What is a Short Sale & Some Things You Should Know

What is a Short Sale & Some Things You Should Know

What is a Short Sale?

A short sale is a transaction where the net proceeds from the sale of a property are not enough to cover the sellers mortgage obligation and closing costs, such as property taxes, transfer taxes, and real estate commissions.

ONLY Real Hardships Get the HELP!

Purchasing or refinancing your house during the housing boom is not a legitimate hardship. Banks actually review and analyze short sale sellers hardships and most center of the economy. In short the banks are going to verify the short sale is in their best interest, not the sellers. What are acceptable hardships? medical issues, divorce, disability, significant loss of income, death, unemployment, and relocation.

Laws Are Local(State)

Foreclosure laws vary from state to state and it is important to remember there are currently no short sale laws on the books. Federal guidelines are in place, however the bank does not have to do anything they do not want too. If you decide to move forward in selling your home as a short sale there are a few things to keep in mind.

1) If the bank approves the short sale will there be a deficiency amount owed for the difference between your mortgage amount and sales price, minus fees?

2) Will the bank accept a “Deed in Lieu of Foreclosure”? With a deed in lieu of foreclosure, the property owner gives the property to the lender voluntarily in exchange for the lender canceling the loan. The lender may or may not agree to forgive any deficiency balance that results from the sale of the property.

3) Potential Tax liabilities- Under federal law, a creditor is required to file a 1099C whenever it forgives a loan balance greater than $600.00 which could create a tax liability  for you. However the Mortgage Forgiveness Debt Relief Act of 2007 provides tax relief for some loans forgiven in 2007 through 2012.

Lastly, please seek the advice and consult with an attorney, and possibly accountant, experienced in bankruptcy law to understand all of your options.

“Until Next Time”

Delays in Foreclosures Reach New Records!

Delays in Foreclosures Reach New Records! Home owners are living in their homes, mortgage & rent free, on average for 20 months or 599 days which is a new record according to data collected by Lender Processing Services, LLP.

There are approximately 1.9 million homes loans that are 90 or more days late, but not yet in foreclosure and 42% of those home owners have not made a payment in more than one year, with average delinquency of 397 days.

Why so long? Well there are judicial states and non-judicial states and the time frame to complete the foreclosure process varies greatly. Florida is non-judicial state and could possible clear inventories within 32 months, compared to a judicial state, like Las Vegas, that would require up to 111months. OUCH!! Yes that is correct, 111 MONTHS to work through inventories that are more than 90 days late.

In my opinion we will be working through these issue for many years to come, maybe upwards of 5-10 years and who really knows. I do know if we do not start creating jobs and help small business owners, it will take even longer because there are not enough qualified people to purchase new or existing homes.

“Until Next Time”

USDA Still has NO Downpayment Loans

USDA still has No Down Payment loans.

U.S. department of agriculture has 11.2 Billion, yes billion, earmarked for mortgage loans thanks to funding from federal programs. Called a Section 502 loan, the loan is one of the few zero down products available in the mortgage market.

In years past money would run out during the summer and buyers would have to wait for more money to be available. Most low to middle income Florida residents can qualify for the USDA Loan if they live in rural, small town cities.

The program will change slightly after Oct. 1, when buyers will be required to pay a 0.3 percent premium for mortgage insurance monthly; however, the cost of upfront mortgage insurance will be reduced to 2 percent from its current 3.5 percent.

For more information, visit the USDA’s website or Call/Text me to find a local lender to answer all of your questions.

“Until Next Time”

John Wayne “DUKE” Rountree

 

 

 

What Happens After Foreclosure? How Long Before You Can Qualify For Mortgage?

Can You Say Tricky Question?

With so many people struggling to find work and therefore, keeping their mortgages current. Foreclosure and Short Sales are at an all time high for our country. The question posed above is not really tricky, but has many variables. The New York Times notes that a past foreclosure will result in the longest wait before you can buy again. Fannie Mae and Freddie Mac properties have a 3 year waiting period after filing foreclosure and 2 year waiting period following a short sale, deed in lieu of foreclosure & discharge or dismissal of bankruptcy. However, there may be certain circumstances, job loss or transfer from job, that may reduce the wait period to qualify for mortgage.

FHA loans also have 3 year waiting period for foreclosure / short sale and 2 years for bankruptcy as well, but note there are plenty of exceptions. Based on New York Time article and example would be, if a borrower was current on payments for year prior to short sale there may be not waiting period and might even qualify for FHA loan immediately.

In conclusion, none of these rules are steadfast or set in stone. With such a large number of people struggling and facing loss of their homes(at the time of this post there are over approximately 1,000,000 properties foreclosed or in the process), poor credit ratings and lack of jobs, lenders will need to take into account circumstances that may have lead to default. I firmly believe these standards will change in years to come. Fannie Mae spokesman says, ” The key is to avoid foreclosure”  and “That is what will help you be eligible for the shorter period.”

“Until Next Time”

 

 

Source: “The Post-Foreclosure Wait,” The New York Times (June 23, 2011)

Freddie Mac Summer Special Deal

GREAT NEWS for Buyers and Sellers!

Freddie Mac is offering a “SUMMER SALES PROMOTION.” Upon qualified closing, HomeSteps will pay up to 3.5% of the purchase price of your home to cover certain closing costs. For instance, if your purchase price is $125,000, and your closing costs are $4,250, HomeSteps will only pay $4,250, an amount equal to 3.4% of your purchase price. Of course, not all homes or borrowers will qualify and the incentive is ONLY good to owner-occupants. You can visit, http://www.homesteps.com/smartbuy for all details.

BUT WAIT? There is more to this sweet deal!

Homesteps SmartBuy Program is also offering a 2 year HomeProtect Home Warranty and HomeProtect Appliance Discount The HomeProtect Home Warranty and HomeProtect Appliance Discount are available only to Participants who purchase and close on a qualifying HomeSteps home during the Program. The HomeProtect Home Warranty begins upon your qualifying home purchase closing date and continues for two years from that date. The HomeProtect Home Warranty has further restrictions and exceptions. Please see the HomeProtect® Home Warranty Terms and Conditions for all of the details. The HomeProtect Appliance Discount provides savings up to 30% savings on new appliances.

HOMES FOR SALE by Freddie Mac?

Where are they? In just about every location across the United States and Puerto Rico

How do you get more information? Contact your REALTOR® or better yet, if you do not have one, please contact ME! Or, you can visit, http://www.homesteps.com/featuresearch.html, and search any state, county or zip code for homes available in the program.

DON’T WAIT!

The offer is only good May 16, 2011 – July 31, 2011 with escrow closed on or before September 30, 2011. Now is a great time buy with low home prices, super low interest rates, and this new program could get you into a new/reseller home with little to no money down.

“Until Next Time.”