Dean Graziosi

Fannie Mae s one of two government-backed mortgage enterprises responsible for ensuring the liquidity of the mortgage market. The recent economic meltdown resulted in a lot of government bailouts. These bailouts were not just limited to banks but also to the real estate sector; to Fannie Mae and its twin, Freddie Mac. The resulting effect was tighter controls on the institutions leading to even more foreclosures flooding the market. All of a sudden, people who were once considered prime purchasers were not unable to meet the steep conditions set by the institutions and could not qualify for housing loans.

The direct result of this is that even though there are now more foreclosed properties on the market than ever before, there is even less buying going on because getting a housing loan is now a rigorous process for prospective purchasers.

Probably as a result of this and other developments in the real estate sector, Fannie Mae recently released a couple of incentives geared towards homebuyers and realtors. These are financial incentives provided on sales of HomePath properties and run through October. According to a press release by Fannie Mae on June 11, the goal of the incentives is to stabilize neighborhoods and is only available to buyers who intend to purchase as a primary residence.

For homebuyers, the incentives offer up to 3.5 percent of the final sales price to put towards closing costs. Realtors representing the owner occupant buyer get to receive a $1,200 bonus on the sale. These are for HomePath properties and for buyers who intend to live in the purchased property as a primary residence. Besides these, there are also some other conditions which must be met in order to qualify for these incentives.

Conditions

One of the conditions is that the buyer or the agent representing the buyer needs to request the incentive upon submission of the initial offer.

The initial offer needs to be submitted on or before June 14, 2011 and any offers made before that do not qualify for the incentives.

Also, the deadline for the incentives is October 31, 2011 and it is absolutely mandatory that the sale close before that date as there would be no extensions to that deadline.

Sales made by pool or auction will not be eligible for the June 14, 2011 to October 31, 2011 incentives.

Any property that was acquired by Fannie Mae in connection to a financing under a reverse mortgage is not eligible for this incentive.

In order to qualify, a buyer has to sign the Owner Occupant Certification Rider to the Real Estate Purchase Addendum.

These are the main conditions although there are a few more which are available on the website, homepath.com.

It is important to note that Fannie Mae also has a lot of other incentives available for homebuyers which can be found on the Homepath.com website.

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It has been said that if you want to make money doing anything you should just follow the Baby Boomers. Almost 80 million Baby Boomers are getting close to retirement. In fact, about a hundred thousand Baby Boomers who have chosen early retirement will be receiving their first Social Security checks. The outlook for these retirees and those who come after them has never been brighter. Although each person’s situation is different, as a whole, this generation will have a quarter of a century of retirement to look forward to, and will bring to retirement an unprecedented level of affluence and continued good health. Droves of Baby Boomers are snapping land for sale because they want to ensure a comfortable retirement. The rest of this article will explore reasons Baby Boomers are snapping up this land.

Boomers are Value Conscious

Although this generation is financially better off than their predecessors, they are more cautious with their money. Since they realize they have a long life span, they understand that they have to be very careful with their assets to that they do not outlive their money. Therefore, Baby Boomers tend to turn down traditional real estate opportunities and financing. Instead Baby Boomers are finding land for sale by owner or foreclosures. They usually intend to build on these properties at a later time. They are buying this property as a foundation for their retirement years. They are looking to get these properties at a bargain.

Location, Location, Location

Part of the process of finding the right kind of land for sale is finding the right location. Current trends indicate that Baby Boomers are choosing to buy land that is off the beaten path. Few are fortunate enough to be able to afford to buy or build Malibu beach houses or Manhattan penthouses. Instead, they are choosing to go where property taxes and property prices are low. However, - and this is a key  factor - they still want many of the amenities that make retirement living relaxing and rewarding. So, for example, they look for land in or near a golf community, or lake land that affords them wonderful opportunities for fishing. They often opt for land in areas that are going to be developed into private communities, complete with lakes, rivers, recreation centers, and nature trails. Most importantly, they don’t want to be “snowbirds,” living winters in one area and summers in another. Instead, they want mild temperatures that they can enjoy year-round. This should be a plus for people with properties in warm climates.

Unlike the generations that came before them, baby boomers know what they want. They also typically have the money to afford to buy exactly what they want. If you can buy investment properties near the things that baby boomers want, you will have a leg up on the competition.

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In 2009, commercial loan defaults hit their highest level since 1993 and astonishingly doubled the number of 2008 defaults.  In the fourth quarter alone, the commercial default rate rose 3.8 percent.  In 2009, multi-family property default rates climbed from 1.8 percent to 4.4 percent.

Default rates for all combined forms of commercial real estate rose to 3.8 percent in 2009 and is projected to top 5.1 percent by the end of 2010 and 5.4 percent by the end of 2011.  Chairperson of the Senate Oversight Panel for TARP said that 50 percent of commercial mortgages would be underwater by the end of 2010.  Commercial real estate owners who leveraged their properties are in trouble as commercial real estate values decreased by as much as 29 percent in 2009.

At the end of 2009, U.S. banks held $1.1 trillion in commercial real estate paper not including $211 billion in multi-family mortgages.  The nation’s smaller banks are carrying a 33 percent higher percentage of default loans. If these smaller banks absorb these losses, they will be unable to provide much-needed regional loans to local borrowers.

Delinquency rates in multi-family properties (13.19 %) and lodging properties (16.89%) lead all forms of commercial delinquencies.  Industrial delinquencies increased 76 percent in year-over-year comparisons while lodging increased 88 percent.  Retail and office space delinquencies rose by more than 70 percent over 2008 rates.

If you believe in the buy low and sell high basic real estate investment theory, this is your time to realize big opportunities.  While there is no doubt buy low properties are out there, investors must make sure they can fill the commercial space. 

Lenders may be receptive to shirt sales and creative financing packages but these lenders want to see occupied space. Many businesses are entering the investment world.  As U.S. companies continue to shed jobs, their space requirements are changing and centralizing.  Many of these companies are now positioned to convert from tenant to owner and banks could not be happier.

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