After a two-day closed door policy meeting last week, the Federal Reserve announced its latest effort to stimulate the economy: “Operation Twist.”

The crux of the plan is to put downward pressure on long-term interest rates by shifting $400 billion from short term Treasury holdings to longer term Treasuries.

Writing for MarketWatch, David Weidner explains that driving long-term interest rates even lower than they have been could help banks by increasing financing activity and generating more fees and transactions. Moreover, he adds, “many homeowners on the edge of being underwater on their home loans would have an opportunity to cut their housing costs. What the banks lose in profit margins — they are currently borrowing for nearly nothing and lending for 4% or more — would potentially be offset by fewer bad loans.”

Economic and housing industry experts are not convinced the outcome is going to turn out to be what the Fed expects and wants it to be. Interviewed for an article in Forbes Magazine, Steve Blitz, senior economist at ITG Investment Research, said that “borrowing is about confidence. If I’m uncertain about growth in my income, I’m not going to go get a mortgage.”

At the same time, as noted in an article on Zacks,

“While all eyes remained fixed on the Federal Reserve’s announcement, data about a surge in the existing-home sales in August was hardly factored in. According to the National Association of Realtors: “Total existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 7.7 percent to a seasonally adjusted annual rate of 5.03 million in August from an upwardly revised 4.67 million in July, and are 18.6 percent higher than the 4.24 million unit level in August 2010.”

Zacks’ article concludes with Lawrence Yun, NAR chief economist, observing that although some of the upswing in existing-home sales in August could be attributed to delayed sales from earlier in the year, “favorable affordability conditions and rising rents are underlying motivations.”

In a recent article, the Associated Press reported that RealtyTrac Inc.’s latest data show bank actions against defaulting mortgage holders rose 33 percent in August from the previous month. As the existing and future inventory of foreclosed upon, or real estate owned (REO), properties continues to loom over the housing market, the National Association of Realtors (NAR) issued a letter to federal agencies urging more backing for loan modification programs, as well as lending initiatives and short sale support.

Responding to a request for input from the U.S. Department of Housing and Urban Development, the Federal Housing Finance Agency and the U.S. Department of the Treasury, NAR sent a letter strongly advocating that the government work to expand financing opportunities. NAR outlined three major areas it feels would have the most and best impact on the housing market:

1. Providing financing opportunities to qualified borrowers — to both relieve the current REO inventory and help forestall adding to the inventory.
2. Strengthening pre-foreclosure programs such as loan modification and short sales).
3. Overseeing and encouraging the disposition of REO inventory — utiliizing local expertise (e.g., contractors, real estate brokerages, professional property managers) as needed.

While stressing that financing should be provided to qualified homebuyers according to strong underwriting guidelines, the letter pointed out that private capital supporting the mortgage market has all but disappeared in the last three years — and that the lack of financing opportunities powers lowering home values, which increases the volume of upside-down mortgages and thus the number of homeowners facing default and foreclosure.

A recent article from RIS Media discusses the increasing percentage of real estate deals that are getting snagged when the appraisal comes in lower than expected. According to the article, this past June and July alone saw 16 percent of real estate professionals reporting a sale cancellation as a result of low appraisals.

What can you do?

1. Negotiate with the seller to lower the price — clearly the simplest solution, though not always the easiest. The earlier in the transaction you address this, the more leverage you may have. Consider that this summer the average home sale took 88 days. Your seller may be willing to balance time against dollars.

2. Ask the seller to carry a second mortgage for the difference — this solution means that the buyer incurs more debt, although it doesn’t cost the seller any more.

3. Do your research — do you have any reason to contest the appraisal? Check the appraisal management company and specific appraiser’s credentials. Find out what comparables were used and don’t be shy about asking to see a list of recent comparable sales that justify the agreed-upon sale price.

4. Ask for a new appraisal — if your research uncovers some doubt or discrepancy, ask the lender to conduct a second appraisal. You might be charged for it, but if your research is convincing enough to you to think one is warranted, it might be worth the money.

5. Order your own, independent appraisal — this can go either way, as the bank will most likely ask the original appraiser to say whether they agree or not with your new one. If they don’t agree, the bank could request another, third, appraisal, or just reject yours altogether. On the other hand, if they agree with your new appraisal and the disputed factors you present, the original appraisal might be adjusted.

For more information, read these articles:

• Weak Appraisals Hamper Home Sales, Experts Say (Realtor Mag)
• Five Ways to Fight a Low Appraisal (RIS Media)
• Low Appraisal Killing a Deal? Here’s What to Do (Realtor Mag)

The S&P/Case Shiller home-price index, released last Tuesday, showed a 3.6 percent increase in home prices from the first quarter of this year to the second. According to the index, however, the average home price year over year dropped 5.9 percent for the first six months of this year compared with last year.

Average home prices are performing differently across the country — The S&P/Case-Shiller index tracks 20 “MSAs” (metropolitan statistical areas), of which, according to David M. Blitzer, Chairman of the Index Committee at S&P Indices, “eight bottomed in 2009 and have remained above their lows.  These include all the California cities plus Dallas, Denver and Washington DC, all relatively strong markets. At the other extreme, those which set new lows in 2011 include the four Sunbelt cities – Las Vegas, Miami, Phoenix and Tampa – as well as the weakest of all, Detroit.”

Mortgage rates continue to stay at record lows for the entire country — Last Thursday, Freddie Mac released the results of its Primary Mortgage Market Survey® (PMMS®), which showed that the average rate for a 30-year fixed mortgage hit an all-time low (at least as far back as 1971) in August of 4.15 percent.

Demand for purchase loans remains down — The Mortgage Bankers Association revealed in a separate survey that, despite record low mortgage rates, demand for purchase loans remains lower than it has been since the 1990s.

Blitzer also noted that “these shifts suggest that we are back to regional housing markets, rather than a national housing market where everything rose and fell together.” In this buyer’s market, that means paying more attention to local sale price trends as cities and areas rebound differently around the country.

RealtyTrac reported that the share of homes in some stage of foreclosure dropped 5 percent from the first quarter of this year to 31 percent in the second quarter.

Additionally, the average sales price of bank-owned (or “REO”) properties was discounted another 4 percent  (to 40 percent from 36 percent) below the average sales price of a non-foreclosure home in the second quarter, while the average sales price of a preforeclosure home (often sold in a short sale) also dropped 4 percent to 21 percent from 17 percent in the first quarter.

James Saccacio, RealtyTrac CEO, is quoted as saying that the reduction in the share of homes in some stage of foreclosure, the bigger discounts being applied to preforeclosures and a shorter sale cycle for preforeclosures

“all point to a housing market that is starting to focus on more efficiently clearing distressed inventory through more streamlined short sales… which gives distressed homeowners who do not qualify for loan modification or refinancing… a better chance of completing a short sale to avoid foreclosure… and give lenders the opportunity to more pre-emptively purge nonperforming loans from their portfolios.”

At the same time, according to an article in RealtyTimes, foreclosures are back down to 2007 levels due in part to the fact that fewer foreclosures are being initiated by the lenders, giving borrowers more opportunity to find solutions to keep their homes or avoid foreclosure in other ways.

The article also cites a recent report by the Mortgage Bankers Association (MBA) that shows that although the number of delinquent mortgage borrowers (people who have missed at least one payment) rose in the second quarter, the number of loans that are delinquent more than 90 days dropped. That’s good news, as it is those distressed mortgages that are more often moved by the lender into a repossession process.

Ranked as the #1 Hotel/Resort in Nicoya by TripAdvisor.com and encompassing some of the most breathtaking views and unspoiled beaches in the region, this turnkey resort offers investors profitable returns year after year.

A select overview of the resort assets that are part of the sale includes:

* 5 Acres of Oceanfront Land with over 700 feet of beach frontage. This encompasses the main resort area including Seaside Cottages, Reception Building with Balcony Rooms, Luxury Oceanfront Villa, Restaurants, Oceanside Pool, and Administration Building.

* 10 Seaside Cottages. All cottages have 1200 sq.ft., 2 bedrooms, 2 baths, and are located steps from the beach.

* Reception Building with 5 Balcony Guest Suites. Each guest suite is 500 sq.ft. with private ocean side balconies. The main level of the building includes Resort Reception Area, Management Offices, and Housekeeping facilities.

* Villa de los Reyes. A 5000 sq.ft. luxury villa with 5 bedrooms and 4 baths, privately located steps from the beach.

* Blue Dolphin Restaurant. Fully equipped and offering international cuisine with the freshest local ingredients possible.

* Bogey’s Hideaway Restaurant. A breezy 1500 sq.ft. restaurant located on the beach and featuring casual dining. Perfect for wedding receptions, dances, and special events.

* Oceanfront Adult and Children’s Swimming Pool. 60,000 gallon free form pool with Jacuzzi, swim-up bar, and traditional 1500 sq.ft. palm leafed rancho.

* Mini Market Building. An 700 sq.ft. building offering a mini-market for guests and 3 additional administrative offices.

* Warehouse. A 2500 sq.ft. storage area with resort equipment including power tools and tractor. The hotel’s laundry facilities are also located here.

Guests are offered unparalleled opportunities to enjoy breathtaking views, consistently beautiful weather, unspoiled beaches that stretch for miles, excellent scuba diving and sport fishing, and friendly local residents – all which have attracted many noteworthy investors and prominent hotel chains including The Four Seasons, The Ritz Carlton, JW Marriott, and new billion-dollar developments by Steve Case and Bill Gates.

One of the few true oceanfront properties in Costa Rica with incomparable beauty and a unique blend of luxury and nature, the Sanctuary Resort and Spa offers investors an incredible vacation property in full-swing operation and priced well below market value.

Contact Scott Huger at 719.659.2630 (United States) for a complete sale prospectus, or email scott@HugerGroup.com.

See the Auction Site at: http://www.CostaRicaAuction.com.

The exquisite kitchen is both elegant and functional with custom cherry cabinetry, slab granite, Bellagio tile, travertine backsplash, large panty, and an expansive counter bar for casual dining. The nearby formal dining area is surrounded by windows and opens to a large deck overlooking the fenced yard with mountain and city views.

The gracious living area centers on a warm gas fireplace, and French doors open to a spacious main-level office which could also be used as a library or play room.

A private hallway leads to the luxurious master suite with a huge walk-in closet and breathtaking views. Custom tile work showcases the master suite 5-piece bath with double vanities, glassed-in shower, and an inviting soaking tub.

A wrought iron stairway opens to the beautifully finished lower level with a spacious theater room and sitting area. Three additional sunny bedrooms, all with walk-in closets, share a full bath and offer quiet privacy for visitors or family.

Central air conditioning, a whole-house humidifier, in-wall theater surround sound, a mudroom with a sink, built-in garage shelving, a low maintenance stucco exterior, and an excellent location in award-winning District 20 schools all showcase this exquisite home. Call Scott Huger at (719) 659-2630 for more information, or email scott@HugerGroup.com

A wraparound deck and covered front porch welcome you inside to a large entryway, and rich hardwood floors flow to the spacious kitchen with tiled countertops, an oversized breakfast bar, and a large gathering room with beamed ceilings and plenty of space for dining and conversation. A redwood deck off the kitchen overlooks the park-like yard and private hot tub. French doors open to the formal living/dining area with a warm gas-log fireplace.

An open staircase leads to an upper level loft with built-in shelving, perfect for an office or sitting area. French doors open to the huge master suite with wood ceilings, an attached 5-piece bath with a raised tub, and a spacious walk-in closet. Two additional upper-level bedrooms share a full hall bath.

The lower level could be a separate guest or family retreat with a grand wet bar topped with granite and a beautifully finished bath.

The private, park-like rear yard surrounded by pine and scrub oak offers flagstone pathways, a large deck, a stone patio, and a private hot tub to enjoy the cool Colorado evenings. All this in a wonderful Gleneagle neighborhood, near award-winning District 20 schools, parks, and the Air Force Academy. Call Scott Huger at (719) 659-2630 for more information, or email scott@HugerGroup.com