Posted December 11th, 2009 by Sheila
If you are one of the many homeowners struggling to make your mortgage payments and considering trying for a loan modification, don’t get your hopes up. To date, only approximately 31,000 homeowners have actually successfully completed a loan modification. That is only 4% of the actual amount of people who have done the paperwork and have tried to work with their lender. The government is fast-learning that the banks themselves are to blame. Good old Bank of America tops the list as the worst (surprise, surprise). Apparently lenders aren’t as concerned about foreclosures as they say because you would think they would make good use of the programs available and help homeowners stay in their homes by simply lowering the monthly payment. I certainly don’t think that a loan modification is the answer to all homeowners woes, but there are many that would benefit from an extra $500 a month and avoid a foreclosure.
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Posted December 8th, 2009 by Sheila
The current way lenders handle short sales is very inefficient and frustrating for everyone involved in the process. It is very obvious to me, as a Realtor, that something needs to change. The short sale negotiation process currently takes anywhere from 90 to 180 plus days, during which time the house sits vacant and deteriorating. The Treasury Department recently released a new plan called the Home Affordable Foreclosure Alternative Program (HAFA) that may help to streamline the short sale nightmare. HAFA does not apply to Fannie Mae or Freddie Mac loans, but we are expecting a similar plan to come out soon from them. HAFA will allow the borrower to obtain short sale pre-approval prior to listing the property, which will hopefully drastically cut back on the amount of time a buyer has to wait for a response from the lender on an offer. Another main component that may help ease borrower’s minds, is the HAFA plan requires that borrowers are released from any future liability associated with the first mortgage (no cash required at closing, no promissory notes, or deficiency judgments). I know from my experience, the possibility of a seller getting a deficiency judgment has been a big issue.
Of course, HAFA is complicated (what government program isn’t?). The program contains 43 pages of guidelines and forms that are supposedly going to make a short sale easier. I guess we will see when the program officially rolls out April 5, 2010.
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Tags: borrowers, buyers, foreclosure, sellers, short sale
Posted October 29th, 2009 by Sheila
MSNBC reported today that the First-time homebuyer tax credit that is set to expire at the end of November, will be extended through April. All sales contracts will be need to be signed by the end of April and then closed by the end of June. This is great news for the sagging real estate market and for first-time homebuyers who are still waiting for a lengthy short sale to be approved.
It appears there may be further help to promote home sales. Buyers who have owned a home for at least 5 years may qualify for a $6500 tax credit, which would further help improve the overall real estate market.
We won’t hold our breath just yet though!! It still has to go through the Senate and the President.
MSNBC article: http://www.msnbc.msn.com/id/33522046/ns/business-real_estate/
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Posted September 15th, 2009 by Sheila
Amherst Securities Group issued a report suggesting that programs designed to support short sales could be the most effective loss mitigation approach, as they minimize loss severity. “In all cases, the loss severity on the short sale is 15-20% less than on the foreclosure sale,” Amherst researchers reported. Amherst researchers also said the Hope-for-Homeowners (H4H) program is a “powerful alternative” to the Home Affordable Modification Program (HAMP). Amherst researchers point to H4H’s ability to mimic the impact of short sales, such as a one-time loss on the loan, which provides a softer loss severity than foreclosure sales.
Borrowers completing the H4H program become re-equified and refinanced into a new Federal Housing Administration-insured mortgage, while HAMP provides capped incentives to servicers to modify mortgages in danger of foreclosure. The US Treasury Department then adjusts the HAMP incentive caps based on the level of actual participation. Plans for the “new and improved” H4H program could be released within the next two months, resolving enough issues to maximize the net present value of loans in bank portfolios but “unlikely” to be used for loans in private label securitizations, according to the report.
Brought to you courtesy of broker, Chris McLaughlin
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Posted May 6th, 2009 by Sheila
If you are a first-time homebuyer with a job and fairly decent credit, your dream of owning a home instead of throwing away your money in rent can come true. There are so many incentives available to you that you simply cannot afford to wait. Below is a list of the top 10 reasons I think a first-time homebuyer needs to make a move now:
- Mortgage Interest Rates - they are at an unprecedented, all-time low (I am talking below 5%). Mortgage rates are steadily going up and they will not be this low forever. You will lose if you are waiting for home prices to go down, but have to pay a higher interest rate. What if home prices don’t go down and you still have to pay higher interest rates? Time is money and don’t forget about inflation. The government is printing money and it will come back to bite us in the immediate future.
- Best Inventory Now - there is an abundance of homes for first-time homebuyers to choose from. Inventory is dwindling and the good ones are getting whipped up.
- $8,000 Tax Credit - This is FREE money to all first-time homebuyers (this means people who have never purchased a home or haven’t purchased a home in the last 3 years). This tax credit expires December 1, 2009 so if you do not close prior to this date, you will lose out (it is currently taking approximately 45 days to close on a loan so don’t think you can wait to buy until late October). You can even amend your 2008 tax return to get the credit.
- Inventory and Prices - there’s a lot of inventory so prices are competitive. The inventory is going down and people are buying so as the inventory goes down, prices will go up. Supply and demand!
- FHA 203k Rehab Loan - this is a great program implemented by the FHA to assist in the rehab of homes that wouldn’t otherwise qualify for an FHA loan. This loan will let you tack the repair costs to your FHA loan so you can make the necessary repairs to qualify for the 3.5% down loan program.
- USDA loan - this is a 100% loan that requires zero money down and no mortgage insurance (like a VA loan). You can even roll in 3% of the closing costs. There are income and area restrictions so you would want to check with your mortgage broker or Realtor. This money may not be around next year so don’t wait!
- Job Protection Programs - if the fear of losing your job is holding back from buying a home, the job protection program may ease your mind. There are sellers offering this protection to buyers that would help assist in mortgage payments.
- Lower Taxes in 2009 - taxes dropped in 2008 and are expected to go even further in 2009. Florida residents are now able to take a $50,000 homestead and property values are being adjusted. Taxes were incredibly high during the housing boom, making it difficult for homebuyers to afford the mortgage and the taxes too.
- 1% Rule for Investors - if you are a first time homebuyer looking to buy an investment property, it makes economic sense to purchase if you are able to rent the property and collect 1% of the sales price that will cover the mortgage. You can live in the house initially and then rent it out.
- Short Sales are taking less time - most of the homes in the Florida market are short sales. These homes are being sold at or below current market value and buyers are getting the benefit of a great home for much less than it was originally sold for. Short sales have traditionally taken several months to a year to get approved, but they are getting better as lenders have been forced to stream-line their business.
Take advantage of this great time to buy and stop procrastinating!
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