The U.S. Treasury Department announced new guidelines this week designed to make short sales go more smoothly.
Read all about it here: http://bit.ly/8FpZ8M
Tuesday, December 15, 2009
Friday, November 13, 2009
Getting a Short Sale Processed
I began a short sale in late spring of 2009. Since then, we have received a total of 3 offers on the property. Two were flat out rejected.
Here is the story on that second offer... Buyers toured the property with their agent. Agent contacted me about making an offer. I told them that based on my conversations with the lender, an offer of $250K would work. I let the agent know it would be best to put in a full price offer, which the buyer's did.
After a couple weeks of waiting, I call the bank only to find out that the offer was rejected. They didn't even bother to counter!
In the meantime, the lender contacted my client, the seller, and offered a modification. Basically they would forgive the 5 payments that had not been made and lower the interest rate permanently. Now, that sounds like it could be a good deal but let me tell you why in this case it was not.
The home was worth $400K at the peak of it all... Now we were struggling to get an offer of $250K. The homeowner's property tax paperwork for 2009 shows the assessed value at $280K. The homeowner naturally made this known to the bank and suggested they lower the principal owed. No go said the bank.
"But wait a minute," said my seller, "You are willing to sell this in a short sale to someone else for less than what I owe. Why can you not sell it to me at that price?"
Naturally the answer is that banks don't want to encourage irresponsibility. They don't want clients thinking they can get away with buying a home for one price and then renegotiating later. Now, isn't that what's happening higher up the chain?? These lenders are asking the Treasury for a bailout, an "injection", an "infusion." Call it what you want, they certainly have no problem asking for a break. But damn their clients if they need a break.
In this time of unprecedented financial turmoil, why is it not possible to reset home values, reset existing mortgages and move forward? Why has it become necessary to displace so many families?
I am happy to hear any explanations as to why this kind of solution is not an option. I mean, the banks are now willing to become landlords for goodness sakes! That means hiring property management, repair expenses since these are no longer the homeowner's responsibility... How can they offer a lower monthly payment when becoming the landlord actually increases their expenses on the property????
Here is the story on that second offer... Buyers toured the property with their agent. Agent contacted me about making an offer. I told them that based on my conversations with the lender, an offer of $250K would work. I let the agent know it would be best to put in a full price offer, which the buyer's did.
After a couple weeks of waiting, I call the bank only to find out that the offer was rejected. They didn't even bother to counter!
In the meantime, the lender contacted my client, the seller, and offered a modification. Basically they would forgive the 5 payments that had not been made and lower the interest rate permanently. Now, that sounds like it could be a good deal but let me tell you why in this case it was not.
The home was worth $400K at the peak of it all... Now we were struggling to get an offer of $250K. The homeowner's property tax paperwork for 2009 shows the assessed value at $280K. The homeowner naturally made this known to the bank and suggested they lower the principal owed. No go said the bank.
"But wait a minute," said my seller, "You are willing to sell this in a short sale to someone else for less than what I owe. Why can you not sell it to me at that price?"
Naturally the answer is that banks don't want to encourage irresponsibility. They don't want clients thinking they can get away with buying a home for one price and then renegotiating later. Now, isn't that what's happening higher up the chain?? These lenders are asking the Treasury for a bailout, an "injection", an "infusion." Call it what you want, they certainly have no problem asking for a break. But damn their clients if they need a break.
In this time of unprecedented financial turmoil, why is it not possible to reset home values, reset existing mortgages and move forward? Why has it become necessary to displace so many families?
I am happy to hear any explanations as to why this kind of solution is not an option. I mean, the banks are now willing to become landlords for goodness sakes! That means hiring property management, repair expenses since these are no longer the homeowner's responsibility... How can they offer a lower monthly payment when becoming the landlord actually increases their expenses on the property????
Keeping Home Affordable Only Works for a Select Few
Nine months ago, the Obama administration offered banks $75 billion in taxpayer money to rework troubled mortgages.
So far 650,994 homeowners nationwide have received temporary, trial modifications under the administration's foreclosure-prevention plan.
However the Congressional Oversight Panel reports less than 2,000 borrowers had successfully completed their trial period and received permanent loan modifications as of Sept. 1.
Now I'm no statistician, but those are some dismal results.
So far 650,994 homeowners nationwide have received temporary, trial modifications under the administration's foreclosure-prevention plan.
However the Congressional Oversight Panel reports less than 2,000 borrowers had successfully completed their trial period and received permanent loan modifications as of Sept. 1.
Now I'm no statistician, but those are some dismal results.
A moment on the soapbox
As an active Realtor in Utah, it is my desire to see people become homeowners. Homeownership creates pride and boosts self respect which in turn strengthens communities... Sadly, these are truisms the government and lenders are only giving lip service to.
The Constitution begins with the words: We the people. When are "we the people" truly going to come together on this issue?
The Constitution begins with the words: We the people. When are "we the people" truly going to come together on this issue?
Monday, November 9, 2009
Homebuyer Tax Credit Extended and Expanded
So this past Friday, President Obama signed the bill extending the First-Time Homebuyers Tax Credit to June 30, 2010 making the new deadline for being under contract April 30, 2010 with a closing date no later than June 30, 2010.
Key improvements to the bill are the increase in income limits. For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.
For up to date information on eligibility and requirements, please take a look at these websites:
http://www.irs.gov/newsroom/article/0,,id=204671,00.html
http://www.federalhousingtaxcredit.com/glance.php
Key improvements to the bill are the increase in income limits. For homes purchased after November 6, 2009 and on or before April 30, 2010, single taxpayers with incomes up to $125,000 and married couples with incomes up to $225,000 qualify for the full tax credit.
For up to date information on eligibility and requirements, please take a look at these websites:
http://www.irs.gov/newsroom/article/0,,id=204671,00.html
http://www.federalhousingtaxcredit.com/glance.php
Wednesday, March 4, 2009
Important Information for Homeowners in Foreclosure!
Please take a moment to read this important information about the dangers of signing over your deed... In Foreclosure? Never Sign Over The Deed!
Also, read our previous post below: "Real Estate Investors - Friend or Foe?"
There is a lot to consider when working towards a short sale and this is a most serious aspect that should be reviewed with the greatest care. It is encouraging to know that there are ways to safeguard your position and ensure you are working with someone who truly has your best interests at heart.
Also, read our previous post below: "Real Estate Investors - Friend or Foe?"
There is a lot to consider when working towards a short sale and this is a most serious aspect that should be reviewed with the greatest care. It is encouraging to know that there are ways to safeguard your position and ensure you are working with someone who truly has your best interests at heart.
Monday, February 9, 2009
Encouraging post from Loanworkout.org
“American families–12 million of them–are underwater on the mortgages on their homes,” he said. “The total amount of money that’s been lost by families out of their net worth due to home depreciation is probably $5 trillion. To me, (those figures) help explain why consumers aren’t buying cars, why they aren’t buying new clothes, why they aren’t taking big trips, why they aren’t eating out.”
Read more about Wilbur Ross and American Home Mortgage Servicing here:
http://bit.ly/PDL8
Read more about Wilbur Ross and American Home Mortgage Servicing here:
http://bit.ly/PDL8
Monday, February 2, 2009
How to Get a Successful Loan Modification
Here is an excellent article from Peter Miller of ourbroker.com:
How to Get a Successful Loan Modification
How to Get a Successful Loan Modification
Friday, January 23, 2009
Real Estate Investors - Friend or Foe?
Have you ever wondered why realtors and investors tend to not get along?
Realtors and some distressed homeowners perceive investors as vultures and ambulance chasers. As with any profession there are some "bad eggs" that may warrant this label. For the most part, real estate investors provide a valuable service to those who are in a bad situation.
The MAIN reason a homeowner is willing to create a trust and deed the property into the trust (with the investor as trustee, thereby giving him control to act as an owner) is for the peace of mind. These people are going through an extremely difficult period in their life and they DON'T WANT to deal with Realtors (whom they perceive as salesman) or any kind of decision making other than "get-me-out-of-this-mess!" They want to hand the situation over to someone who will take care of all the details and decisions and a Realtor is not in a position to do that.
Realtors and some distressed homeowners perceive investors as vultures and ambulance chasers. As with any profession there are some "bad eggs" that may warrant this label. For the most part, real estate investors provide a valuable service to those who are in a bad situation.
The MAIN reason a homeowner is willing to create a trust and deed the property into the trust (with the investor as trustee, thereby giving him control to act as an owner) is for the peace of mind. These people are going through an extremely difficult period in their life and they DON'T WANT to deal with Realtors (whom they perceive as salesman) or any kind of decision making other than "get-me-out-of-this-mess!" They want to hand the situation over to someone who will take care of all the details and decisions and a Realtor is not in a position to do that.
Thursday, January 22, 2009
The Lowdown on Loan Modification Programs
According to the government's Office of the Comptroller of the Currency, loan modification plans are getting nowhere fast. The number of loans modified in the first quarter that were 30 or more days delinquent was 37 percent after three months and 55 percent after six months. The number of loans modified in the first quarter that were 60 or more days delinquent was 19 percent at three months and nearly 37 percent after six months.
Comptroller of the Currency John C. Dugan stated that re-default rates increased each month, whether measured using 30-day or 60-day delinquencies, and showed no signs of leveling off after six months and even eight months.
Modified mortgages during the first half of 2008 were structured for about 200,000 borrowers who were falling behind on their payments. Unfortunately, most of those homeowners missed at least one payment after the loan modification which means that they're once again on the road to losing their homes to foreclosure.
Doing a modified refinance is one of the best ways to rescue those who are underwater on their mortgages, particularly if they can switch from an adjustable-rate mortgage (ARM) to a fixed-rate loan. But too many mortgages are encumbered by home equity loans or other second mortgages. And before considering loan modifications on primary mortgages, investors holding liens on smaller secondary loans must agree. Many do not, because a modified refinance costs them too much money.
The FDIC launched a program for the seriously delinquent customers of IndyMac (which is now under its control). The program seems to be working for those who are participating, but the problem is that so few actually qualify for the loan modifications (only about 10 or 12 percent). Admittedly, some homeowners haven't responded to offers for loan modification, but many who did don't meet the necessary criteria.
The $300 billion foreclosure prevention program managed by HUD and the FHA is supposed to help about half a million homeowners, but so far, it's only managed to save less than 300 borrowers across the entire country. The program is in the process of being revised; hopefully into a more effective incarnation than the last.
What's a homeowner to do?
* see ABC News report on the challenges of loan modification: http://abcnews.go.com/Blotter/story?id=6702731&page=1
Comptroller of the Currency John C. Dugan stated that re-default rates increased each month, whether measured using 30-day or 60-day delinquencies, and showed no signs of leveling off after six months and even eight months.
Modified mortgages during the first half of 2008 were structured for about 200,000 borrowers who were falling behind on their payments. Unfortunately, most of those homeowners missed at least one payment after the loan modification which means that they're once again on the road to losing their homes to foreclosure.
Doing a modified refinance is one of the best ways to rescue those who are underwater on their mortgages, particularly if they can switch from an adjustable-rate mortgage (ARM) to a fixed-rate loan. But too many mortgages are encumbered by home equity loans or other second mortgages. And before considering loan modifications on primary mortgages, investors holding liens on smaller secondary loans must agree. Many do not, because a modified refinance costs them too much money.
The FDIC launched a program for the seriously delinquent customers of IndyMac (which is now under its control). The program seems to be working for those who are participating, but the problem is that so few actually qualify for the loan modifications (only about 10 or 12 percent). Admittedly, some homeowners haven't responded to offers for loan modification, but many who did don't meet the necessary criteria.
The $300 billion foreclosure prevention program managed by HUD and the FHA is supposed to help about half a million homeowners, but so far, it's only managed to save less than 300 borrowers across the entire country. The program is in the process of being revised; hopefully into a more effective incarnation than the last.
What's a homeowner to do?
* see ABC News report on the challenges of loan modification: http://abcnews.go.com/Blotter/story?id=6702731&page=1
Friday, January 16, 2009
Newspaper Advertising, a Thing of the Past?
In the last week I have heard the same "advice" from two completely different sources: "No one is reading newspaper ads anymore. Target your audience where it's at - online. "
Are you thinking, "people don't buy a house online!" "Am I really missing out on potential clients by not having a solid presence on the web?" You betcha. Statistics from the National Association of Realtors show that over 80% of home buyers use the internet as their primary research tool. And you have heard that the LA Times has dropped the real estate section, right?
Now I'm no statistician, but I think it's safe to say that even on a local scale, you can reach more people online. Here are some other interesting numbers... In 2008, $23.6 billion (yes, with a "b") was spent on internet ads. Of that amount almost $1 billion went into online video. In fact, online video ad spending grew faster than search spending. What does all this mean? It means we need to change our thinking when it comes to building relationships with potential and existing clients.
For example:
Are you thinking, "people don't buy a house online!" "Am I really missing out on potential clients by not having a solid presence on the web?" You betcha. Statistics from the National Association of Realtors show that over 80% of home buyers use the internet as their primary research tool. And you have heard that the LA Times has dropped the real estate section, right?
Now I'm no statistician, but I think it's safe to say that even on a local scale, you can reach more people online. Here are some other interesting numbers... In 2008, $23.6 billion (yes, with a "b") was spent on internet ads. Of that amount almost $1 billion went into online video. In fact, online video ad spending grew faster than search spending. What does all this mean? It means we need to change our thinking when it comes to building relationships with potential and existing clients.
For example:
- host a live online event where buyers can ask questions and get answers in real time from you
- deliver free real estate news in the form of a brief video news bulletin
- offer how-to videos for both buyers and sellers to guide them through the process of buying and selling a home.
Sunday, January 11, 2009
Small Improvements that Payoff Big
These days you want to do whatever it takes to make your house appealing. While curb appeal is important, ultimately you want your home's future owner to see themselves living in it as their home. Your goal is to make the home look inviting and full of potential inside and out.
Here are some quick ways to add value with minimal expense.
1. Get rid of clutter! Give each room a definite purpose.
2. Add landscape lighting to your walkways.
3. Update hardware and light fixtures throughout the house to give it a bright and harmonious feel.
4. A fresh coat of paint. (A standard suggestion because it really makes a BIG difference!)
5. Consider replacing carpet with hardwood flooring. Hardwood floors are easier to clean, feel more spacious, and the cost is about the same as carpet.
Once you've got your home in tiptop shape, the next step is to get it seen. There will be articles to come on how to do just that.
- Maximize your Real Estate Depreciation Deduction
Here are some quick ways to add value with minimal expense.
1. Get rid of clutter! Give each room a definite purpose.
2. Add landscape lighting to your walkways.
3. Update hardware and light fixtures throughout the house to give it a bright and harmonious feel.
4. A fresh coat of paint. (A standard suggestion because it really makes a BIG difference!)
5. Consider replacing carpet with hardwood flooring. Hardwood floors are easier to clean, feel more spacious, and the cost is about the same as carpet.
Once you've got your home in tiptop shape, the next step is to get it seen. There will be articles to come on how to do just that.
- Maximize your Real Estate Depreciation Deduction
Wednesday, January 7, 2009
What Lies Ahead?
Reading over the latest Utah headlines it's obvious that although we have been somewhat sheltered from the overall economic climate, we are not unaffected. According to the Utah Department of Workforce Services, although Utah has led the nation in employment growth in the past, "from Oct to Nov 2008 alone, the statewide job-loss rate accelerated from 0.4 percent to 0.9 percent, a difference of more than 6,000 jobs." - Standard-Examiner.
After all is said and done, it is quite obvious that a fair portion of the current climate is based on fear. On top of real issues, the fear that has been induced by all the constant media gloom and doom coverage of the subject is adding to the crisis. Consumers are holding back from making that "big purchase" out of fear which affects businesses and adds to the overall slump we are experiencing.
"We've swung from one extreme to the other," states Rees Petersen, vice president and regional investment manager of Wells Fargo's private bank division, "from being a culture that uses debt to being debt averse. And that's a dangerous reaction because not all debt is bad. The government has been good at addressing fiscal policies but they also need to address the fear that consumers and investors now have." - The Daily Herald.
Are we through the worst of this crisis in Utah? Or merely experiencing a delayed reaction? With job growth stagnating it will be a while before the excess inventory of housing is absorbed. What are your thoughts?
Sources:
http://www.standard.net/live/news/160660
http://www.heraldextra.com/content/view/294903/18/
After all is said and done, it is quite obvious that a fair portion of the current climate is based on fear. On top of real issues, the fear that has been induced by all the constant media gloom and doom coverage of the subject is adding to the crisis. Consumers are holding back from making that "big purchase" out of fear which affects businesses and adds to the overall slump we are experiencing.
"We've swung from one extreme to the other," states Rees Petersen, vice president and regional investment manager of Wells Fargo's private bank division, "from being a culture that uses debt to being debt averse. And that's a dangerous reaction because not all debt is bad. The government has been good at addressing fiscal policies but they also need to address the fear that consumers and investors now have." - The Daily Herald.
Are we through the worst of this crisis in Utah? Or merely experiencing a delayed reaction? With job growth stagnating it will be a while before the excess inventory of housing is absorbed. What are your thoughts?
Sources:
http://www.standard.net/live/news/160660
http://www.heraldextra.com/content/view/294903/18/
Friday, January 2, 2009
Welcome 2009!
A new calendar marks the entrance of a new year. But it's more than that. This is a mile marker on life's highway.
Let's make 2009 a year of opportunity by taking advantage of the current economic environment and putting our creativity and initiative to work like never before.
Every day we wake up, it's a new day. Live in the moment. Be in the moment. Follow your heart and your dream. Only look forward and see your goal coming closer and closer as you near it with every step you take.
- Popular Tax Saving Tips
Let's make 2009 a year of opportunity by taking advantage of the current economic environment and putting our creativity and initiative to work like never before.
Every day we wake up, it's a new day. Live in the moment. Be in the moment. Follow your heart and your dream. Only look forward and see your goal coming closer and closer as you near it with every step you take.
- Popular Tax Saving Tips
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