Friday, July 31, 2009

FHA Program To Help Stuggling Home Owners

Here is a press release from the National Association of REALTORS today about the FHA Making Home Affordable Loan Modification Program:

The newly enhanced FHA Making Home Affordable Loan Modification Program will help struggling home owners—who qualify—to significantly reduce their monthly mortgage payments and stay in their homes, said NAR President Charles McMillan in a public statement.

The changes expand the Obama administration's Making Home Affordable Loan Modification Program to include FHA borrowers. NAR is optimistic that this will have positive implications for thousands of home owners, McMillan said.

“Until foreclosures have been significantly reduced and housing inventory reaches a more normal level, there can be no true housing recovery," McMillan said. "The FHA–HAMP program will go a long way in achieving these important goals by helping FHA servicers bring mortgages current, buy down loans by up to 30 percent of the unpaid principal balance, and defer these amounts until the first mortgage is paid off."

NAR will continue to call on Congress and the Obama administration to expand the first-time home buyer tax credit to all home buyers and continue efforts to streamline the short-sale process.

"Along with the expanded loan modification program, addressing these issues will help reduce foreclosures and housing inventory, and stabilize home values," McMillan said.

Source: NAR

Wednesday, July 29, 2009

I Believe......

I Believe..........For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.

I Believe............That my wife Kimberly is awesome and that she and I need to take a day off together just to "hang out"

I Believe..........That ALL human life is precious including the unborn.

I Believe..........That if Jesus himself came down from heaven and held a press conference stating that Barack Obama was born in the United States, that there would still be Conservative Republicans claiming that he was not born in the states and immediately call for an investigation as to the authenticity of the press conference, claiming it to be some kind of liberal conspiracy.

I Believe..........That every person in this country should have adequate health care coverage and 5 years after we get that, people will wonder what took us so long to do so.

I Believe..........That there needs to be a legitimate 3rd party in politics.

I Believe..........That there was a 2nd gunman on the grassy knoll.

I Believe..........Tea Parties are one of the stupidest ideas that people have come up with to protest wasteful spending. I can think of much better ways to show your displeasure of wasteful spending then spending wastefully on Tea and dumping it into a river or whatever it is these people do.

I Believe..........That despite our mild summer here in Indiana, that there is such a thing as global warming.

I Believe..........That if Jesus himself came down from heaven and held a press conference saying that there was no such thing as global warming, that the tree huggers of the world would not believe him and immediately call for an investigation as to how "Big Oil" manipulated Jesus.

I Believe..........That the Christian Faith does not need Satan to divide us apart, we seem to do a good job of it on our own.

I Believe..........That if the Detroit Tigers do not get another good starting pitcher and another good left handed batter, that they do not have a chance on getting to the post season, let alone the world series.

I Believe..........That the Republican party is listening too much to the ultra conservative wing of their party driving away moderates like myself. After all, they don't even want Colin Powell anymore which I find ridiculous.

I Believe..........That if the Democrats keep letting Pelosi run wild, then they just might revive the Republican party by default.

I Believe..........That the big difference in Energy Policy between Republicans and Democrats, is that Republicans do not want to be dependent on other countries oil, while Democrats do not want to be dependent on any oil.

I Believe..........That we need to pay more attention to what the Bible says about the poor.

I Believe..........That I probably need to get back to work.

Thursday, July 23, 2009

Housing and Economic Recovery Act (HERA)

Surprisingly, I have heard little out of the real estate community about the upcoming changes that are taking place on July 30 in regards to lending practices. This makes me a little nervous that Realtors and Lenders will not be prepared for the upcoming changes, causing confusion and frustration between Realtors, lenders, buyers and sellers. The changes, in my opinion, will create 45 -60 day closings for a while until processes are understood and implemented. Which is why, in the intial stages of this, when I write up an offer for a buyer or get an offer on a property that I have listed, I will be insisting on at least a 45 day close.

In the past, Lenders were able to collect up front fees from the buyers. These fees were mostly to cover the cost of the credit report and for the cost of the appraisal. In doing this, the lender was able to order the appraisal right away which sped up the process of getting the loan processed quickly.

With the new laws, lenders will still be able to collect the upfront fee for the credit report, but will no longer be able to collect the upfront fee for the appraisal. The reason for this, is that the new law dictates that the buyer must recieve their disclosures for the loan for review. These disclosures have always been sent out in the past, but by the time the buyer had them to review them, the appraisal may have already been ordered which could make the buyer more apt to feel obligated on going on with the loan even if they disagreed with the terms. The new law says that the appraisal fee can be collected 1 day after the buyer has received the overnight package containing the terms to be reviewed. This is meant to give the buyer more of an opportunity to ask questions before preceeding. The effect of this could be about a 5-7 day delay from how the loan was processed in the past.

The other really big change is in the Truth In Lending Dislclosure which is referred to as a TIL in the industry. The TIL will be given out at the begining of the process and again at the end of the process, which was done before as well. The TIL will reflect the lender fees that are involved with your loan so that you know exactly what you are being charged for by the lender. These "Fees" that are listed is figured into your Annual Percentage Rate (APR) for your loan. The more fees and such that are added into your loan, the higher the APR will be from the loan percentage rate that you have. An example would be that the interest rate of your loan may be 6% but the APR might show 6.375% because of the fees that are added in. The APR will always be higher then the percentage rate of the loan.

The big change in this TIL comes near the end of the transaction. In the past, the buyer may not see a new TIL until they get to the closing table. Since the first TIL you recieve usually is not the most accurate, the closing TIL will differ usually from the 1st one that you see. This can be a shock to buyers. Starting July 30, the new law says that the buyer MUST have at least 3 days to review the new TIL before closing if the new TIL will be .125% different then the first TIL. Which it most certainly will be. So, this change will cause at least a 3 day delay over the past way of closing loans. Basically meaning that the closing will be done and ready and sitting there for at least 3 days before we close on the house.

When you add up those changes, it results in a 7-14 day delay in closing over how things were done in the past. With the current economic climate we are in where everyone has cut back on staffing, 30 -45 day closings are very common right now before these laws take effect. That is why, for the time being, the new typical closing time will probably be 45-60 days.

Monday, July 20, 2009

Housing Deals Are Plentiful

Here is an article that was on today's front page of the South Bend Tribune where I was one of the Realtors that was interviewed for the story:

How to find bargains in today's distressed real estate market.

By KIM KILBRIDETribune Staff Writer

When Zach Quiett returned from serving in Iraq with the Army National Guard in May 2008, one of his top priorities was to become a homeowner.

Quiett hooked up with David Bodine, a Realtor with Coldwell Banker Anchor Real Estate, and planned a marathon outing during which they'd look at a couple dozen properties in a single day.

Some of them, Quiett said, he was able to quickly scratch off his list of potentials. But the last house the pair looked at seemed perfect.

It was a historic three-bedroom in the Leeper Park area of South Bend.

And it was a foreclosure.

Quiett paid $45,000 for the house. It appraised at closing for nearly $60,000. Fixed up, his Realtor says, it likely will appraise for more than $80,000.

Because of the high number of distressed homes available for sale, local real estate experts say, there are plenty of deals to be had these days.

But buyers must be patient, educated about the market and willing to be aggressive when a bargain pops up.

Short sales

Homeowners who have fallen behind on their mortgage payments and are facing foreclosure likely will consider requesting a loan modification from their lender.

But if a modification isn't an option or if the terms can't be hammered out, a short sale is sometimes considered.

"Usually, the bank is the one saying, 'Let's do a short sale,'" said Barry Skalski, a broker associate with Prudential One Realty who specializes in short sales.

In a short sale, the lender will often agree to accept less for the property than the seller owes on it, he said.

The downside, he said, is it's a much more complicated process than a conventional real estate transaction.

"Once an offer has been submitted to the bank, you have a whole short sale package that has to be filled out," Skalski said.

Most of those items are documentation of the seller's hardship.

The process can take about 45 days, he said.

For a patient buyer, however, the process can pay off with a savings of some 25 percent to 30 percent on a home.

Last week, Skalski showed a Tribune reporter and photographer a home he has listed as a short sale in Royal Oak Estates on the south side of South Bend.

The owner, who has been relocated and no longer lives in this area, owes more on the property than it's worth, Skalski said.

In 2005, the owner bought the four-bedroom, waterfront two-story home new for $220,000.

Late last week, Skalski had it listed for $189,900 and was considering lowering the asking price.

"This is a great offer where someone could make a $170,000 to $175,000 offer and get a heck of a deal on a house," Skalski said of the home that is nearly 2,300 square feet and move-in ready.

If Skalski can sell the home and the bank agrees to take a loss, the homeowner's credit score will be negatively affected by the short sale for about two years.

If not, the home will likely be foreclosed on and the homeowner's credit will potentially suffer to some extent for seven years.

"This is a market like none we've come across before," Skalski said.

If a homeowner doesn't sell in time, his lender's next step could be scheduling the home for a foreclosure auction, giving anyone with the cash an opportunity to bid on the property.

Skalski warned, however, that potential buyers cannot inspect a home before it goes up for auction. They also inherit any liens on the property and are required to pay in full on the day of the purchase.

Bank-owned homes, aka REOs

Often, lenders will send representatives to foreclosure auctions to buy back their own properties. After that, they ask real estate agents they partner with to prep the homes and get them on the Multiple Listing Service.

That's where David and Amy Bodine with Coldwell Banker come in. The couple specialize in repossessions.

It's often David Bodine's job to give homeowners — if they're still occupying the property — final notification of the foreclosure.

Often, he said, lenders will allow him to offer the inhabitants of foreclosed homes — even if they aren't the owners — a check for cleaning up the property and leaving it in decent condition.

Then, he coordinates with the bank to have any items left behind cleared out, as well as to have the property winterized, if necessary, before putting it on the market.

The bank-owned homes he lists, he said, are priced to sell within two months.

That often means they're undervalued, he said.

A home the couple just last week sold in Forest Hills in Granger is a perfect example.

Listed at $111,750, the five-bedroom ranch features a vaulted living room and wooded lot. It does need cosmetic work, however, such as new carpet and paint and some drywall repairs.

The day after the Bodines showed it to two Tribune staffers, an offer was accepted on the bank-owned property.

The seller was able to get a loan called a 203K that will allow him to finance the needed repairs.

David Bodine said he couldn't divulge the price the home sold at because the sale had not closed.

But even at $111,750, it seemingly was a deal in a neighborhood of homes valued at $130,000 to $250,000.

Before it sold, David Bodine said the bank was potentially looking for about $100,000 for the home. In his opinion, it required about $15,000 to $20,000 in repairs and updating. Fixed up, he said, it would likely be worth $150,000 to $160,000.

The average number of days a decently priced foreclosure stays on the market here is 30 to 65 days.

"Their goal," he said of lenders who buy back properties, "is to move the property in 60 days.

"About tips for finding good deals on foreclosures, David Bodine said, "The key is finding homes that are priced well."

Don't be overly concerned about cosmetic defaults, he said, but ensure that the "big ticket" items, such as the roof, heating and air conditioning systems, foundation, and well and septic systems are sound.

And when you see a deal, be ready to make an offer.

Being realistic

Skalski, meanwhile, said the local real estate market certainly is a buyer's one right now, but it's not as depressed as some may think.

Generally, you won't pick up a $100,000 home for $50,000.

"Unfortunately," he said, "there are buyers out there who think they'll get 50, 75 percent off. This market is not like that. ... Maybe Vegas, but this (real estate) bubble was not that big.

"Instead, he said, expect to save about 25 percent to 30 percent compared to the value of other homes in the neighborhood when you buy a distressed home.

He advised buyers to always consider what they'll have to pay for a property and then start adding back in what it will cost to make it move-in ready.

"Not every foreclosure is a good deal," he said.

"Don't expect (to be able to make) a huge profit (on the home) right away," he said. "Expect to have to put a lot of work into the home. Just because you've watched a couple of HGTV shows doesn't mean you're going to be able to flip this house."

Thursday, July 16, 2009

I Just Don't Get It

This probably will not be a popular post, since most people drink coffee and seem to enjoy it:

Every morning, I wake up and turn on "Morning Joe" on MSNBC and "Mike and Mike In The Morning" on ESPN and flip back and forth between the two shows. I have noticed over the past few weeks, that "Morning Joe" is now "Morning Joe Powered By Starbucks". Then this morning on "Mike and Mike" they had a special guest host named Tim Kurkjian who is an awesome baseball analyst. On "Mike and Mike" Greeny kept trying to get Tim hooked on coffee. To Tim's credit, he just does not get what the big deal about coffee is. I don't either.

Why is everyone so hooked on this drink? It smells bad, it is hot (I prefer cold beverages) and you have to add all kinds of stuff to it to make it drinkable. Froca moca lattes, frapa chino's, foam, no foam. Whatever, I just don't get it!

Have you ever noticed the ugly grimace on peoples face when they take that first drink of coffee in the morning? Watch for it, it's there! Why do people drink this stuff?

Three years ago, Kimberly and I were in Hawaii and everywhere we went we kept hearing about how you had to try Kona Coffee. I had never tried coffee before, so I thought I would try a small sample. Some kind of Hazelnut flavor. It was awful! Very bitter tasting, not a pleasant smell. Just an awful taste and experience.

Everyone says, "you just have to add milk and sugar and flavoring to it and then it tastes great!" Well, I am sure that there are a lot of things that would taste great if you added a bunch of flavoring to it to disguise the disgusting taste in its purest form. So why go through the trouble? Why pay $3-4 for a cup of Starbucks? If you want something that tastes like chocolate, drink a hot chocolate. It costs less. I just don't get this whole coffee craze that people are on. Is it really that cool to have a starbucks cup in your hand? I'll just be uncool and keep drinking my Diet Coke.

OK. That's my rant on coffee. I know you have opinions, feel free to voice them.

Thursday, July 9, 2009

"I Am Not A Role Model"

"I Am Not A Role Model" I remember those words caused a lot of controversy back in June of 1993 when Charles Barkley uttered those words followed by "Just because I can dunk a basketball, does not mean that I should raise your kids." At the time, and even more so now, I felt that he was unfairly criticized for those remarks.

I understand that kids look up to athletes, actors, actresses and pop singers. After all, I was a kid once and I remember looking up to Detroit Tigers shortstop Alan Trammell. But just because an athlete, a musician or an actor/actress have success in their public life does not mean that they have success in their private life. And I think that is what Charles Barkley meant by his statement, especially since Charles has been arrested for prostitution solicitation and has an admitted gambling problem.

Now, there are a lot of great people to look up to including athletes, actors, actresses and pop singers. But the point I am trying to make, is that the people you come into contact on a daily basis are the people that should be having the greatest influence. Parents, relatives, friends, pastors and neighbors are going to have far more influence in a persons life. We need to be careful and distinguish the difference between just looking up to someone because of success and fame and fortune, and idolizing someone.

Since the death of Michael Jackson, the AP has reported 12 suicides as a direct result of Jacksons death and several more attempted suicides.

"I Am Not A Role Model" has been echoing around in my head for the past week or two as I see more and more people that have fallen lately. Quarterbacks, pop singers, governors and senators. All who have had a very different public life vs. their private life. This could be a great opportunity for people to be reminded who their role models should be.

Wednesday, July 8, 2009

Mortgage Fraud Continues To Increase

Here is an article from the AP about the continuing problem of Mortgage Fraud. This is going to continue to be a problem, in my opinion, as people are getting more desperate with the poor economy and finding new ways to scam people. There is a lot of scamming going on right now with the loan modification aspect of mortgages:

Mortgage fraud continues to increase as vulnerable homeowners seek answers to their housing issues, according to the 2008 Mortgage Fraud Report released Tuesday by the Federal Bureau of Investigation.

Reported losses to fraud hit $1.4 billion, up 83 percent compared to 2007 and are likely to climb even higher in 2009, the FBI said.

The number of fraud reports was 63,713 in fiscal 2008, up from 46,717 the previous year.

"The downward trend in the housing market during 2008 provided a favorable climate for mortgage fraud schemes to proliferate," the report said. "Several of these schemes have the potential to spread if the current economic downward trend, as expected, continues into 2009 and beyond."

Source: The Associated Press (07/08/2009)
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