The experts at RealtyTrac told 7 On Your Side that home prices have increased 28 percent in the Bay Area from the time the housing market hit bottom in February 2012. In San Francisco, the prices have risen even more dramatically.

Brian Miller saw first hand how frantic the housing market in San Francisco can be right now.

“I found myself being constantly outbid, putting in offers of 20 percent over asking, getting outbid at 50 percent over asking in cash,” Miller said.

That type of activity didn’t surprise Serena Kokjer Greening of Guarantee Mortgage. She says the small number of homes for sale combined with the improved employment picture is leading to bidding wars.

“You’ll see properties getting six, eight, even 20 offers which, you know, hadn’t happened in four to five years here,” Kokjer Greening said.

All those offers mean rising prices taking us closer to the bubble, the point when homes are considered overpriced.

The Vice President of RealtyTrac Daren Blomquist says we’re still 21 percentage points below the peak of the housing bubble in the Bay Area.

“But then if you focus in on the city, that’s where we’re very close actually to the peak of the housing bubble in San Francisco,” he said.

Blomquist says San Francisco is just 6 percentage points from reaching that bubble stage.

“I think it’s pretty dangerous,” he said.

“Today I received probably my eighth denial of a modification,” San Francisco resident Gale Rosboro said.

Rosboro wrote President Barack Obama and the White House forwarded her case to the Treasury Department to assist her in getting a modification from Wells Fargo. So far, even that hasn’t helped.

“They’ve made no move towards working with me to get a modification,” Rosboro said.

In an email, Wells Fargo told 7 On Your Side, “We have worked with Ms. Rosboro for nearly three years and will continue to try to identify options that are appropriate for her individual financial circumstances. Our foreclosure rate is less than 1 percent.”

Ironically, rising home values could make it even more difficult for struggling homeowners to get modifications.

“I think that people are barely hanging on. There have been a lot of cuts and its been very difficult for families,” Alliance of Californians for Community Empowerment spokesperson Grace Martinez said.

Blomquist predicts another round of foreclosures in San Francisco in the coming months.

“Four of the last five months in San Francisco foreclosure starts have increased from the previous month,” he said.

Blomquist advises home buyers to be patient and not feel you have to buy right now.

Miller waited and found something he could afford. “It feels great, I mean I’m very excited, he said.

RealtyTrac says the next wave of foreclosures in San Francisco won’t be an overwhelming flood, but it does expect an uptick.

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Article source: http://abclocal.go.com/kgo/story?section=news/7_on_your_side&id=9196447

(Read More: Inside America’s Economic Crisis)

That is why their stocks initially plummeted in value in 2008 and were delisted from the New York Stock Exchange. The shares would only have value if Congress were to take them out of conservatorship and allow them to recapitalize. That, most analysts say, is a very long shot.

“This is a congress that needs and wants a lot of money. Why would they ever give up this revenue stream, especially if it’s going to speculative bets on Wall Street?” asked Ed Mills of FBR Capital Markets.

Mills said investors are weaving an exciting tale, but one unlikely to have a happy ending. At first it was small individual investors, but now larger hedge funds, like Paulson and Co and Perry Capital, are getting in, according to several published reports. While members of Congress have yet to pass any legislation toward dismantling Fannie and Freddie or returning them to private companies, with or without a government backstop, the idea that they would just give them back to shareholders is, again, unlikely.

(Read More: Paulson Raised Bet on Mortgage Insurers in First Quarter Filing)

Sen. Bob Corker, a Republican from Tennessee who is sponsoring legislation to reform Fannie Mae and Freddie Mac, has been clear that stockholders will get nothing in his plan, despite the recent profitability of the two:

“If Treasury were to decide to sell its preferred share investment without Congress having first reformed our housing sector, we would just be returning to a time where gains are for private shareholders and losses are for taxpayers. Neither of these is an acceptable outcome,” according to a recent release.

Still, it is enticing to think about.

“Fannie/Freddie is an extremely exciting story. This year, Fannie and Freddie are likely to post combined net income of over $100 Billion—more than the combined estimated earnings of both Exxonand Apple. Pretty good for two entities left for dead in the fall of 2008,” said James Fenkner, a California-based investor who has owned Fannie Mae shares. “I’m a long term believer in the eventual recovery of Fannie and Freddie, but also believe that the story of the commons and [less so] junior preferred are not yet ready for prime time. Should Fannie and Freddie recover to their pre 2008 highs, the common shares could rally eight times and the preferred five times their current prices. Yet, such gains assumes a fairly tale ending, and that is a probability asymptotically close to zero.”

As Fannie Mae’s dividend payments to Treasury, so far $95 billion, now approach the amount it drew, $116.1 billion, investors have a better case to make.

(Read More: Fannie Mae Should Be Abolished, Says Barney Frank)

Article source: http://www.cnbc.com/id/100754423

(Read More: Inside America’s Economic Crisis)

That is why their stocks initially plummeted in value in 2008 and were delisted from the New York Stock Exchange. The shares would only have value if Congress were to take them out of conservatorship and allow them to recapitalize. That, most analysts say, is a very long shot.

“This is a congress that needs and wants a lot of money. Why would they ever give up this revenue stream, especially if it’s going to speculative bets on Wall Street?” asked Ed Mills of FBR Capital Markets.

Mills said investors are weaving an exciting tale, but one unlikely to have a happy ending. At first it was small individual investors, but now larger hedge funds, like Paulson and Co and Perry Capital, are getting in, according to several published reports. While members of Congress have yet to pass any legislation toward dismantling Fannie and Freddie or returning them to private companies, with or without a government backstop, the idea that they would just give them back to shareholders is, again, unlikely.

(Read More: Paulson Raised Bet on Mortgage Insurers in First Quarter Filing)

Sen. Bob Corker, a Republican from Tennessee who is sponsoring legislation to reform Fannie Mae and Freddie Mac, has been clear that stockholders will get nothing in his plan, despite the recent profitability of the two:

“If Treasury were to decide to sell its preferred share investment without Congress having first reformed our housing sector, we would just be returning to a time where gains are for private shareholders and losses are for taxpayers. Neither of these is an acceptable outcome,” according to a recent release.

Still, it is enticing to think about.

“Fannie/Freddie is an extremely exciting story. This year, Fannie and Freddie are likely to post combined net income of over $100 Billion—more than the combined estimated earnings of both Exxonand Apple. Pretty good for two entities left for dead in the fall of 2008,” said James Fenkner, a California-based investor who has owned Fannie Mae shares. “I’m a long term believer in the eventual recovery of Fannie and Freddie, but also believe that the story of the commons and [less so] junior preferred are not yet ready for prime time. Should Fannie and Freddie recover to their pre 2008 highs, the common shares could rally eight times and the preferred five times their current prices. Yet, such gains assumes a fairly tale ending, and that is a probability asymptotically close to zero.”

As Fannie Mae’s dividend payments to Treasury, so far $95 billion, now approach the amount it drew, $116.1 billion, investors have a better case to make.

(Read More: Fannie Mae Should Be Abolished, Says Barney Frank)

Article source: http://www.cnbc.com/id/100754423

Fannie Mae and Freddie Mac were put under government conservatorship in 2008, in the wake of the housing and mortgage crash. (Related Link: Fannie Freddie Takeover.)

“With today’s announcement, we are taking the next step toward responsibly winding down Fannie Mae and Freddie Mac, while continuing to support the necessary process of repair and recovery in the housing market,” said Michael Stegman, Counselor to the Secretary of the Treasury for Housing Finance Policy in a press release.

Treasury officials announced they will now require the two to reduce their investment portfolios at a faster rate, 15 percent a year instead of the previous 10 percent.

The Treasury is also replacing the ten percent dividend payments the two make to Treasury on its preferred stock investments with a “quarterly sweep of every dollar of profit that each firm earns going forward.” Fannie Mae and Freddie Mac only became profitable again this year, the first time since the crash of the market.

“We see this as a positive for housing, as it ensures that Fannie and Freddie will remain in business,” writes Jaret Seiberg of Guggenheim Partners. “Absent Fannie and Freddie, we believe housing finance will become more expensive and less available.” (Related Link: US Home Builders Begin to See Credit Thaw.)

Seiberg also notes that this is a positive for private mortgage insurers because Fannie Mae and Freddie Mac require such insurance when a borrower puts down less than 20 percent in equity on a loan. Without Fannie and Freddie, the private insurers would lose a lot of business.

The announcement, however, does not really speak to the future of the GSEs, rather just rids them of a counterproductive debt repayment situation. With the former 10 percent dividend requirement, Fannie and Freddie, up until the past two quarters, were actually having to borrow more from the Treasury in order to pay the Treasury the dividend.

Questions?  Comments?  And follow me on Twitter @Diana_Olick