LENDER PROGRAMS OFFERING CASH TO SHORT SALE SELLERS

18 Feb

ALL PROGRAMS PROVIDE FULL WAIVER OF DEFICIENCY
NONE ARE AVAILABLE IN REDEMPTION PERIOD
BELOW IS A LIST OF PROGRAMS CURRENTLY AVAILABLE

1. FANNIE MAE OR FREDDIE MAC conventional mortgages: The seller may be entitled to an incentive payment of $3,000 from FNMA or Freddie.
These are cases of where seller has an inability to sustain their mortgage payment due to financial hardship and is in serious default. Assistance availability is case by case and is determined during the short sale approval process. This program is new and is not the HAFA short sale program as FNMA and Freddie Mac no longer approve HAFA short sales. Seller eligibility for these funds is more likely than HAFA.

2. BANK OF AMERICA COOPERATIVE SHORT SALE: This program IS NOT available for Fannie Mae or Freddie Mac invested mortgages that are being serviced by BAC. The BAC Coop Short Sale is available on Bank of America owned loans and those of some private investors. The BAC Coop Short Sale provides $5,000 – $30,000 to eligible sellers at the closing of their short sale. Seller MUST BE pre-approved for the BAC Coop Short Sale before offer is submitted. If short sale is submitted with an offer prior to pre-approval for the program, seller is ineligible for BAC Coop SS. If status of the loan indicates it may be eligible for BAC Cooperative Short Sale, homeowner should contact MZ Law for consultation and we can confirm their eligibility and get their BAC Cooperative Short Sale pre-approved. Pre-approval process takes about 3-4 weeks. Once homeowner is pre-approved for the program, short sale approval is granted within 2-3 weeks of acceptable offer being submitted to BAC.
Indicators that seller is likely eligible for BAC Coop SS (including but not limited to these indicators):
a. Fannie Mae or Freddie Mac IS NOT the investor on the loan
b. Loan must be non-performing (ie: loan is in serious default and/or has been bankrupted)
c. Loan originated with Country Wide (not required, but likely eligible)
d. Loan was a sub-prime loan, no doc loan, or interest only loan (not required but likely eligible)

3. CHASE COOPERATIVE SHORT SALE: Similar to BAC Coop SS and offers up to $30,000 to short sale seller at closing. Not available on FNMA or Freddie Mac invested mortgages. Available on some Chase portfolio loans and loans with some private investors. Seller must be in serious default (ie: 60 days or more default). If homeowner is eligible for Chase Coop SS, Chase will send letter to homeowner requesting they consider a short sale and offering the incentive up to $30,000. If seller receives the letter, it is for real and seller’s loan is eligible. If seller has not received the letter, they are likely not eligible. Homeowner considering a short sale can call Chase to find out if their loan is eligible for this program.

4. FHA mortgages: If seller’s mortgage is FHA and they have no 2nd mortgage on the property, seller will receive $750 or $1,000 in FHA short sale incentive. If there is a 2nd mortgage on the property, seller’s incentive is used as part of the payment to the 2nd mortgage for release of lien. Also, if there are any fees due at closing not payable by seller’s lender such as delinquent HOA dues, final water bill, etc., seller’s FHA incentive can be used to pay those items required for clear to close. If seller’s FHA incentive is not needed for 2nd lien release or other uncovered costs, the funds are for the seller to keep.

5. HAFA SHORT SALES: The US Treasury Dept HAFA short sale is available now on limited basis through 2013. It is no longer available on FNMA or Freddie Mac invested loans, only on some conventional loans with private investors (ie: Non-Government Sponsor Exchange loans). HAFA short sales offer $3,000 in relocation assistance funds for homeowners.

“FHA EXTENDS ‘ANTI-FLIPPING WAIVER’ TO HELP STABLIZE HOUSING MARKET:

30 Jan

Measure continues effort to boost home values and accelerate resale of vacant properties:

In an effort to continue stabilizing home values and improve conditions in communities experiencing high foreclosure activity, Federal Housing Administration (FHA) Commissioner David H. Stevens today extended FHA’s temporary waiver of the agency’s ‘anti-flipping rule.’ The extension announced today is intended to accelerate the resale of foreclosed upon homes in neighborhoods struggling to overcome possible property abandonment and blight.

With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days. Early last year, FHA temporarily waived this regulation through January 31, 2011. FHA today posted a notice extending this waiver through the remainder of 2011. This action will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

“As I noted when we first announced this policy change early last year, because of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers,” said Stevens. “Today I can report that this policy change has been effective. Since the original waiver went into effect on last February, FHA has insured more than 21,000 mortgages worth over $3.6 billion on properties resold within 90 days of acquisition.”

FHA research finds that in today’s market, acquiring, rehabilitating and reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

Stevens added, “Because of past restrictions, FHA borrowers have often been shut out from buying affordable properties. This action enables our borrowers, especially first-time buyers, to take advantage of this opportunity and buy a home that has recently been rehabilitated. It will also help to move more foreclosed properties off the market and reduce the number of vacant homes in neighborhoods throughout this country.”

The extension announced today is effective through December 31, 2011, unless otherwise extended or withdrawn by FHA. All other terms of the waiver will remain the same, and HUD continues to invite public comment on it. The waiver contains strict conditions and guidelines to assure that predatory practices are not allowed.

To protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver continues to be limited to those sales meeting the following general conditions:

• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.

• In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.

The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Read the waiver: http://www.hud.gov/offices/hsg/sfh/currentwaiver.pdf”

Taxes and Real Estate

26 Jan

Tax season is upon us, and homeowners everywhere will reap the benefits of tax breaks and incentives. If you’re currently renting, consider the tax advantages of home-ownership. Now may be the time to buy. If you’re an owner or seller, new incentives will help you survive this tough housing market. Know what expenses you can deduct and understand how new laws affect you. Remember to consult your tax advisor.

1. Deduct the interest you pay on your home loan on your tax return.
That means the mortgage interest deduction reduces your tax liability. And because your mortgage payments for the first few years are almost entirely comprised of interest, they are almost entirely tax deductible.
Take advantage of homeowners’ biggest tax break >>
2. Deduct property taxes and points you paid to lower your loan’s interest rate.
The IRS offsets the expense of your state/local property taxes by allowing you to deduct them from your itemized income tax return. And you get a tax benefit if you paid for discount points to lower your mortgage interest rate.
Home improvements you make have tax benefits too >>
3. Request a property tax reassessment if your home’s market value has declined.
You don’t need to pay for a special service to have your local tax assessor adjust your property taxes. If your property value is significantly lower now than when you bought it, show proof of your home’s current market value and recent comparable sales in your neighborhood and do it yourself to get your taxes lowered.
Lower your property taxes now >>
4. Research past and proposed assessments that may apply to your home.
Understanding property taxes and assessments will give you a truer picture of the cost of homeownership and help you predict and control your monthly expenses.
Taxes and assessments that affect your bottom line >>
5. Get a reliable estimate of your property tax bill.
If you’re buying a home, don’t rely on the tax data in the property listing. Depending on the circumstances of the sale, your tax bill can differ from the previous owner’s bill.
How property tax is determined >>
6. Wrap your property taxes into your monthly mortgage payment
If paying one huge tax bill once or twice a year seems daunting, consider getting an escrow account. Also called an impound account, it protects the lender and offers convenience for the homeowner.
See if escrow is right for you >>
7. Understand how capital gains tax is calculated.
When you sell your home, you’re taxed on any profit over $250,000 if you are single, $500,000 if married. But calculating your gains isn’t as simple as “price you sold it for” minus “price you paid for it.” The IRS takes into account the money you put into improving the home as well. So remember to save receipts for any repairs, maintenance and upgrades.
Get exempt from capital gains tax >>
8. Know how your tax situation changes with every real estate move you make.
Whether you’re buying a home, refinancing or renting out an investment property, understand how you’ll be affected tax-wise.
You’ll be paying more taxes under these scenarios >>
9. See if homeownership lowers your tax liability.
Your tax situation varies depending on your stage in life. Examine your payroll withholdings and reduce them to account for the reduction in net tax liability. That means more money in your pocket every pay period.
Boost your purchasing power >>

NOTE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Taxpayers should seek professional advice based on their particular circumstances.

Frontdoor.com

Home shopping and home buying tips – working with an agent

19 Dec

Before house hunting, make a list of things you want in the new place.
Then make a list of the things you don’t want. You can use this list
as a guide to rate each property that you see. The one with the
biggest score wins! This helps avoid confusion and keeps things in
perspective when you’re comparing dozens of homes.

When house hunting, keep in mind the difference between “STYLE AND
SUBSTANCE”. The SUBSTANCE is the set of things that cannot be changed such as
the location, view, size of lot, noise in the area, school district,
and floor plan. The STYLE represents easily changed surface finishes
like carpet, wallpaper, color, and window coverings. Buy the house
with good SUBSTANCE, because the STYLE can always be changed to match
your tastes. I always recommend that you imagine each house as if it
were vacant.

Consider each house on its underlying merits, not the seller’s
decorating skills.

Don’t Be Pushed Into Any House

Your agent should show you everything available that meets your
requirements. Don’t make a decision on a house until you feel that
you’ve seen enough to pick the best one.

A decade ago, homes were selling quickly, usually a few days after
listing. In that kind of market, agents advised their clients to make
an offer ON THE SPOT if they liked the house. That was good advice at
the time. Today there isn’t always this urgency, unless a home is
drastically under priced, and you’ll know if it is.

Don’t forget to check into the SCHOOL DISTRICTS of the area you’re
considering. Information is available on every school; such as class
sizes, % of students that go on to college, SAT scores, etc. You can
get this information from this web site.

Stop Calling Ads!

Please note – ads are sometimes created to make the phone ring! Many
of the homes have some drawback that’s not mentioned in the ad, such
as traffic noise, power lines, or litigation in the community. What’s
not mentioned in the ad is usually more important than what is.

For this reason, I want you to be very careful when reading ads.
Remember that the person writing the ad is representing the seller
and not you! The most important thing you can do is have someone
on your side looking out for your best interests. Your own agent
will critique the property with an eye towards how well it meets your
needs and will point out any drawbacks you should know about. So
whether you decide to work with me or not, pick an agent you feel
comfortable with and enlist the services of that agent as a buyer’s
broker. Then you become a client with all the rights, benefits, and
privileges created by this agency relationship, and you’re no longer
just a shopper. Did you know that many homes are sold WITHOUT A SIGN
ever going up or an AD EVER BEING PUT IN THE PAPER? These “great
deals” go to those people who are committed to working with one
agent. When an agent hears of a great buy, who do you think he’s
going to call? His client, who he has a legal obligation to work
hard for you, or someone who just called on the phone and said
“keep your eyes open”? So to get the best buy on a property, I always
recommend that you hire your own agent and stick with him or her.

Specialty Mortgages: Risks and Rewards

22 Nov

In high-priced housing markets, it can be difficult to afford a home. That’s why a growing number of home buyers are forgoing traditional fixed-rate mortgages and standard adjustable-rate mortgages and instead opting for a specialty mortgage that lets them “stretch” their income so they can qualify for a larger loan.

But before you choose one of these mortgages, make sure you understand the risks and how they work.

Specialty mortgages often begin with a low introductory interest rate or payment plan — a “teaser”— but the monthly mortgage payments are likely to increase a lot in the future. Some are “low documentation” mortgages that come with easier standards for qualifying, but also higher interest rates or higher fees. Some lenders will loan you 100 percent or more of the home’s value, but these mortgages can present a big financial risk if the value of the house drops.

Specialty Mortgages Can:

Pose a greater risk that you won’t be able to afford the mortgage payment in the future, compared to fixed rate mortgages and traditional adjustable rate mortgages.
Have monthly payments that increase by as much as 50 percent or more when the introductory period ends.
Cause your loan balance (the amount you still owe) to get larger each month instead of smaller.

Common Types of Specialty Mortgages:
Interest-Only Mortgages: Your monthly mortgage payment only covers the interest you owe on the loan for the first 5 to 10 years of the loan, and you pay nothing to reduce the total amount you borrowed (this is called the “principal”). After the interest-only period, you start paying higher monthly payments that cover both the interest and principal that must be repaid over the remaining term of the loan.
Negative Amortization Mortgages: Your monthly payment is less than the amount of interest you owe on the loan. The unpaid interest gets added to the loan’s principal amount, causing the total amount you owe to increase each month instead of getting smaller.
Option Payment ARM Mortgages: You have the option to make different types of monthly payments with this mortgage. For example, you may make a minimum payment that is less than the amount needed to cover the interest and increases the total amount of your loan; an interest-only payment, or payments calculated to pay off the loan over either 30 years or 15 years.
40-Year Mortgages: You pay off your loan over 40 years, instead of the usual 30 years. While this reduces your monthly payment and helps you qualify to buy a home, you pay off the balance of your loan much more slowly and end up paying much more interest.

Questions to Consider Before Choosing a Specialty Mortgage:
How much can my monthly payments increase and how soon can these increases happen?
Do I expect my income to increase or do I expect to move before my payments go up?
Will I be able to afford the mortgage when the payments increase?
Am I paying down my loan balance each month, or is it staying the same or even increasing?
Will I have to pay a penalty if I refinance my mortgage or sell my house?
What is my goal in buying this property? Am I considering a riskier mortgage to buy a more expensive house than I can realistically afford?

Be sure you work with a REALTOR® and lender who can discuss different options and address your questions and concerns!
Learn about the NATIONAL ASSOCIATION OF REALTORS® Housing Opportunity Program at http://www.REALTOR.org/housingopportunity. For more information on predatory mortgage lending practices, visit the Center for Responsible Lending atwww.responsiblelending.org.
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Before you start looking, find a loyal and committed real estate professional to take be with you through the buying process.

14 Nov

Finding the right home is not an easy task. Before you start looking, find a loyal and committed real estate professional to take be with you through the buying process.

Some buyers are tempted to leave their names and needs with other Realtors. The advantage seems obvious…the more people you have looking, the better chance you’ll have of finding the home of your dreams.

This, however, is not usually the case. In fact since you are not committed to one specific Realtor, you may find that your realtors are not as committed to spending the extra effort on your behalf. My advice is to shop for a buyer representative who will get the results you want, and then stick with that person exclusively. In the end, you will have a dedicated agent who will personally handle all the details of your upcoming home purchase. If you give your loyalty to one Realtor, you will be rewarded with great results.

A buyer representative works solely for you and has no legal or other responsibilities to the seller. Although a general real estate agent can help you present and negotiate the offer, they still have certain obligations to the seller of the property you choose.

When you hire me as your buyer representative, I am committed to protecting your best interests during the purchase of your home. I am highly skilled in the art of negotiation and have years of experience closing the deal.

I provide the following buyer services:

Access to every home listed in the Realtor’s Multiple Listing Service, plus Real Estate Owned and For Sale By Owner properties

A comprehensive package of information on the entire home purchase process, including pertinent forms

Thorough review of all aspects of the home buying process

Discussion of your needs and wants
Identify and locate every property that may be suitable to you

Information on the areas and neighborhoods and school districts you are interested in

Personal tours of selected homes

Review of homeowners’ associations, rules and restrictions, if applicable

All information necessary to determine market value

Determination of the best offering price

Negotiation on your behalf to obtain the best possible price and terms

Follow up on all “deadline” dates to secure your purchase

Coordination of all closing arrangements

Review the closing statement with you to help resolve any problems

A pre-closing walk-through, and if necessary, negotiation on any final issues

Attend closing with you

NEEDS VERSUS WANTS

When you first start searching for your home, the sky is usually the limit. You want walk-in closets, a screened porch, a fireplace, a fenced- in backyard, and a Jacuzzi in the master bath.

Unless you balance those wants with your absolute needs, you may be disappointed, even discouraged, after a few weeks of searching. You may find that the cute, two-story on the corner has a screened porch but no Jacuzzi and a tiny backyard. Or that the great rambler has a huge backyard but no fireplace.

Before you start looking, I meet with you to determine exactly which features you can’t live without. I also make a list of your “wants” in the order of importance. These parameters help narrow the search so you don’t waste time touring homes without the amenities that truly meet your needs.

UNDERSTANDING DISCLOSURE

Because I represent you, the buyer, I am committed to serving your best interests throughout the purchase process. This responsibility includes providing you with any information, whether positive or negative, about properties you are investigating for purchase.

I will disclose any specifics on:

Location

Property values

Offering price

Negotiations

Counter offers

Contingencies

Financing

Closing process

Armed with such valuable details, you can be confident the home you eventually choose will be right for you and your family.

PRE-QUALIFY…
THEN SHOP WITH CONFIDENCE

One of the most frustrating situations you may face while house hunting is finding your “dream home,” negotiating an offer everyone is happy with…and then failing to qualify for the needed financing.

The best way to avoid this disappointment is to pre-qualify for a mortgage through a lender. Then you’ll know exactly what you can afford, and you can limit your search to that particular price range.

Prequalification doesn’t mean you are obligated to finance your home through a specific lender. You can still shop for the mortgage deal while you continue house hunting. But it makes sense to start the loan application process as early in your search as possible. The process can be lengthy, with lenders requesting detailed information about your debts, assets and credit history. By starting early, everything will be in place when you find the right home.

When it’s a seller’s market with multiple offers and quick sales, prequalification through a lender is vital. It guarantees the seller that you can afford your offer. Prequalification always increases a buyer’s standing because the seller has security that the deal will not disintegrate at the last minute because your financing falls through.

THE DETAILS: PURCHASE AGREEMENT
TO CLOSING

So now that you’ve found the home of your dreams, how do you actually buy it? There’s a lot more to buying a house than just making an offer. The process can be complex and confusing. My job is not finished until the deal is closed and you are moving into your dream home.

I will prepare the details of your purchase agreement and any necessary addenda including:

Purchase Agreement
-Pricing
-Special assessments and real estate taxes
-Title issues
-Personal property
-Contingencies
-Arbitration
Addenda
-Financing
-Inspections
-Disclosure
-Representation
-Lead-based paint
-Wells
-Arbitration

I will also complete a large volume of paperwork and manage numerous closing activities and procedures. I help guide you through the closing process, and together we handle the following details:

Buyer’s loan application

Conditional approval

Removal of contingencies

Final approval

Closing instructions

Escrows

Mortgage closing

Settlement statement

Appraisal and inspections

Appraisal and work orders

Closing schedule

Final walk-through

Homeowners insurance

Title closing

7 Mistakes Home-Owners Make When Trying to Sell Their Homes

14 Nov

Mistake #1 — Pricing Your Property Too High

Every seller obviously wants to get the most money for his or her
product. Ironically, the best way to do this is NOT to list your
product at an excessively high price! A high listing price will cause
some prospective buyers to lose interest before even seeing your
property. Also, it may lead other buyers to expect more than what you
have to offer. As a result, overpriced properties tend to take an
unusually long time to sell, and they end up being sold at a lower
price.

Mistake #2 — Mistaking Re-finance Appraisals for the Market Value

Unfortunately, a re-finance appraisal may have been stated at an
untruthfully high price. Often, lenders estimate the value of your
property to be higher than it actually is in order to encourage
re-financing. The market value of your home could actually be lower.
Your best bet is to ask your REALTOR® for the most recent information
regarding property sales in your community. This will give you an
up-to-date and factually accurate estimate of your property value.

Mistake #3 — Forgetting to “Showcase Your Home”

In spite of how frequently this mistake is addressed and how simple it
is to avoid, its prevalence is still widespread. When attempting to
sell your home to prospective buyers, do not forget to make your home
look as pleasant as possible. Make necessary repairs. Clean. Make sure
everything functions and looks presentable. A poorly kept home in need
of repairs will surely lower the selling price of your property and
will even turn away some buyers.

Mistake #4 — Trying to “Hard Sell” While Showing

Buying a house is always an emotional and difficult decision. As a
result, you should try to allow prospective buyers to comfortably
examine your property. Don’t try haggling or forcefully selling.
Instead, be friendly and hospitable. A good idea would be to point out
any subtle amenities and be receptive to questions.

Mistake #5 — Trying to Sell to “Looky-Loos”

A prospective buyer who shows interest because of a “for sale” sign he
saw may not really be interested in your property. Often buyers who do
not come through a REALTOR® are a good 6-9 months away from buying, and
they are more interested in seeing what is out there than in actually
making a purchase. They may still have to sell their house, or may
not be able to afford a house yet. They may still even be unsure as
to whether or not they want to relocate.

Your REALTOR® should be able to distinguish realistic potential buyers
from mere lookers. REALTOR®s should usually find out a prospective
buyer’s savings, credit rating, and purchasing power in general. If
your REALTOR® fails to find out this pertinent information, you should
do some investigating and questioning on your own. This will help you
avoid wasting valuable time marketing towards the wrong people. If
you have to do this work yourself, consider finding a new REALTOR®.

Mistake #6 — Not Knowing Your Rights & Responsibilities

It is extremely important that you are well-informed of the details
in your real estate contract. Real estate contracts are legally
binding documents, and they can often be complex and confusing.
Not being aware of the terms in your contract could cost you thousands
for repairs and inspections. Know what you are responsible for before
signing the contract. Can the property be sold “as is”? How will deed
restrictions and local zoning laws affect your transaction? Not
knowing the answers to these kinds of questions could end up costing
you a considerable amount of money.

Mistake #7 — Limiting the Marketing and Advertising of the Property

Your REALTOR® should employ a wide variety of marketing techniques.
Your REALTOR® should also be committed to selling your property; he or
she should be available for every phone call from a prospective buyer.
Most calls are received, and open houses are scheduled, during
business hours, so make sure that your REALTOR® is working on selling
your home during these hours. Chances are that you have a job, too,
so you may not be able to get in touch with many potential buyers.

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