Nope, Not Worried About Shadow Inventory....Just Any Inventory Will Do

Read a couple of different articles this morning and am, of course, sharing. Topic of today is ....surprise....lack of inventory!

For several years in the middle of this housing crisis we were very worried about a Shadow Inventory. Worried that just as housing would begin to recover, the banks would release a flood of foreclosed upon properties. I, in the beginning, was one of those believers. However, I haven't been for quite some time now.

I did believe that banks were holding properties waiting for home prices to rise. Here we are, rising prices, where are my REO properties?

It's been a natural progression though, what with all the mistakes that were made, the bills that were passed, the T's that were not crossed correctly, and now the I's that are, painstakingly, being dotted in the right spot. As natural a progression can be to create such a lack of inventory. A time period when once all is right again with foreclosure procedures, I anticipate not a flood of REO's but at some point in the next year or two, at least a nice little river of bank-owned homes.

I feel the recent increase in home prices are mostly being afforded to those standard sellers. And, reading this morning confirms that REO properties are not seeing the jump in sales prices. Why would they? Very rarely are they in the condition as a standard seller. Same with short-sales.

On short-sales, where are those? Hmmph! I certainly expected to see several SS homeowners come back on the market what with the extension of the Debt Relief Act. Hasn't really happened. But, I'm the one that does the right thing, so maybe those that could be short-selling their home have decided to strategic default instead. They were just extended that possibility to the end of this year too. Then they will be added to my pretty little river above!

I'm starting to ramble too much but had lots of thoughts today for you.

Summary? We are working out of this mess, we should see some additional inventory numbers before the end of the year. As always though, buy/sell when the time is right for you and your family.

I'm here for you. Any questions, just ask. As you can see, I'm a spewer of information!

Tax Time and Your Home!

New listing that I just took had purchased their home when one of those tax credits was being utilized by any first time home buyer. There were a couple a few year ago, remember? Incentive income tax 'rewards' to stimulate the housing market.

Now, with a family change, we are selling their home. So, what happens to their tax credit? It was the 8k one that they are now paying back at 500/year on their income taxes. They got the gift/loan, so they have to pay it back.....right?

Quite honestly, I don't know for certain. But, as with most things Real Estate and tax related, accountants defer to us Realtors, and we defer to those Accountants!

Why bring this up if I don't know the answer? Even if I did, I'm never supposed to give tax or legal advice. Says so, right in one of the many pages of documents you sign when selling your home. However, it is important to bring it up as it may affect you when considering the sale of your home.

With that said, if you have questions about that same scenario, talk with your accountant before you talk with me.

As well, remember that us Realtors fought tooth and nail not to have the wonderful home ownership tax benefits taken away from you. Property taxes, interest on your mortgage, and mortgage insurance premiums...all still tax deductions. (check with your accountant for any limits though!)

Be sure to thank your local Realtor when you see me next! 

I have battle scars from that fight!

But, more important, speak with your accountant or tax adviser if you have any concerns about how buying or selling your home will affect your tax situation....before your buy or sell....and, certainly, before April 15th!

Seller Reminders

Pictures really do say a thousand words. It's the only thing the buyers have to look at once they leave the physical viewing of your home. Shouldn't they be the best they can be? I don't mean pictures that don't honestly represent the home, nope not that. But make sure they certainly put the best face forward. That's your job, the photographers job, and your agents job.

Go ahead, hire someone that says they'll take a few quick pics with their cell-phone and get your home on the market tomorrow.....if you want to.Or hire someone that has a professional Real Estate photographer on their team. Hmmm, seems like a pretty easy choice to me.

Some shots are hard to get. Rooms just don't work for the camera. But, remember to get the ones buyers love to look at over and over again.

Per Trulia's research:

(5) The Living Room (4) Oh, yes, The Master Bath (3) The Master Bedroom (2) The Front of Home 

(1) And, the number one picture buyers like to see? The Kitchen

Time it hits the market is key as well. Most agents should completely understand this. As should sellers. Please don't push your agent  to put it on the market tomorrow, when tomorrow is Sunday. If your tomorrow is Friday? That's the best day to put your home on the market!

These are reminders for homeowners considering listing their home for sale. It takes a bit of time to get a quality listing on the market. Lots of coordination to complete. Your home better be in perfect condition for me to put it on the market tomorrow!..... only if tomorrow is Friday and, only if I've had my photographer in for those 5 most important shots!

Your home needs to have it's best face on when getting ready to sell.

 Timing and photographs help the homes face looking it's best!!

Well, sometimes a bit of 'lipstick and mascara' help too!

Consumer Financial Protection Bureau Strikes Again!

I've got clients right in the middle of it. Another just missed the bullet! It's those dang Service Release/Transfer Dates and what happens before, during, and after it actually goes through.

Happy to know that the CFPB is monitoring those loan transfers and will continue to do so. There are rules and regulations that the lenders have to follow. A bulletin was issued to servicers, on behalf of consumers, reminding them of required protections when loan transfers occur.

My favorite quote from the article I read? : From the director of the CFPB ~ "Consumers should not be collateral damage in the mortgage servicing transfer process." Right On!

So, be aware, homeowners, you may have a transfer. Very similar to when you take out your home loan and the note is sold in under 30 days. You get notices, don't ignore them. When you are in the middle of a loan modification, don't ignore them. When you are in the middle of a Short-Sale, don't ignore them....and TELL YOUR REALTOR!!

Paperwork is supposed to follow to new lender. They are supposed to honor plans in motion. But, it's ultimately in your best interest to contact the new servicer/mortgage company quickly and establish that all ducks are in a row. One missing could muck up the whole process!

HAFA Changes Effective 2/1/2013

As a Certified Distressed Property Expert I have access to some information other Realtors do not. One of them was a great webinar about the newest changes to HAFA.

Keep in mind that these are guidelines set forth by the Treasury Department. Not every lender will follow, but newer guidelines are better than no guidelines at all.

A couple of forms have been changed which will allow for shorter time periods. Not as much back and forth to initiate a Short-Sale.

Servicers are required to respond within 30 days, previously 45 days.

If a pre-determined hardship is verified, the short-sale can progress without the hardship affidavit stalling the time frames. It is required at the end, but doesn't stall the beginning.

The treasury used to contribute up to $2000.00 for 2nd lien holder payoff. Now they will contribute up to $5000.00.

Resale on a HAFA short-sale couldn't happen for 90 days. Now, as long as the new sale price isn't more than 120% of the purchase price, the resale can happen after 30 days. Good for investors.

All servicers should have on their websites the Short-Sale Matrix...the way a short-sale is handled by their company.

The relocation incentive paid to borrowers can be used to pay tenants to vacate after a short-sale on investment property if chosen to do so. Of course must be disclosed to lender/servicer.

And, needless to say, I've received some secret e-mails and toll-free numbers to help sellers even more

 if their servicer/lender isn't cooperating!

Santa Clarita Valley MLS Stats February 2013

Yahooooo!!! We finally hit an active total of over 300 again. Well, it shows 301 at this moment, that is. Remember I include Santa Clarita Valley communities from Castaic to the north, Stevenson Ranch to the West, Newhall to the south and Acton to the east.

301 Active listings!

And, the breakdown as follows:

Active ~ 301
31 are Short-Sales
25 are REO's

Pending/Back-Up ~ 809
507 are Short-Sales
72 are REO's

Sold in the last 30 Days ~ 275
119 were Short-Sales
Only 39 were REO's

So, yes, we are selling everything we have, yes we are seeing less distressed properties and more Standard Sellers. California experienced a 12% gain in prices and somewhere I read this week we may see an additional gain of 10% this year!

Nothing is set in stone, but we are seeing appreciation. It's the law of Supply and Demand though. Keep that in mind, the more inventory we get the slower the appreciation will be.

FHA MIP Permanent after April 1, No Fooling!

FHA Increasing Mortgage Insurance cost as of 4/1/2013

              

 

Effective for FHA Case Numbers pulled after April 1, 2013:

 

For most FHA borrowers, the annual MIP (mortgage insurance premium) will be increased.

 

Most FHA buyers put 3.5% down and get a 30 yr fixed rate loan, and buy homes at prices below $625,000. 

For these buyers, the annual MIP will be increased to 1.35% per yr (from 1.25%per yr) 

 

Also, the mortgage insurance premium will become permanent for many borrowers, whereas, current FHA Policy calls for  mip to drop off after a certain number of years, and principal pay down.

      

So, it would be advisable to buy a home now, before these increases take effect.                                  

 

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Pulled straight from the horses mouth as they say:

~ Mitch Milat of Augusta Financial ~ Mitch@mitchforloans.com