If you are struggling making your mortgage payments you need to seek help as early as possible to avoid foreclosure. Fannie Mae, an insurer of home loans, has released a new interactive tool online to help you determine what your options are. KnowYourOptions.com The website is designed to be a virtual one-stop-shop for anyone facing financial hardship and in need of foreclosure prevention solutions.
The site is available in both English and Spanish and includes tools like educational videos, mortgage calculators, financial forms and checklists. A virtual assistant will walk you through the site.
Not all mortgages are insured by Fannie Mae, but this is a great general resource. The site does provide a Fannie Mae Look-up Tool so you can find out if your mortgage is insured by Fannie Mae so you can take advantage of the Fannie Mae specific programs that are detailed on the site.
Again the key for anyone homeowner who is facing difficulties or anticpates that they may have an issue in the near future is to seek help as early as possible. This website is a great first step.
The National Association of REALTORS released some updated infomation on the affects of short sale, foreclosure, bankruptcy and deed-in-lieu of foreclosure on FICO scores and the ability to purchase another home.
Short Sale (Deed-inlieu of Foreclosure Guidelines are similar) – According to the report the affect on your FICO score from short sale depends on how the sale is reported to the credit bureau. If reported as “not paid as agreed” the score could go down 100+ points. Late payments will also affect the FICO score and are reported for 7 years, with thier impact lessening over time. Buyers looking to purchase after a short sale will have to wait to purchase another home. If purchasing using FHA financing the wait is 3 years (possibly less if not in default at time of short sale). For a Fannie Mae insured loan buyers need only wait 2 years if putting 20%+ down, 4 years if putting between 10%-20% down, and 7 years if putting less than 10% down. If getting a Freddie Mac insured loan the wait is 4 years, 2 years if extenuating circumstance are documented.
Foreclosure – A foreclosure stays on your credit report for 7 years, with the impact lessening over time. A foreclosure could lower your FICO score 100+ points. Buyers looking to purchase after a foreclosure will again have to wait. If purchasing using FHA financing the wait is 3 years. If getting a Fannie Mae insured loan the wait is 5 years from the foreclosure sale date, 3 years if there are extenuating circumstances. Additional underwriting requirements may be required. The wait for Freddie Mac insured loans is similar with a 5 year wait, 3 years for exentuating circumstances.
Bankruptcy – Bankruptcies stay on your credit report for 7 years (10 if there was a full discharge of debt). Bankruptcies generally have a greater negative affect on the FICO score in comparison to the above mentioned issue. Buyers looking to repurchase after a bankruptcy using an FHA loan will have to wait 2 years from discharge date with a chapter 7 BK and 1 year with a chapter 13 BK. If getting a Fannie Mae or Freddie Mac insured loan there is a 4 year wait for chapter 7 or 11, and 2 year wait if chapter 13. Some allowance are made for exentuating circumstances.
Extenuating Circumstances – include serious illness or death of a wage earner, but do not include an inability to sell a house due to job transfer or relocation.
For a full copy of this report please feel free to contact me.
REALTORS Care Nevada will be hosting a Housing Counseling Event for homeowners in the Reno-Sparks and surrounding areas on Saturday, May 8th from 10 a.m. to 4 p.m. The event will be held at the Reno Sparks Association of REALTORS which is located at 5650 Riggins Court, Reno. Homeowners will have the opportunity to hear from a panel of local counselors, an attorney and a CPA. After the panel discussion they will have the opportunity to meet one-on-one with these HUD-approved housing counselors. Panel members include: Jill Perry, Northern Nevada Director, Counsumer Credit Affiliates; Jeni Temen, Branch Office Mangager and Certified Housing Counselor with NID Housing Counseling; Rhea Gertken, Esq., Nevada Legal Services;Tim Nelson, CPA with Evans, Nelson & Company CPAs; and Elizabeth Fielder, Attorney with Jones Vargas. For more information visit foreclosurehelpfornevadans.org
Homeowners should come prepared with the following documents:
Monthly mortgage statements.
Information about other mortgages on your home if applicable.
Two most recent pay stubs or other income documentation for all borrowers, if self-employed a profit and loss statement.
Two most recent bank statements.
Account balances and monthly payments for credit cards and debts.
Estimates of monthly expenditures (medical, utitilies, insurance etc.)
The new Home Affordable Foreclosure Alternative (HAFA) program introduced by the Treasury starts today. This program was designed to help homeowners who did not qualify for the Home Affordable Modification (HAMP) program or were unsucessful at completing a trial modification. The new HAFA program allows the homeowner to apply for and get a pre-approved short sale on their FIRST MORTGAGE.
The key to the new HAFA program is that the homeowner must meet the HAMP guidelines to be considered, which are as follows:
Property must be the homeowner’s primary residence.
The first mortgage must have originated before 2009.
Mortgage payments must be delinquent OR default is reasonably foreseeable.
Unpaid balance is not more than $729,750.
Homeowner’s TOTAL monthly payment (principle, interest, taxes, insurance and HOA dues) MUST EXCEED 31% of thier GROSS MONTHLY INCOME.
Timelines for this program are set at much shorter periods than traditional short sales.
Within 30 days of the request to be considered the servicer must respond to the homeowner.
14 calendar days from the servicer’s response the homeowner must sign the “short sale agreement” and return it to the servicer.
At this point the homeowner then lists the property.
Once an offer is recieved the homeowner must submit it to the servicer within 3 business days.
The servicer then has 10 business days to accept or reject the offer.
If the servicers can meet these deadlines it will greatly improve the market for these short sale properties. (I for one am currently in the watch and see mode.)
Here are some other key points that must be considered….
Homeowner gets a $1500 incentive for relocation assistance at the conclusion of the sale.
Homeowner must negotiate separately with any second mortgages etc.
If there is mortgage insurance the insurer must waive their rights to recieve additional payment.
Must be an arms-lenght transaction.
Servicer/Investor must agree not to pursue a deficiency balance against the homeowner (this is huge!)
Contact me for more detailed information and to see if you might qualify for this program.
With a new decade just begun, it’s interesting to look back at where we’ve been these past 10 years. In 2002, there were 1023 single family homes sold in the Truckee/Lake Tahoe area, with a median price of $397,500. By 2006, we reached the peak of market value, at a median price of $680,000. Now, at the end of 2009, we’re down to a median price of $512,000, a total decrease of 25% in median value from the high in 2006, yet a 29% increase since 2002. However, this year has also seen an increase in number of homes sold (787), up 20% from the low in 2008 of 655.
In looking at the Tahoe Donner subdivision in Truckee, which comprises the largest percentage of the sales in the overall area, the statistics are similar. In 2002, there were 302 single family homes sold, with a median price of $495,000. The highest median market value was reached in 2005, at $765,000. At the end of 2009, the median price is at $568,500, again, a 25% drop since the high in 2005, yet still a 29% increase from where we were in 2002. And similar to the picture for the entire area, the number of homes sold in 2009 in Tahoe Donner (225) was up 16.5% from 2008.
During the past year, we’ve seen our share of distressed properties come on the market, although not near as many as many areas of our state and country. Of the 787 single family homes that sold in 2009, 127 (16%) were foreclosures and 85 (11%) were “short sales”. We currently have only 23 foreclosure properties active on the market (3% of the total inventory available), and 102 “short sales”, comprising 14%.
As we look towards this new decade, we’re excited about the opportunities in our industry that will hopefully allow many more buyers to realize their dreams of home ownership, be it here in our mountain paradise, or wherever their dreams may take them.
The Washoe County Senior Services Senior Law Project is holding free foreclosure workshops this month for people who need help in keeping their homes. These workshops are open to the public.
The workshops are being held at Reno Center at 1155 E. Ninth Street in Reno.
Saturday, December 5th from 9am to Noon Saturday and Wednesday December 16th from 4pm to 6:30pm.
The goal of the events is to educate and empower people about what steps to take when attempting to modify their mortgage, the time frame of the foreclsure process, discussing common options that are available from your mortgage company and other options that may be available to you so you can retain your home.
For more information, email the Senior Law Project at slawproj@washoecounty.us. Space is limited to please RSVP at 775.328.2592.
As a Real Estate Broker, focused primarily on distressed property sales, I can honestly say that I have. August – October of this year I was just about as busy as I have ever been in the business of Real Estate. Most the people I chat with in Mortgage, Title, Inspection Services, etc. say the same thing. The transactions were typically affordable in nature but it was nice to see a lot of them. More importantly there was a sense of urgency in the market-place. In certain price ranges and neighborhoods demand clearly exceeded supply. When considering the following points I can’t help but feel as if another shoe is about to drop.
The extension and expansion of the credit has left some recent buyers wondering why they were in such a big hurry. Meanwhile some would-be buyers are feeling a little less confident. All are worried they will or have paid too much.
Housing demand is typically created by one or more of the following: Household formation, employment opportunities, attractive financing and the lure of home equity. All of these are lacking in my market.
I sense that many if not most of the recent first-time buyers would have eventually purchased a home regardless. The looming expiration of the tax credit served to get them of the fence. This created a somewhat false demand.
In short I do think we’ll suffer a bit of a hang-over this next year. As a generality banks are holding a bit firmer to their prices when dealing with fore-closed properties. I do expect interest rates to rise at some point. Short sales are just as mixed up as they ever have been. It will be interesting to see how things turn out for the big auto companies after the “cash for clunkers” revenue stops showing up on their bottom line. Perhaps an indicator for the near future in our housing market.
That said, if you’re in the market for a home now, don’t be too concerned. Your income should be secure. The monthly payment should be conservative in relationship to your income. It needs to be the right house at a fair price. If all those pieces fall in place, I say go for it. Prices will inevitably rise & fall and I think the joy of home ownership has been relatively under-rated lately. Planting a tree or shrub wherever you wish, knocking a hole in the wall to hang the family heirloom or driving down your street to the “best” house on the street; some things are priceless.
An REO (Real Estate Owned) is a property that goes back to the mortgage company after an unsuccessful foreclosure auction (also known as a Trustee’s Sale). Trustee Sales (often an auctions held on the courthouse steps) begin with a minimum bid that includes the loan balance, any accrued interest, plus attorney’s fees and any costs associated with the foreclosure process. In order to bid at a foreclosure auction, you must have a cashier’s check in your hand for the full amount of your bid. If you are the successful bidder, you receive the property in “as is” condition, which may include someone still living on the property. There may also be other liens against the property. Trustee’s Sales are typically advertised via local, public notices such as local newspapers.
Since what is owed to the bank is almost always more than what the property is worth, very few Trustees’ Sales result in a successful closing. If the Trustee’s Sale is unsuccessful the property reverts to the bank or loan servicer and is now considered REO, or “real estate owned” property.
The bank now owns the property and the mortgage loan no longer exists. The bank will handle the eviction, if necessary, and may do some repairs. They will typically negotiate with the IRS and local municipalities for removal of tax/municipal liens and they normally pay off any homeowner’s association dues. As a purchaser of an REO property, the buyer will typically receive “clear title” and the opportunity to thoroughly inspect the property. These are the properties buyers will typically see on MLS.
A bank owned property might not be a great bargain. Do your homework before making an offer. Make sure that the price you’re offering is comparable to similar homes in the neighborhood. Consider the costs of renovation. Last but not least, consider your loan type and down payment amount. Loans with high “loan to value” (small down payment) generally require that the home be in good condition.
A well informed real estate agent, representing the buyer exclusively is invaluable in such a transaction. There are many pitfalls and complications that can be avoided with such representation.
Dan Rider, an Owner/Broker of Dickson Realty, talks about Freddie Mac properties and the Homesteps program in the first part of our Freddie Mac series. Watch the video and learn what Freddie Mac and Homesteps is all about.
Dan Rider, an Owner/Broker of Dickson Realty, talks about Freddie Mac properties and the Homesteps program in the first part of our Freddie Mac series. Watch the video and learn what Freddie Mac and Homesteps is all about.
Tuesday, August 3, 2010 By: Amy Shocket
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