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Principle Reductions for Underwater Borrowers on the Horizon?

December 6, 2011 By 2 Comments

A letter sent to the Federal Housing Finance Agency’s (FHFA) acting director Edward DeMarco by 21 member of the United States Congress urged this director to implement principle reductions on loans currently backed by Fannie Mae and Freddie Mac—2 of the largest backers of mortgage securities.

The letter explains that the members of congress do not urge that the FHFA request principal reductions out of kindness to homeowners yet support principal reductions in order to save taxpayers money for any future losses (foreclosed homes).

Principle reductions are when the financing institution reduces the amount owed against the debt in order for the homeowner to not be “underwater”.   The purpose of principle reductions is to help those that are substantially underwater or owe much more than what the asset is worth.

17% of Fannie borrowers are underwater and 18% of Freddie borrowers are underwater.  This provides a great risk of eventual default by this particular group.

Loan modifications have not solved the problem since 44% of loans modified within the past 24 months are three months past due, according to a Freddie Mac cited letter:  “The performance of the mortgage modifications leaves much to be desired for homeowners, for the housing market and for taxpayers”.

The members of Congress which urged the principle reduction stated that the short term effects of principal reductions on the books may look grim yet the long term effects greatly outweigh the money lost if homes and property continue to default on a regular basis.

Questions about principle reductions?  Call me directly at 28-869-3469. –Matt

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Purchasing a Home After a Short Sale or Foreclosure

November 4, 2011 By Leave a Comment

Purchasing a Home After a Short Sale or Foreclosure

Many have questions regarding how long it takes to be eligible to purchase a home if  a foreclosure is currently on record or you have sold your home via the short sale route.  Below you will find detailed information to help shed light on the subject!

I can be reached directly at 208-869-3469 and am happy to answer any questions that you may have!

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$20,000 Short Sale Incentive offered by B of A

October 10, 2011 By Leave a Comment

$20,000 Short Sale Incentive offered by B of A

Bank of America is now offering homeowners located in states with high foreclosure activity up to $20,000 at closing (yes, $20,000) to sell their home as a short sale rather than allowing the home linger within the foreclosure proceedings.

Short sales which qualify for the cash at closing much be submitted for approval to Bank of America prior to November 30, 2011.  The closing must occur prior to August 31, 2012 and the home must not have any offers submitted on it currently.

As most know, a short sale is when the bank or lien holder accepts an offer to purchase for less than what is owed against the home.

The Bank of America strategy which has a minimum “cash at closing” payout of $5,000 is a true incentive to homeowners struggling to make their payment and on the brink of losing their home to foreclosure.

The national average timeline for foreclosure proceedings is 318 days.  This said, B of A providing an incentive will help homeowners receive incentive to sell the home prior to it sitting vacant for months—if not years.  Some call it a relocation fee yet it’s basically a “bribe” to make certain that the home owner leaves the home in good condition.  Some would say that providing an incentive of 20K makes sense considering that the bank may need to pay $20,000 (or more) to fix the home up prior to selling.  You see, in many circumstances the home owner which feels “cheated” by the bank will take /stead appliances, fixtures and intentionally damage the home.

Wells Fargo and Chase have similar programs for short sales which they call “cash for keys”.  In fact, Wells Fargo offers up to $20,000 on eligible short sales which are left in tip-top condition.  Although not advertised, these types of incentives are available w/in states with lengthy foreclosure durations.

In a nut shell, banks are now getting creative in order to get the distressed homes “off the books” and get back to a new normal.

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SHORT SALES–THE NEW “NORMAL”

August 17, 2011 By Leave a Comment

SHORT SALES–THE NEW “NORMAL”

Short sales are now becoming more and more appealing to banks throughout the greater Boise-Nampa Metro Area and the United States.  Larger banks, such as Bank of America, are ramping up their short sale departments by adding 3 additional servicing locations in order to help facilitate short sales and avoid additional inventory weighing down their books and cutting into the servicers and investor’s bottom line.

Finally, banks are getting smart (or smarter).  The foreclosure process through the re-sale of the home as a “bank owned property” takes a substantial amount of time and money.  Banks avoid the legal, maintenance and re-selling costs by approving a short sale rather than allowing the home to be sold at a trustee auction.

A short sale could take as long as six months approximately 1 year ago.  Today, the short sale process from the submission of the offer and seller financial documents to the approval letter ranges from 30-60 days—depending upon the servicer of the loan.  This said, banks are going to greater lengths to review and approve short sales in a timely manner.

Proceeding with a short sale rather than allowing a home to go through the foreclosure process is good for the owner, the purchaser and the local real estate market.  Homes sold as “short sales” typically are in better condition than bank owned property and also help keep the banks inventory low.  In turn, the lack of additional foreclosed upon property hitting the market helps to maintain current property values.

Although short sales do damage credit (minimally, however), the damage done to credit if a home is foreclosed upon is very substantial.  In fact, an owner that has his/her home foreclosed upon cannot purchase a home for at least 7 years.  However, those who complete the short sale process may be able to purchase again w/in 2 years (depending upon the circumstances of the short sale and credit scores).

Short sales aren’t difficult as long as you have an experienced Real Estate Broker helping with the process.  Items needed to submit for short sale approval are as follows:

1)      Hardship Letter

2)      Most recent 2 bank statements

3)      Most recent 2 tax returns

4)      Most recent 2 pay stubs

5)      Financial Analysis (document which states your monthly income and expenses)

Please call me directly if I can answer any additional questions for you about short sales or assist with the sale of your home.  Also, the following link contains a recent video which discusses the lending institutions stance on short sales.

http://kcmblog.com/2011/06/22/are-short-sales-getting-easier/

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BOISE SHORT SALES

May 23, 2011 By Leave a Comment

BOISE SHORT SALE

12705 9th Ave Boise, ID  83714

Wonderful short sale opportunity located in the pleasing Hidden Springs Community!  This Boise short sale, containing 4 bedrooms, 3 ½ bathrooms and 3167 square feet is located directly across the street from the community pool and sits on an oversized corner lot.  This short sale opportunity contains superb finishing touches throughout which include:  tile, granite, hardwood, and vaulted ceilings.  This Boise short sale also encompasses a plush theater room with stadium seating, a separate guest quarter and a private office. Priced at only $329,000 yet the bank may take less for this Boise short sale home for sale. Call me today to view the interior!

The lien holder which must approve the Boise short sale should allow a closing cost credit of 3% to be included with the purchase of this home.

Please visit http://www.trustidaho.com/search/#PropertyID=36419213 to view detailed information on this Boise short sale.

Interested in obtaining information on all Boise short sale homes for sale?  Just send me a quick not via email and I will forward a list of available Boise short sales within 24 hours.  Please sent your request to:  matt@trustidaho.com

 

Call me today for additional information or to view the interior of this Boise short sale!  208-869-3469 . .

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BOISE HOMES—HAS THE MARKET STABALIZED?

March 14, 2011 By Leave a Comment

BOISE HOMES—HAS THE MARKET STABALIZED?         

Boise home pricing has stabilized (in my opinion and others).  Granted, we could see a spurt of depreciation if inventory were to increase substantially. However, inventory levels within the Greater Boise-Nampa Real Estate Market have subsided drastically within the past 6 months.  If this trend continues then Boise home pricing will continue to stay stable and appreciation should begin.

Typically, any type of trend in home pricing is found at the employment epicenter of our Valley–Boise.  Statistics show that there has been some appreciation (although minimal) within certain pockets of SE Boise and North Boise.  This is a very good sign and I hope that the trend spreads throughout the remainder of the Treasure Valley that include Meridian homes, Kuna homes, Eagle homes, and Nampa homes.

A strong case for market stabilization can be found by viewing market statistics from the 1980’s.  You see, the real estate market during the mid 1980’s was similar (not exact since typical interest rates during this time were at 15%–much different then the 4.5% mortgage rates at this time).  At the “bottom” of the market during the 80′s, a potential purchaser could purchase a home for less then what it costs to rent a home.  When this happened, home pricing began its upward climb.  One can assume that this trend will surface for Boise homes, as well. 

At this time, one can purchase a Boise home for sale for less then it costs to rent.  I, along with most real estate experts predict that we are at the bottom of the market due to this fact.

It’s time to take advantage of the historically low Boise home prices and interest rates before this opportunity passes.  Please call or email me to discuss your options!

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When Can I Purchase A Home After Short Sale Or Foreclosure?

March 9, 2011 By Leave a Comment

The waiting periods in order to qualify for a home loan after a foreclosure, deed-in-lieu, short sale and bankruptcy varies both by the government agency purchasing or insuring the loan as well as the dollar amount of the loan.

Conventional Conforming (FNMA/FHLMC)

1) Foreclosure is 7 years

2) Deed-in-Lieu is 4 years < 80% LTV and 5 years > 80% LTV for primary residences. 7 years for second homes and investment properties regardless of LTV.

3) Short Sales is 2 years < 80% LTV and 5 years > 80% LTV and 7 years > 90% LTV

4) Bankruptcy is 4 years

Conventional Non-Conforming (JUMBO)

1) Foreclosure is 7 years

2) Deed-in-Lieu is 7 years

3) Short Sale is 7 years

4) Bankruptcy is 7 years

Federal Housing Administration (FHA)

1) Foreclosure is 3 years

2) Deed-in Lieu is 3 years

3) Short Sale is 3 years

4) Bankruptcy is 2 years

Veterans Administration (VA)

1) Foreclosure is 2 years

2) Deed-in Lieu is 2 years

3) Short Sale is 2 years

4) Bankruptcy is 2 years

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Real Estate forms–Sellers

November 2, 2010 By Leave a Comment

Legal transactions always involve the use of forms and contracts to make the deal enforceable.  These include selling a residential property such as a home.

Selling real estate properties require the use of specific forms.  These can be the standard ones or the state specific forms.  The reason is that some states have their own set of laws when it comes to buying and selling homes which homeowners and real estate agents should follow.

Whether you’re selling your home on your own or are using a real estate agent, here are some of the most important forms that you should prepare.

Home/Property disclosure form.

This particular document is required from sellers.  As per its name, it aims to disclose the physical condition of the property at the time of sale.  To gain the trust of potential buyers and agents, home sellers needs to be as honest as they can in providing information about the real state of the property such as repairs made and other existing physical defects.

Lead disclosure form.

Those selling homes built before 1978 are required to submit this form as per the Residential Lead-Based Paint Hazard Reduction Act of 1992.  The goal is to disclose any known information regarding the use of lead paint and possible hazards, the location of this paint and condition of painted surfaces.

Executing this form is also a way of protecting the parties involved.  This can even serve as a deciding factor for the buyer whether to push through with the purchase or not after learning of the property’s condition.

Purchase contract.

Also known as a purchase agreement or sales agreement/contract, this document states the intention of the buyer.  It specifies the proposed purchase price and details of the person buying the property as well as suggestions for an appraisal and home inspection if necessary.  It should also state the payment terms such as if a deposit is required, how much and who should handle the amount.

Normally, an escrow agent is needed and in most cases, a lawyer acts as the agent.

Counter offer.

This can be presented by buyers who may not be amenable to the requested purchase price by the seller.  Most often, the counter offer asks for a lower amount and this done formally through the execution of a document.  This contains the property address, original and proposed selling price, terms and conditions, date when the proposal ends and suggested terms of payment.

There are two options when the counter offer is accepted by the seller.  It’s either the revisions will be included in the offer to purchase document or the signed counter offer will serve as supporting document to the sales contract.

Home inspection form.

If the homeowner has earlier called for a professional to do a home inspection, he or she can provide a copy of the inspection report to the potential buyer.  This will give the buyer a concrete idea in advance on the real condition of the residential property being sold and can even save him or her additional costs.

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August in Review–Ada County:

September 15, 2010 By Leave a Comment

August sales in Ada County were 421.  That’s a decrease from August ’09 of 19%. Year-To-Date ’10 is now 3,954; an increase of 18% over the first eight months of 2009.  Historically, sales volume is about the same July to August.  From 2006 to now we’ve had two years with decreases, one year with an increase and one year in which it stayed the same.  This August was up over July ’10 by almost 7%.

Of our total sales in August…52% were distressed….up 6% from last month.

Pending sales rose slightly in August to 724; from 700 in July.  Pending sales in April were 1,162; May 806.

The percentage of pending sales in distress fell 3% from July to 43% overall.  That’s down nearly 22% our high in March.  One bright note, default filings continue to slow.

Inventory took its biggest “hit” in August; falling from 3,288 in July to 3,094.  At the same time, the percentage of active inventory that is distressed, showed no change from July…holding steady at 39%.  In Ada County we have 8 months of inventory on hand.  The price category in shortest supply…$200k – $250k at 7.2 months.

Median home continued to improve; holding on to gains made starting in March of this year.  In August our combined median was $163,000; down 4.1% from August ’09.  We’ve been enjoying median price improvement since February.  YTD comparison to ’09 is off 9.6%…and closing.  New Homes median price, for those 59 people who bought new homes in August, increased by almost 6% over this period last year.  At the same time it dropped $27k from July.  Interestingly, average sales price retreated from the $200k numbers in July to $186,608.

source:  acar

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DISTRESSED SALE STATISTICS

August 10, 2010 By Leave a Comment
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