Wednesday, March 30, 2011

Banks Mortgage Servicing Plan

This article I picked up today was about the banks actually having a better way for the consumer to keep track of their loan modification status'....and more!

They are self-admitting, it would appear, that they have been screwing things up. Good, admission is the first 'step' towards a healthier lifestyle. And, these banks certainly could benefit from squeezing the 12 Step program into just one.

However , I'm pro-mortgage reduction plans by these institutions too. They are losing tons, costing them arms and legs, and taking all-together too much time in bringing our housing crisis out of this crappy status.

Let's say they just give all homeowners a certain amount, 25%, reduction in the mortgage balance. Would that eliminate the 50% loss by taking back a property? Maybe. Would it eliminate some of the strategic defaults? Maybe. Would it help people stay in their homes? Quite possibly.

Can't wait to hear the outcome.....

Sunday, March 27, 2011

More Great Ways To Buy Your First Home!

Wow, oh wow! More new loan ideas! Some make me cringe a little, but for now if it helps qualified (note I italicized qualified) people get into homes? I'm all for it.

So, really, a way to do 99% financing. Should last for several years. There's a lot of money floating around to make it happen.

It's the CalHFA/Chdap combo loan package. 1% down, truly only 1%, with 99% financing and the 2.5 % is basically never paid until the property is sold.

For first time buyers or if you haven't owned for the last 3 years. Low rates, check the CalHFA website for current rates. 4.75 at time of writing. Must have the same minimum FICO score of 620, as with almost all FHA loans.  The seller can pay up to 3% towards closing costs. You do have to pay MIP, mortgage insurance, as well.

The regular FHA loan of 96.5% is the first. Then the buyer puts up 1%, and borrows through the Chdap program 2.5% which doesn't require any payments until the home is sold, re-fied or the first is paid off. And that rate is currently 3.25%.

There is over $66 million in funds available for the Chdap 2nd. Check out the website link below to see how the money is going!

There certainly some restrictions to income levels. Must, of course, be owner occupied. But, yes, you can use a co-signer that isn't going to occupy the home. No manufactured homes, Flips create a bit of a problem. Forget homes that have non-permitted items, guest houses, or no stove. Won't work with this program.

You can use the Chdap program with other first loans also. There is a review of income for prior 3 years, mostly looking for the home ownership situation.

Seems a little crazy to give a home away to someone that only has 1% towards the purchase price. Seems like we did that a few years ago....? But, again, if they are qualified properly and really want to take advantage of great home prices, and just don't have a lot of money saved...this is a terrific option!

Thursday, March 24, 2011

Sales Slump in February

So here we are about to start the 2nd quarter of 2011 and everything I've been reading this week mentions the slump in sales in February. Okay, it's true, it's been quiet.

But, in my clients experience it's been slumpy (if that's even a word) quiet because we're not getting any good inventory on the market.

Working with 5 buyers would be very difficult if we had a lot of inventory, good inventory. I'd never get out of my car! I don't utilize a buyers agent, I do it all. But, I'm lucky (clients are too) if I'm getting in the car 2 - 3 times a week right now. And, gone are the days when I'd have 8 or 9 homes to show in one trek. It's out for one, maybe 2 at a time. And, all 5 are itching to buy! All of them!

So, I keep them motivated by constant communication, every week check in with some tid-bit or another. Something to say hello about. Something to check-in for. And, right from the start I've warned them it won't be a quick process.

I long for the days of more than 2 homes to show a buyer in one trip. It keeps their excitement up, makes them feel like they are getting somewhere.

And, today's influenced by distressed properties? I applaud them for the excitement they show when looking at stained carpet, broken doors, overgrown weeds...over and over again.

Tuesday, March 22, 2011

Never Give Up....Never Surrender

I'm so close to finishing the toughest transaction of my decade career. Sooo very close, I can practically taste they say.

Several times I just thought I should walk away. For my sanity. For my safety. For my happiness. For my health.

But I didn't. I just couldn't. People were counting on me. People trusted me. I couldn't let them down.

Many people would have walked away, some not. I have to admit I lost it on my client once. Only once. I needed to. I had taken it up to 'here'! I certainly felt better after. ;o)

I know that what goes around comes around. Do unto others as you would have them do unto you. But, I did absolutely nothing to deserve this challenge.

Did I?

But, I continued on, I persevered. And, for that I am very proud of myself. Very proud.

So, if you remember the movie.....

I never gave up, never surrendered.

And, I believe in the end, two families will be far better off than they were before they met me. And, I, of course, will have learned what to step away from in the future, and what to take on with the experience gained from all of this.

Monday, March 21, 2011

Who Pays For What?

In Real Estate contracts it behooves everyone to make certain, right from the start, who will pay for what. The seller, or the buyer?

If you're not sure there will be a cost for something, write it in anyways. If you think the lender may require a roof cert, write it in the beginning that whomever you want to pay for it, will pay for it. If there are questions about Home Warranty, ask for it up front.

Sometimes, we think we can negotiate that later. And, yes, sometimes this is true. And, a lot depends on the popularity of the property, who the seller is. Many factors.

But, if it's standard, ask up front. Get it worked out now. Nothing worse that all those little surprises a week before close of escrow to botch a deal!

With Short-Sales, we have come to expect that the lender won't pay for Home Warranties, 6% commissions, and more. But, with experience and know-how, a CDPE agent can get some of that covered.

Any agent, that tries hard enough, and knows enough. will generally guide their clients correctly from the get-go.

Hire a good agent, listen to what they say. They've sold many more REO's, Short-Sales and standard sales in this last year than you have in a lifetime!

Wednesday, March 16, 2011

CDPE - Another Designation... ;o)

I'm on day two of a 16 hour grueling class here in Valencia. Realty Executives organized it so as many of our agents that wanted to, could be educated and given additional tools to handle the market better.

Certified Distressed Property Expert

It's not the getting of the designation, it's the getting of the knowledge. I feel, and it was greatly confirmed yesterday, that we are going to be in this market for 5 - 7 more years. Too many loans, and loan mods, coming due to think otherwise.

While I've been dealing with Short-Sales for a few years now, it's best to have as much knowledge as possible. What they went over yesterday was much of what I already knew, but a few extra documents (among the mountain already required) were very good.

Today we are going to get to the nitty-gritty. Sheesh! In, according to the instructor, 'nauseating' detail.

But, we need that. There are so many homeowners that don't really know what their options are. What is the difference between BK, Foreclosure and Short-Sale. What the ramifications are to all of them.

And, while I'm not allowed to give legal or tax advice, I can certainly open a door that a homeowner may not have known existed.

Unfortunately, what we learn at this course may not be the same as next year or the year after. But, my fellow classmates, and myself, will certainly be better equipped than many agents attempting short-sales out there now.

If you know of anyone that is struggling and doesn't know where to turn, feel free to have them call me .....before they get a notice from their bank......I just may be able to help them. And, help them better with the additional tools and knowledge gained by this two day designation earning class.

I'm earning this designation to help troubled homeowners.

Sunday, March 13, 2011

Are You Able To Escape Taxes On Short-Sale Gain ?

Most of us believe that the normal capital gains tax that has been deferred until 2012 would handle any misunderstanding as to if you owe taxes when you do a short-sale.


House is worth 400
You owe 500
Bank accepts the 400
Forgive 100

Back in the day, you'd owe taxes on that 100k forgiveness. We have had a reprieve on that and it's been extended.

Talk with your tax guy though if you did a short-sale last year and are expecting not to pay taxes on that 100k.


Read the article linked here and decide if this is you, or if you are still safe from paying taxes on a 100k 'gain.

Whenever I discuss Short-Sales with a prospective client....'Talk to you Tax person and/or Financial Planner'. Needless to say, I have them sign a disclosure stating the same thing. But, I'm sure others may have forgotten to have this discussion.

Thursday, March 10, 2011

Prospecting for New Buyers and New Sellers

Monday through Friday I get on my phones and call people on my Real Estate Data Base. I add to it when I meet new people, close new transactions. And, as it continues to grow, I continue to be able to help people in and out of homes.

Sometimes, I just leave a message, sometimes I drop a personal note. My favorite times are when I get to chat with someone I haven't talked to in a while. It's always a great catch-up time.

The last few months the market has been so stagnant with SS (Short-Sales) that I've been bumping up the reason for prospecting. To find some Standard sellers for all my buyers.

Fortunately for me, my data base people don't mind me calling them and asking for help. They know that the help I am working on for current clients will someday be the same help they are looking for.

When I have more listings than buyers, I work the opposite harder.

But, all in all, when I contact people, they have come to learn that it's not just for business, that I truly enjoy hearing about what is going on in their world. And frequently, I am able to help them somehow too. The electrician? I know someone that needs a new outlet. The plumber, I have a client with a leak. The single mom that needs a little baby-sitter, someone on my RE data base has a teenage daughter looking for extra money.

Prospecting, it's work for some, it's rewarding for others. It's what I do.

Sunday, March 6, 2011

All Cash - Is It King?

On Sunday mornings I do like to write a semi-weekly blog post. So, I generally wake up wondering what I want the topic to be and start reading to stimulate those thoughts.

Today I am taking a buyer out to look for homes in Valencia and/or Stevenson Ranch. We've been out to several properties in the last few months. Criteria is tight, so it's been challenging. But, we have made offers on two. My client has shied away from Short-Sales (SS), so it limits us further.

We wrote an offer on a Standard Sale, cash wasn't king there. The seller was a bit over-priced and didn't accept our offer. Not to mention, they had a Home of Choice contingency on the sale. Since that time, those sellers have taken their home off the market. Go figure.

Second one was investor owned. They had purchased at a Trustee Sale, cash there, and since their initial investment, the values had dropped quite a bit in the area. Needed a little bit of work, but was good for my buyer. Cash was pretty close to King on that one, but off by about 10k so the sellers took the financed offer. That one is still in escrow now. They had a small margin of profit, understandable to me.

So today, we are going to look at a SS. Nice property, pretty close to clients needs. Have to check out a couple street noise issues and see what the family thinks. And, then of course, see if cash is king here.

Funny thing is, this morning I started with L.A.Times Real Estate reading and saw this article:

I'm working in the wrong neighborhood!!!

I do think that an all cash buyer will certainly be able to get a better deal than a financed buyer. But it depends on several different factors. And, sometimes, the factors don't fit the needs.

Wednesday, March 2, 2011

Reading About Loan Changes Today, Again.

Reading, Reading, Reading. Today it seemed to be all about some modifications of loan down payment amounts. Not all financial institutions are agreeing to them, but seems as if it's a plan that is moving forward.

L.A.Times had this one: Should a 20% Mortgage Down-Payment Be Standard?

And, this one on Inman this morning too: Consumer Group Defends Low Down Payments.

Basically will reward those that have enough for 20% down, and of course, penalize those that don't. But, some would say that the larger down doesn't mean they won't default on their loan. That it isn't the money they stand to lose that we should be watching, but the qualification of their original loan application. Yes!

And those lenders, the ones that fudge the applications......still today? Some will be required to be held accountable for a small portion of those loans even if the note is sold. And, we all know the notes are sold religiously and quickly. I've had some sold before the buyers new home has it's first payment due! So, if they have to hold 5% of that loan, it will tie up their capital....the banks certainly won't want that. And, won't want the risk of a default either.

So, I'm not sure how I feel about it. I've always felt the more you put down, the less likely a default. But, there is proof, in my buyers' pudding, that the small down-payment doesn't equal quick to trustee sale. And, really, don't qualify a buyer for more than they can afford, ever.