ago, but it became easier to qualify for a home loan, and a lax set of standards became the industry norm.

Since approximately the third quarter of 2011, the average real estate values in Boise, Idaho, have been rising. Many Idaho real estate agents want to summarize the market or narrow it down to a few points but the real estate market is a dynamic industry.

There are many segments including short sales, foreclosures, used homes for sale and new homes for sale. There are home buyers like families and empty nestors, but also investors and spec home builders that add a layer of complexity. Take each of these across each MLS area and factor in home buying decisions like traffic, road construction, failed home owner associations and more and one begins to realize the complexity of the real estate market

Trying to sum up the entire Boise Real Estate market is not as simple as most want to make it but there are two consistent trends- 1) the amount of homes for sale continues to drop and 2) because of the sustained demand for homes the average real estate values continue to rise.

In May 2012, the Intermountain MLS noted that the total number of listings was up 54 from April at 2,043 listings but the total listings in May 2011 total was 2,629, a difference of 586. The total number of homes sold was at 600, almost the same as 2011 but new homes sold was up 100%, 130 new homes sold. The average price of homes was up $30k in May 2012 compare to 2011.

New construction is benefiting as home buyers frustrated with the lack of inventory and trying to bid against investors have many looking at new homes. Many builders are starting to build again but one challenge they face is finding building lots. Many of the largest Boise home builders have been purchasing entire communities which is also increasing lot prices.

Sales of investment and vacation homes* jumped in 2011, with the combined market share rising to the highest level since 2005, according to the National Association of Realtors®.

NAR’s 2012 Investment and Vacation Home Buyers Survey, covering existing- and new-home transactions in 2011, shows investment-home sales surged an extraordinary 64.5 percent to 1.23 million last year from 749,000 in 2010. Vacation-home sales rose 7.0 percent to 502,000 in 2011 from 469,000 in 2010. Owner-occupied purchases fell 15.5 percent to 2.78 million.

Vacation-home sales accounted for 11 percent of all transactions last year, up from 10 percent in 2010, while the portion of investment sales jumped to 27 percent in 2011 from 17 percent in 2010.

NAR Chief Economist Lawrence Yun said investors with cash took advantage of market conditions in 2011. “During the past year investors have been swooping into the market to take advantage of bargain home prices,” he said. “Rising rental income easily beat cash sitting in banks as an added inducement. In addition, 41 percent of investment buyers purchased more than one property.”

Yun said the shift in investment buyer patterns in 2011 shows the market, for the large part, is able to absorb foreclosures hitting the market. “Small-time investors are helping the market heal since REO (bank real estate owned) inventory is not lingering for an extended period. Any government program to sell REO inventory in bulk to large institutional companies should be limited to small geographic areas. Even where alternatives are needed, it’s best to rely on the expertise of local businesses, nonprofit organizations and government,” he said.

All-cash purchases have become fairly common in the investment- and vacation-home market during recent years: 49 percent of investment buyers paid cash in 2011, as did 42 percent of vacation-home buyers. Half of all investment home purchases in 2011 were distressed homes, as were 39 percent of vacation homes.

“Clearly we’re looking at investors with financial resources who see real estate as a good investment and who aren’t hesitant to use cash,” Yun said. Of buyers who financed their purchase with a mortgage, large downpayments were typical. The median downpayment for both investment- and vacation-home buyers in 2011 was 27 percent.

“Given the tight credit in recent years, many would-be normal home buyers for owner occupancy declined,” Yun said.

The median investment-home price was $100,000 in 2011, up 6.4 percent from $94,000 in 2010, while the median vacation-home price was $121,300, down 19.1 percent from $150,000 in 2010.

Investment-home buyers in 2011 had a median age of 50, earned $86,100 and bought a home that was relatively close to their primary residence – a median distance of 25 miles, although 30 percent were more than 100 miles away.

“The share of investment buyers who flipped property remained low in 2011, and many of those homes likely were renovated before reselling,” Yun said. Five percent of homes purchased by investment buyers last year have already been resold, up from 2 percent in 2010. The typical investment buyer plans to hold the property for a median of 5 years, down from 10 years for buyers in 2010.

The typical vacation-home buyer was 50 years old, had a median household income of $88,600 and purchased a property that was a median distance of 305 miles from the primary residence; 35 percent of vacation homes were within 100 miles and 37 percent were more than 500 miles. Buyers plan to own their recreational property for a median of 10 years.

Lifestyle factors have consistently been the primary motivation for vacation-home buyers, while the desire for rental income drives investment purchases. Vacation homes purchased last year were more likely to be in suburban or rural areas; investment homes were concentrated in suburban locations.

Eighty-two percent of vacation-home buyers said the primary reason for buying was to use the property themselves for vacations, or as a family retreat. Thirty percent plan to use the property as a primary residence in the future, and only 22 percent plan to rent to others.

Half of investment buyers said they purchased primarily to generate rental income, and 34 percent wanted to diversify their investments or saw a good investment opportunity.

Sixteen percent of vacation buyers and 14 percent of investment buyers purchased the property for a family member, friend or relative to use. In many cases the home is intended for a son or daughter to use while attending school.

Forty-two percent of vacation homes purchased last year were in the South, 30 percent in the West, 15 percent in the Northeast and 12 percent in the Midwest; 1 percent were located outside of the U.S.

Forty-four percent of investment properties were in the South, 23 percent in the West, 17 percent in the Midwest and 15 percent in the Northeast.

Eight out of 10 second-home buyers said it was a good time to buy. Nearly half of investment buyers said they were likely to purchase another property within two years, as did one-third of vacation-home buyers.

Currently, 42.1 million people in the U.S. are ages 50-59 – a group that has dominated second-home sales since the middle part of the past decade and established records. An additional 43.5 million people are 40-49 years old, while another 40.2 million are 30-39.

“Given that the number of people who are in their 40s is somewhat larger than the 50-somethings, the long-term demographic demand for purchasing vacation homes is favorable because these younger households are likely to enter the market as their desire for these kinds of properties grows, and individual circumstances allow,” Yun said.

NAR’s analysis of U.S. Census Bureau data shows there are 8.0 million vacation homes and 42.8 million investment units in the U.S., compared with 75.3 million owner-occupied homes.

NAR’s 2012 Investment and Vacation Home Buyers Survey, conducted in March 2012, includes answers from 2,241 usable responses about home purchases during 2011. The survey controlled for age and income, based on information from the larger 2011 NAR Profile of Home Buyers and Sellers, to limit any biases in the characteristics of respondents.

The 2012 Investment and Vacation Home Buyers Survey can be ordered by calling 800-874-6500, or online at www.realtor.org/prodser.nsf/Research. The report costs $19.95 for NAR members and $149.95 for non-members.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

Top of Tamarack

The Tamarack Municipal Association has reached an agreement with the State of Idaho and Credit Suisse that ensures Tamarack Resort will have a 2011-12 ski and snowboard season. The resort is on target to open Dec.15, a release from Tamarack said on Wednesday. Tamarack’s snow making could make Tamarack be the only open ski area next week. 

 Tamarack Municipal Association and Credit Suisse will make full payment on a 2012 mountain land lease to the Idaho Department of Lands by Dec. 16, the release said. The association will pay $100,000, and Credit Suisse will provide $150,000.

  The agreement was reached after TMA submitted a business plan for the $1.6-million operation to members of the Idaho Land Board. TMA also got approvals from both Tamarack Resort LLC and Credit Suisse to operate the resort for the second consecutive year. The financially troubled resort is facing foreclosure, but operated its lifts and restaurants for skiers last winter to show it’s financially viable to do so.

The ski operations showed a slim profit last winter, Tamarack officials said. “TMA appreciates the hard work and cooperation of the Idaho Land Board’s staff making it possible to have a winter season at Tamarack,” said Tim Flaherty, TMA Executive Director. “More than 130 jobs are created and preserved through this agreement. The economic stimulus will be much appreciated by the local communities– not to mention the fun we expect our association members and guests to experience on the mountain this winter.”

Tamarack plans a 15-week season from Dec. 15 to April 1. The resort will be open Thursdays through Sundays, with extended days during holidays of Christmas, New Year, Martin Luther King, Jr. Day, President’s Day and Spring Break.

New Snow in McCall

New snow has fallen in the high country with about 12 inches of snow at the summit of Brundage Mountain.  While we wait for more snow, here are some winter sports updates.

The McCall Area Pass (MAP) has always been a bargain, offering year-round cross country skiing at Jug Mountain Ranch, Little Bear Basin, Ponderosa State Park and The Activity Barn for the low price of $135.00 for a single pass and $250.00 for a family pass.  This year, McCall Nordic is also offering three clinics that will be FREE for MAP pass holders while being available to the public for a charge. 

The first clinic will be Saturday, December 4 starting at 10:00 AM at Bear Basin: beginner and intermediate clinics with the focus on early season skiing and conditioning.  Advance sign up is required: call Ed Roper at 208-634-9417. Cost for the general public is $20.00 — FREE for McCall Area Pass Holders.   Other clinics will be offered throughout the year, visit the McCall Nordic Website for the schedule and where to buy the pass.  

Payette Powder Guides besides providing the best back county ski guiding and lodging in the area, will be offering a full range of clinics this year for Avalanche safety and rescue, and other back country topics.  Visit the website Payettepowderguides for a full schedule and information on their trips.  

Tamarack Resort will be opening on December 15 with the main lifts to the summit and some smaller lifts.   They will be operating from Thursday to Sunday and holidays visit the website for more info Tamarack resort

Thanksgiving Activities in McCall

Roadhouse Java in New Meadows will host a Holiday Artist Bazaar from noon to 5 p.m. Saturday, Nov. 26.  The bazaar is a chance for residents to shop local for the holidays and enjoy complimentary coffee and treats.

Featured will be DeMoss Glass Art, Deck the Halls with Boughs by Hollys, Dale James metal art, jewelry and scarves by Darcy Williamson and Momma’s Hats by Chris Patrick.  Also featured will be dogwood and huckleberry wreaths, Leap Year Designs jewelry and linen, wool crafts by Gitte DuPont and handcrafted greeting Cards.

Tickets are still available for the St. Luke’s McCall’s Auxiliary Holiday Happening, a traditional kickoff to the holiday season.  The event will take place Saturday, Dec. 3, at 11 a.m. at Shore Lodge and will have the theme “Christmas around the World.”

The event centers on a luncheon featuring a style show with international attire, live auction for dessert, and raffle prizes.

Tickets cost $25 and are available at the auxiliary Thrift Shop and St. Luke’s McCall Marketing Office. Tickets will not be sold at the door the day of the event.

Proceeds from Holiday Happening go toward scholarships for local students studying for health care professions.   For more information, call St. Luke’s McCall, 634-4061, ext. 271

There are many other events, visit the McCall Chamber Website for more info at McCall Chamber

Home Prices to Fall Nationally, Vacation Home Markets Expected to Rebound First

The besieged housing market has even further to fall before home prices really hit rock bottom.

According to Fiserv (FISV), a financial analytics company, home values are expected to fall another 3.6% by next June, pushing them to a new low of 35% below the peak reached in early 2006 and marking a triple dip in prices.   Several factors will be working against the housing market in the upcoming months, including an increase in foreclosure activity and sustained high unemployment, explained David Stiff, Fiserv’s chief economist.

Should home values meet Fiserv’s expectations, it would make it the third (and lowest) trough for home prices since the housing bubble burst.  

However the article goes on to say that many of the markets that will record the biggest increases or the first to stabilize are vacation or retirement communities, like McCall,  that had taken some of the biggest hits during the bust.   Already vacation home areas in Florida, Colorado have seen a price increase for vacation homes.   The biggest “winner” will be Ocala, Fla., with a 22.4% spike for the 12 months ending June 30, 2013. Ocala was one of the hardest hit communities in the U.S. over the past several years, with home prices falling some 50%.   

New Listings

Many new listings are still coming on the market with a variety of properties offering great deals.  We have a comfortable modern and rustic cabin close to downtown and only two blocks from Payette Lake with lake views, 3 bedrooms 3 bath for $359,000 here is the link to our

video tour   Also listed is a hard to find Tamarack Bay Condo, includes dock slip, beach, pool, tennis courts, 3 bedroom and 2 bath on the ground floor opening to the lake for $695,000, here is the link to our video tour

Mortgage rates are scraping along near historic lows, Freddie Mac says in its latest survey of what lenders are offering to well-qualified borrowers.

Home on over 3 acres Short Sale

The 30-year fixed-rate mortgage averaged 4.22% early this week, the same as the week before, and just above the 4.15% record low reached two weeks ago.

The rate on a 15-year fixed mortgage dropped to 3.39% this week from 3.44% last week.

Borrowers on average would have paid lenders 0.7% of the loan amount upfront to get a 30-year loan and 0.6% on a 15-year loan to get those rates, said Freddie Mac, the giant government-controlled finance company.

Meanwhile, for loans that become adjustable after five years at a fixed rate, the initial rates fell again, setting all-time lows for the eighth straight week, Freddie Mac said. Such loans indexed to Treasury bonds had an average starting rate of 2.96% this week, down from 3.07% last week. Upfront lender fees averaged 0.6%.

Economists said weaker economic signals and slowing home sales were keeping rates low. There’s little immediate fear of inflation, and the Federal Reserve has said it expects to hold its benchmark short-term rate close to zero through the middle of 2013.

“In addition,” Freddie Mac economist Frank Nothaft said Thursday, that “consumer confidence in August fell to the lowest reading since April 2009.”

The result? An early-August surge of interest in mortgages, which was driven by homeowners refinancing at rates under 4.5%, appears to be running low on steam.

A Mortgage Bankers Assn. survey of mortgage applications, released Wednesday, showed the volume decreasing for a second straight week.

The lobbying group has revised its projections of mortgage volume for this year because of the refinancings. It now expects $1.1 trillion in residential mortgages to be originated in 2011, $100 billion more than earlier forecasts.

But adjustments for the weak economy have the home-lending association reducing its outlook for 2012. The group cut its forecast for mortgage volume next year to just $931 billion, which would be the lowest since 1997.

So the Obama administration is apparently exploring alternate options with regards to preventing 1 Million homeowners avoid foreclosure in the midst of a nasty housing market crisis. The strategy involves encouraging lenders to process loan modifications on delinquent or defaulted home loans, including the reduction of principal on home loans, by bringing new investors into the market.

 This proposal to prevent 1 Million Foreclosures is based on a paper released by Jordan Dorchuck <http://www.housingwire.com/tag/wl-ross-co> , James Lockhart <http://en.wikipedia.org/wiki/James_B._Lockhart_III>  and Pete Mills, who are the MDs of Mortgage Banking Initiatives Inc. While it’s true that banks have resisted this kind of measure in the past (for overtly obvious reasons), the initiative will apparently be of benefit to all parties involved. Even more amazing, this strategy is not supposed to require a single taxpayer dollar. Skeptical? Well…I can’t say I blame you.

 So how is this possible anyway, at least from a theoretical point of view? Among the residential home loan-backed securities <http://en.wikipedia.org/wiki/Security_(finance)>  that are outstanding, approximately $1.3 trillion are what are known as private label notes which were issued by lenders and banks, based on information released from the Securities Industry and Financial Markets Association <http://en.wikipedia.org/wiki/Securities_Industry_and_Financial_Markets_Association>  (SIFMA). A large number of contracts regulating such securities limit the percentage of loans which can be amended, or forbid the reductions of principal.

As a means to overcome this little hurdle, the U.S. Treasury is being called upon to assist with facilitating the sales of defaulted or delinquent mortgages out of the securities to external investors at a discounted rate. Due to the fact that these investors would be purchasing loans at a level below face value, they will be quite open to renegotiating the relevant terms, including lowering the principal.

The U.S. Treasury would also be required to provide legal cover against lawsuits to the lenders servicing the mortgages, by declaring short-sales <http://en.wikipedia.org/wiki/Short_sale_(real_estate)>  to be “qualified loss-mitigation activity” based on legislation introduced in 2009.

So, allegedly, if lenders could simply sell toxic mortgages to strained debt investors, then everyone stands to gain. Banks would net a greater amount of money than they would through the foreclosure process, homeowners would benefit from a lower loan amount and keep their cherished homes, and the debt investor would gain a great deal on a loan that stands a greater chance of performing well.

 If all this represents such a rosy picture, why is there a need for legal cover? The investors involved in these deals should be able to connect and modify their respective agreements. However, some of them would most likely not be too happy if their loans were sold to other investors at a loss to themselves. This potentially represents the biggest technical/legal snag in the setting up of the process. The resultant sale price must please both the original investor as well as the investors to follow.

Well, a positive response to the housing market crisis that results in the saving of one million homes without causing any party involved to suffer any kind of loss, sounds a little too good to be true, doesn’t it? Typically when various deals are struck between the big players in the housing market, it’s the average middle-class family that gets screwed over in the process.

I could hardly blame the normal homeowner for harboring a healthy dose of cynicism and guardedness when it comes to developments of this nature. At the end of the day, the proof is in the pudding, and hopefully it doesn’t leave a heck of a sour taste in the mouths of American homeowners.

Ocwen  servicer of residential mortgages, has initiated a loan modification program designed to help distressed homeowners who owe more than their houses are worth and, at the same time, mitigate the likelihood of “rewarding” borrower delinquency.

Ocwen’s Shared Appreciation Modification (SAM) program reduces delinquent customers’ principal owed but also compels them to share some of the appreciation with the mortgage’s owner (not the servicer) if the house increases in value by the time they sell or refinance it. With a SAM, the principal of the loan is written down to 95% of the current market value of the home. The written-down portion is forgiven in one-third increments over the next three years, so long as the homeowner stays current on the modified mortgage. When the house is later sold or refinanced, the borrower must share 25% of the appreciation with the investors that own the loan; borrowers keep 75% of the gain. “Like all modifications, SAMs help homeowners avoid foreclosure. But they also restore equity. That’s a significant benefit to the customer and, we believe, the economy and housing market. Psychologically, it’s important too. Our analytics tell us that an underwater mortgage is one-and-a-half to two-times more likely to default than one with at least some positive equity,” said Ocwen CEO Ronald Faris. He added, “Investors who own the mortgages benefit too. SAM modifications keep loans performing and, equally important, they will deliver additional returns once the housing market rebounds.” Ocwen launched the SAM program on a pilot basis in August, 2010. “The results of our initial pilot were extremely positive — 79% borrower acceptance rate with only 2.63% redefaults,” said Mr. Faris. Ocwen has since ramped up the program and now has regulatory clearance to make it available to qualified customers in 33 states. “We think this program can make a real impact on curing the negative equity problem and are working hard to obtain approvals for SAMs in all jurisdictions,” added Mr. Faris. “Ocwen is to be applauded for this visionary program. They have created a win-win situation for all involved,” said Marcia Griffin, President of HomeFree-USA, a leading community-based homeownership development organization. “The homeowner benefits from a stable housing situation and the investor is positioned to share in the future appreciation of the home’s value. In addition, communities nationwide will benefit from fewer foreclosures.” Ocwen is a foreclosure prevention leader. Since the start of the mortgage crisis, Ocwen has saved over 200,000 homes from foreclosure, modifying loans so they’re affordable for homeowners and also perform for investors. Ocwen has produced 25 times as many modifications per loan serviced as the servicing industry overall. John Taylor, President and CEO of the National Community Reinvestment Coalition, said, “This innovative modification program offers meaningful help for underwater borrowers. The simplicity and rationale of the SAM is striking: the homeowner maintains the equity that would otherwise be lost in the foreclosure process, and servicers and investors maintain a performing asset. Ocwen has found a way to align the interests of borrowers, servicers and investors, making the program a win-win for all involved.” Mr. Taylor added, “We hope this innovative effort inspires other mortgage servicers to follow suit, because fixing the housing market is the best way to bring back jobs and revitalize the American economy.” Ocwen currently has a $74 billion residential servicing portfolio and is expanding as financial institutions exit the servicing market. Last year Ocwen acquired the HomEq servicing business from Barclays’ Bank and earlier this year Ocwen announced it reached agreement to acquire Litton Loan Servicing from Goldman Sachs. About Ocwen Ocwen Financial Corporation is a leading provider of residential and commercial loan servicing, special servicing and asset management services. Ocwen is headquartered in Atlanta, Georgia, with additional offices in West Palm Beach and Orlando, Florida and Washington, DC, with support operations in India and Uruguay. Utilizing our global infrastructure, proprietary technology, world-class training and processes, we provide solutions that make our clients’ loans worth more. Additional information is available at www.Ocwen.com .

Cabin for Sale in McCall

Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), which shows fixed-rate mortgages declining for the fifth consecutive week amid mixed economic and housing data. The 30-year fixed averaged 4.61 percent and the 15-year, 3.80 percent. 30-year fixed-rate mortgage (FRM) averaged 4.61 percent with an average 0.7 point for the week ending May 19, 2011, down from last week when it averaged 4.63 percent.

 Last year at this time, the 30-year FRM averaged 4.84 percent. 15-year FRM this week averaged 3.80 percent with an average 0.7 point, down from last week when it averaged 3.82 percent. A year ago at this time, the 15-year FRM averaged 4.24 percent. 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.48 percent this week, with an average 0.6 point, up from last week when it averaged 3.41 percent.

A year ago, the 5-year ARM averaged 3.91 percent. 1-year Treasury-indexed ARM averaged 3.15 percent this week with an average 0.6 point, up from last week when it averaged 3.11 percent. At this time last year, the 1-year ARM averaged 4.00 percent. Frank Nothaft, vice president and chief economist at Freddie Mac, reports, “Fixed mortgage rates inched down for the fifth consecutive week as financial markets try to ascertain the current strength of the economy. 

 ”Data on the housing market was mixed. New construction on single-family homes fell 5.1 percent in April, with the largest declines occurring in the Midwest and South regions where tornados hit the hardest. Homebuilder confidence remained unchanged in May and near its January 2009 historical low, according to the NAHB/Wells Fargo Housing Market Index. However, conventional mortgages applications rose for the past five straight weeks ending May 13th, buoyed by lower mortgage rates and stronger refinancing activity.”