Marketing Tips For Lenders When Attracting First-Time Homebuyers

A recent article from residential mortgage industry member Karen Deis noted that there are some tactics that lenders should use in order to pull first time homebuyers in when it comes to marketing.

Deis noted that it is important to get these consumers' attention to encourage them to make the plunge into the residential housing market.

Reminding consumers that their lease is not permanent is important, she said. At any point, a person can find out that their lease is not going to be renewed. Purchasing a home isn't difficult, and a person who buys a home would only need to put down approximately one month's rent and a security deposit to obtain a mortgage. Also, if a person starts now, instead of wasting cash on a rental property, they can end up owning their home much more quickly.

The National Association of Realtors recently released a report which noted that first-time homebuyers made up nearly one-third of all home purchases during February. While this is down slightly month-over-month and year-over-year, it is a large group of the market, and encouraging this section to buy could help improve sales significantly.

Explaining Plan B: HARP 2.0

HARP 1.0 was introduced in April 2009 by The Federal Housing Finance Agency (FHFA) and the Department of the Treasury. It was part of the Obama Administration’s Making Home Affordable program. It provided an option to borrowers who might not qualify for refinancing due to declining home values or reduced access to mortgage rates. In some cases, borrowers could refinance up to 125% of their mortgage into a lower interest rate and/or more stable mortgage product.

Borrowers who are underwater, and owe more than their home is worth, can utilize FHA Streamline or HARP to take advantage of low interest rates and other refinancing benefits. Nearly 894,000 borrowers had refinanced through HARP as of August 11, 2011. However, there are still many more homeowners that need help.

HARP 2.0 is designed to increase the number of homeowners who are able to refinance through this program. With the enhanced HARP 2.0, borrowers must meet the following criteria:

·         The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae. Homeowners can determine if they have a Fannie Mae or Freddie Mac loan by going to:

http://www.FannieMae.com/loanlookup/ or calling 800-7FANNIE (8 a.m. to 8 p.m. ET)

https://ww3.FreddieMac.com/corporate/ or 800-FREDDIE (8 a.m. to 8 p.m. ET)

·         The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.

·         The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.

·         The current loan-to-value (LTV) ratio must be greater than 80%.

·         The borrower must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past 12 months.

Based on these criteria, the FHFA estimates that there are 4 million loans that are eligible for refinance through the revised program. It is estimated that HARP 2.0 will be available by mortgage lenders in the first quarter of 2012.

Experts Positive About Improving Residential Housing Market with Early Warm Weather

Many industry members are increasing their hopes for a much-improved spring season when it comes to residential housing transaction volume, according to USA Today.

With the warm weather breaking out in most parts of the country, there may be an extension of the spring season, and this could translate to a larger number of homes sold. February home sales were up nearly 10 percent year-over-year, while confidence is up for industry members, the news source reported.

Home prices are projected to continue their decline, while some areas are expected to begin their climb back for the first time since the housing bubble burst.

"This spring will be the litmus test for housing demand," Steven Ricchiuto, chief economist for
Mizuho Securities USA, told the news source.

Not only are experts optimistic about the improving residential housing market, but many consumers feel the same way as well. According to Fannie Mae's latest edition of the Quarterly National Housing Survey, most of American renters are interested in purchasing a home at some point in the future. In addition, a majority of consumers think that the present is a good time to purchase a property.