Real Estate Information

We are in Nashville TN, and we are so excited to be attending an annual real estate convention that we always make sure to attend called Star Power.  Much of our success in real estate has been attributed to attending this annual conference and learning from some of the top agents across the country.  We understand that in order to truly help families in this correcting market we need to be on top of our game in learning what some of the top names in real estate are thinking may occur in the next few years. 

We just came out of a session where we heard from the CEO of REMAX, Dave Liniger.  He presented a plethora of graphs, number and figures showing us what the real estate market has done in the past year.  He made sure to state that although real estate, when looking at the sales figures from across the country has done quite poorly in the past 2-3 years, it has maintained and sales volume has increased in local areas.  We will have some more recent figures out on our market as soon as we get back from this conference but if you want to see last month’s figures be sure to visit our news letter page.   

While in the session, Dave Liniger also mentioned that there are still many homeowners out there that may be defaulting on their homes very soon.  Consumer confidence is still low which means that the unemployment rate will still be low in the coming months, if not years.   If that is you, or if you are coming to a place where you are exhausting your savings in order to maintain payments on your home, remember that there is a smooth way to relieve yourself of that mounting debt.  Remember we are here to help families get out of the situation that they are in and our services are completely free to you.  Give us a call anytime…

For those of you who were bummed that the $8,000 Federal Tax Credit expired, read the article below.  There's great news!!!!  The Federal Tax credit has been extended...

WASHINGTON (Reuters) - The Congress on Wednesday approved a bill
extending the closing deadline for homebuyers trying to take advantage
of a popular tax credit.
 
Homebuyers with contracts signed by April 30 who failed to go to closing
by the June 30 deadline will now have until September 30 to complete
their purchases. The House of Representatives on Tuesday approved the
bill and it now goes to President Barack Obama for his signature.
 
The $8,000 tax credit for first time homebuyers and $6,500 credit for
others purchasing a new primary residence was a highly popular temporary
measure by the Obama administration to jump start home sales during the
economic recession.
 
Real estate agents said thousands of homebuyers would miss the June 30
deadline because banks and settlement offices were struggling to deal
with the volume of people rushing to close on their deals.
 
"In addition to helping thousands of families experience the American
dream, this successful and popular program provides a much needed boost
to Nevada's housing market and economy," Senate Majority Leader Harry
Reid said in a statement.
 
Reid, a Democrat, faces a tough re-election fight in Nevada, where the
U.S. foreclosure crisis is most pronounced.
 
The Senate acted separately on the tax credit extension after another
bill that included both the homebuyers measure and an extension of
jobless benefits for the long-term unemployed was blocked by
Republicans.
 
The jobless aid bill fell one vote short of the 60 needed to overcome
procedural hurdles in the 100-member Senate. Republicans objected to the
$34 billion cost of the bill.
 
The Democratic-backed bill would have extended the federal jobless aid
program through November. Senate Republican Leader Mitch McConnell
offered a two month extension that was paid for by using unspent money
from last year's economic stimulus program and Democrats objected.
 
Reid said he would try again to pass the jobless aid bill after the
Senate returns from the July 4 holiday recess.
 
(Reporting by Donna Smith; editing by Anthony Boadle)

!Close your Escrow in 30 days !

Owner Occupied  FHA
3.5% down  Purchase, Condo, SFR, up to 4 Units,

620 Minimum Fico

Owner Occupied  VA
0% down Purchase, Condo, SFR, up to 4 Units,

620 Minimum Fico

Owner Occupied  Conventional with MI 

5% down  Purchase only SFR

Up to $417,000

680 Minimum Fico

Owner Occupied  Conventional NO MI  

1 – 2 units 20% down 

3- 4 units 25% down

620 Minimum Fico

2nd Homes

10% down Purchase SFR - No Condos or Attached Housing

Up to $417,000
680 Minimum Fico
Property Must Be Located In Resort or Vacation Area

Agency Jumbos Up to $729,750  
10% down Owner Occupied, Purchase, Condo, SFR,
740 Minimum Fico

Investment Property Conventional

1 unit  20% down

2 to 4 units 25% down

SFR ,Condos, up to 4 Units

620 Minimum Fico

Give us a call if you would like to get pre-approved!

We are memebers of this organization called CDPE - Certified Distressed Property Experts and below is a very informative video on how the HAFA program works and how it can help you...Remember that we are here to serve you with all your real estate needs. 

Many have been asking us for details regarding the new HAFA program that was released to banks on April 5th.  We are very excited about this program so we wanted to make sure that we brought you all the details so that you can make an informed decision if you are currently struggling to stay in your home as many are across Southern California. 

It is a program that will help a lot of family's and two of the great benefits of this program is that, 1. It helps families with money for relocating if you are short selling your home, and 2.  Once you sell your home utilizing the HAFA program, the lending bank may NOT pursue the seller with a deficiency judgement.

READ ON...

What is HAFA?
HAFA directs lenders to assist eligible homeowners in quickly and effectively implementing short sales or deeds-in-lieu by providing financial incentives to lenders that carry out foreclosure alternatives through the program's guidelines.  The program was introduced in part with the intent to remove the stigma from short sales and help keep communities from being destroyed through massive foreclosures. HAFA in its current state is only applicable to conventional-type, non-Governmental Serviced Enterprises (non-GSE) mortgages and therefore does not apply to loans owned or guaranteed by Fannie Mae or Freddie Mac.4 These organizations may have plans to release their own versions of HAFA.

Who is eligable for HAFA?
Most homeowners facing financial hardship are eligible. As a rule, if a homeowner is eligible for HAMP but cannot pay the mortgage, then he or she is eligible for an assisted short sale through HAFA. However, loans owned or guaranteed by Fannie Mae or Freddie Mac do not qualify. Servicers must consider possible HAMP eligible borrowers for HAFA within 30 calendar days if the borrower has met one or more of the following criteria1:

• Does not qualify for a HAMP Trial Period Plan
• Does not successfully complete a HAMP Trial Period Plan
• Is delinquent on a HAMP modification by missing at least two consecutive payments
• Requests a short sale or deed-in-lieu2

For a loan to qualify, it must meet the following criteria:

• The property is the borrower's principal residence
• The mortgage loan is a first lien mortgage originated on or before January 1, 2009
• The mortgage is delinquent or default is reasonably foreseeable
• The current unpaid principal balance is equal to or less than $729,750
• The borrower's total monthly mortgage payment exceeds 31 percent of the borrower's gross income (as defined in HAMP Supplemental Directive 09-013)
• The mortgage is not owned or guaranteed by Fannie Mae or Freddie Mac

Details of HAFA
HAFA was introduced to simplify and streamline the short sale process. HAFA accomplishes this in the following ways:

• Compliments HAMP by providing viable alternatives for borrowers who are HAMP-eligible
• Uses standard processes, documents and timeframes
• Provides financial incentives to borrowers, servicers and investors
• Requires that borrowers be fully released from future liability for the debt
• Utilizes borrower financial and hardship information collected in conjunction with HAMP, eliminating the need for additional eligibility analysis
• Allows the borrower to receive pre-approved short sale terms prior to the property listing
• Prohibits the servicer from requiring, as a condition of approving the short sale, a reduction in the real estate commission agreed upon in the listing agreement1

HAFA provides financial incentives as follows:

• Homeowners qualify for $3,000 (updated March 26, 2010; was previously $1,500) in Borrower Relocation Assistance after a short sale or deed-in-lieu has been completed (may classify as taxable income in some cases2)
• Financial incentives for servicers participating in the program include up to $1,500 (updated March 26, 2010; was previously $1,000) servicing bonus upon completion of a short sale or deed-in-lieu
• Financial incentives for investors include up to $2,000 (updated March 26, 2010; was previously $1,000) for those who allow a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders. This reimbursement will be earned on a one-for-three matching basis3
• Lenders pay all servicing fees — homeowners have no out-of-pocket expenses4

How to apply for HAFA?
Homeowners interested in utilizing foreclosure alternatives under HAFA are instructed to contact their lender if they meet the eligibility requirements and inform them of their desire to participate. Homeowners unsure of whether or not they meet eligibility requirements should contact us directly at 562-883-1003

Rates Going Up & Tax Credits Coming To An End.  What this means for Buyers and Sellers

In the second quarter of 2010, we will have 3 major factors working against the housing market at the same time.  They are; climbing interest rates, expiring tax credits and worsening lending guidelines.  What I’m going to outline for you now is how this will impact us and why it is so urgent for your sellers and prospective seller to act NOW.

1.)    Rates: Interest rates have been at their historic low point (5%-5.5%) for so long now, most people have forgotten that the average 30 year rate is somewhere between 7% and 7.5%.  On March 30^th the Federal Reserve will cease buying all the low rate mortgage bonds.  This means buyer will qualify for less house since interest rates will likely be around 6%-6.5% by June and probably in the 6.5%-7% range by the end of the year.  This is the optimistic forecast.  If inflation shows up we’ll see rates spike sooner.

2.)    Tax credits expire: Buyers will no longer be provided incentives by the government to purchase houses.  You probably have some decent statistics about what % of sales over 100K are 1^st time or move up homebuyers.  This will put a significant dent in demand

3.)    Worsening lending guidelines: Buyers will qualify for less house because lending guidelines continue to become more restrictive.  The pendulum is not done swinging.  We can currently qualify buyers at 50% of their gross income.  This will fall to 41%-45% by mid year and we are unlikely to see any improvement until we’ve had a few years where loans stop defaulting.  Also, the minimum credit score required to purchase FHA is about to move from 620 to 640.

Looking at those three factors we can see less demand, tougher qualifying through higher rates, and tougher qualifying through lower debt standards.  These three combined will put another layer of significant pricing pressure on housing over and above some of the REO pressure that exists already.

Here is a tangible example of what we’re talking about:

Today Sally Seller sells her 200K home to Billy Buyer.  Billy gets a 200K loan at 5.5% and qualifies for the $1135 payment…everyone is happy.  Months from now Sally Seller tries to sell her home to Billy Buyer for 200K but the market is at 6.5%.  Billy can't qualify for the extra $130 per month.  For Billy to qualify for that $1135 payment when rates are 6.5%, Sally has to sell her 200K house for 180K.

This is JUST due to interest rate pressure, we’re not even considering Billy’s debt ratio or the fact that because the tax incentives are long gone, there will be fewer of Billy.

Sellers must understand the consequences of waiting in this market.  Many sellers believe waiting means give it a year and the REO market will be out of the way and we'll be fine.  The reality is as interest rates climb on a 200K house they will lose 20K in sales price for every 1% increase to rates.  We're at 5%-5.25% now and we're headed into the 7%-7.5% range.  You can do the math quickly.

Sellers must take advantage of this opportunity to sell NOW.  Some people will feel they don’t want to "give away" their house but the reality is they can cash out for significantly more value in the first half of this year, especially in the first quarter, than they will in the next 2-3 years.  

As always, if there is anything you need we are here to serve you.