Lower down-payment requirements and easier underwriting standards have increased the use government-insured loans dramatically which now account for 1 in 3 mortgage applications in October, the Mortgage Bankers Association just reported. FHA loans only require a 3% down payment (will be raised to 3.5% in 2009), while the VA continues to guarantee some loans with ZERO down.

That's a huge rise from 1 in 10 applications just one year ago and the biggest share of applications for FHA, VA and other government-insured loans since February 1991. Another factor for the surge was the decision in March to boost FHA and conforming loan limits to $729,750 in high-cost areas for 2008 (which will decrease to a $625,500 cap for 2009).

Fannie Mae and Freddie Mac require a 5% down payment, and private mortgage insurance is required when down payments are less than 20%. The MBA survey showed applications for government-insured loans were up 113.6% from a year ago in October. Refinancings from conventional loans to FHA-insured loans were up 144.3% from a year ago, the MBA said.

Since the MBA began surveying loan applications in January 1990, government-insured loans have ranged from a low of 5.8%  of total applications in August 2005 (the top of the subprime boom), to a high of 43.8% in February 1990.

This report confirms what I've been seeing personally and through my many successful clients... entry level houses are selling quickly because easy FHA financing is here for our buyers. Now you just need to land some great wholesale foreclosure deals at huge discounts, so you can sell them quickly to the many home buyers waiting for your deals. Your timing is great to find out how...

Make sure you register NOW for my Free Foreclosure Investor Webinar, this Wednesday, December 3rd, at 6pm Pacific (9pm Eastern) and get the details FREE! Call 800-310-7730 x2 for the details and REGISTER HERE NOW before we run out of space!

The Federal Reserve and Treasury Department on Tuesday unveiled $800 billion into the struggling U.S. economy, more than Congress approved in October for the banks bailout, trying to jumpstart lending by the nation's banks for mortgages and consumer debt.

By putting that money in the hands of holders of consumer and mortgage loan securities, the government hopes more money will flow to consumers than has occurred so far in previous bailout plans. I think they got it right this time. 

They announced a program to make $200 billion available for a range of consumer loans, including credit cards and car loans, to spur consumer borrowing will come from the Federal Reserve Bank of New York, which will lend that money to holders of securities backed by consumer debt, such as credit card debt. 

The Treasury, which oversees the $700 billion approved by Congress last month to help financial institutions, has been reluctant to make a major commitment of those funds to this new effort. 

Thus it allocated only $20 billion, or the same amount it invested in troubled banking giant Citigroup in a move announced Sunday.So it was left to the Federal Reserve of New York, which is headed by Timothy Geithner, the man nominated by President-elect Obama to take Paulson's place, to come up with the funds to try to restart consumer lending. 

The moves came as the Commerce Department announced that GDP, the broad measure of the nation's economy, fell at an annual rate of 0.5% in the third quarter, the biggest drop in economic activity in seven years. In addition, the Federal Reserve, the nation's central bank, announced it will purchase up to $500 billion in mortgage backed securities that have been backed by Fannie Mae, Freddie Mac and Ginnie Mae, the three government-sponsored mortgage finance firms (GSE’s) set up to promote home ownership. It will also buy another $100 billion in direct debt issued by those firms. 

Finally, the government is buying GSE debt. This will really help push down mortgage rates and help jump start the housing market. For those of you following the financials, stocks are still dramatically oversold. The biggest short-term problem, Citigroup, is now off the table. This move will bring buyers back, as there is a ton of money sitting on the sidelines waiting for a place to go. Personally, I would rather see it all go to real estate.   

Don’t forget to register for my FREE Foreclosure Investor Webinar on Wednesday, December 3^rd, 6pm Pacific. Learn with the many misconceptions about the real estate, foreclosure and credit markets – what’s really going on? And what's our plan for 2009? Get the scoop next Wednesday. Register Here. Talk to you then!  

Happy Thanksgiving… Off to visit family, Mickey and the beach with the family!

Nationally, existing-home sales fell 3.1% in October as well as total inventor which dropped .9% which represents a 10.2-month supply at the current sales pace.

Here's the Regional Breakdown:

Northeast slipped 1.2% and are 9.8% lower than a year ago.

West slipped 1.6% but are 37.5% higher than a year ago.

South slipped 3.2% and are 10.2% lower than a year ago.

Midwest slipped 6.0% and are 9.1% lower than a year ago.

Bright Spots:

A number of areas had solid sales gains from a year ago such as California and Florida markets, as well as Boston, Minneapolis, and Denver.  There's no denying that the hardest-hit cities in Florida, California and Nevada are staging sales rallies as prices fall and houses become affordable again.

California:

The percentage of households that could afford to buy an entry-level home in California stood at 53% in the third quarter of 2008, compared with 24% for the same period a year ago, according to a report released today by the CALIFORNIA ASSOCIATION OF REALTORS. Full report here.

Florida:

For the second month in a row, Florida's existing home sales rose in October with a 15% increase in activity in the year-to-year comparison. 13 of Florida's metropolitan statistical areas reported increased existing-home sales in October; 7 areas also showed gains in condo sales, marking the fourth consecutive month that a number of markets have noted higher sales activity. Among the state's large to medium-size markets, the Miami MSA reported a 23% increase, Fort Lauderdale a 46% increase; Orlando a 18% increase; West Palm Beach-Boca Raton a 37% incrase. Full report here.

Foreign Investors Eye US Market:

Overseas property investors are expressing an interest in the US property market due to the bargains and currency conversion advantages currently available, it has been claimed. According to the Dallas Morning News, the number of offshore buyers has been increasing, with Lawrence Yun, chief economist of the National Association of Realtors, reportedly telling a conference that the number of international buyers operating in the sector "may be doubling over the next ten years".

And he noted that 21% of Realtors believe there are more overseas investors buying US property now than there were five years ago, with a survey by the association revealing almost half of properties bought have been in the southern states.

"The growth opportunities for foreign buyers in the US are tremendous," Mr Yun was quoted as adding, a statement which overseas property investors may wish to act upon.

Finally the Dow has a big fat 7% rally. Wall Street cheered today on reports that Obama has chosen Timothy Geithner as Treasury Secretary.

Geithner would take over from U.S. Treasury Secretary Henry Paulson, with whom he has been working hand-in-glove for months while dealing with a crisis that continues to wrack financial markets worldwide. Geithner was the Fed's point person on the rescue of Bear Stearns and AIG.

Still a relatively youthful 47, Geithner already has a lengthy stint at Treasury under his belt. He joined the department in 1988 and worked his way up to under secretary for international affairs during the Clinton administration under former Treasury Secretary Robert Rubin and then under Summers, who succeeded Rubin as Treasury chief.

Investors gave his nomination an early endorsement.

Stock prices jumped higher within minutes of word flashing around the world that Geithner was expected to get the job -- a key one in any administration but especially sensitive given the crisis that is hurting everyone from pensioners to Wall Street titans as their wealth melts away.

A New York Fed spokesman refused to comment on the reports that Geithner will be tapped for Treasury. His current job is also a highly sensitive one, since the New York Fed president is at the nexus of dealings between Wall Street and policy-makers at both the Treasury and the Fed, the U.S. central bank.

The head of the New York Fed also carries a permanent vote on the Fed's interest rate-setting committee, which would make the selection of a successor to Geithner at the Fed also of great interest to financial markets.

Fannie Mae and Freddie Mac effective Nov 26 through Jan 9 will halt foreclosures and evictions of about 16,000 troubled borrowers while they implement their streamlined loan modification program starting December 15. (Read the full release here.)

The streamlined modification program is aimed at borrowers who have missed three or more payments on their primary residence and have not filed for bankruptcy. The program could help some obtain a more affordable monthly payment through a mix of reducing the mortgage interest rate, extending the life of the loan, or deferring payments on part of the principal Fannie Mae said its loan servicers are also prepared to work with borrowers who have already tried, but failed to obtain workouts. Seriously delinquent loans are being reviewed under the company's "Second Look" initiative to determine if the borrower has been contacted and all workout options have been exhausted.

Wondering what this means to you, the foreclosure investor? Bottom line - this is a good news!

This will absolutely help slow down foreclosures and give banks a chance to do workouts with folks who are working to keep them in their home. The end result will stem house price depreciation, which for us and everyone, is our top goal right now.

There are PLENTY of great REO (and pre-foreclosure) leads for us right now, that a slow down of new leads is definitely not going to hurt. This will give banks a chance to move the inventory they haven't even brought to the market and clear their books in time for January when the flood gates open again.

Next... if we can get TARP to buy bad mortgages as originally proposed... and Congress to pass a series of tax credits for folks who buy homes... that would absolutely end this mess. This is not a far fetched idea guys, it is being discussed I write this.

Wow, just imagine if this is passed by our new administration in January. Let's keep our positive thoughts that this WILL happen!

Again, California stats are coming out showing a strong rebound, this time in Southern California. (Read my prior blog posts on foreclosures.com and realtor.org data showing 2 months of improvements in CA.) If you are "waiting to get in"... you are making a big mistake. These numbers speak LOUDLY. The market has turned and affordability is back. Investors the deals are popping and it's time for you to get to it. Let us show you how HERE.

This just in... Southern California home sales rose unseasonably in October as buyers shook off gloomy financial news and took advantage of often-steep discounts. The median sale price fell to $300,000 - a 67-month low - as foreclosures once again accounted for over 50% of all resales. A total of 21,532 new and resale houses and condos closed escrow in the six-county Southland in October - the highest for any month this year. Last month's sales rose 5.0 percent from 20,497 in September and jumped a record 66.7 percent from 12,913 in October 2007, according to San Diego-based MDA DataQuick, a real estate information service.

Southland sales have risen on a year-over-year basis for 4 consecutive months, breaking a 33-month streak of annual declines. October has never been the peak month for sales in any year back to 1988, when DataQuick's statistics begin.

Last month's record annual sales increase reflects two things: Very weak sales a year ago on the heels of the August credit crunch and earlier subprime meltdown, and this year's big sales gains in inland markets where prices have fallen 30 percent or more. Depreciation in such areas has triggered record foreclosures, which tend to sell at a discount, attracting bargain hunters.

51 percent of existing homes that closed escrow in October were foreclosed on at some point in the prior 12 months. That's up from a revised 50.0 percent in September and 16.0 percent in October 2007. At the county level, these "foreclosure resales" ranged from 39.2 percent of October existing home sales in Orange County to 67.7 percent in Riverside County. In Los Angeles County foreclosure resales were 40.3 percent of sales; in San Diego 48.6 percent; San Bernardino 65.2 percent and in Ventura County 47.0 percent.

Many of the region's relatively affordable neighborhoods saw October sales more than double from a year ago. Use of FHA-insured loans allowing a down payment of as little as 3 percent represented nearly one-third of all Southland purchase loans last month, up from 2 percent a year earlier.

The typical monthly mortgage payment that Southern California buyers committed themselves to paying was $1,413 last month, down from $1,458 the previous month, and down from $2,115 a year ago. Adjusted for inflation, current payments are 33.9 percent below typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 45.8 percent below the current cycle's peak in June 2006.

Foreclosure activity is dropping from record levels, financing with adjustable-rate mortgages is near the all-time low, as is financing with multiple mortgages. Down payment sizes and flipping rates are stable, non-owner occupied buying activity appears flat but might be emerging, MDA DataQuick reported.

I'm preparing for tonights Mastering Mini-Lab Webinar and can hardly wait to meet with my clients. Its so important that I check in with you every month and NUDGE your foreclosure business forward... helping you as much as I can via the web and phone. These calls are sure making a difference to my clients and I am thrilled that I can offer this level of interactive help.

For those of you who are not clear on how to run a title search properly (so you know what you are buying), and then how to fill out your contract properly (legally) so your deal closes (without a hitch and on time) you absolutely need to be on tonights private call (6pm Pacific, 9pm Eastern)

I will have Coach Mary Kay on with me too, and we will absolutely keep you on your toes! If you have not registered yet, make sure you do asap as we have had a big surge in signups for this important topic, and we are getting full! CLICK HERE ASAP or Call 800-310-7730 x2 and Jim or Judy can help you out.

Don't forget... I will be raffling off a FREE LAB SEAT to one lucky participant at the end of Tonights Private Webinar! Talk to you tonight and Good luck!!!!!!!!!!!

As you all know, a surplus of cash has led to a shortage of common sense in the lending and borrowing of capital, which has the end results of our financial markets in disarray. Visions of our economic future remain cloudy, causing a loss of investor confidence and liquidity. This has in turn created historic stock market swings, suggesting that investors see a very wide range of possible economic outcomes.

However, Doug Kass of The Street.com has noted there are tentative signs of improvement. For example, the actions taken by the U.S. and other nations are beginning to have an impact. Though credit remains dear, credit markets are beginning to thaw. Businesses are slowly gaining access to essential short-term financing. In other words, a measure of stability is returning to the financial system.

Today, as investment icon Howard Marks recently stated, negativity reins supreme, possibly opening the door of opportunity for the contrarian. Doug finds that he often ends with a quote from Warren Buffett and often it's the same one: "The less prudence with which others conduct their affairs, the greater the prudence with which we should conduct our own affairs".

But now I want to talk about the flip side: When others conduct their affairs with excessive negativism, it's worth being positive. When others love 'em, we should hate 'em. But when others hate 'em, we can love 'em.

In "The Tide Goes Out" in March, I listed the stages of both bull and bear markets. I said that in the terminal third stage of a bull market, everyone is convinced things will get better forever. The folly of joining that consensus is obvious; people who invest thinking there'll never be anything to worry about are sure to get hurt.

In the third stage of a bear market, on the other hand, everyone agrees things can only get worse. The risk in that -- in terms of opportunity costs, or forgone profits -- is equally clear. There's no doubt in my mind that the bear market reached the third stage last week. That doesn't mean it can't decline further, or that a bull market's about to start. But it does mean the negatives are on the table, optimism is thoroughly lacking, and the greater long-term risk probably lies in not investing.

The excesses, mistakes and foolishness of the 2003-2007 upward leg of the cycle were the greatest I've ever witnessed. So has been the resulting panic. The damage that's been done to security prices may be enough to correct for those excesses -- or too much or too little. But certainly it's a good time to pick among the rubble.

-- Howard Marks, Chairman, Oaktree Capital Management (October 2008, "The Limits to Negativism")

In order to stage a substantive year-end recovery, Mr. Market needs some luck. President-elect Barack Obama needs to connect on a long bomb. Stated simply, in order for the markets to rally into year-end, we need "shock and awe" policy and personnel decisions from the President-elect, and we need them to be announced as soon as is practically possible.

Here are some of the events and policy measures that might contribute to a sharp year-end rally:

1. Recommend a massive tax stimulus. Senator Obama should be prepared to stand behind a massive fiscal stimulation package that represents as much as 4% of GDP, or at least $400 million, introduced in two stages. He should emphasize his intention to promote the package immediately following his inauguration.

2. Lower middle-class tax rates. Again, immediately!

3. Announce a $25 billion rescue package to domestic automobile manufacturers. This might be distasteful to the President-elect, but it is necessary to the markets. (Note: Europe has already announced a $55 billion-plus automobile rescue package.)

4. Introduce large tax incentives for home ownership. On Friday, FDIC Chairwoman Sheila Bair unveiled the details for a plan to give government support to delinquent homeowners by artificially lowering rates and promising to share in the losses of borrowers who receive government help and still go into default. Obama should go further and announce a large ($10,000-plus) tax incentive for the purchase of new and existing homes in order to eradicate the glut of unsold homes.

5. Immediately announce Cabinet appointees with the broadest experience and the highest credibility, from both within the two political parties (a team of rivals) and from industry. More than ever today (and especially under the weight of debt and a contracting economy), a house divided against itself cannot stand. As soon as possible, Obama should announce his intention to embark on a magnanimous transpartisan approach to his appointments of 14 Secretaries of Departments and of the Attorney General in his Cabinet as well as the five other non-Secretary positions of Cabinet-level status. As well, he should announce appointments of specialists in some of these positions who are outside of the political realm. Bold bipartisan appointments would wow the markets as a sense of engagement is underscored.

6. Cut interest rates. The Fed should slash the fed funds rate to zero.

Of course these changes will also have a huge beneficial impact to the housing market and create more buyer demand that we will know what to do with. So now the question is, if any of these come to fruition will you be ready to reap the rewards? Or will you be late to the party?

Now... if you think like I do... that this is THE time to be a foreclosure investor... a time like we've never seen before... then you will not wait! You will prepare now so you are ready to jump in with both feet. And you WON'T MISS my monthly private Mastering "Mini-Lab" Webinar Tuesday Night (Tomorrow) at 6pm Pacific (9pm Eastern). There's a right way to close on your 50% off foreclosure deals, and I will show you how! Do not wait. You need to Register Now! MORE HERE.

The FDIC came out with it's plan to prevent about 1.5 million home mortgage foreclosures by promising to share any losses with mortgage companies that agree to refinance certain home loans. This is a really good plan guys and will help alot of homeowners who have income (ei, working) stay in their home. It will slow down the tide of foreclosures and help the market absorb the REOs that exist right now and get them sold. 

Their program will be applied to the estimated 1.4 million non-GSE mortgage loans that were 60 days or more past due as of June 2008, plus an additional 3 million non-GSE loans that are projected to become delinquent by year-end 2009. Of this total of approximately 4.4 million problem loans, we expect that about 50% can be modified, resulting in some 2.2 million loan modifications under the plan.

That means 50% of those who do not qualify to get modified, will need our help! So make sure you continue to work pre-foreclosures and help those who do not have the income to stay in their home. This also means our window to buy REOs at unbelievable prices will not be here forever as the flow of new REOs will be slowing down and our house market will stabilize once this excess inventory is absorbed.

Do not wait, get your wholesale foreclosure buying hat on NOW! Make sure you don't miss my Mastering Mini-Lab Webinar this Tuesday on the details of how to get deals done right in this market HERE: http://www.foreclosures.com/pages/mastering_community.asp

Here is their plan:

• Paying servicers $1,000 to cover expenses for each loan modified according to the required standards.
• Sharing up to 50% of losses incurred if a modified loan should subsequently re-default.

Eligible Borrowers:
The program will be limited to loans secured by owner-occupied properties.

Exclusion for Early Payment Default:
To promote sustainable mortgages, government loss sharing would be available only after the borrower has made six payments on the modified mortgage.

Standard NPV Test:
In order to promote consistency and simplicity in implementation and audit, a standard test comparing the expected net present value (NPV) of modifying past due loans compared to the strategy of foreclosing on them will be applied. Under this NPV test, standard assumptions will be used to ensure that a consistent standard for affordability is provided based on a 31% borrower mortgage debt-to-income ratio.

Foreclosures fell for the second month in a row in October to nationwide lows not seen since last February, according to the latest U.S. Foreclosure Index from ForeclosureS.com.

In this first post-election look at foreclosure numbers, October pre-foreclosure filings -- which can include notice of default and/or foreclosure auction -- were off more than 10% from August's highs, and nearly 7% from September's numbers. October numbers were down in about half of the states in the U.S. Foreclosure Index.

Properties repossessed by lenders following foreclosure or REOs (bank-owned real estate) were down significantly in October, too -- off 22% from September's high to just 84,286 properties, the lowest monthly total since May, the U.S. Foreclosure Index shows.

Property information specialists ForeclosureS.com bases its U.S. Foreclosure Index and comprehensive analysis of pre-foreclosure and foreclosure proceedings nationwide on the number of formal notices filed against a property during the foreclosure process. That can include notice of default, notice of foreclosure auction, and/or notice of REO -- lender-owned real estate that occurs after a foreclosed property reverts back to the lender. (All pre-foreclosure filings do not end up in foreclosure).

"These latest foreclosure numbers are great news because pre-foreclosures are early signals of what\'s to come," says Alexis McGee, real estate expert, educator, president of ForeclosureS.com. "The nation's foreclosure free-fall may be subsiding. We still have a long way to go, and some of the recent numbers are skewed by lender programs for homeowners that delay rather than eliminate foreclosures. But gains as measured by drops in foreclosure numbers in the past two months reflect that efforts by lenders, banks, organizations, and government entities to work with strapped homeowners to avoid foreclosure are beginning to pay off."

McGee is author of The ForeclosureS.com Guide to Advanced Investing Techniques You Won\'t Learn Anywhere Else (Wiley), and The ForeclosureS.com Guide to Making Huge Profits Investing in Pre-foreclosures without Selling Your Soul (Wiley).

"Keep in mind, too, that though foreclosure is a coast-to-coast issue that affects tens of thousands of Americans every month, our analysis reveals that a huge chunk of the REO and pre-foreclosure filings are concentrated in certain states, and key metropolitan, and coastal areas," adds McGee. "Some are either hard-hit by recession and layoffs as in the case of the Detroit area, or are where property speculation, prices, and affordability spiraled seemingly out of control before the sub-prime debacle. The latter includes areas in California, Florida, and Nevada."

Almost one-third of the 1.76 million pre-foreclosure filings so far this year are in 10 counties out of the more than 1,300 nationwide included in the ForeclosureS.com database. Those counties include: Maricopa County, Arizona; Los Angeles, Riverside, and San Bernardino counties in California; Miami-Dade, Broward, Palm Beach, and Lee counties in Florida; Clark County, Nevada, and Cook County, Illinois.

More than 255,000 of the 828,670 completed foreclosures this year to date are in 10 counties, too, U.S. Foreclosure Index analysis shows. Those counties include Maricopa County, Arizona; Los Angeles, Riverside, San Bernardino, Sacramento, and San Diego counties in California; Clark County, Nevada (including Las Vegas); Wayne County, Michigan (including Detroit); Harris County, Texas (including Houston), and Cook County, Illinois (Chicago).

Looking at nationwide foreclosures another way, based on the number of filings out of every 1,000 households, the clearest indication of trends, ForeclosureS.com reports:

-- 11.5 out of every 1,000 households nationwide have been repossessed by lenders following foreclosure YTD based on REO filings. That's up 71.64% from the same time a year ago.

-- 24.6 of every 1,000 have had to deal with pre-foreclosure filings YTD, up 71.53% from 2007 YTD.

"Foreclosures as part of the nation's broader economic crisis will likely be the first major issue President-elect Obama addresses when he takes office in January," adds McGee. "He has promised a 90-day freeze on foreclosures. But each state has its own regulations relating to foreclosures, so whether the promise will become reality is another question.

Meanwhile, for the next close to three months, foreclosures and economic stimulus packages remain the purview and the problem of the Bush administration."

Government intervention in foreclosures could end up a moot issue, however, since some key banks and lenders already have recognized that keeping homeowners out of foreclosure is good business. Banks like the now FDIC-operated IndyMac, Bank of America (which acquired Countrywide), and most recently JPMorgan Chase already have pledged to cut monthly payments for many strapped borrowers by lowering interest rates and temporarily reducing home loan balances, adds McGee.

"Our foreclosure numbers, plus the National Association of Realtors recent Existing Home Sales and Pending Home Sales reports for the last two months show that housing markets may be stabilizing. You can't call a bottom with two months of data, but we are absolutely headed in the right direction," McGee said.

She continued, "Prices are low and current government backed mortgages are making homes more affordable than ever. Plus lenders are finally getting realistic and unloading REO's at cut-rate prices. The deals are happening. Whether you're a would-be homeowner or property investor now is a great time to buy discounted properties from motivated sellers."

With its data base of more than 5.5 million property listings, ForeclosureS.com has been the professional's source for accurate foreclosure property information for more than 20 years. For more information on ForeclosureS.com and its products, please visit www.foreclosures.com.