I am a member of Realty Trac, which is the source for information and statistics in the real estate industry...
Read this Article....
Let's face it.. Loan Modifications are not working... Since 2007, I have had only 1 client get a loan modification and I have worked on well over 100 transactions... Many of my clients tried for months before giving up and realizing that the short sale was in their best interest and hassle free..
Recently, I had a client who was given a loan modification right before closing on the short sale which would reduce her interest rate in half and thus her monthly payment... My client said yes if the lender would reduce her principal balance to what they approved the short sale for, which was $120,000 less than what was owed. The bank said no and so did my client and they were happy to accept the short sale... Financially speaking, it made more sense to do the short sale vs. loan mod. In 2 short years, they can qualify for a new loan....
Sunday, January 24, 2010
Strategic Defaults and the Foreclosure Crisis
Please read this very informative news article by US News & World Report..
As a world, we are tightly connected more than ever... In Real Estate, if a neighbor defaults for any reason, strategic or not, it will have a dramatic effect on valuations in the neighborhood...
Sometimes I hear from sellers that those sales (Short Sales & Foreclosures) don't count because they are in a distress situation.. This is incorrect thinking, especially in today's environment here in Southwest Florida.. Buyers and Buyer's agents will see the sale and will not want to pay more for your home just because it is not a distressed sale... That's the market....
Additionally, let's say you get someone to buy your home and needs to obatin a loan, the appraiser will take the distressed sales into account when evaluating market value... Most people don't know that there is a new system for Appraisals... No longer can an agent or lender hire an appraisal company.. In the past, you could say the contract came in at $200,000.. Make it work..! The appraiser, in my opinion, had to balance the constant struggle of making their client happy (lenders & agents) & doing the right thing. If you did the right thing, they could stand to lose a lot of business...
The Govt. put in place a middle man, which has created HVCC and they are called "Appraisal Management Companies".. It was too easy for Fraud to happen.... The problem I am seeing now is that the appraisers being hired don't know the area and we are seeing deals fall apart due to this reason. Additionally, it takes a lot longer for the appraisal to be done which is also having an impact as contracts today with short sales and foreclosures are very time sensitive...
As a world, we are tightly connected more than ever... In Real Estate, if a neighbor defaults for any reason, strategic or not, it will have a dramatic effect on valuations in the neighborhood...
Sometimes I hear from sellers that those sales (Short Sales & Foreclosures) don't count because they are in a distress situation.. This is incorrect thinking, especially in today's environment here in Southwest Florida.. Buyers and Buyer's agents will see the sale and will not want to pay more for your home just because it is not a distressed sale... That's the market....
Additionally, let's say you get someone to buy your home and needs to obatin a loan, the appraiser will take the distressed sales into account when evaluating market value... Most people don't know that there is a new system for Appraisals... No longer can an agent or lender hire an appraisal company.. In the past, you could say the contract came in at $200,000.. Make it work..! The appraiser, in my opinion, had to balance the constant struggle of making their client happy (lenders & agents) & doing the right thing. If you did the right thing, they could stand to lose a lot of business...
The Govt. put in place a middle man, which has created HVCC and they are called "Appraisal Management Companies".. It was too easy for Fraud to happen.... The problem I am seeing now is that the appraisers being hired don't know the area and we are seeing deals fall apart due to this reason. Additionally, it takes a lot longer for the appraisal to be done which is also having an impact as contracts today with short sales and foreclosures are very time sensitive...
Understanding the Bank's Foreclosure Process & NEW Regulations to Help Buyers
Please read this article.. It is very informative on how the banking institutuion processes their foreclosures and the new steps they are taking to speed up the process when selling the homes...
READ THIS IF YOU HAVE A FHA LOAN
The Government just released this NEW program to assist in the real estate market recovery.
IF you are current on your mortgage & other installment debts and have been for the last 12 months and you can no longer afford your home, the Government will allow you to SHORT SALE your home & BUY ANOTHER HOME WITH GOVT. FINANCING IMMEDIATELY...
There are a few requirements to be eligible for this new program
1. The home you are going to Short Sale IS your Primary Home.
2. Your new Purchase has to be a reasonable commuting distance away
3. If you are in default, you will not be eligible for a new FHA insured mortgage for 3 years from the
date of the sale.
Again, This is brand new and some lenders do not even know about this. The lenders that do are still waiting for the specific underwriting details as well...
IF you are current on your mortgage & other installment debts and have been for the last 12 months and you can no longer afford your home, the Government will allow you to SHORT SALE your home & BUY ANOTHER HOME WITH GOVT. FINANCING IMMEDIATELY...
There are a few requirements to be eligible for this new program
1. The home you are going to Short Sale IS your Primary Home.
2. Your new Purchase has to be a reasonable commuting distance away
3. If you are in default, you will not be eligible for a new FHA insured mortgage for 3 years from the
date of the sale.
Again, This is brand new and some lenders do not even know about this. The lenders that do are still waiting for the specific underwriting details as well...
Monday, January 18, 2010
Investor Investors Investors - GOOD NEWS ALERT
The Federal Government has lifted the "Anti-Flip" ban on real estate.... Previously, you had to wait 90 days from date of purchase to resell to a buyer who needed Government backed Financing (FHA, USDA, etc.)..
This is good news for investors.... The carry cost and/or opportunity cost will decrease significantly and may prove to actually raise prices on the bottom end as I have been seeing throughout 2009...
This begs the question: Why now? It may be that they see more foreclosures in 2010 flooding the market and want to allow investors to absorb some of the excess inventory... Not sure... The reasoning is cloudy, but the result will be that the people with means will get farther and farther ahead in this market and thus ever widening the rich to poor gap in the US, which already is the widest ever..
This is good news for investors.... The carry cost and/or opportunity cost will decrease significantly and may prove to actually raise prices on the bottom end as I have been seeing throughout 2009...
This begs the question: Why now? It may be that they see more foreclosures in 2010 flooding the market and want to allow investors to absorb some of the excess inventory... Not sure... The reasoning is cloudy, but the result will be that the people with means will get farther and farther ahead in this market and thus ever widening the rich to poor gap in the US, which already is the widest ever..
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