Ran across this information today from By Christopher Solomon of MSN Real Estate

and wanted to make sure all Buyer had a chance to see it... the market is only going to get hotter in 2010 so be sure you have the most update information....

 1. Choose a reputable auctioneer. First, do your research by poking around the auction Web site's "About" page; find out when the site was established and how long it's been in operation, says author Roberts. Make sure the business has a real street address or mailing address, not just a P.O. box, he says. Make sure the business has a phone number you can call -  and do so, asking the person who picks up the phone about the business.

If the service requires you to pay a deposit prior to entering a bid, make sure you're paying the deposit to a reputable escrow company, not to the individual running the auction, warns Roberts.

2. Do your homework. It applied in seventh grade; it still applies. When you see a property that intrigues you, know what you're getting into, says Bid4Assets' Lauroesch.

How? Several ways:

• Know what properties are worth in the area where you're looking. You can start by reviewing local listings, checking out open houses for similar homes and by using online home-valuation tools. 
• Go and physically look at the house, and have it inspected if possible: "Foreclosed properties unfortunately do have a tendency to be damaged by the people who are leaving the property," Lauroesch says.
• Have your financing and money lined up so you know what you can spend.

3. Do more homework. Do a title search. Either ask to be provided one, or go to the county records office and get one. You're checking to make sure the property can be bought free and clear, with no liens.  And if there are liens, ensure that they can be satisfied in the transfer process, says Lauroesch. Have this document interpreted for you, says author Sherby.

4. Know the law. "Foreclosure is not a national thing; it's administered on a state level," says Sherby. Get familiar with the laws in the state where you want to buy. (You can see RealtyTrac's foreclosure laws here.)

For example: In New Jersey, Sherby says, if you buy a home at auction, the owner still has 10 days to reclaim the property if they somehow can come up with the money. "You will still be refunded your money, but some of these rights of redemption can go for up to one year," complicating a would-be homeowner's plans to fix up and perhaps sell a property, he says. "It restricts your ability to do anything with that property," he says (though he concedes that 99 times out of 100 the previous owner will not redeem the property. If they could, "it wouldn't be in foreclosure.")

5. Tally all the costs. Make sure you weigh all the costs of buying that home before you go for it, everything from how much repairs will cost to how much the financing will cost you, says Sherby. And here's something auction newbies may forget: Depending on the auction, there can be a "buyer's premium" of 10% to 15% tacked on to some properties sold at auction; be sure to study the terms of sale, advises Williams.

 

6. Think local. "I think the online auctions are great, but I still think that to be a successful investor you still need to invest in your neighborhood," says author Roberts. That means buy close to home, ideally in a general circle in which you travel in your regular life. "In every circle you travel, there are opportunities," he says.    

Why hyper-local? "Because you know the area. You can drive to the home. You can maybe even find a tenant whom you know to occupy the home. The farther it is away from you, the higher the chances you could be a victim of fraud," he adds. "The houses I own, I can drive by them on the way to work. In fact, I drive by one of them each day on the way to work."

Holiday sales up

 According to figures from MasterCard Advisors' SpendingPulse, which track all forms of payment, including cash, retail sales rose 3.6 percent from Nov. 1 through Dec. 24, compared with a 2.3% drop a year ago.  Adjusting for an extra shopping day between Thanksgiving and Christmas, the number was closer to a 1 percent gain.  Last year, the economy was in "critical condition," said Michael McNamara, vice president at MasterCard Advisors' SpendingPulse. "This year, it's in stable condition."  "We had a pretty decent surge," McNamara said.  Online sales were a particular hot spot, fueled by a big increase the weekend before Christmas. They rose 15.5 percent on the season, though they make up less than 10 percent of all retail sales.  Stores count on a post-Christmas boost because of the growing importance of January on the retail sales calendar. Last year, the week after Christmas accounted for 15 percent of overall holiday sales, according to ShopperTrak, a research firm.  Retai  l consultant Burt P. Flickinger describes gift cards as "the lifeblood" of the post-Christmas season, because shoppers typically spend more than the value of the cards.  "Retailers with a disappointing December are going to need January to survive," Flickinger said. "Inventories are even too low for retailers

Mortgage rescue can kill your credit rating

 Most troubled homeowners don't realize that President Obama's entering a trial mortgage modification can actually hurt their credit.  It's true that many people who apply for the president's plan are already delinquent in their mortgage payments, but being in a months-long trial period may only add to the pain.  Under the president's plan, troubled borrowers can have their monthly mortgage payments reduced to 31% of their pre-tax income.  Homeowners are first put in a trial modification for several months to prove they can handle the new commitment and to give the bank time to collect the necessary income and hardship verification documents.  During this period, industry guidelines call for loan servicing companies to report borrowers to the credit bureaus according to their status before they entered the modification - either current or the number of days delinquent.  However, borrowers' accounts are also designated with a code indicating they are in a partial payment plan.

  The coding alone can impact credit scores, which measure a consumer's financial health and range from 300 to 850 under the FICO system. The severity depends on how many payments the borrower missed before entering the program. Those who were current in their mortgages could see their scores fall up to 100 points, according to the Treasury Department.

S.&P Downgrades Five Mortgage Insurers

Standard & Poor's downgrade the credit ratings on five mortgage insurance companies. The credit ratings agency said continued losses on insurance claims exceeded previous expectations, as low-risk books of business are starting to experience greater losses.  "The lower-risk books of business within the mortgage sector (such as those with higher FICO scores or lower loan-to-value ratios) have been and will be more adversely affected than we had anticipated and U.S. mortgage insurers' losses will continue to be greater than previously expected overall," S&P analyst Ron Joas wrote.  "If the US economy were to experience another setback, prolonging the exit from the recession, delinquencies and resulting losses could increase at an even greater rate, with lower benefits available from rescissions than what has been seen over the past year," Joas wrote.  "In addition, any existing and potential benefits from modification programs might reverse, and modification attem  pts might be ineffectual."  The mortgage insurers downgraded are: Genworth From triple-B plus to triple-B minus; PMI Group from double-B minus to B plus; Radian Group from double-B minus to B plus; Republic Mortgage Insurance Co. From A minus to triple-B minus; United Guaranty From triple-B plus to triple-B.

Mortgage rates increase

 Freddie Mac said the average rate for a 30-year fixed-rate mortgage (FRM) was 4.94% with an average 0.7 point for the week ending December 17, up from 4.81% last week. A year ago, the 30-year FRM was 5.19%.  Freddie Macs survey has put the rate for 30-year FRMs below 5% for the past seven weeks, creating a boost in refinance activity. Bankrate.com put the 30-year FRM at 5.13% with an average 0.42 point for the same period, up from 5.04% in the previous week.  Mortgage rates followed bond yields higher once again this week amid signs of an improving economy, said Frank Nothaft, Freddie Mac vice president and chief economist.  On the consumer side, retail sales jumped 1.3% in November and consumer sentiment, as measured by the University of Michigan, rose above the market consensus forecast to the highest reading since September.  Industrial production also showed large gains in November. 

 Freddie said the 15-year FRM averaged 4.38% with an average 0.6 point, up from last week when it was 4.32%. A year ago, it was 4.92%. Bankrate.com put the 15-year FRM rate at 4.53%.  The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.37% with an average 0.6 point this week, up from last week when it averaged 4.26%, Freddie said. The one-year Treasury-indexed ARM averaged 4.34% this week with an average 0.5 point, up from last week when it averaged 4.24%. Bankrate.com put the five-year ARM at 4.6%, up from 4.55% last week

Foreclosure backlog at 1.7 million

 About 1.7 million homeowners were on the verge of foreclosure in the fall, a looming "shadow inventory" of homes that will be put up for sale in the coming years and weigh down prices, according to a report from First American CoreLogic.  The number, up from 1.1 million a year earlier, is likely to keep rising through the middle of next year or later, said Mark Fleming, chief economist of CoreLogic.   The foreclosure backlog isaAlready equal to nearly half the 3.8 million unsold new and existing homes currently on the market, First American said.  "We're going to be dealing with high levels of distressed (sales) in the marketplace for at least a couple of years," Fleming said. "It's not just all going to disappear."  Other reports have come up with larger estimates.

 But FirstAmerican assumes that fewer delinquent borrowers  only about one-third  will wind up losing their homes. It also estimates that nearly 30 percent of bank-owned properties have already been listed for sale.  In many markets around the country, the number of new foreclosures has dropped in recent months as homeowners are reviewed for loan modification programs. But real estate agents, who have seen this as an encouraging sign, still fear that an onslaught is coming.  "We've been in recovery mode for most of the year. How many foreclosures do they have to dump on the market to affect that? I don't know," Deborah Farmer, owner of StarLight Realty in Tampa, Fla. "Any house priced under $225,000 will be affected by a large increase in foreclosures in this market."

Fannie Mae increases credit requirements

 Fannie Mae has increased the minimum borrower credit score from 580 to 620.  Brian Faith, a spokesperson at Fannie, confirmed the minimum hike, adding that the adjustment reflects a careful analysis of borrowers ability to repay their mortgage obligations over the life of the loan.  Our experience with recently delivered loans with credit scores below 620 is that they reached a level of serious delinquency at a rate approximately nine times higher than other acquisitions during the same period, Faith said in a statement.  Fannie also reduced the allowable debt-to-income (DTI) ratio to 45% when executing loss mitigation efforts under the Home Affordable Modification Program (HAMP). Under HAMP, the US Treasury Department provides allocated capped incentives to servicers for the modification of loans on the verge of foreclosure.   Faith said that high DTI ratio loans also have higher levels of serious delinquency.  Its not enough to help borrowers buy a home  w

 e must also ensure that they can stay in the home over the long term, Faith said.

More foreclosures coming

 Diana Olick has climbed on board with an increasing number of people who thinks foreclosures are still going to hit us like a ton of bricks, driving home prices even further down.  She quotes Lender Processing Services: "The November Mortgage Monitor report, released by Lender Processing Services, Inc. (NYSE: LPS), reveals a nationwide loan deterioration ratio higher than 3:1 - indicating that for every one loan improved, three more loans are deteriorating... The number of foreclosures on the market continues to stall as foreclosure timelines extend. Nearly 30 percent of properties that have been in foreclosure for 12 months have not yet been put on the market for sale - twice the level of the prior year. Foreclosure inventories continued to climb to record levels. October's foreclosure rate stood at 3.14 percent, a month-over-month increase of 0.7 percent and a year-over-year increase of 85.1 percent."  And she quotes Mark Zandi, who we quoted yesterday:  "This lull in forec  losure sales has resulted in the price gains in the past few months," he told Reuters.  "Foreclosure sales will increase, and home prices will resume their decline by early 2010 as mortgage servicers figure out who will not qualify for a modification."