A New Study Shows How To Convert Foreclosures into Rental Properties

Las Vegas, Nv - Lewis Ranieri, the co-inventor of the mortgage-backed security, authored a research paper with University of California economist Kenneth Rosen that lays out the case for using federal entities to support private investors who are already converting foreclosed properties into rentals.

This Foreclosure to Rental model can more than likely be adapted into every market the United states currently offers. Mr Ranieri and Mr. Rosen have chosen the top ten markets where their research could benefit greatly. The cities listed are Chicago, Denver, Detroit, Oakland, Seattle, Minneapolis, and Los Angeles. The reasoning behind why these cities were picked is rather quite simple. These cities have a very high rental condition and high levels of bank-owned foreclosures.

Las Vegas, is not well suited yet because we have poor rental fundamentals despite a glut of bank-owned inventory. No matter what our city makes it's way on to every list created, Good or Bad. It just so happens that Las Vegas is one of the worst housing market in the United States, as well as having the highest unemployment rates.

The paper argues that existing industry and government effort to modify mortgages, while necessary, won’t alone be enough to deal with the problem of already vacant properties and those that may not qualify for modifications.

So why is the government needed? There’s two reasons: First, Fannie Mae, Freddie Mac, and the Federal Housing Administration sit on nearly half of all foreclosed properties, making them key sellers to investors that are converting properties into rentals. Second, Mr. Ranieri says investors could soak up the overhang of distressed properties even faster if Fannie or Freddie expanded their investor financing programs.

The paper includes a series of other interesting ideas that build on the rental-conversion idea:

• Employ a “rent-to-own” option that would allow tenants to allow some tenants to ultimately purchase their rental homes. Mr. Ranieri has already employed that option through his company, Selene Finance, which invests in distressed loans and homes.

• Raise the ceiling on the number of loans that Fannie and Freddie will guarantee to a single buyer. Currently, those limits are set at 10 and four, respectively, but Mr. Ranieri has argued that investors who make large down payments of 30% or 35% should be able to take out 25 mortgages. That would allow smaller investors to get more involved in repairing their local markets, even as federal officials consider structured sales of bulk properties to larger outfits.

• Change appraisal rules for investor purchases to evaluate the value of properties based on the rental income, rather than the traditional metric of “comparable sales.”

Other influential housing analysts, including Laurie Goodman of Amherst Securities, have also strongly backed policies

But the idea remains unpopular with the National Association of Realtors and major real-estate brokerages, which say that foreclosed properties are selling briskly and don’t need to be taken off the market.

Settlement offers help for Nevadans who faced foreclosures

Las Vegas, NV (KTNV) -- Las Vegas is one of the hardest-hit areas in the country when it comes to foreclosures, and residents are wondering how the new national settlement may help them.

There are still many questions regarding how the payout will reach those who need it most, and some worry that it's already too late.

"I went to home modification twice," James Miller, a Las Vegas resident who lost his battle with the banks, said. "And they say, 'we'll see what we can do about it.' Nothing happened."

Miller said he paid cash for his house, but was advised to take out a loan for $182,000. He couldn't keep up with the payments, and despite trying to work with Bank of America, he says they took over his home in August of 2011.

"It was our home," Miller said. "My wife was so aggravated, she had a stroke and died. That's not going to bring her back, nothing will bring her back, but I'd like to get my home back."

The government announced a $25 billion deal reached between 49 states and the nation's five largest banks on Thursday.

Those lenders were accused by the government of a long list of abuses- among them, robo-signing. Under this deal, about 1 million homeowners under water with their mortgages will have their debt reduced by lenders or be able to refinance at lower rates.

Another 750,000 Americans who lost their homes in the last three years will get a check for about $2,000.

Unsure on whether he qualifies for help in this settlement, Miller said he intends to find out.

"I'm 80 years old, and I got nowhere else to turn," he said.

Critics say the settlement will only help a small fraction of the millions of homeowners who are drowning under their mortgages, and it won't move anyone back into the home they lost to foreclosure.

The state Attorney General said Nevada will receive about $1.3 billion in benefits from loan modifications and other relief.

you can watch the news report Here

Sen. Reid hosting foreclosure workshop in Las Vegas this weekend!

Las Vegas, NV (Valley West Mortgage) -- Sen. Harry Reid's office will host a home in Las Vegas at the Financial Guidance Center from 10 a.m. to 4 p.m. Saturday, Feb. 11.

Struggling homeowners with a Bank of America or Wells Fargo loan in Nevada who attend the clinic will have the chance to sit down with a HUD-approved housing counselor and a representative from Bank of America or Wells Fargo.

Those who are interested in attending must RSVP by sending an email to foreclosureprevention_reid@reid.senate.gov or by calling Sen. Reid's office at 702-388-5020.

Homeowners must also bring the following documents with them to the clinic:

-- Copies of pay stubs from the past two months;

-- Copies of bank statement from the past two months;

-- If self-employed, the most recent Profit and Loss Statement and a copy of the last full tax return with all schedules;

-- Letter of explanation of the hardship they are currently experiencing;

-- Signed copies of 2009 and 2010 tax returns.

The Financial Guidance Center is located at 2650 S. Jones Blvd.


More Nationwide mortgage dels are headed to state officials

Las Vega, Nv - An early draft settlement between the nation's major banks and U.S. states over deceptive foreclosure practices has been sent to state officials for review.

Many home owners have lost their homes and will not benefit from the possible $1,800 check, assuming that the settlement is for $25 billion dollars, that will show up by mail. 750,000 people would be likely to receive a check. That is not the surprising part.

The surprising part about this settlement is how it just might re-form the mortgage guidelines for good. This could make it easier for those at risk of foreclosure to restructure their loans. Roughly 1 million homeowners could see the size of the mortgage become lowered.

Five major banks - Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial - and U.S. state attorneys general could adopt the agreement within weeks, according to two officials briefed on the discussions. They spoke on condition of anonymity because they are not authorized to discuss the agreement publicly.

Our current President Barack Obama will address this issue in his 2012 State of the Union Address on the 24th of January.

The settlement would only apply to privately held mortgages issued between 2008 and 2011, not those held by government-controlled Fannie Mae or Freddie Mac. Fannie and Freddie own about half of all U.S. mortgages, roughly about 31 million U.S. home loans.

As part of the deal, about 1 million homeowners could also get the principal amount of their mortgages written down by an average of $20,000. One in four homeowners with a mortgage - or roughly 11 million people - owe more than their home is worth. These so-called "underwater" borrowers have little chance at refinancing.

Democratic attorneys general are meeting Monday in Chicago to discuss the deal with Housing and Urban Development Secretary Shaun Donovan. Republican attorneys general will be briefed about the deals via conference call later in the day.

Under the deal:

- $17 billion would go toward reducing the principal that struggling homeowners owe on their mortgages.

- $5 billion would be placed in a reserve account for various state and federal programs; a portion of that money would cover the $1,800 checks sent to those homeowners affected by the deceptive practices.

- About $3 billion would to help homeowners refinance at 5.25 percent.

Negotiations have been dragging on for more than a year over fraudulent foreclosure practices that drove millions of Americans from their homes during the housing crisis.

In October 2010, major banks temporarily suspended foreclosures following revelations of widespread deceptive foreclosure practices by banks. Discussions then began over a national settlement.

But some states have disagreed over what terms to offer the banks. In September, California announced it would not agree to a settlement over foreclosure abuses that state and federal officials have been working on for more than a year.

New York, Delaware, Nevada and Massachusetts, which sued five major banks earlier in December over deceptive foreclosure practices, have also argued that banks should not be protected from future civil liability. The deal will not fully release banks from future criminal lawsuits by individual states.

And both sides have also fought over the amounts of money that should be placed in the reserve account for property owners who were improperly foreclosed upon. Many of the larger points of the deal, including a $25 billion cost for the banks, have long been worked out, officials say.

Last month the Las Vegas City Council passed a Home Upkeep Ordinance to all Lenders that requires lenders to upkeep their properties on foreclosed homes in holding, or face some pretty steep penalties. So far the last 2 months in Las Vegas has brought some amazing changes to the once "Worst Housing Market ANYWHERE".