The times that we are currently working through have been a challenge for many of us. I believe the key to success in this market is knowing your market and products better than anyone else.
They say knowledge is power, but I disagree I believe knowledge is potential power. If you have the knowledge but do not utilize it than it is wasted.
Many Realtors do not know all of the mortgage products available today which could help increase their business significantly. If you know that 100% financing is available you may market this demographic. You may not immediately disqualify someone because they do not have a down payment.
I am going to list some programs for 100% financing below, if you have specific questions regarding the programs or need an immediate pre-qual call me at 386-615-7977.
VA loans for eligible veterans, 100% with the seller paying up to 6% of the buyers closing cost. This is a great 0% down option.
FHA purchases. FHA allows for 97.75% financing, but they allow a grant program for the remaining down payment. Companies such as Ameridream and the Nehimaih program assist with the 2.25% down payment and the seller can also contribute to the buyers closing costs. The 2.25% and closings costs can also be from gift money.
USDA will do 100% financing in Flagler county and west of I-95 in Volusia county.
These loans are document intensive and will take up to 45 days to close. But in the right situation this is great option, but there is limited funds available. Once they use the allotted money the program disappears until next year.
These programs have different borrower qualifications, they must be able to prove their income, no stated loans with these programs.
Many programs change with out notice, so call your lender our broker to make sure they are available at the signing of your contracts.
By: Joe Phillips
America's Mortgage Resource
386-615-7977
Monday, June 30, 2008
Wednesday, June 25, 2008
Property Appraisers Brace for Outcry over Assesments
By JAMES MILLER Staff Writer
It's only 3 percent, but it's 3 percent that's likely to come as an unwelcome surprise to tens of thousands of Volusia and Flagler counties' homeowners.
When property owners in the two-county area open proposed tax notices in August, an estimated 102,440 of those who benefit from Save Our Homes will get notice that, while their home's market values decreased, it's assessed value went up.
Called "recapture," the phenomenon is the product of a state Department of Revenue rule adopted after voters passed the Save Our Homes cap on annual homestead assessment increases in 1992.
What it means for a tax bill depends on property tax rates.
But, while it affected some homeowners last year, it is expected to affect a much larger number this year, with property appraisers' assessments reflecting decreased values as of Jan. 1.
And appraisers are bracing themselves to hear all about it.
"People don't like it," said Flagler County Property Appraiser Jay Gardner.
He said he had arranged to have photocopies of the rule requiring him to raise assessed values handy in his office to show people that he doesn't have any say in the matter.
"They come in here and say, 'Show me where you're allowed to do this,' " he said. "People don't understand it and don't think it's fair. I'm not judging whether it's fair or not."
Gov. Lawton Chiles and his Cabinet signed off on the rule in 1995.
Basically, it says that Save Our Homes operates in the same way whether values are going up or down.
Save Our Homes caps annual increases in assessed value for properties claimed as primary residences by their owners at 3 percent or the percentage change in the consumer price index, whichever is lower. With the recapture rule, the assessed value will go up by a maximum of 3 percent, even if a property's market value goes down -- until the assessed and market values are the same.
New homesteaders who haven't accumlated any savings under Save Our Homes won't be affected by the provision.
Lee County Property Appraiser Ken Wilkinson, who created Save Our Homes, said its proponents didn't want the rule.
"The concept of recapture never entered anybody's mind in the whole process," he said. "We tried to get them (the governor and Cabinet) to throw out the rule. We lost."
Wilkinson said he expects about 96,000 Lee County homestead-property owners will see assessment increases despite value decreases this year.
Based on first-blush assessment data, Gardner anticipates about 18,860 Flagler County homesteaders will have the same experience. Volusia County Property Appraiser Morgan Gilreath put that county's number at roughly 83,580.
The tax roll value of the 3 percent increase could exceed $400 million in the two counties.
A bill eliminating the provision failed to get through the Legislature this spring.
"People can start contacting their legislators for the 2009 session now, because this recapture creature will raise its ugly head again next year and it is ugly," Gilreath said.
But there is another side to the argument.
Some see it as a balancing out of the benefits that accrued to homestead-property owners as values soared during the early part of the decade.
Combined with tax rates, Save Our Homes has been blamed for shifting a disproportionate share of the property-tax burden to nonhomestead properties like businesses and second homes.
"It doesn't seem unfair to me," said Port Orange homeowner Harry Miller, a retiree from northern Ohio who has benefited from Save Our Homes since 2002.
Miller said he learned of the rule by doing online research after reading a newspaper story about declining values. He conceded his view might not be in the majority.
"Maybe not," he said. "Many people probably want to have the best of both worlds."
From The Daytona Beach News Journal
It's only 3 percent, but it's 3 percent that's likely to come as an unwelcome surprise to tens of thousands of Volusia and Flagler counties' homeowners.
When property owners in the two-county area open proposed tax notices in August, an estimated 102,440 of those who benefit from Save Our Homes will get notice that, while their home's market values decreased, it's assessed value went up.
Called "recapture," the phenomenon is the product of a state Department of Revenue rule adopted after voters passed the Save Our Homes cap on annual homestead assessment increases in 1992.
What it means for a tax bill depends on property tax rates.
But, while it affected some homeowners last year, it is expected to affect a much larger number this year, with property appraisers' assessments reflecting decreased values as of Jan. 1.
And appraisers are bracing themselves to hear all about it.
"People don't like it," said Flagler County Property Appraiser Jay Gardner.
He said he had arranged to have photocopies of the rule requiring him to raise assessed values handy in his office to show people that he doesn't have any say in the matter.
"They come in here and say, 'Show me where you're allowed to do this,' " he said. "People don't understand it and don't think it's fair. I'm not judging whether it's fair or not."
Gov. Lawton Chiles and his Cabinet signed off on the rule in 1995.
Basically, it says that Save Our Homes operates in the same way whether values are going up or down.
Save Our Homes caps annual increases in assessed value for properties claimed as primary residences by their owners at 3 percent or the percentage change in the consumer price index, whichever is lower. With the recapture rule, the assessed value will go up by a maximum of 3 percent, even if a property's market value goes down -- until the assessed and market values are the same.
New homesteaders who haven't accumlated any savings under Save Our Homes won't be affected by the provision.
Lee County Property Appraiser Ken Wilkinson, who created Save Our Homes, said its proponents didn't want the rule.
"The concept of recapture never entered anybody's mind in the whole process," he said. "We tried to get them (the governor and Cabinet) to throw out the rule. We lost."
Wilkinson said he expects about 96,000 Lee County homestead-property owners will see assessment increases despite value decreases this year.
Based on first-blush assessment data, Gardner anticipates about 18,860 Flagler County homesteaders will have the same experience. Volusia County Property Appraiser Morgan Gilreath put that county's number at roughly 83,580.
The tax roll value of the 3 percent increase could exceed $400 million in the two counties.
A bill eliminating the provision failed to get through the Legislature this spring.
"People can start contacting their legislators for the 2009 session now, because this recapture creature will raise its ugly head again next year and it is ugly," Gilreath said.
But there is another side to the argument.
Some see it as a balancing out of the benefits that accrued to homestead-property owners as values soared during the early part of the decade.
Combined with tax rates, Save Our Homes has been blamed for shifting a disproportionate share of the property-tax burden to nonhomestead properties like businesses and second homes.
"It doesn't seem unfair to me," said Port Orange homeowner Harry Miller, a retiree from northern Ohio who has benefited from Save Our Homes since 2002.
Miller said he learned of the rule by doing online research after reading a newspaper story about declining values. He conceded his view might not be in the majority.
"Maybe not," he said. "Many people probably want to have the best of both worlds."
From The Daytona Beach News Journal
Friday, June 20, 2008
Property Flipping Rule Suspended
The Bush administration suspended an old rule that was meant to deter property flipping, this is meant to help eliminate the glut of vacant foreclosed properties.
This rule has only been suspended for the next twelve months with the possibility of a 12 month extension. The new administration will be left to sort things out next year.
The Federal Housing Administration (FHA) will no longer impose a 90 waiting period before foreclosed properties can be sold to receive government-backed loans.
A glut of foreclosed and abandoned homes harms neighborhoods, frustrates home buyers and delays a community's recovery," FHA commissioner Brian Montgomery said in a prepared statement.
Nationwide, 261,255 homes received at least one foreclosure-related filing in May, up 48% from the same month last year, and up 7% from April, foreclosure listing company RealtyTrac Inc. said Friday.
This rule has only been suspended for the next twelve months with the possibility of a 12 month extension. The new administration will be left to sort things out next year.
The Federal Housing Administration (FHA) will no longer impose a 90 waiting period before foreclosed properties can be sold to receive government-backed loans.
A glut of foreclosed and abandoned homes harms neighborhoods, frustrates home buyers and delays a community's recovery," FHA commissioner Brian Montgomery said in a prepared statement.
Nationwide, 261,255 homes received at least one foreclosure-related filing in May, up 48% from the same month last year, and up 7% from April, foreclosure listing company RealtyTrac Inc. said Friday.
Thursday, June 19, 2008
Holding Property in LLC will be Harder
Many Realtors in the area work with investors who place properties in LLCs. This is going to be a big problem come Aug. 1st, 2008.
Freddie Mac, one of the two largest underwriters of conforming loans, have changed their rules to state that they will no longer refinance a property that has been inside of a Limited Liability Company (LLC) for any time within the past 6 months.
A press release from Freddie Mac in part stated;
"We are revising our requirements for Investment Property Mortgages to reduce the number of financed properties in which a Borrower who owns more than one financed Investment Property may have an individual or joint ownership interest (including the subject property) from 10 to 4. Also, effective for Mortgages with Freddie Mac Settlement Dates on or after August 1, 2008, the Borrower on a cash-out refinance Mortgage must have owned the subject property for at least six months prior to the Note Date of the new refinance Mortgage."
The last statement is the key -- transferring title into your name before applying for a cash-out refinance will be considered a change in ownership and the 6-month trigger will apply. This change won't affect most homeowners, but it has caused a major ripple in the investor community, as has the reduction of properties an investor can own and still get Freddie Mac refinancing.
Fannie Mae is considering this change but has yet to implement. Now is a great time to go to all of your investors that may be considering refinancing in the future and have them lock in prior to Aug.1st with Freddie or get moving before Fannie changes.
Joe Phillips
Freddie Mac, one of the two largest underwriters of conforming loans, have changed their rules to state that they will no longer refinance a property that has been inside of a Limited Liability Company (LLC) for any time within the past 6 months.
A press release from Freddie Mac in part stated;
"We are revising our requirements for Investment Property Mortgages to reduce the number of financed properties in which a Borrower who owns more than one financed Investment Property may have an individual or joint ownership interest (including the subject property) from 10 to 4. Also, effective for Mortgages with Freddie Mac Settlement Dates on or after August 1, 2008, the Borrower on a cash-out refinance Mortgage must have owned the subject property for at least six months prior to the Note Date of the new refinance Mortgage."
The last statement is the key -- transferring title into your name before applying for a cash-out refinance will be considered a change in ownership and the 6-month trigger will apply. This change won't affect most homeowners, but it has caused a major ripple in the investor community, as has the reduction of properties an investor can own and still get Freddie Mac refinancing.
Fannie Mae is considering this change but has yet to implement. Now is a great time to go to all of your investors that may be considering refinancing in the future and have them lock in prior to Aug.1st with Freddie or get moving before Fannie changes.
Joe Phillips
Tuesday, June 17, 2008
New Homes: A Silver Lining in Today's Housing Market
by Dena Kouremetis
While it seems no one has a crystal ball about the housing market, you'd assume it's a bad time to build that dream home – at least until the market comes into some kind of balance.
But the truth is, it may never be a better time to build. The silver lining in all this is that land prices have been and continue to go down, materials prices are competitive and there are a lot of contractors out of work, willing to resort to bargain basement prices for their services.
According to CNN Money, framing lumber is now 18 percent cheaper than it was a year and a half ago, while drywall is selling for 40 percent less. Even land prices are 20 percent lower in some areas due to developers having acquired too much land before the bubble hit.
Thanks to a 34 percent decline in new home starts, you won't have to get on most builders' waiting lists, either.
According northern California-based Kensington Homes' custom homebuilder Jeremy Bernau, just a few years ago when the real estate frenzy was in full bloom, the cost of materials, land and labor was skyrocketing.
Because contractors and trades were so busy, they could charge pretty much anything they wanted for their services. Of course, all that has now changed and a lot of the costs now are reminiscent of ten years ago.
To top it off, many cities and towns are making it easier to cut through the red tape when building a home these days. Building permit and impact fees are adjusting downwards in some areas as a response to changes in the market.
Of course, building a new custom home isn't something to enter into lightly. Building on speculation or to "flip" a property for a profit may not be a safe bet right now.
But if you've been hanging on to land for just the right time to build your dream home to stay in for the long term, it just may be time to dust off those blueprints and get busy getting some bids.
Published: June 17, 2008
http://realtytimes.com/rtpages/20080617_newhomes.htm
While it seems no one has a crystal ball about the housing market, you'd assume it's a bad time to build that dream home – at least until the market comes into some kind of balance.
But the truth is, it may never be a better time to build. The silver lining in all this is that land prices have been and continue to go down, materials prices are competitive and there are a lot of contractors out of work, willing to resort to bargain basement prices for their services.
According to CNN Money, framing lumber is now 18 percent cheaper than it was a year and a half ago, while drywall is selling for 40 percent less. Even land prices are 20 percent lower in some areas due to developers having acquired too much land before the bubble hit.
Thanks to a 34 percent decline in new home starts, you won't have to get on most builders' waiting lists, either.
According northern California-based Kensington Homes' custom homebuilder Jeremy Bernau, just a few years ago when the real estate frenzy was in full bloom, the cost of materials, land and labor was skyrocketing.
Because contractors and trades were so busy, they could charge pretty much anything they wanted for their services. Of course, all that has now changed and a lot of the costs now are reminiscent of ten years ago.
To top it off, many cities and towns are making it easier to cut through the red tape when building a home these days. Building permit and impact fees are adjusting downwards in some areas as a response to changes in the market.
Of course, building a new custom home isn't something to enter into lightly. Building on speculation or to "flip" a property for a profit may not be a safe bet right now.
But if you've been hanging on to land for just the right time to build your dream home to stay in for the long term, it just may be time to dust off those blueprints and get busy getting some bids.
Published: June 17, 2008
http://realtytimes.com/rtpages/20080617_newhomes.htm
Monday, June 16, 2008
Downpayment Gift Money
This could spell trouble for many who qualify for FHA loans who need the 2.25% downpayment assistance.
Washington Report: Downpayment Gift
by Kenneth R. Harney
It's an issue that's been festering for years, and last week it blew up again: The Bush administration relaunched its campaign to ban “downpayment gift” programs where home sellers make contributions to nonprofit groups that then funnel most of the money to purchasers.
At a National Press Club luncheon, FHA commissioner Brian Montgomery said such programs - which effectively cut downpayments to zero and may artificially inflate sales prices - rack up three times the number of foreclosures and insurance claim losses compared with loans where buyers come up with their own downpayments.
Montgomery noted that “no private mortgage insurance companies back these loans,” and the FHA insurance funds no longer can tolerate their high foreclosure rates. One of every three FHA loans in recent years has carried some form of downpayment gift, often facilitated by large, politically influential nonprofit corporations.
The heads of the two largest downpayment gift providers -- AmeriDream Inc. and Nehemiah Corp. of America -- immediately denounced the proposed ban. Ann Ashburn, president of AmeriDream, which has arranged more than 250,000 gift-assisted loans, said “over 100,000” buyers would be kept out of home ownership in the coming months if HUD gets its way.
Scott Syphax, president and CEO of Nehemiah, said “HUD has the temerity” to relaunch its efforts to ban downpayment gifts despite two federal decisions that blocked the agency's previous regulatory proposal -- issued last October. The court decisions primarily faulted HUD on federal administrative procedural grounds, rather than dealing with the substance of the regulation.
The Congressional Black Caucus, the National Urban League, and the Congressional Hispanic Caucus all have opposed the agency's earlier efforts.
Despite opposition in Congress, however, HUD argues that it has a statutory responsibility to safeguard the integrity of FHA's reserve funds, which it says are being depleted by insurance claims on seller gift-assisted loans that default and must be foreclosed.
Montgomery has warned Congress that the FHA insurance funds, which currently are solvent, will require direct appropriations next year if the losses from the downpayment assistance programs are not cut off.
With newly-authorized loan limits in high cost areas that go as high as $729,750, giant gift-asissted mortgages with effectively no cash investments up front by purchasers are “an unacceptable risk” for the agency, he said.
Where's this all headed? Probably to court again to challenge HUD's proposed regulatory move, and almost certainly back to Congress, which currently is working on an FHA Modernization bill as part of a large housing relief package.
We'll keep you posted as new developments occur.
From: The Realty Times
http://realtytimes.com/rtpages/20080616_washingtonreport.htm
Washington Report: Downpayment Gift
by Kenneth R. Harney
It's an issue that's been festering for years, and last week it blew up again: The Bush administration relaunched its campaign to ban “downpayment gift” programs where home sellers make contributions to nonprofit groups that then funnel most of the money to purchasers.
At a National Press Club luncheon, FHA commissioner Brian Montgomery said such programs - which effectively cut downpayments to zero and may artificially inflate sales prices - rack up three times the number of foreclosures and insurance claim losses compared with loans where buyers come up with their own downpayments.
Montgomery noted that “no private mortgage insurance companies back these loans,” and the FHA insurance funds no longer can tolerate their high foreclosure rates. One of every three FHA loans in recent years has carried some form of downpayment gift, often facilitated by large, politically influential nonprofit corporations.
The heads of the two largest downpayment gift providers -- AmeriDream Inc. and Nehemiah Corp. of America -- immediately denounced the proposed ban. Ann Ashburn, president of AmeriDream, which has arranged more than 250,000 gift-assisted loans, said “over 100,000” buyers would be kept out of home ownership in the coming months if HUD gets its way.
Scott Syphax, president and CEO of Nehemiah, said “HUD has the temerity” to relaunch its efforts to ban downpayment gifts despite two federal decisions that blocked the agency's previous regulatory proposal -- issued last October. The court decisions primarily faulted HUD on federal administrative procedural grounds, rather than dealing with the substance of the regulation.
The Congressional Black Caucus, the National Urban League, and the Congressional Hispanic Caucus all have opposed the agency's earlier efforts.
Despite opposition in Congress, however, HUD argues that it has a statutory responsibility to safeguard the integrity of FHA's reserve funds, which it says are being depleted by insurance claims on seller gift-assisted loans that default and must be foreclosed.
Montgomery has warned Congress that the FHA insurance funds, which currently are solvent, will require direct appropriations next year if the losses from the downpayment assistance programs are not cut off.
With newly-authorized loan limits in high cost areas that go as high as $729,750, giant gift-asissted mortgages with effectively no cash investments up front by purchasers are “an unacceptable risk” for the agency, he said.
Where's this all headed? Probably to court again to challenge HUD's proposed regulatory move, and almost certainly back to Congress, which currently is working on an FHA Modernization bill as part of a large housing relief package.
We'll keep you posted as new developments occur.
From: The Realty Times
http://realtytimes.com/rtpages/20080616_washingtonreport.htm
Friday, June 13, 2008
Mortgage rates at 8-month high
Freddie Mac says 30-year fixed rates rise to 6.32% as Federal Reserve officials express concern over inflation.
NEW YORK (CNNMoney.com) -- Rates on 30-year fixed mortgages have surged nearly a quarter percentage point to an 8-month high on growing concerns about inflation, mortgage backer Freddie Mac said Thursday.
Freddie Mac (FRE, Fortune 500) said 30-year fixed-rate mortgages averaged 6.32% with an average of 0.7 point in the week ending Thursday, up from 6.09% last week. Last year at this time, the 30-year loan averaged 6.74%.
The last time the 30-year fixed rate mortgage was higher was the week ended Oct. 25, when it averaged 6.33%.
"Mortgage rates jumped this week after a number of Federal Reserve officials, most notably Chairman (Ben) Bernanke and Vice Chair (Donald) Kohn, expressed concern over a threat of inflation," said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement.
"This led some market participants to believe that the Fed will raise rates more aggressively over the year than previously thought," Nothaft added.
The 15-year fixed-rate mortgage this week averaged 5.93% with an average 0.6 point, up from last week when it averaged 5.65%. A year ago at this time, the 15-year fixed rate mortgage averaged 6.43%.
The last time the 15-year fixed-rate mortgage was higher was the week ended Oct. 25, when it averaged 5.99%.
"Inflation concerns are still continuing, so that would suggest some upward pressure on interest rates," said Keith Gumbinger, Vice President of HSHAssociates.com, an online publisher of consumer loan information.
Five-year adjustable-rate mortgages (ARMs) averaged 5.70% this week, with an average 0.7 point, up from last week when it averaged 5.51%. A year ago, the 5-year ARM averaged 6.37%.
One-year ARMs averaged 5.09% this week with an average 0.6 point, up from last week when it was 5.06%. At this time last year, the 1-year ARM averaged 5.75%.
Other news in the housing market has been more mixed. The number of homes under contract to be sold rose 6.3% in April, according to National Association of Realtors, showing that buyers were out shopping for bargains.
As interest rates move higher, buyers leave the market, and the lack of demand pushes home prices lower, according to Gumbinger. "The higher interest rates put renewed pressure on home prices," he said.
Single-family home prices dropped 7.7% in the first quarter, according to the National Association of Realtors. The year-over-year drop was the largest decline since the association began reporting on home prices in 1982.
"Serious delinquencies (loans overdue 90 days or more or in foreclosure) for both prime and subprime conventional mortgages nearly doubled between first quarter of 2007 and 2008, according to the Mortgage Bankers Association," added Nothaft.
First Published: June 12, 2008: 10:49 AM EDT
NEW YORK (CNNMoney.com) -- Rates on 30-year fixed mortgages have surged nearly a quarter percentage point to an 8-month high on growing concerns about inflation, mortgage backer Freddie Mac said Thursday.
Freddie Mac (FRE, Fortune 500) said 30-year fixed-rate mortgages averaged 6.32% with an average of 0.7 point in the week ending Thursday, up from 6.09% last week. Last year at this time, the 30-year loan averaged 6.74%.
The last time the 30-year fixed rate mortgage was higher was the week ended Oct. 25, when it averaged 6.33%.
"Mortgage rates jumped this week after a number of Federal Reserve officials, most notably Chairman (Ben) Bernanke and Vice Chair (Donald) Kohn, expressed concern over a threat of inflation," said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement.
"This led some market participants to believe that the Fed will raise rates more aggressively over the year than previously thought," Nothaft added.
The 15-year fixed-rate mortgage this week averaged 5.93% with an average 0.6 point, up from last week when it averaged 5.65%. A year ago at this time, the 15-year fixed rate mortgage averaged 6.43%.
The last time the 15-year fixed-rate mortgage was higher was the week ended Oct. 25, when it averaged 5.99%.
"Inflation concerns are still continuing, so that would suggest some upward pressure on interest rates," said Keith Gumbinger, Vice President of HSHAssociates.com, an online publisher of consumer loan information.
Five-year adjustable-rate mortgages (ARMs) averaged 5.70% this week, with an average 0.7 point, up from last week when it averaged 5.51%. A year ago, the 5-year ARM averaged 6.37%.
One-year ARMs averaged 5.09% this week with an average 0.6 point, up from last week when it was 5.06%. At this time last year, the 1-year ARM averaged 5.75%.
Other news in the housing market has been more mixed. The number of homes under contract to be sold rose 6.3% in April, according to National Association of Realtors, showing that buyers were out shopping for bargains.
As interest rates move higher, buyers leave the market, and the lack of demand pushes home prices lower, according to Gumbinger. "The higher interest rates put renewed pressure on home prices," he said.
Single-family home prices dropped 7.7% in the first quarter, according to the National Association of Realtors. The year-over-year drop was the largest decline since the association began reporting on home prices in 1982.
"Serious delinquencies (loans overdue 90 days or more or in foreclosure) for both prime and subprime conventional mortgages nearly doubled between first quarter of 2007 and 2008, according to the Mortgage Bankers Association," added Nothaft.
First Published: June 12, 2008: 10:49 AM EDT
Tuesday, June 10, 2008
Self Employed Clients
There are many new loan programs available for your clients in this market, but on the flip side there are many programs that no longer exist. The biggest cut back is on stated income or no income verifiers. These loans are mainly used by self employed individuals who have great income but can not prove it due to good accountanting work. As we know they traditionally write much of their income off of their taxes, so their provable income shows much less then they actually make. This now causes problems qualifying for mortgages and home equity loans. Lenders have become less willing to offer those who can not prove their income mortgages, and when they do the loans are cut back to lessen the lenders risk.
I have listed some of the of the Fannie Mae guidelines relating to non income loans.
The maximum loan to value is 80% on one loan on a primary residence. The reason for this is mortgage insurance companies are not offering MI on stated loans at all. The answer to this problem is to have your client take a line of credit from his bank for the remaining loan to value, or you can have the seller take back a second in the same amount.
example
$220,000 purchase price, borrower is putting down 10% or $22000. The max amount for this stated income loan is 80% or $176,000. That leaves us $22000 short on this transaction. We can have the seller hold a $22000 second for 12 to 24 months or get a line of credit.
Stated income loans are almost if not totally impossible to get on investment properties.
Please understand that lenders change their guideline everyday and what isn't available today may be available tomorrow. It is always in your clients best interest to speak with a mortgage professional to see what they can qualify for.
I have listed some of the of the Fannie Mae guidelines relating to non income loans.
The maximum loan to value is 80% on one loan on a primary residence. The reason for this is mortgage insurance companies are not offering MI on stated loans at all. The answer to this problem is to have your client take a line of credit from his bank for the remaining loan to value, or you can have the seller take back a second in the same amount.
example
$220,000 purchase price, borrower is putting down 10% or $22000. The max amount for this stated income loan is 80% or $176,000. That leaves us $22000 short on this transaction. We can have the seller hold a $22000 second for 12 to 24 months or get a line of credit.
Stated income loans are almost if not totally impossible to get on investment properties.
Please understand that lenders change their guideline everyday and what isn't available today may be available tomorrow. It is always in your clients best interest to speak with a mortgage professional to see what they can qualify for.
Monday, June 9, 2008
Pending Home Sales Jump 6.3% in April
Index of homes under contract rises to the highest level since October, but is 13% lower than last year, Realtor group says.
The number of homes under contract to be sold rose unexpectedly in April as buyers go bargain hunting, according to a report released Monday.
Pending Home Sales Index from the National Association of Realtors (NAR) rose to 88.2 in April, up 6.3% from March's reading of 83 and the highest level since October. The increase defied the consensus estimate of economists polled by Briefing.com, who had expected pending sales to fall by 1%.
This is a great signal for those reluctant buyers to come back into the market.
We all know that the media creates a lot of the momentum in our industry and I see this as a huge positive for all of us.
Time to start making the donuts again. Go get yourself a piece of the pie.
The number of homes under contract to be sold rose unexpectedly in April as buyers go bargain hunting, according to a report released Monday.
Pending Home Sales Index from the National Association of Realtors (NAR) rose to 88.2 in April, up 6.3% from March's reading of 83 and the highest level since October. The increase defied the consensus estimate of economists polled by Briefing.com, who had expected pending sales to fall by 1%.
This is a great signal for those reluctant buyers to come back into the market.
We all know that the media creates a lot of the momentum in our industry and I see this as a huge positive for all of us.
Time to start making the donuts again. Go get yourself a piece of the pie.
Wednesday, June 4, 2008
The Market is Turning
April Home sales have come out for the Daytona Beach area. There was a small 27 sale decrease from last year. The market is turning and buyers are starting to feel as if the bottom is here. Values are down and rates are still at almost all time lows, which is a great situation for new buyers coming into the market.
Below are the April numbers,
........April 2008 ..........April 2007 ........% change
SFR...... .556..................... 602 .....................-8%
condos... 121..................... 102..................... 19%
Total..... 677...................... 704.................. -3.9%
Below are the April numbers,
........April 2008 ..........April 2007 ........% change
SFR...... .556..................... 602 .....................-8%
condos... 121..................... 102..................... 19%
Total..... 677...................... 704.................. -3.9%
How to Make a Short Sale
Arizona broker Bob Stephens of West USA Realty has some suggestions:
Disclose, disclose, disclose.
Stephens says the fact that a seller is short must be disclosed to the buyer. If both agents want the transaction to go smoothly, it's wise to get the seller's lender on board before the purchase contract is written.
One way to do that is for the title company or attorney that will be handling the transaction to communicate with the loss mitigation department of the seller's lender to start the process with a "buyer to come" notification.
To get the ball rolling, the seller must give permission to the bank to communicate with the listing and selling brokers.
Document, document, document.
The seller must prove hardship and document why he or she cannot pay what's owed to the lender including W-2s, bank statements, hardship letter, and other proof of inability to pay.
The seller must realize by reading and signing the short sale addendum to the sales contract that the short sale doesn't absolve them of all responsibility for the debt. Short sales may affect their credit scores, and some lenders may not forgive the entire debt, requiring the seller to pay the difference as a personal debt. FHA or VA loans may also require repayment in full. There may also be tax consequences -- the IRS requires a 1099 from the forgiving bank so the amount will be on record and must be declared by the seller at tax time.
Try, try, try.
In short sales, the seller nets zero, because all the proceeds go the seller's bank. Their incentive is to get out from under increasing debt.
Lenders don't want to become homeowners, and if they can avoid foreclosure, they might mitigate their losses. However, the short sale won't happen unless the lender releases the lien and the buyer can have clear title in order to place a new lien on the house. Therefore, all liens must be found and paid, including HOA fees, second liens, equity lines of credit, and so forth, so no other lien holder can come in and spoil the deal.
Says Stephens, "There are misconceptions that the sellers lender seems to be the only one that has any power. Yes, of course they have some but then so does the buyer's lender. The buyers lender makes loans as a business to make money. The sellers lender wants to make the deal so they don’t have the great expense of foreclosure. Too many foreclosures and they will have a real problem getting their loans insured."
That's why short sales could be the short cut to getting many markets back on track.
Disclose, disclose, disclose.
Stephens says the fact that a seller is short must be disclosed to the buyer. If both agents want the transaction to go smoothly, it's wise to get the seller's lender on board before the purchase contract is written.
One way to do that is for the title company or attorney that will be handling the transaction to communicate with the loss mitigation department of the seller's lender to start the process with a "buyer to come" notification.
To get the ball rolling, the seller must give permission to the bank to communicate with the listing and selling brokers.
Document, document, document.
The seller must prove hardship and document why he or she cannot pay what's owed to the lender including W-2s, bank statements, hardship letter, and other proof of inability to pay.
The seller must realize by reading and signing the short sale addendum to the sales contract that the short sale doesn't absolve them of all responsibility for the debt. Short sales may affect their credit scores, and some lenders may not forgive the entire debt, requiring the seller to pay the difference as a personal debt. FHA or VA loans may also require repayment in full. There may also be tax consequences -- the IRS requires a 1099 from the forgiving bank so the amount will be on record and must be declared by the seller at tax time.
Try, try, try.
In short sales, the seller nets zero, because all the proceeds go the seller's bank. Their incentive is to get out from under increasing debt.
Lenders don't want to become homeowners, and if they can avoid foreclosure, they might mitigate their losses. However, the short sale won't happen unless the lender releases the lien and the buyer can have clear title in order to place a new lien on the house. Therefore, all liens must be found and paid, including HOA fees, second liens, equity lines of credit, and so forth, so no other lien holder can come in and spoil the deal.
Says Stephens, "There are misconceptions that the sellers lender seems to be the only one that has any power. Yes, of course they have some but then so does the buyer's lender. The buyers lender makes loans as a business to make money. The sellers lender wants to make the deal so they don’t have the great expense of foreclosure. Too many foreclosures and they will have a real problem getting their loans insured."
That's why short sales could be the short cut to getting many markets back on track.
Monday, June 2, 2008
How to Get More From Your Prospecting
Real estate professionals need to break out of the Prospecting-Closing-Prospecting cycle — which involves aggressively prospecting until enough deals are in the pipeline, focusing on these transactions until they close, and then returning to heavy prospecting. The cycle can be broken with technique, touch, and time, says veteran real estate marketing and management expert Joe Cooke. As far as technique, he says it is necessary for practitioners to implement data management systems that are easy to use, can be moved from one brokerage to another, and have the ability to send mass e-mails without triggering spam blockers. As for touch, he underscores the importance of categorizing prospects and following up accordingly. The prospects who require the most frequent attention are those who make regular purchases or continually make referrals. Practitioners should then concentrate on qualified prospects who need a little more time before making a move, sending them market updates, newsletters, and other information on a regular basis. Finally, they should devote the least amount of time to prospects with limited interest in their services, offering quarterly market updates and mass mailings only. With regard to time, Cooke says agents must make prospecting a high priority every day in order to create a steady — and likely increasing — stream of income.
Source: RISMedia, Joe Cooke (05/29/08)
Source: RISMedia, Joe Cooke (05/29/08)
Subscribe to:
Posts (Atom)
