The government's bold new plan to stem the foreclosure crisis and limit damage to the overall economy aims to succeed where previous efforts have fallen flat.  However, as before, the odds of hitting those lofty goals are small, the risks are there for taxpayers, and many struggling homeowners in the Denver area and nationwide won't even qualify.

In theory, the effort unveiled March 26th would help millions of troubled borrowers who fall into one of two groups: those who are under water in their mortgages, or those who are unemployed and need a break on their payments.  This plan, though, depends on the cooperation of investors and bankers, many of whom have been locked in disputes over whether to reduce the debt owed by homeowners.  Because of this, and the likelihood that many homeowners will not fit into either of the two groups the program is geared to help, it will probably only benefit less than half of the proposed 3 to 4 million borrowers (around 1.5 million, according to Mark Zandi of Moody’s Analytics).

The program is designed to reach those 3 to 4 million homeowners by the end of 2012.  So far, barely a dent has been made in that number.  To date, only 170,000 borrowers have completed loan modifications out of 1.1 million who began the Home Affordable Modification Program since it started in 2009.  Right now, estimates are that about 6 million homeowners have missed at least 2 months of payments on their mortgages, and it is expected that 10 to 12 million borrowers are in danger of foreclosure over the next 3 years.  These figures don’t even take into account the 10 million (or so) homeowners who owe at least 20% more than their homes are worth, which is where the revisions to this plan come into play.

Under this new plan, mortgage companies can cut the total amount homeowners owe, or they can  refinance into loans backed by the Federal Housing Administration (FHA).   The reductions (if they’re approved by the lender) will happen gradually over 3 years, and FHA will get $14 billion in incentives from the federal bailout fund for this purpose.  In order to qualify, homeowners must owe at least 15% more than their homes current value and can not have missed any payments. 

For unemployed borrowers, if they’re receiving unemployment benefits and owe less than $729,750 on their home, their mortgage payments can be cut to no more than 31% of their monthly income for 3-6 months so they have time to find another job.  If they do find work, they may qualify for a loan modification that would permanently reduce their mortgage payment - if they don’t, lenders will encourage them to consider a short sale.

To apply, call your mortgage company to see if you qualify, and if you are unable to get in touch with someone, visit www.findaforeclosurecounselor.org.  If you’re a Denver area homeowner who’s trying to avoid foreclosure, give the Bandy Team a call.  We can assist you with finding the best option for your situation, and we’re more than willing to help. 

Marianne Bandy
Learn more about local Denver resources

Do you think you’ve got what it takes to successfully flip houses in the Denver housing market?  Are you a current homeowner who wants to fix up your home and expect to see a return when you go to sell it in the future?  While the current market has tons of potential for owners to make some money while cleaning up homes in disrepair (while adding value to neighborhoods), it pays to be smart about just how much you put into any one fix-up job.  Keeping up with the Joneses can be detrimental to one's savings account, but surpassing them can prove even more damaging.

The first thing to consider when remodeling any home is the value of neighboring properties.  If you spend too much money on a new bathroom or a kitchen upgrade, your home will stand apart, but not necessarily in a way that will translate to a higher selling price.  The advantage may come with a sparked sale, as a chef’s kitchen will certainly appeal to a buyer who is a chef.  You just need to be aware that certain upgrades, while potentially beneficial, just may not be in the form of money because they don’t appeal to everyone.

Those who are smart about investing the right amount of money into remodels understand that the market doesn’t care what you paid for the house, nor does it matter how much you invest in the property - it all comes back to value.  You may really love those granite countertops or glass backsplash tiles, but some sellers are improving their homes so much that they end up pricing themselves out of the market.
 
The best advice?  Get a feel for the market before you do any work on a home.  A good way for potential sellers to do this is to study the homes selling around their property - paying attention to  their square footage and their amenities.  Also, consult with a professional real estate agent who can pull comparable homes for you to support the sale value of your home (and offer you a realistic picture of what the market will support). 

Your Realtor® can give you some great advice to help you focus on the improvements that will bring you the most return.  Professional real estate agents spend time all day long with people who are buying homes - they know what the average buyer is looking for, and what doesn’t impress them.

Another source for determining where to put your fix up money is the 2006 Cost vs. Value Report.  It’s a little dated, but still gives a good idea of the relative merits of different projects.

If you’re looking for some expert advice for buying or selling a home in the Denver area,  look no further than the Bandy Team!  We can help you find a great investment property in Castle Rock’s Castlewood Ranch, sell your fixed up home in Littleton, or buy a dreamy golf course house in Parker at the Pinery.  Whatever your real estate needs, we’re here to help!

Marianne Bandy
Find out what we offer Denver area sellers

While finding an alternative to foreclosure is certainly a good thing for many struggling Denver homeowners, some who sign up for the government's mortgage-assistance program are receiving a nasty surprise in return: lower credit scores.  Before you decide on this route, be aware of the facts so you aren’t surprised later.

If you happen to be delinquent already on any of your payments, damage to your credit has already been done.  However, if you are a borrower who has been making your payments on time, but you’re on the verge of default, the Obama administration's loan-modification program can reduce your credit score as much as 100 points. That can make it harder for you to get a loan in the future, and can present a problem when you apply for a new job.

To enroll in the Obama administration's $75 billion "Making Home Affordable" program, borrowers enter a trial period in which they make at least three payments. But some are finding out that their credit score takes a dive during this trial phase. It happens once their mortgage company notifies the three big credit bureaus — Experian, Equifax and TransUnion.  This happens because a request for a loan modification is the first sign of difficulty for previously stable borrowers.  This means a sharp drop in their credit score.

Even so, the impact of loan modification is far less severe than a foreclosure, where borrowers typically find their credit is in tatters for years. That's due to the cumulative impact of many months of missed payments and the foreclosure itself, which drags down a homeowner's credit by 150 points or more on a scale of 300 to 850.

The good news is that if homeowners get accepted into the Obama program and have loans permanently modified, lenders update the credit bureaus on the new status of the loan.  This neither hurts nor helps the credit score, but over time, borrowers who maintain their new loan payments can see their score increase. 

If you’re a Denver area homeowner facing foreclosure do you still have questions about the best route for you and your family?  Contact the Bandy Team for expert guidance during this confusing and challenging time.  We have helped many others who’ve faced the same struggles and we’d love to help you, too!  We are your local Denver area real estate pros, and we’re here for you.

Marianne Bandy
Find out more about Denver Metro Area Real Estate

Supply is beginning to catch up with demand in the Denver real estate market.  According to a report by the Department of Local Affairs’ Division of Housing, foreclosure filings in Colorado's 12 largest counties rose 7% in February, as compared to the same month a year ago.  Additionally, foreclosure sales at auction increased 14% during the same period, but remain down 14% from February 2008, according to the same report.

Analysts say that the increase is likely because lenders phased out moratoriums that previously slowed the number of foreclosures.  Those foreclosures are now hitting the market.  Most agree that these numbers do not reflect a deterioration of the market, just a reflection of the low numbers while the moratoria were still in place.

The largest increase in foreclosures was in Mesa County, where filings rose 223% from the same time last year.  Experts believe that Mesa County is just now starting to catch up to the rest of the counties in Colorado because of a recent sharp decline in demand for housing.  El Paso and Larimer counties posted the largest decreases in filings from February 2009 to February 2010, declining 16% and 2%, respectively.
 
When it comes to foreclosure sales, Adams, Denver, and Weld counties saw the greatest drops from February 2009 to February 2010, where sales fell 17%, 18%, and 20%, respectively. The largest increase in foreclosure sales was in Mesa County, which reported an increase of 362%.

Now that the banks are becoming more receptive to working with homeowners on foreclosure alternatives, industry professionals say the number of foreclosures should flatten out.  Of course, this depends on the bank and their loan volume, which determines how quickly they’re able to process loan modifications or short sales.

Are you considering jumping into the Denver housing market?  Are you already a Denver homeowner trying to avoid foreclosure?  Whatever your real estate needs, give the experts at the Bandy Team a call - we are ready, willing, and able to help you!  We are your local Denver housing market specialists.

Marianne Bandy
Look for a home in the Denver Highlands neighborhood

According to top economists, the Denver housing market (and that of the nation, in general) should start reaping the benefits of positive signs on employment and national economic growth  in the coming several months.  This is great news for all who’ve endured what has been a challenging economic climate for the past several months.

First of all, employment is up.  The Labor Department reports that there were 200,000 more job openings nationwide in February 2010 (2.7 million) than in the same survey the month before.

Secondly, the expected growth of gross domestic product (GDP), the main barometer of the U.S. economy’s health, is for a very solid 3% during the first quarter of 2010.  Top experts are saying these signs are indicative of a labor market, as well as an economy that is in the midst of recovery.

How does that impact the real estate market?  Expanding employment, like we’re seeing, that’s created by a momentum-gaining national economy are critical precursors to stimulating high demand and sales.  The more plentiful jobs are and the higher buying power of consumers create increased demand for homes, which are already in somewhat short supply.  As we’re headed into a traditionally stronger time of the year for housing (spring and summer), analysts are predicting a strong market over the next several months.  And, because the federal tax incentives ($8,000 for first-time buyers and $6,500 for repeat buyers) will be expiring at the end of April, sales volume through the spring should be steadily improving to ramp up for the summer season.

As far as home pricing goes, evidence continues to mount that in most parts of the country, home values have either bottomed out or have turned positive.  Here in Denver, we are one of just six cities listed in a Standard & Poor’s report last month that showed a year-over-year increase in prices - we seemed to have bottomed out in February 2009, but have been gaining steadily now since September of last year.

Nationally, last week's Zillow home value report found values essentially flat on a national average basis. They were down by just three tenths of a percent, but up in some major markets of note.  For example, Boston's home values are up nearly 2% year-over-year, according to Zillow, and Los Angeles, San Diego, Philadelphia and Denver have registered gains after long periods of negative numbers.

Two other statistical hints that conditions are improving:

• The difference between listed prices and selling prices of homes nationwide is now smaller than it's been in a year, according to real estate research site Trulia.com.
• Realty Trac found that foreclosures, which are clearly still a drag on the market, dropped by 2% last month, which is the second straight month of decline.
  

Are you ready to jump off the sidelines and buy in our local Denver market?  If so, call your real estate experts at the Bandy Team!  We’ll show you some great deals in the Denver metro area, and across the front range.

Marianne Bandy
Look for Homes in Castle Rock’s Founders Village

In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their Denver area homes, and nationwide with their Making Home Affordable program.  Now it will take a brand new approach: encouraging underwater borrowers to leave their homes more quickly.  This latest program is one of the administration’s most aggressive attempts to grapple with a longstanding problem that has defied solutions.

Upward of five million households are behind on their mortgages and are at risk of foreclosure, and the government’s $75 billion mortgage modification plan has helped only a small slice of them. Consumer advocates, economists and even some banking industry representatives say much more needs to be done. 

The new program, set to take affect in about three weeks - on April 5, could encourage hundreds of thousands of delinquent borrowers who have been unable to modify their loan to shed their houses through a process known as a short sale (selling a home for less than the mortgage balance). Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed. 

To serve as incentive to bring the various parties to the table, the government intends to spread its cash around.  Under the new program, the servicing bank, as with all modifications, will get $1,000.  Another $1,000 can go toward a second loan, if there is one.  And for the first time the government would give money to the distressed homeowners themselves.  They will get $1,500 in “relocation assistance.”
Should the incentives prove successful, the short sales program could have multiple benefits.
For the investment pools that own many home loans, there is the prospect of getting more money with a sale than with a foreclosure.

For the borrowers, there is the likelihood of suffering less damage to credit ratings. And as part of the transaction, they will get the lender’s assurance that they will not later be sued for an unpaid mortgage balance.

For communities, the plan will mean fewer empty foreclosed houses waiting to be sold by banks. By some estimates, as many as half of all foreclosed properties are ransacked by either the former owners or vandals, which depresses the value of the property further and pulls down the value of neighboring homes.

In order to curtail fraud, under this new program, a lender will use real estate agents to determine the value of a home and thus the minimum to accept.  This figure will not be shared with the owner, but if an offer comes in that is equal to or higher than this amount, the lender must take it.

There are myriad other potential conflicts over short sales that may not be solved by the program, whose details are still being fine-tuned, but the administration is obviously hopeful that it will pave the way for major lenders to more readily work with borrowers in the short sale process.

Are you or someone you know facing foreclosure in the Denver area and think you might benefit from this new federal program?  If so, give the experts at the Bandy Team a call.  We will let you know what your options are and guide you ever step of the way with our experience and knowledge of the Denver metro housing market. 

Marianne Bandy
Search for homes in Littleton

The economic impact on Denver’s real estate market (and in general) of Aurora’s Fitzsimons project, scheduled to be completed this year, is likely to be huge.  When fully developed, the 32-acre Fitzsimons Village will include hotels, offices, shops and housing for nearly 35,000 Colorado residents.  What’s more, the former Fitzsimons Army Hospital (closed in 1999) is currently undergoing a $4 billion renovation plan, which is the largest medical-related redevelopment project in the US.

Right now, a small retail center near East Colfax Avenue and I-225 is the only one easily accessed on foot by the nearby students, doctors and other workers on the Fitzsimons campus, but that is going to change soon with some new neighbors planning to break ground.  With just one vacancy in the 20,500-square-foot center, tenants include Anthony's Pizza & Pasta, Chipotle Mexican Grill, Spicy Pickle, Noodles & Co., Caribou Coffee, Curves, FedEx Kinko's and IronStone Bank.

Construction of two developments across from the Fitzsimons campus are close to starting.  The first, from Bush Development, is planned to break ground this spring on its 4.5-acre site located at the southeast corner of East Colfax Avenue and Peoria Street.  That project will include a First Bank, 7-Eleven and Qdoba Mexican Grill.

Separately, developer Andrew Klein, who has teamed up with Corporex Colorado, said he expects to break ground this month on a 176,000- square-foot office building (occupied largely by Children’s Hospital) and a 153-room Spring Hill Suites hotel.

Neither construction project probably would be happening if it weren't for the redevelopment of the Fitzsimons campus.  Add to that plans to bring the light rail through, and we’ve got a great recipe for economic growth that will sustain both retail and residential development!

Are you interested in seeing what your housing options are in Aurora’s Fitzsimons Village?  Maybe you’d like to see the other possibilities for homes in Aurora communities, like Saddle Rock homes, homes in Tallyn’s Reach, houses at Buckley Air Force Base, or houses in Heritage Eagle Bend?  Just give your local real estate pros, the Bandy Team, a call!  We will help you discover all that living in Aurora or anywhere on the Denver front range can be!

Marianne Bandy
Check out all of Denver’s Local Resources

If you believe real estate is cyclical, then the facts show the Denver real estate market has hit bottom and is on the way back up.

February 2010 has the lowest residential and condo inventory in 7 years.  This month also displays the highest number of home under contract for a February since 2006 and although the sold data is lagging behind previous years, the 2010 spring season is showing signs of a rebound.

There are Five Facts why 2010 will be a more consistent year in residential real estate in Denver Colorado

The First Fact: 2010 will be improved over past years are inventories are at historical lows in Denver.

Inventory in February of 2010 is the lowest level in 7 years.  With single family and condo units that are for sale totaling 18,716, makes for a 8.7% decrease in the number of available properties over February of 2009 and a whopping 28.1% over February of 2006.

Real estate experts agree that a home is sold faster, easier, and for a higher sale price with careful staging.  Next to a highly effective and knowledgeable real estate agent, one of the best strategies for quickly selling your Denver area home is prepping your house inside and out to appeal to the largest possible audience.  If you’ve ever walked through a model home and dreamed about making it your own, you understand the concept.  Interior designers and home stagers know that the key to making a home as desirable as possible is catering to a large number of buyers’ senses, which helps them to see themselves living in your home. 

Still not sure whether staging your home is necessary?  Consider that many buyers decide whether to buy a house or not based on their first impression - often within the first 15 seconds of walking through the front door.  Follow these tips and tricks when you put your home on the market, and you’ll likely benefit from a higher offer in less time.

1.  Eliminate clutter in every room of the house, including closets and garages.  Buyers want to see a clean house that is open and feels big enough for them and their things. 

2.  Take down family photos and anything that is personalized on the walls, so buyers can see themselves in your home.  Make sure the colors on your walls are not too taste-specific.  You want buyers to feel as though they could live there, not emphasize that someone else already does.

3.   Bring a sense of warmth and comfort to your home by adding strategically placed blankets, pillows, coffee table books and vases around the living areas.

4.  Refinish hardwood floors and replace worn carpets - this eliminates excuses for buyers not to purchase your home because it is already move-in-ready.  Buyers will feel like they will be getting more for their money if updating work is already finished.

5.  Capitalize on natural light by making sure furniture and window coverings don’t block incoming light, and use high wattage bulbs to brighten a room (which makes it appear larger).

6.  Ensure pet odors or cooking smells are not lingering in your home - buyers will be turned off right away.  Open windows for fresh air, utilize air fresheners, and clean carpets and furniture for a fresh look and scent.

For more tips and ideas, read our detailed tips on staging your home, and this helpful article on staging secrets from HGTV.  Then call us!  The Bandy Team is ready, willing, and able to help you sell your Denver home for as much money and in as little time as possible!  And, when you’re ready to purchase your next home, we are your local Denver real estate experts, with experience all across the front range - from Parker’s Stroh Ranch, to Denver’s Washington Park, and all communities in between.

Marianne Bandy
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Many potential home buyers in the Denver area may be hesitant to contact lenders or begin a serious home search because of the recent tightening of qualifications for mortgages.  However, there is a program that might offer buyers some good options as well as good deals.  Fannie Mae’s HomePath® Mortage Program offers special financing on select homes that are owned by Fannie Mae with tons of benefits.  Some of these benefits include:

• Low down payments and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only)
• Possible loan qualification even if your credit is less than perfect
• Loans available to both owner occupiers and investors
• Down payment (at least 3%) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer
• No mortgage insurance (*ask your lender for cost details on these loans)
• No appraisal fees
• Offered by a variety of lenders

The homes offered through HomePath® are all properties that Fannie Mae has acquired through foreclosure, deed in lieu of foreclosure (when an owner gives the home back to the lender to avoid the foreclosure process), or forfeiture.  Because of the nature of the homes available through this program there are some great deals for buyers, and a professional inspection is recommended to determine the extent of any repairs, if necessary.

In addition, Fannie Mae is offering a 3.5% incentive for owner-occupant buyers who purchase and close on a Fannie Mae-owned home between January 28 and April 30, 2010. Some details about this incentive are as follows:

• Offers must be accepted on or after January 28, 2010
• Property sales must close before May 1, 2010
• Investors are excluded

If you’re considering buying a home in the Denver metro area, don’t wait and risk missing out on these Fannie Mae incentives and the Federal tax incentives set to expire in April!  Call the real estate pros at the Bandy Team to find a great deal on a home in metro Denver or in any of our surrounding communities, such as Aurora’s Buckley Air Force Base or Castle Rock’s Castlewood Ranch.  Let us help you reach your goals!

Marianne Bandy
Avoid Foreclosure in Denver