Now that negative equity sales are accounting for more than half of the transactions in many markets if you’re not involved in any short sales you might be getting left in the dust. Real Estate Agents, Mortgage Brokers, Short Sale Negotiators and Title Agents are all wrestling with the same beast - no matter how hard you work and how high your level of expertise, many short sale transactions will fall apart.
Lately, second mortgage holders have had no qualms about squashing deals over a few thousand dollars. Just when FNMA and Freddie Mac have announced they will protect Real Estate Agent commissions in short sale negotiations, second lien holders are insisting on higher pay-offs and suggesting it comes from commissions.
Here’s a quote from a recent conversation with a negotiator in Citi’s loss mitigation department: “Citi’s position is that real estate agents should not profit from short sales and should share in the losses”. Some lenders, including Bank of America and Citi, have suspended progress on many negotiations midstream until new authorization forms are signed on their letterhead. Countrywide has insisted on second lien pay-offs before making determinations, then closed files if it takes more than a few days to get attain them. Of course by now we are all getting accustomed to documents being lost or misplaced as part of standard operating procedure in loss mitigation departments.
As frustrating as all this sounds, nothing is more disappointing than working hard (very hard), for months and finally getting an offer accepted by the bank only to find the buyer, for whatever reason, is no longer interested in proceeding.
The reasons are many, but most could be avoided if the lenders could condense the timeline on the negotiating process. In many instances the buyer’s due diligence clock doesn’t start until the offer is accepted by the lender and the buyer can choose to walk with limited consequences. Now, everyone involved has run the gauntlet and the accepted offer is without a buyer! Real Estate Agents, Mortgage Brokers, Title Agents and Short Sale Negotiators are “all dressed up and nowhere to go”. The work has all been done and no one is getting paid! The distressed sellers and disappointed Agents need to find new buyers before the lenders acceptance of the offer expires, normally in 30-45 days.
Once again, time remains the # 1 obstacle to a smooth and successful short sale transaction. On the selling side it takes the form of the time spent negotiating with the lender and keeping the buyers engaged, all the while trying to keep the property from getting to the courthouse steps. From the buyer’s side of the market, there is a teeming interest in purchasing these deeply discounted properties but without waiting for 4-6 months to see if an offer will be accepted while other opportunities come and go.
Many real estate professionals are finding salvation in a brand new, free cooperative service at RealEstateRoadkillUSA.com. The website takes these “accepted offers in need of buyers” and presents them, not only as the best deals in the market, but ready to close immediately. Remember, once an offer is finally accepted the lender doesn’t care who the buyer is as long as the bottom line remains the same.
Although the service has only recently become available, real estate agents and buyers are flocking to the website like bees to honey (or vultures to carrion). These are the absolute hottest deals available and all the work has already been done to prepare them for closing. Wouldn’t you have to be crazy to buy any property without looking here first? Likewise, if the buyer is lost on an accepted offer it makes perfect sense to post it on RealEstateRoadkillUSA.com immediately. Currently the website is servicing limited areas but opportunities exist for enterprising real estate professionals poised to serve as “gatekeepers” in their market. Details are available in the “Join Our Network” section.
Like it or not, short sale transactions are going to represent a growing market for years to come. Lenders are being encouraged to exhaust all options before foreclosing and hopefully they will streamline and homogenize the process in the months to come. In the meantime we can only try to work smart and diligently to avoid “All Work and No Pay”.
First time home buyers in Virginia have two very unique opportunities awaiting them! Utilizing VHDA’s FHA/PLUS program, and The Economic Recovery Act’s First time buyer tax credit, it is possible to purchase a home in Virginia without spending one red cent and receive get $8,000 back from the US Government at tax time next year. Talk about synergy!
The tac credit is a true credit and is applied to the amount owed for taxes and then some! For more detail regarding this tax credit, email Phil for a free, no obligation copy of this informative report. philgoldberg1@gmail.com
Today’s real estate market has a lot of great values. Since there is such an abundance of inventory, sellers are doing everything possible to make sure their properties will sell including paying closing costs for buyers.
VHDA’s FHA/Plus program can go to 103% without the help of down-payment assistance (The True No Down payment Loan) while FHA is capped at 96.5% financing. Add to this a seller credit for the purchaser and it is possible to buy a home without spending one cent of your hard earned moneyto purchase a property
***Important*** Please keep in mind that not all lenders or loan officers are able to do VHDA loans. FYI, both Virginia Commerce Bank and I are certified to do VHDA loans. Feel free to contact Phil Goldberg at 703-912-9122 or email Phil at philgoldberg1@gmail.com with any questions you may have.
Did you know that eighty million Americans go pledge to lose weight each year and go on a diet and some sort of physical exercise program? In these economic times, the cost of joining a gym and may be out of the question. Good news is that ordinary items in the home can become workout tools.
1. The very best thing one can do for one's self is to get up and start moving. Stretch out for a few minutes before starting any workout.
2. Walking and jogging are fantastic cardio exercises that can be done almost anywhere.
3. The American Heart Association says that a twenty to thirty minutes walk three times a week will make you feel happier, calmer and more energetic. Be sure and increase your heart rate since an increased heart rate will burn more calories which will burn more fat.
4. Need weights? Check your pantry. A can of soup or canned vegetable weighs about two pounds. For more weight use larger cans or bottled water.
5. Short on time? Begin with squats, lunges, crunches and pushups. Use chairs, walls, and the floor as support devices.
6. Believe it or not, cleaning your house will burn approximately 200 calories
7. Working out with a friend is an excellent idea. You will keep each other motivated and since you will depend on each other, it is harder to quit.
8. Take your workout and turn it into family time. Incorporate activities for the entire family and watch the fitness levels rise.
Want to invest in "bargain" real estate. Check out www.realestateroadkill-northernvirgina.com The site lists approved short sales and can help you identify some super bargains in the market
Want To Purchase? FHA Requires Less Cash...
Fannie Mae has conducted national surveys regarding the obstacles potential homeowners have to overcome when trying to purchase their first home. The findings showed that there are many obstacles to home ownership ranging from credit to income, yet, there is no obstacle more important than finding the cash necessary to close.The cash necessary to close is comprised of these components:
A. Downpayment
B. Closing costs
C.
The current fiscal crisis has made it much tougher from a cash perspective. A few years ago, just about anyone could find a loan program that would enable one to purchase with no money down. Programs were available for those with poor credit and whose incomes could not be verified. Now, there are very few no downpayment programs available and most of the programs remaining service very specific segments of the population such as veterans and rural housing.
Most programs require at least a five percent downpayment and together with closing costs and required reserves, might result in the need for $15,000 or more on a $200,000 home purchase. Coming up with that much cash is a hardship for many Americans, especially with the economy contracting.
We are here to tell you that a longstanding governmental program is proving to be the answer for many Americans in 2009. The Department of Housing and Urban Development(HUD) houses an agency called the Federal Housing Administration which insures mortgages made by lenders.
Why is FHA so important? Let’s just look at the cash requirements:
1. Lower downpayment. The required downpayment on an FHA loan is 3.5%,instead of 5.0%. That is a savings of $1,500 on a $200,000 purchase price.
2. Alternatives to coming up with the downpayment.
3.
4. Grants from Governmental Agencies. FHA did tighten its requirements which had previously allowed the downpayment to come from nonprofits that collected the money from the seller. However, grants and loans for the down payment (and closing costs) are still allowed from government agencies.States and some localities have agencies that are authorized to raise money by selling non-taxable bonds under the Federal ond Subsidy Act. This money can be used to provide below interest loans to finance real estate outright or grants for cash to close.
5. Closing costs.
A. Seller Contributions. Especially in a buyers market such as we are experiencing presently, many sellers are willing to pay closing costs to entice a purchaser to buy their home. FHA again is more liberal than most programs in this regard. FHA allows the seller to pay up to 6.0% of the sales price towards closing costs. Many other programs cap this contribution at 3.0%.This means that the seller can typically cover all closing costs and might even provide a subsidy for a lower interest rate.
B. Lender rebates. Using a slightly higher interest rate, the lender can also sometimes use a “rebate” or “yield spread” to pay closing costs. This rebate is made possible because the higher rate brings a better price when the loan is sold on the secondary markets. FHA allows the lender to pay all closing costs in this way.
C. Reserves. Many loan programs require that the purchaser have up to two months payments in reserve after closing. FHA does not have such a requirement.
However, that does not mean that having money left is not a good idea. It is always a good idea to have cash available as a “cushion” after closing. How much cash can you save purchasing using the FHA program? On a $200,000 sales price, the requirement of $15,000 or more could be reduced to $7,000 or even less. That is a significant savings and coupled with available tax incentives could reduce your net cost to zero!...??
Phil Goldberg
Home Loan Specialist
Email: philgoldberg1@gmail.com
www.e-mortgageinfo.com
www.realestateroadkill-northernvirginia.com
Sunday, February 22, 2009
The effects of the bill just signed will have a positive benefit for homesellers, homebuyers, and especially first time home buyers here in the DC Metro area. Loan limits for conforming jumbo and FHA jumbo limits are now established at $729,750 for purchases, rate and term refinances, and cash out refinances. This allows for much lower interest rates up to $$729,750 and allows persons who have a VA entitlement to puchase to approximately $820,000 with no money down.
The new bill provides first time buyers with a credit equal ten per cent of the sales price credit (capped at $8,000)for all principal residense purchases. This credit will be refunded once the qualified person files their tax return. Income limits are $75,000 for an individual and $150,000 annually for joint return. The credit phases out above $95,000 for an individual and $170,000 for those filing jointly. The requirements are fairly simple. Neither the purchaser nor the purchasers spouse may have owned a home three years prior to purchase. The home purchased must be a primary residence.
The credit is only subject to recapture if the home is sold within three years. This a huge improvement over the July 2008.
Looking for a bargin in real estate? Checkout realestateroadkill-northernvirginia.com which has a lot of information regarding short sales. A list of preapproved short sales here in northern Virgina is a high point of site. Also Florida. Site is rolling out nationwide and plans to be nationwide by summer of 09.
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