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Lillian Wong
Senior Mortgage Loan Officer
14850 N. Frank Lloyd Wright Blvd. 
Scottsdale, AZ  85260
Email:   Lillian@LillianWong.com

 'First Look' aids home purchases By Catherine Reagor The Arizona Republic 09.23.09 

Mortgage giant Fannie Mae recently launched a program called "First Look" that bars investors from bidding on its foreclosure homes for the first 15 days that they go on the market. In metropolitan Phoenix , first-time buyers typically lose out to investors on the best foreclosure homes.

In April, the Arizona Housing Department, several Valley cities and Tucson received a total of $121 million in federal money from the U.S. Department of Housing and Urban Development's Neighborhood Stabilization Program. Most of the money is being used to help first-time buyers purchase foreclosures homes and fix them up. The typical qualifying borrower can get at least $10,000 in down payment and closing-cost assistance.

Hundreds of people Valley-wide have gone through the required counseling and education to qualify for city and state Neighborhood Stabilization funding.

However, it has proved difficult for home buyers to spend the money, particularly in the Valley. Most lenders, including Fannie Mae, have been selling foreclosure homes to investors who can pay cash and close on deals quickly.

Valley housing-market watchers say buyers trying to use NSP money are making higher bids than investors on foreclosure homes but are still losing out to the buyers paying cash.

"The Fannie Mae program will help a lot," said Patricia Garcia Duarte, president of Neighborhood Housing Services of Phoenix. "Now, if the other big lenders, especially Freddie Mac, would do the same."

Fannie Mae's First Look program was launched at the end of August to help people and groups using government funding buy its foreclosure homes. It makes sense that the nation's biggest mortgage firm, which is government-owned, should try to help people, non-profits and cities use federal money to tackle the nation's growing foreclosure problem. Freddie Mac is also owned by the federal government.

A few months ago, the NSP was tweaked to encourage more lenders to participate. Originally, lenders had to discount foreclosure properties by 15 percent to buyers using the federal funds. That was lowered to 1 percent, which has helped some.

Joann Hauger, president of Community Housing Resources of Arizona, said lenders are still not doing enough. Her non-profit group had been working since June with a buyer trying to use NSP money to purchase a foreclosure home in Phoenix . Recently, the deal fell through because the lenders involved were moving too slowly.

All the federal foreclosure funds must be spent by early 2011. Several Valley cities and the Arizona Housing Department have programs. Check out yourwayhomeaz .com.

Foreclosure funding

HUD is about to award $1.9 billion in the second round of the NSP. About $3.9 billion was awarded in the first round of the federal package to help areas hard hit by foreclosures.

Some cities in Arizona , which has one of the nation's highest foreclosure rates, are wisely asking for more money in this second round of funding.

Phoenix , which received almost $40 million of Arizona 's $121 million from the first round, has asked for $60 million.

Tucson , working with Pima County , has asked for about $20 million. It received $7.3 million in the first round.

Ron Sims, assistant director of HUD who was in Phoenix last week to speak at the Governor's Housing Forum, said the second round of NSP funding should be awarded soon.

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