Wednesday, August 26, 2009
Short Sale Myths
Dear Sue,
I am planning on moving my family out of state. We need to sell our home first.
Our Realtor said that we owe more than it’s worth so we need to do a short sale.
I have heard that the lender won’t approve a short sale unless we are behind on our payments. Is this true?
We have never missed a payment in our lives!
Moving Mike
Dear Mike,
If your credit is important to you and you can still make your payments, then do it!
The story about not making your payments is a myth. Don’t fall prey to it.
A short sale does not always affect your credit but not making your payments will.
Missing payments will compound your problems. You will have excess interest and penalties. Your credit rating will suffer.
A low credit score means higher interest rates on credit cards and any money that you borrow in the future.
Make your payments!
Dear Sue,
I am in construction and have been out of work for over a year.
My unemployment and side jobs have been getting us by.
It is getting to a point where I can no longer make my house payments.
I don’t know if I should just walk away or try a short sale. Maybe I should try a loan modification?
What I do know is that I can’t go on like I have been. Something has got to change.
Broke Bob
Dear Bob,
You must have sufficient verifiable income to qualify for a loan modification. Go to FinancialStability.gov for qualifications and guidelines.
If you decide you can’t do it yourself, don’t send your money to an advanced fee company without knowing for sure that they are legitimate. It’s best to have personal references. Be sure to check the DRE web site to make certain that they are listed as legitimate.
There have been way too many scams!
I would recommend that you engage the services of a trusted financial adviser, one that is not selling you anything. You want an adviser who can objectively evaluate your financial situation. Try your CPA or tax attorney.
Evaluate all of your options and make your decision based solvency, credit and tax implications. It will be a matter of good home $$’s and Sense.
Visit HomeTown Realtors
I am planning on moving my family out of state. We need to sell our home first.
Our Realtor said that we owe more than it’s worth so we need to do a short sale.
I have heard that the lender won’t approve a short sale unless we are behind on our payments. Is this true?
We have never missed a payment in our lives!
Moving Mike
Dear Mike,
If your credit is important to you and you can still make your payments, then do it!
The story about not making your payments is a myth. Don’t fall prey to it.
A short sale does not always affect your credit but not making your payments will.
Missing payments will compound your problems. You will have excess interest and penalties. Your credit rating will suffer.
A low credit score means higher interest rates on credit cards and any money that you borrow in the future.
Make your payments!
Dear Sue,
I am in construction and have been out of work for over a year.
My unemployment and side jobs have been getting us by.
It is getting to a point where I can no longer make my house payments.
I don’t know if I should just walk away or try a short sale. Maybe I should try a loan modification?
What I do know is that I can’t go on like I have been. Something has got to change.
Broke Bob
Dear Bob,
You must have sufficient verifiable income to qualify for a loan modification. Go to FinancialStability.gov for qualifications and guidelines.
If you decide you can’t do it yourself, don’t send your money to an advanced fee company without knowing for sure that they are legitimate. It’s best to have personal references. Be sure to check the DRE web site to make certain that they are listed as legitimate.
There have been way too many scams!
I would recommend that you engage the services of a trusted financial adviser, one that is not selling you anything. You want an adviser who can objectively evaluate your financial situation. Try your CPA or tax attorney.
Evaluate all of your options and make your decision based solvency, credit and tax implications. It will be a matter of good home $$’s and Sense.
Visit HomeTown Realtors
Friday, August 21, 2009
How Will Short Sales Affect Appraisals?
Dear Sue,
How would I know if I am “upside down” on my house? Several of my neighbors have sold their homes for half of what I paid.
What’s going to happen when I go to sell? How will the appraisal be effected? ??
Worried Walt
Dear Walt,
Great question. It happens to be one that many homeowners have been asking.
Home values tripled between 2000-2005. That rate of appreciation hasn’t been seen since the Gold Rush days.
However, since 2005 home values have fallen by approximately 50% and continue to do so. If you purchased a new home between 2000-2006 or maxed out your equity with a “cash out” refinance on your existing home between 2000-2009, you are probably “up-side down.”
If you plan on selling within the next 3-5 years a short sale may be necessary. The only way to know for sure is to get an estimate of value on your home. If it is less than what you owe the bank and your cost of sale combined, a short sale may be your best answer.
Short sale and bank owned property sales have dominated the local market since November of 2008. An appraiser cannot possibly ignore the distressed sales comps. They need to be factored into the appraisal.
If you enjoy your home and plan on living there for years to come, the market will have stabilized. In fact, you will aid in the stabilization by staying put.
Dear Sue,
I made a good cash offer on a short sale listing. After waiting for sixty days I received a verbal counter offer from the lender for $20,000.00 more than I offered.
I was very surprised and disappointed. Do I have to accept their verbal counter offer?
Can I counter back?
Anxious Andy
Dear Andy,
I would strongly encourage you to counter back, in writing, with your best offer. Support your offer by including the most recent comparable sales.
Remember, short sale negotiators are paid to negotiate. So negotiate. It could be a matter of good home $$’s and Sense!
Please visit HomeTown Realtors
How would I know if I am “upside down” on my house? Several of my neighbors have sold their homes for half of what I paid.
What’s going to happen when I go to sell? How will the appraisal be effected? ??
Worried Walt
Dear Walt,
Great question. It happens to be one that many homeowners have been asking.
Home values tripled between 2000-2005. That rate of appreciation hasn’t been seen since the Gold Rush days.
However, since 2005 home values have fallen by approximately 50% and continue to do so. If you purchased a new home between 2000-2006 or maxed out your equity with a “cash out” refinance on your existing home between 2000-2009, you are probably “up-side down.”
If you plan on selling within the next 3-5 years a short sale may be necessary. The only way to know for sure is to get an estimate of value on your home. If it is less than what you owe the bank and your cost of sale combined, a short sale may be your best answer.
Short sale and bank owned property sales have dominated the local market since November of 2008. An appraiser cannot possibly ignore the distressed sales comps. They need to be factored into the appraisal.
If you enjoy your home and plan on living there for years to come, the market will have stabilized. In fact, you will aid in the stabilization by staying put.
Dear Sue,
I made a good cash offer on a short sale listing. After waiting for sixty days I received a verbal counter offer from the lender for $20,000.00 more than I offered.
I was very surprised and disappointed. Do I have to accept their verbal counter offer?
Can I counter back?
Anxious Andy
Dear Andy,
I would strongly encourage you to counter back, in writing, with your best offer. Support your offer by including the most recent comparable sales.
Remember, short sale negotiators are paid to negotiate. So negotiate. It could be a matter of good home $$’s and Sense!
Please visit HomeTown Realtors
Thursday, August 13, 2009
100% Financing is Live and Well
Many people think that today’s buying opportunities are just for investors with cash. Not true. USDA (U.S. Department of Agriculture) offers 100% financing for moderate to low-income buyers in rural areas like ours.
Yes, a borrower who meets the USDA guidelines can buy a home without a down payment.
An eligible borrower must have an adequate and dependable income, be a U.S. citizen, qualified alien or be legally admitted to the U.S. for permanent residence.
The adjusted annual household income cannot exceed the moderate-income limit established for the area. A family’s income includes the total gross income of the applicant, co-applicant and any other adults in the household. The borrowers debt cannot exceed 41% of their income.
For the home to qualify, it must be located in a rural area, be structurally sound, functionally adequate and in good repair. There are no restrictions on the size or design. The homes must not be used for income producing purposes.
USDA defines a rural area as open country and a population of 10,000 or less and under certain conditions towns and cities with between 10-25,000 residents.
USDA has a map on their website. All you have to do is enter the property that you would like to buy and it will tell you whether or not the property qualifies. Luckily for Auburn area residents, most of the properties surrounding us qualify.
To get started, I would recommend going to your select lender. Have them qualify you and the property.
I spoke with Ryan Rivera of Goldmine Financial. He has closed about a dozen USDA loans this year. He said it was a very simple process with specific guidelines.
“I can actually qualify someone through an automated underwriting system. We get to use our own local appraisers. This really helps to expedite the process,” Ryan explained.
“Once the borrower has gone through the approval process, I send the package directly to USDA where it undergoes a mini-underwriting process so it can be stamped for approval and loan docs generated,” Ryan continued.
USDA will allow up to a 6% credit back from the seller for the buyers recurring and nonrecurring closing costs.
“I always suggest that even though the interest rate is competitive, any seller credits be used to buy the interest rate down even further,” advised Ryan.
A one-time mortgage insurance fee of 2% of the loan amount is charged up front. There is no monthly mortgage insurance fee required on a USDA loan. This can save the borrower $91 per month on a $200,000 loan. It is a huge savings over the life of the loan.
“The turn around time for these types of loans is anywhere from 45 to 60 days, usually 45, depending on the loan volume USDA is experiencing at the time,” said Ryan.
Contact your select lender to see if you or a loved one qualifies for a USDA loan. It could be a matter of Good Home $$s and Sense.
For more real estate news, listings,and local information, visit our HomeTown Realtors website!
Yes, a borrower who meets the USDA guidelines can buy a home without a down payment.
An eligible borrower must have an adequate and dependable income, be a U.S. citizen, qualified alien or be legally admitted to the U.S. for permanent residence.
The adjusted annual household income cannot exceed the moderate-income limit established for the area. A family’s income includes the total gross income of the applicant, co-applicant and any other adults in the household. The borrowers debt cannot exceed 41% of their income.
For the home to qualify, it must be located in a rural area, be structurally sound, functionally adequate and in good repair. There are no restrictions on the size or design. The homes must not be used for income producing purposes.
USDA defines a rural area as open country and a population of 10,000 or less and under certain conditions towns and cities with between 10-25,000 residents.
USDA has a map on their website. All you have to do is enter the property that you would like to buy and it will tell you whether or not the property qualifies. Luckily for Auburn area residents, most of the properties surrounding us qualify.
To get started, I would recommend going to your select lender. Have them qualify you and the property.
I spoke with Ryan Rivera of Goldmine Financial. He has closed about a dozen USDA loans this year. He said it was a very simple process with specific guidelines.
“I can actually qualify someone through an automated underwriting system. We get to use our own local appraisers. This really helps to expedite the process,” Ryan explained.
“Once the borrower has gone through the approval process, I send the package directly to USDA where it undergoes a mini-underwriting process so it can be stamped for approval and loan docs generated,” Ryan continued.
USDA will allow up to a 6% credit back from the seller for the buyers recurring and nonrecurring closing costs.
“I always suggest that even though the interest rate is competitive, any seller credits be used to buy the interest rate down even further,” advised Ryan.
A one-time mortgage insurance fee of 2% of the loan amount is charged up front. There is no monthly mortgage insurance fee required on a USDA loan. This can save the borrower $91 per month on a $200,000 loan. It is a huge savings over the life of the loan.
“The turn around time for these types of loans is anywhere from 45 to 60 days, usually 45, depending on the loan volume USDA is experiencing at the time,” said Ryan.
Contact your select lender to see if you or a loved one qualifies for a USDA loan. It could be a matter of Good Home $$s and Sense.
For more real estate news, listings,and local information, visit our HomeTown Realtors website!
Wednesday, August 5, 2009
Is the Home Modification Program a Success?
My sister Sandra Bridges, a short sale negotiator was on the phone with a representative of a large bank. Sandra was airing her discontent over the handling of a client’s file. She was unhappy that the file was declined. The bank representative said he shared her frustration. He told her that the bank was receiving over 300,000 short sale or loan modification requests a week. He went on to say that they were severely under staffed.
Sandra told me her story just one day after the Administration announced the success of the Making Home Affordable program. The announcement can be read in its entirety at www.Financial/Stability.gov.
Obama’s making home affordable loan modification program is reportedly on track. According to the Treasury Public Affairs Department, loan modification servicers are covering more than 85% of loans in the country. 400,000 modification offers have been extended while 230,000 modifications have been completed. At this rate, the modification program is on track to modify 3-4 million loans over the next three years.
The administration is taking additional steps to improve the performance of the loan servicers. Treasury Secretary Tim Geithner and Housing and Urban Development Secretary Shaun Donovan, in a face-to-face meeting, asked the servicers to redouble their efforts to increase staffing, improve borrower response time and streamline the application process.
The administration is also in the process of developing ways to measure the quality of the borrowers experience, such as average wait time for inbound modification requests, completeness and accuracy of information provided and response time for completed applications. Another additional protection for borrowers is that the administration is urging, Freddie Mac, the compliance agent, to develop a “second look” process to audit modification applications that have been denied.
The comprehensive Making Homes Affordable Program, MHA, was developed in an effort to stabilize the US housing market. MHA has already provided $75 billion dollars to subsidize sustainable mortgage modifications. The purpose of the modification program is to prevent more foreclosures.
Of all the people I know that have attempted a loan modification, I personally only know of one that was successful. Recently I was listening to a talk show on CNN. The topic was loan modifications. Only one person called in to report a successful loan modification. He did it by himself and it took one year!
With one bank reporting up to 300,000 requests per week I hardly think that 230,000 modifications since February can be seen as a success. I recommend that Mr. Geitner man the phones of a major banks loss mitigation department for one week! It could be a matter of good Home $$’s and Sense.
For more up to date real estate news, listings and local information visit:
HomeTown Realtors
Sandra told me her story just one day after the Administration announced the success of the Making Home Affordable program. The announcement can be read in its entirety at www.Financial/Stability.gov.
Obama’s making home affordable loan modification program is reportedly on track. According to the Treasury Public Affairs Department, loan modification servicers are covering more than 85% of loans in the country. 400,000 modification offers have been extended while 230,000 modifications have been completed. At this rate, the modification program is on track to modify 3-4 million loans over the next three years.
The administration is taking additional steps to improve the performance of the loan servicers. Treasury Secretary Tim Geithner and Housing and Urban Development Secretary Shaun Donovan, in a face-to-face meeting, asked the servicers to redouble their efforts to increase staffing, improve borrower response time and streamline the application process.
The administration is also in the process of developing ways to measure the quality of the borrowers experience, such as average wait time for inbound modification requests, completeness and accuracy of information provided and response time for completed applications. Another additional protection for borrowers is that the administration is urging, Freddie Mac, the compliance agent, to develop a “second look” process to audit modification applications that have been denied.
The comprehensive Making Homes Affordable Program, MHA, was developed in an effort to stabilize the US housing market. MHA has already provided $75 billion dollars to subsidize sustainable mortgage modifications. The purpose of the modification program is to prevent more foreclosures.
Of all the people I know that have attempted a loan modification, I personally only know of one that was successful. Recently I was listening to a talk show on CNN. The topic was loan modifications. Only one person called in to report a successful loan modification. He did it by himself and it took one year!
With one bank reporting up to 300,000 requests per week I hardly think that 230,000 modifications since February can be seen as a success. I recommend that Mr. Geitner man the phones of a major banks loss mitigation department for one week! It could be a matter of good Home $$’s and Sense.
For more up to date real estate news, listings and local information visit:
HomeTown Realtors
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