ViewFromTheFootHills.com

Archive for the 'Real Estate' Category

B of A to Offer Principle Reductions??

Bank of America to Offer Mortgage Principle Reduction to 200,000 Borrowers

As a result of a recent $25 billion settlement agreement with the U.S. Department of Justice and the state attorneys general (allegations of abuses over the handling of foreclosures) Bank of America committed $11 billion toward a mortgage principal reduction program aimed at approximately 200,000 delinquent mortgage holders.

B of A has dabbled in a trial modification program since March, 2012 which included some 5,000 owners. They claim the program delivered a collective $700 million in savings for their borrowers.

There is currently an estimated 5.6 million U.S. loans that are delinquent or in the process of foreclosure of which 1 million of those are serviced by Bank of America. The balance are loans owned by Fannie Mae and Freddie Mac.

B of A says it has begun to send out 200,000 certified letters to potential candidates for this program and they estimate it will complete the staggered priority mailings by the end of the third quarter of this year.

Bank of America has suspended any foreclosure actions against these borrowers until the process of qualifying the 200,000 is complete.

Executives say borrowers receiving the letters are eligible for the modification, but they still have to prove they qualify. If the buyer qualifies, Bank of America will bring the monthly mortgage payment to 25% of the borrower’s gross income. In some cases this could mean principle forgiveness well over $100,000 because there is no limit to the amount of the mortgage. A successful modification could result in a 35% reduction in savings on their monthly mortgage payment.

The eligible candidates were determined after the bank performs a net present value test on each loan. This was done to determine if the principle reduction modification would net Bank of America or the investor who owns the loan more than foreclosing on the home.

Ron Sturzenegger a Bank of America executive says “If you can afford to make your monthly payment and are choosing not to, you will not get this principal modification”.

B of A spokeswoman Jumana Bauwens outlined the following criteria as primary qualification for this program.

• The program extends only to homeowners whose loan is held by Bank of America or an investor who has agreed to participate (excludes Fannie Mae, Freddie Mac or FHA-backed loans.
• The homeowners must owe more than the property is currently worth (underwater).
• The borrower must have been at least 60 days delinquent on payments AS OF JANUARY 31 OF THIS YEAR.
• Their combined monthly payment including insurance, taxes association fees along with principal and interest, must total more than 25% of their gross household income.

After qualifying, the homeowners have to make three on-time payments to make the reductions permanent.

It is important to note that according to FICO spokesman Anthony Sprauve that “There is no published direction on how to report principal reduction under the DOJ agreement at present”. In other words it is unclear whether the principle reductions will affect homeowners’ credit scores. B of A spokeswoman Bauwens further adds that it’s possible credit scores may be affected.

Auburn CA Real Estate is seeing multiple offers over asking price.

Multiple Offers Gaining Momentum in Auburn CA, and other hot real estate markets.

Remember the “Roaring 90’s”….. Those days when you could list your house on Friday and on Saturday people would be parked in your driveway writing offers and good faith checks on the hood of their cars? Multiple offers were the norm and offered sellers a generous selection of offers from which to choose.

Believe it or not we are experiencing a trend toward multiple offers even in this still difficult market and there is evidence that this trend will continue as buyers compete in a market with limited inventory.

What are the fundamentals driving this “Multiple Offer” revival?

• We are currently experiencing a shortage of inventory. Inventories are down 30% over this time last year. Banks are slower to process and release their inventory of bank owned properties and the building industry continues to search for solid economic signals that would incent them to invest in new building projects once again.
• Interest rates continue at historically low rates and it would appear that they will hold for the near future.
• There are continuing signs that the over-all housing market may have reached its bottom or near bottom and that this is the strategic time to jump in to maximize future appreciation. The latest data from Zillow points to stabilized pricing in almost every major housing market.
• Renters are starting to realize that they can afford a mortgage that is less than their current rent. This will continue as the cost of renting rises as landlords realize they can raise rents to the current market “pain threshold”. The flip side of this is that this represents an opportunity for those who want to invest in rental property to optimize their cash flow income with little risk.
• Successful sellers are pricing their homes at fair, realistic and competitive levels as opposed to pricing that reflected emotional attachment to unrealistic historical home values (Which resulted in “months on the market” and repeated price reductions).

Based on this current shift and what appears to be a continuing shortage of inventory, how do serious buyers improve their odds of success in this increasingly competitive “multiple offer” environment?

• Buyers who are serious and want to be able to get their offer viewed as competitive should always pre-qualify with their financial institution or have strong, liquid cash resources. Cash buyers or buyers with a strong cash content in their offer reduce the buyers risks and get their attention immediately. Remember, you may be competing against cash laden investors who want the property as much as you !
• Be prepared to make a strong and realistic offer that is most likely at or above the asking price.
• Sellers who have fairly priced their homes to prevailing market metrics are well aware of the trend in multiple bids and are not motivated to consider “low-ball” or sub market offers.
• Make sure you have a Realtor that does their homework on the current market value of the property in that micro-market and knows how to write an offer that will attract the attention of the seller and their agent. A professional and experienced agent will be able to show you that the home is or is not properly priced based on recent comparative market data in the neighborhood in question. Savvy agents will research the sales data and insure that the home and the data represent an “apples to apples” comparison scenario.

Watch a recent a recent video from the Wall Street Journal on this latest trend.

Good luck and let the bidding begin!

If you’re a home seller on the fence, you had better SEIZE THE MOMENT!

Talk to any busy Realtor in our Auburn, CA, or anywhere in Placer County for that matter, and you will no doubt hear that houses are selling over asking price, and with multiple offers.

Properties in Placer County are being listed and bombarded with multiple offers in a matter of days. And I’m not just talking in the affordable price range of $200,000 or under.

Cases in point:

1. A house in Meadow Vista in the $600K range had two offers–one buyer was disappointed.
2. My listing in Ophir, that did not attract an offer in January until the listing price went below $500K.  I received 2 offers the first day after it was relisted at the bank’s countered price of $520,000 (first buyer had to cancel), with two other buyers who were late to the party.
3. Another listing of mine in Ophir received 5 offers the first week, and I receive calls about it almost every day.
4. I listed a house in Wheatland on Saturday morning and had a cash offer by Saturday afternoon.

So what’s going on? In a nutshell, inventory is severely low.

The old rule of Supply and Demand

In September of 2007, during the decline, we had 10 months of inventory! What do you think was happening to home prices? Bingo, they were sliding downward. Now the reverse is true.

The perfect storm.

Sellers, you have a window of opportunity. We have heard the tale of “shadow inventory,” the homes in default that will eventually be hitting the market as bank owned. We have been hearing this for a very long time. If you need to sell, and sell quick, there hasn’t been a better time in a long time, and we don’t know how long this window will stay open.

Upside-down?

If you are upside-down in your home, there are options for you too. As an agent specializing in helping homeowners sell their upside down homes through short sale in Auburn, CA, and Placer County, my team can get your home sold on you on your way to getting back into this great market sooner as opposed to later.

Contact me to learn more about selling your home.

If you stay current, you may be able to buy a home immediately after short sale.

Under the right circumstances, you don’t have to wait to buy your next home!

Recently I learned about a new loan program from my favorite lender, Roland Benson. He is with iMortgage, a direct lender, who has access to many loan programs that the big banks do not.

Through this particular program, you may be able to complete a short sale on your home and immediately move into your next home, avoiding the typical 3-year wait that most homeowners must endure.

There are some very specific requirements to qualify for this program:

1. Your present home is financed through a conventional loan.
2. You are current on your mortgage payments.
3. You are current on all other debt.
4. The NEW HOME must MAKE SENSE for your family (i.e., you are not selling just because you don’t want to keep your upside-down home), for example:
• The price is lower
• The payment is lower
• The home is closer to work
• There is an increase in room count
• Bottom line, it is the right decision for your family

To see if you might be a candidate for this program, contact me, or call Roland directly at (916) 768-1578.

Loan Modification: Should you waste your time?

Why you shouldn’t hold your breath for your bank to modify your loan.

For the past several months my Auburn CA Short Sale Team and I have been holding free community workshops for homeowners who are upside down in their homes and are unsure of their options. Our local attorney in Auburn, CA, Richard Hall, who specializes in this area of law, gives a great presentation which helps people understand what their options are.

A repeated theme is that our attendees tell us about the nightmare of their attempted loan modification, and include some or all of the following details:

1. It’s been 2 years and they still haven’t modified our loan.
2. They lost my paperwork over and over again.
3. I was assigned a new negotiator repeatedly.
4. One hand doesn’t know what the other hand is doing.
5. A notice of foreclosure sale was posted on my house!
6. My modified payment is higher than it was before I started the process.
7. They told me they wouldn’t work with me until I missed my mortgage payment.
8. And finally, “you don’t qualify.”

Do any of these scenarios sound familiar? Frustrating, right?

The reality is:

1. Approximately 1% of borrower-initiated loan modifications are ever granted.
2. Almost never is there a reduction of principle balance owed.
3. Even if your interest rate is modified, you will likely not be able to pay off your upside-down property in your lifetime.

The other thing that most consumers aren’t aware of is that the path to foreclosure keeps marching on. When the bank finally declines your loan modification, your options become very slim because time is about up.

There are more options than you might think, including the possibility to buy a new home, at today’s value, immediately after closing escrow on your short sale. Contact me to learn more.

Upside-down in your home? You may be able to qualify to buy another.

Many upside-down homeowners have found a way to take advantage of this incredible buyer’s market!

I talk to people daily who express frustration about the fact that they must continue to make payments on a home that is significantly upside-down. They watch as their neighbors abandon properties, either due to hardship, or because they are simply sick of paying for a home that will possibly never be worth what it once was. Then they watch helplessly as new buyers come in and buy the abandoned home at a deep discount, further submarining their property value. 

So, why don’t they follow suit? For many, walking away from their responsibility is not something they can comfortably do.

What is an upside-down homeowner to do?

Many homeowners decide that the best strategy is to call their bank and try a loan modification. Unfortunately, the reality is that 96% of loan modifications fail. Typically, as a condition of being considered for a loan modification, they are told by their lender that they must miss payments, which causes havoc to their credit score. And in many cases where the modification is granted, the new payment ends up being higher due to the fact that the accumulation of missed payments is lopped onto the new loan balance.

You may be like these frustrated homeowners who don’t want to ruin their credit by defaulting on a loan. You may not qualify for a short sale. Or you may not feel right about walking away. However, you wish you could take advantage of the best buying market in decades.

Guess what? You may be able to!

What?! I can buy an investment property?

Quite possibly. I had lunch today with my favorite lender, Roland Benson, with iMortgage (916) 768-1578. He said that while most large banks will not fund this type of loan, iMortgage is a direct lender and does NOT impose extra restrictions. Because of this freedom, Roland’s company has success getting these loans funded and closed!

Here’s how it works:

1. Find a property you would like to buy. If you don’t have an agent, I can help you. Contact me.
2. Contact Roland Benson with iMortgage (916) 768-1578.
3. Most properties in this market can cover their own mortgages through rental income.
4. As long as your credit is intact (i.e., you have not missed payments by attempting a no-win loan modification), you are likely good to go.

Many people have no idea that this is an option. I sure didn’t until I talked to Roland today. Take advantage of this great market and go buy an investment property today!

Waiting Period after Loan Modification same as Foreclosure or Short Sale?

Most lenders insist borrowers who have received a Loan Modification (even with a simple interest rate change) wait 3 Years to be able to qualify for a loan, just as those who have had either a Foreclosure or Short Sale.

Here is an example:

“Joe” and “Jane” have owned their home for 10 years. They aren’t upside-down like many homeowners and they have never missed a payment. They decide it’s wise to take advantage of the improving interest rates, and so they contact their lender and receive loan modification with an interest rate reduction.

A year later they decide they have outgrown their home and start looking into purchasing a new home. According to Fannie Mae Guidelines, if a homeowner works with his or her lender to modify their loan with a lower interest rate, this Loan Modification is interpreted to be a “Significant Adverse Event,” and is then lumped in with and considered to be as derogatory as Foreclosure or Short Sale.

What does this mean?

Joe and Jane, though in good standing on their loan in every other way, will be turned down by the bulk of lenders based upon this little known fact, and will be forced to wait 3 full years before they can qualify for a loan.

It’s important to choose a lender who looks a little deeper.

According to Roland Benson with iMortgage, “Interest rate change should not be considered a significant adverse event.   However, lenders are declining borrowers because their credit (past or current mortgage) contains a clause stating “modified.”   Just like the hundreds of other pitfalls, borrowers get lumped into this category when they chose the wrong lender.”

It’s important to use a company that thinks outside-the-box, and who will will dig deeper and uncover that the “modified” loan was only a simple interest rate reduction (no late or missed payments) and approve an otherwise well qualified buyer. I have found that Roland Benson at iMortgage is one who truly cares and has success finding ways to help homebuyers who have been turned down by other lenders, and who also consistently closes on time.

Contact me for more information and to get you in touch with Roland Benson.

cforms contact form by delicious:days

Great Deals on HUD Homes for Sale in Auburn, Roseville, Rocklin, Lincoln, CA

HUD Owned 1601 Montrose Ln, Lincoln CA - 5 bed 3.5 bath, 3128 SF - $222,000

Great bargains on FHA owned, or HUD Homes, such as this one on Montrose Lane in Lincoln CA, will be hitting the market starting this quarter, and peaking by the end of the year.

An increase in FHA loan defaults will give rise to the release of 178,000 HUD owned properties nationwide. Of those, 40,000 are said to be in the Northern California region, including homes for sale in Auburn, CA, Roseville, Rocklin, Lincoln, Sacramento, and surrounding areas.

What is a HUD home?

A HUD home is a 1-to-4 unit residential property acquired by HUD as a result of a foreclosure action on an FHA-insured mortgage. HUD becomes the property owner and offers it for sale to recover the loss on the foreclosure claim.

Who can buy a HUD home?

Owner occupants and investors can buy HUD homes. Priority is given to owner occupants during the initial listing period.

How can I buy a HUD home?

Only real estate agents with registered brokerages can make offers on HUD homes on behalf of their clients. Contact me if you would like more information on making an offer on a HUD home. The process is quite specific, and you will want an experienced HUD agent on your side.

What about financing?

FHA loans can be used to purchase HUD homes. HUD will pay for a section one pest clearance if the buyer finances using an FHA loan. Some of the benefits of an FHA loan are down payments as low as 3.5% and low closing costs. Buyers must meet loan qualifications. For more information, contact a qualified FHA lender such as Roland Benson at 916-768-1578.

Other types of financing, such as a conventional loan, can also be used to purchase HUD homes, as well as cash.

What is the Neighbor Next Door Program?

HUD’s Good Neighbor Next Door initiative is designed to encourage renewal of revitalization areas by providing law enforcement officers, firefighters, emergency medical technicians and teachers an opportunity to purchase homes in these communities. HUD provides a substantial incentive in the form of a fifty percent discount off the list price of eligible properties. Buyer’s paticipating in the Good Neighbor Next Door program must live in the home for 36 months to qualify for the discount.

For more information, visit the Official HUD Website.

When can I buy a home after Bankruptcy, Foreclosure or Short Sale?

Here is a quick guide for required waiting periods after going through Bankruptcy, Foreclosure or Short Sale

The waiting periods for each type of distress situation are dependent upon the type of loan you will be pursuing going forward.

For Conventional Loans:

• Chapter 7 Bankruptcy – 4 year waiting period from the discharge/dismissal date
• Chapter 13 Bankruptcy – 2 year waiting period from the discharge date, or 4 years from the dismissal date
• Multiple Bankruptcies – If within a 7 year period, the waiting period is 5 years from the most recent discharge/dismissal date
• Foreclosure – 7 year waiting period from the completion date
• Deed-In Lieu or Preforeclosure (Short Sale) – Minimum 2 year waiting period

For FHA or VA Loans:

• Chapter 7 Bankruptcy – 2 year waiting period from the discharge/dismissal date
• Chapter 13 Bankruptcy – 1 year of the payout must have elapsed and the borrower’s performance must have been paid as agreed. Document that the borrower’s current situation is not likely to recur. The court must grant permission to the borrower to enter into a mortgage transaction.
• Foreclosure/Preforeclosure (Short Sale) – 3 year waiting period
• VA Loans ONLY – 2 year waiting period on Foreclosures.

Information provided by iMortgage, Roland Benson, 916-746-8412

This information should not be deemed as legal or financial advice. Please consult the appropriate professional to assess your particular situation.

For short sale assistance, contact Noel.

More about short sales…

What goes in your short sale package?

When can I buy after a short sale?

How can I repair my credit after short sale?

Short Sale Basics

Auburn CA Real Estate Mortgage Rates Decline…for now.

Looking for a mortgage to purchase a home in Auburn, CA? Better do it soon!

Inman news reports that mortgage rates dipped for the second week in a row, down from 5.05% the week ending February 10th. The median home for sale in Auburn, CA is $262,000, up from $252,000, a slight increase month over month. Another interesting statisic is that the number of months of inventory based on pending sales dropped from 5.0 to 3.2 from December to January. The law of supply and demand tells us that that a dip in supply can trigger a price increase.

The Mortgage Bankers Association (MBA) stated in their  Feb. 18 forecast, that projected rates on 30-year fixed-rate loans will average 5.2 percent during the first three months of this year, rising to an average of 5.5 percent in the second quarter, 5.6 percent in the third quarter, and 5.8 percent in the final three months of the year.

Next year, the MBA projects rates on 30-year fixed-rate loans will gradually climb to an average of 6.3 percent in the final three months of 2012.

Real the full article about projected mortgage rates here.