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A U.S. Economic and Housing Market Outlook for February was released by Freddie Mac (OTC:FMCC). It reflected vigilant signs of the progress of the economy and housing market as driven by the low interest rates and more promising job opportunities for Americans.

Here are the outlook highlights:

• For the past 2 months, job gains outdid the anticipations. However, voluntary resignations are an estimated 2 million in December compared to the 3-million pre-recession average, thus, showing worker agitation. 
• A drop to 8.3% in the rate of unemployment, with a declining number of unemployment benefits application weekly for the third consecutive week 348,000, the littlest from the first week in March 2008. 
• In 2013, more progress is anticipated in the housing market as the economy remains in its slow but strong recovery in a low-interest-rate situation.
• Low rates of mortgages will keep high the homebuyers’ ability to purchase and help motivate more HARP refinances.
• Consumer worries faded in January as homebuilder confidence remains reflecting signs of progress.
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Frank Nothaft, Freddie Mac vice president and chief economist said,  ”The US economy continues to build on the momentum from the end of last year … Our outlook anticipates gradual, but steady, improvement in the economy and the housing market, supported by low interest rates and brightening job market prospects.”

On March 28, 2012, Wednesday, Freddie Mac’s 2012 Economic Outlook report stated that the slow spring back of home prices all over the United States was due to the economy’s improvement. However, the report mentioned that there are still a lot to go through in the recovery of the housing market.

The report further said, “The housing market is showing some signs of shaking off the depression-like conditions that have plagued it for much of the past few years… As if awakening from hibernation, housing starts and home sales moved to higher levels of activity.”

Freddie Mac‘s change to an uphill forecast for sales and originations was encouraged even by these signs of improvement. The plunge in the unemployment rate to 8.3 percent, the lowest in three years, is considered as one economic contributor that helps housing stabilization.

Frank Nothaft, Freddie Mac’s chief economist commented, “A variety of encouraging indicators suggest that the housing market may be feeling a nascent recovery … and more neighborhoods may see stabilization in overall demand and housing values this spring.”

Although there is a minor drop in new and existing sales of home, median home sale prices are up, as reported by Freddie Mac. The erection of rental apartments in multi-unit structures account for about half of the raise in housing starts as stated by the report. Since 2005, it is expected that the new rental construction be at its highest level.


Also, the report mentioned, “Housing starts continue to run below net household formations [and will allow for absorption of existing vacant homes].”

An announcement of the HUD’s $72.6 million offer for all 50 states’ public housing agencies and the District of Columbia to be able to supply permanent housing and for the more than 10,000 homeless veterans’ case management was made by Secretary Shaun Donovan of the U.S. Housing and Secretary Eric K. Shinseki of the Urban Development and U.S. Department of Veterans Affairs.

On March 29, 2012, the announcement on permanent supportive housing assistance was made through HUD’s Veterans Affairs Supportive Housing Program (HUD-VASH). This program administered by HUD, VA, and local housing agencies aims to offer permanent housing with case management and other services to support the homeless veterans all over the country. 

HUD Secretary Donovan said, “It’s a national disgrace that one out of every six men and women in our shelters once wore a uniform to serve our country… But we know that by providing housing assistance and case management services, we can significantly reduce the number of veterans living on our streets. Working together, HUD, VA and local housing agencies are making real progress toward ending veteran homelessness once and for all.”

On the other note, VA Secretary Shinseki commented that, “Under the leadership of President Obama, we have made significant progress in the fight to end homelessness among veterans, but more work remains… The partnership between the federal government and community agencies across the country has strengthened all of our efforts to honor our veterans and keep us on track to prevent and eliminate veteran homelessness by 2015.”

Elimination of the Veterans’ and the citizens’ chronic homelessness by 2015, as one of Obama’s Administration’s commitment, was the reason for the funding of local housing agencies. Opening Doors: Federal Strategic Plan to Prevent and End Homelessness guides the federal government in working hand in hand with the state and local agreements in confronting the causes of homelessness, especially among men and women who previously served the country. A decline of nearly 12 percent (or 8,834 people) since January 2010 was found by HUD’s annual “point in time” approximation of the number of homeless persons and families for 2011.

The source of the said grants was from the $75 million allotted for Fiscal Year 2012 to support the housing needs of homeless veterans. On the other note, the services and case management offered for the homeless veterans are to be provided by VA Medical Centers (VAMC), being the first of the 2-round funding of HUD-VASH. The remaining funding are to be announced by the end of this summer, as HUD anticipates.

VAMCs work hand in hand with homeless veterans, followed by their referrals to public housing agencies for these vouchers. A lot of factors are considered their basis, mainly the duration of the homelessness and the necessity for longer term more rigorous support to be able to acquire and preserve permanent housing. . The HUD-VASH program includes: the rental assistance and the comprehensive case management provided by the VAMC staff.

Those participating veterans in the HUD-VASH program rent privately owned housing and generally contribute up to 30 percent of their income for rent. VA offers qualified homeless veterans clinical and supportive services all over the U.S., Guam and Puerto Rico. 

A drop off in the number of foreclosures was recorded in the markets previously experienced an all time high in the years 2009 and 2010.

A report made by the National Association of REALTORS®’ Local Market reflected a decrease in the national foreclosure rates, from 2.8% down to 2.7% by December. In 163 markets surveyed, 113 witnessed to a reduced foreclosure rates over this period.

Markets with high rates in 2009 and 2010 comprise the largest declines in foreclosures currently. Florida and Nevada markets conquered most of the top 10 places in declines. Seattle and Spokane Washington also ranked in the top 10 although these markets maintain low foreclosure rates, thus, implying stronger proportionate progress in recovering. Over all, Miami, Fort Myers, Orlando and Sarasota Florida have the utmost decrease in rates of foreclosures.

The drops in foreclosure rates imply stronger conditions of employment and consumer confidence. Mortgage rates will also be lower that will then be motivating more home sales. There were also effects seen for the hard work in enhancing the process of short sale and modification programs.

The reason for the slowing of foreclosure activities during the survey period is that servicers are looking forward to the new processing standards of the multi-state AG agreement that would reduce their liability risk. Since the new agreement has been signed, increasing new filings for foreclosure are anticipated.

Homeowners struggling in selling their homes in a short sale received a good news last February 28, 2012 from the REALTORS® that assists them – a new National Association of REALTORS® alliance with the U.S. Department of the Treasury will make their services better.

The Treasury Department sponsors an upcoming Making Home Affordable “Help for Homeowners” outreach events will help REALTORS® who will attend in gaining visions to better manage their short sale process and have the chance to meet face-to-face with loan servicers on behalf of their clients who needs assistance for difficult transactions.

NAR President Moe Veissi stated, “As the nation’s leading advocate for homeownership and housing issues, REALTORS® are working hard to keep more people in their homes, and when a family is absolutely unable keep their home, REALTORS® are there to help homeowners by facilitating a loan modification or short sale… I encourage our REALTORS® members to participate in these new events so that they have the tools and information to help distressed homeowners achieve the best possible outcome.”

All year round, Help for Homeowners community events will go on. Last 22nd of February, the first session was held, with an additional event on the 24^th. Chicago, Indianapolis, Los Angeles, and Sacramento, California are the next settings of the scheduled events.

The said events enable REALTORS® to attend workshops and hear it straight from the lenders and loan servicers regarding the execution of short sales in the currently challenging market. Navigation of the short sale process, negotiating effectively the short sale offers and expedition of transactions are some of the tips to be discussed. From the Treasury officials, REALTORS® can learn various foreclosure prevention programs, and specifically the Home Affordable Foreclosure Alternatives (HAFA) short sale program. For those real estate professionals who won’t be able to attend personally in the workshops can have live webinars instead.

Though the sessions for real estate professionals are unavailable for homeowners, the free homeowner sessions instead are open to borrowers in financial distress and anxious about losing their homes to foreclosure.

To learn more about foreclosure prevention options and work on the road to solutions to their mortgage problems, a face-to-face encounter with loan servicers and housing counselors will be off help to these distressed homeowners.

Veissi further stated, “REALTORS® embrace the opportunity to partner with the Treasury Department and drive participation at upcoming “Help for Homeowners” events. Working together we can improve the success rate for short sale transactions, which will reduce the overall number of foreclosures and benefit sellers, lenders, buyers and the entire community.”

To speed up and to prevent losing homes because of the long process of short sale, three senators, Lisa Murkowski (R-Alaska), Scott Brown (R-Massachusetts), and Sherrod Brown (D-Ohio) proposed and introduced legislation on February 17 addressing the concern of short sale timelines, “The Prompt Notification of Short Sale Act”.

It requires an acknowledgement letter from a lender after receiving a request letter from the buyer no later than seventy five (75) days. The acknowledgement from the lender must specify a counter offer, acceptance, rejection, extension, and timeframe. It will limit the servicer to one (1) extension not more that twenty one (21) days.

The buyer will receive $1000 and attorney fees if the bill is violated.

Same bill was passed last April 2011 by Reps. Tom Rooney (R-Florida) and Robert Andrews (D-New Jersey). This legislation only requested an acknowledgement deadline of forty five (45) days.  

Currently, many agents work for the worst deals in the record of the history of the real estate line. In addition to this insult, the agents take each other’s leg for almost nothing.

With most traditional marketing that produce enough transactions for the average agent’s survival failure, a number of agents have been forced to switch to traditional companies and have enough business. Those traditional companies though, have been glad to provide leads for relocation at despicable prices.

Speaking under anonymit, one major Atlanta broker-owner confessed that in his eight offices, agents have become more and more dependent on his company in looking for opportunity for sales. He further explained that the relocation department provided pays a 40% referral fee just for having rental leads. That’s on top of their 8% payment (of the gross commission) to their home office franchise.

Adding up those enormous expens3es leaves only about 25% to be divided between the company and the agent who sells. The company’s part provided business is 50/50 in traditional companies, having only 26% of the gross commission left for the selling agent. This excludes the gas expenses, client meals, advertising, or other operating expenses.

Agents take this kind of deal because they have to. Agents today feel the hardship of making enough business for their living. Traditional estate marketing let them down. Most agents have been experimenting in online marketing, wasting their limited budgets.

There is no assurance in being clean and straight in preparing tax returns to avoid an IRS audit, although some anticipation can help in preventing hassle.

First is to consider audit predictors, as suggested by Jim Wang at U.S. News and World Report. Based on many returns, the IRS has formula that picks out problem filings. Some of the possibilities are the following:

• Mismatch of return with W-2 and 1099 forms, including interest paid by the banks
• Having a Swiss bank account
• Getting paid for a service in a company and the company gets audited

Second important consideration is to get the filing done on time. According to Jeff Schnepper at MSN Money, tax paperwork is one of the hardest things to get done by some. Crammers have to motivate themselves to gather the data they need. Another step that is necessary is to learn about the key tax changes every year, especially the tax credits, which are things that are most effective in legitimately decreasing final tax bills.

Third important consideration is to use softwares, such as DIY, to improve accuracy of doing the forms. A number of name-brand tax-software permit online federal flining, such as the IRS website with free electronic versions of all its forms, in which taxpayers with up to $57,000 income can use name-brand software without being charged.

Lastly, some free programs are supported by IRS in which tax preparation are assisted by volunteers, most of which are for lower-income taxpayers and the elderly, although some are offered to anyone.

Housing is rough especially in the winter. The recent winter has been remarkably difficult, given that large swaths of the country have been either concealed in snow or frozen over.

Possibly the weather explains the current news on home sales. This January, existing-home sales catapults 2.7 percent to a higher-than-expected annual rate of 5.36 million units, although it appears there was major discounting. The median price drops to a nine-year low of $158,000. The good thing was that supply plummet to 7.6 months at the current sales rate from 8.2 months, which may or may not be linked to the foreclosure moratorium.

It is more credible that weather was the reason new-home sales plunged to an annual rate of 284,000 units in January, however we are not sure. Homebuilders might be taking on more severity. The supply of new homes drop 0.5 percent to 188,000 units at the same time as the median sales price increased to $230,600. This simply means that homebuilders are drained of discounting. They would rather decrease output than sell at prices that fail to generate a reasonable return on investment.

Pricing remains a national issue. The closely watched S&P/ Case-Shiller home value index stated that national home prices dropped 3.9 percent in the fourth quarter of 2010. After the index was published, Robert Shiller, the index’s co creator, ended the rounds to different media outlets to let everyone know that he’s concerned that home prices will continue to drop, and not just a little. Shiller observes prices plunging 15 to 25 percent in real terms.

This same concept concerns to mortgage rates. Indeed, rates have even out over the past two weeks, as Treasuries have recovered their haven status because of Middle East unrest. Though, 2 to 4 percent yields on Treasury securities would not be deemed a haven when inflation consumes all the return. It is only a matter of time before credit investors insist higher lending rates.