Reducing the amount struggling homeowners owe on their mortgages is proving to be a more effective way to prevent foreclosures than other methods, such as reducing interest rates or postponing payments, according to Amherst Securities Group.  That brings the home’s value near market value, so borrowers do not fall behind on payments & lose their homes.  Only 12% of borrowers who receives principal reductions re-defaulted in 2011, compared to 23% who received interest rate reductions (but NO principal reduction) & 30% who received forbearance, which postpones their debt repayment.  In many cases homeowners are no longer hopelessly underwater.  Loans backed by Freddie Mac & Fannie Mae are NOT included, but could change as the Federal Housing Finance Agency, who controls the majority of outstanding mortgages through its oversight of Fannie & Freddie, has thus far prohibited the mortgage giants from including debt forgiveness as part of their mortgage modifications, as considered unfair.  Uncle Sam could help with these loans, but conplicated & more to come.

Freddie Mac yesterday released the results of its Primary Mortgage Market Survey, showing average mortgage rates easing amid worsening economic indicators.  THIRTY- YEAR FIXED rate mortgages averaged 3.66% with an average of 0.7 point for the week ending 6/21/2012 or down from 4.5 % a year ago.  FIFTEEN- YEAR FIXED rate mortgages averaged 2.95% with an average 0.6 point or down from 3.69% a year ago.  Five-year Treasury-indexed hybrid ARMs or adjustable rate mortgages averaged 2.77%  this week with an average 0.6 point or down from 3.25% a year ago.  One-year Treasury-indexed ARMS averaged 2.74% this week with an average of 0.5 point & down from 2.99% a year ago.

Tyler area home sales in May 2012 jumped 6.65% from the same time last year.  289 units were sold as compared to 271 in May 2011 reported by the Greater Tyler Association of Realtors.  Increase from April, but April was slow.  Median home sale prices are still $137,500 as they were a year ago.  Dr. Lawrence Yun, National Association of Realtors chief economist, said the housing recovery is under way.  It is no longer just investors, but folks taking advantage of the HIGH AFFORDABILITY conditions, which includes the continuing low interest rates.  The number of days on the market in the Tyler area is DECREASING, so inventory is lowering, which is a good indication of a stronger market.  Still a ways to go to be a stable market for both buyers & sellers.

The real estate matra, “location, location, location,” doesn’t apply just to homebuyers anymore, but to renters also, according to the National Association of Home Builders (NAHB).  The location of an apartment building is the most important feature for renters choosing their home.  As a result more and more developers are choosing to build in urban areas near public transit, such Millennials – the largest group of renters – seek shorter commute times and better quality of life.  Onsite fitness centers are becoming more prominent as well, with top-of-the-line equipment and yoga rooms.  Common areas are become more, well, common, such as computer centers, media centers and lounges – previously separate spaces – are now coming together to foster more resident interaction.

The Texas Veterans Land Board (VLB) has voted to increase its home and land loan limits.  Texas veterans can now borrow up to $417,000 to buy a home and up to $100,000 for the purchase of land.  Both options are available as low-interest loans.  Also lots as small as ONE ACRE and now eligible.  Information on the loan program and be found at the  VETERANS LAND BOARD WEBSITE.  You may need to go thru a local lender, but be sure you deal with a lender who deals with these loans and only a few do.