FHA’s 203K  loan program

Purchasing foreclosures also means discounts, but with the markdown is the price of repairs. According to RealtyTrac, foreclosures or REOs sold at an average discount of 27 percent compared to non-distressed properties in the first quarter of 2012. Through an FHA203(k) loan, potential buyers who want to purchase a discounted foreclosure but don’t have cash for the repairs may find a way to receive financing.

According to HUD, the 203(k) program is the department’s main program for rehabilitating and repairing single family properties, and it’s viewed as an important tool to revitalize neighborhoods.

In order to be eligible, the property must be purchased as a primary residence or it can be for a HUD approved nonprofit. Also, the property must be a one-to four-family residence that has been completed for at least one year.

The maximum amount that can be taken out for the property is based on the value or the purchase price of the property before rehabilitation (whichever is less), plus the estimated cost of rehabilitation or 110 percent of the property after improvements, according to HUD.

A down payment is required, and the minimal amount for a down payment is 3.5 percent of the accepted bid price plus the cost of financing repairs.

“FHA 203k approvals take more time, but are no more difficult than any other mortgage type,” said Green. “Borrowers should expect to provide the documentation required, and should respond to loan officer requests in a timely manner.”

Is a 203K Loan Right for You?

1. Buy a “Fixer-upper” or REO property needing renovation
2. Get funds to both purchase and upgrade your dream home
3. Refinance and renovate your existing home

Advantages of 203K

• Loan amount based on the home value including renovations
• Only one loan needed to both purchase and improve
• Refinance and rehab your own home
• Can be used to buy property otherwise not eligible for financing

Who Qualifies?

• A minimum down payment of 3.5%
• A credit score of 640 or higher
• You currently have no other FHA loans
• You DO NOT have to be a
  first-time buyer

FHA 203(k) Loans Offer Way to Finance Repairs for Foreclosures | Arizona ForeGolfProperties AZ golf communities specialist

With home prices still at record lows, Buyers can get more home for less money under today’s housing conditions. Buyers will also pay a smaller amount of interest over time and can snag that dream home for a fraction of its boom era price. Additionally, with the large number of distressed homes on the market, you may even find a home at a steep 10 to 20 percent discount.

Before you start mentally decorating that dream home, however, you should consider what “moving up” means for you. For some buyers, moving up means a better neighborhood. For others it means a bigger home with more space or amenities.

Here’s what every buyer should consider before making the move.

Where do you stand on equity? In simple terms, equity is the difference between what you owe and what your home is worth. You might already know this amount, but if you don’t, you can always call your lender to get more details.

Despite recent declines in home prices — and some areas have had steeper declines than others — if you’ve lived in your home for over five years you may have built a substantial amount of equity. Equity gives you some wiggle room during the selling process. You can rest a bit easier that you will sell for a profit instead of a loss.

What is the state of your financial situation? Some jobs are more stable than others. You do not want to take on a new financial burden if you fear that there may be downsizing at your company. Are you a two income household? What would happen if one of you were to lose your job? Can you really afford to move up? This means having at least 20 percent to put down, being able to pay off your current mortgage, and not having to lay a finger on your retirement funds to make the new purchase.

Are you willing to move during a market that is still seeing home price declines? Yes, you might be able to get into your dream home, but will be you also might see your new home’s value decline in the months and years to come.

What is pricing like for your current neighborhood? You may wish to get a comprehensive market analysis to find out the current value of your home as well as the specifics on your neighborhood competition.

What is your real reason for wanting to move? Are you an empty nester wanting to simplify life by downsizing to a smaller home, condo, or town home? Are multiple generations living under the same roof? Are you wanting to move to a newer neighborhood? Consider what it is that you really want.

Does moving up make sense for you at this moment in time? While there are some great deals to be had, it has to make good financial sense right now.

Thinking of Moving Up to a Golf Property?

Are You Thinking of Moving Up? | Arizona ForeGolfProperties AZ golf communities specialist

Through the Responsible Homeowner Refinancing Act of 2012 introduced by Democratic Sens. Bob Menendez (D-New Jersey) and Barbara Boxer (D-California), a new HARP 3.0 would break down barriers preventing millions more from refinancing.

During a hearing on Thursday before a senate subcommittee, industry experts and leaders offered testimony on how the proposed legislation could impact the economy.

Mark Zandi, chief economist for Moody’s Analytics, delivered a testimony in which he said, “Policymakers should act to substantially increase mortgage refinancing activity.”

When first introduced, the Obama administration expected HARP to refinance between 4 and 5 million homeowners, but FHFA estimates show that since its 2009 inception, the program has refinanced close to 1.1 million borrowers as of February 2012.

In late 2011, HARP underwent an expansion to allow borrowers with loan-to-value (LTV) ratios higher than 125 percent to apply, among other changes.

Acknowledging that it takes time for servicers to implement new changes, Zandi said in his written testimony that HARP refinancings in early 2012 appear to have run close to 50,000 per month, up from 30,000 per month since the program began. Zandi also noted reports from the Mortgage Banks Association showing a pickup in applications for refinancing.

While these changes have helped to encourage more activity, Zandi expressed his support for more changes.

“More refinancing will mean fewer borrower defaults and more money in the pockets of homeowners, supporting the recovery through a quick and sizable cash infusion at no meaningful cost to taxpayers,” he said.

If the proposed expansions are fully implemented, Zandi said the legislation would increase eligibility to nearly 21.5 million borrowers.

Under the Responsible Homeowners Act, borrowers with LTVs lower than 80 percent and non-GSE loans would be eligible for the program. Currently, HARP only includes Fannie Mae and Freddie Mac loans.

Overall, Zandi said the broader economy, taxpayers, and homeowners, who are expected to save $2,500 to $3,000 a year, will benefit from refinancing.

Though, Zandi does acknowledge a loss for one segment: investors in mortgage backed securities.

“While the agencies would lose some interest income on their $1.2 trillion in mortgage securities and whole mortgage loans, under reasonable assumptions that would be offset by lower default rates on refinanced loans,” he said.

In a calculation, Zandi said HARP refinancings totaled 4.2 million, private investors would receive about $6.5 billion less in annual interest income.

While investors may not be pleased with their return due to low interest rates, Zandi said, “they were aware of this prepayment risk when they purchased their securities.”

Source: DSNEWS.com

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HARP 3.0 will reach more underwater homeowners. | Arizona ForeGolfProperties AZ golf communities specialist

Foreclosure can seriously affect the credit of the homeowner for up to seven years. To help homeowners avoid this predicament, the government has developed programs to help homeowners get out of debt with their home and get on with their lives.

With the HAFA programs available qualified homeowners will be able to receive money upon giving up their homes in order to avoid foreclosure.

Short Sales are considered to be the most advantageous and practical solution for homeowners and banks to get out of a financial debilitating situation.

Banks can write off a bad loan and homeowners can avoid a foreclosure.

The homeowner who qualifies for a short sale will receive the Short Sale incentive offered by banks at the closing. Short Sale Incentives could be considered taxable income so it’s best to consult with your accountant or CPA for professional advice. Usually, borrowers are not taxed for any deficiency amount forgiven due to the Mortgage Forgiveness Debt Relief Act.

HAFA:  Fannie Mae and Freddie Mac participate in HAFA.

• Borrowers will receive $3,000 at the end of the short sale to help with relocation expenses.
• Servicers will receive $1,500 after a successful short sale.
• Investors will receive a max of $2,000 for overhead to second position lien holders.
• Investors will also receive $1 for every $3 spent to release junior liens up to 6% with a maximum of $6,000.

In order to qualify for HAFA, borrowers must already meet the central eligibility criteria for the HAMP modification program.

• The Property must be the homeowner’s primary residence.
• The loan must be the first mortgage on the premises.
• The homeowner must be delinquent in payments or can anticipate nonpayment in the near future.
• The unsettled balance cannot exceed $729,750.00.
• The borrower’s monthly mortgage payment must be more than 31% of the homeowner’s gross income.

Some other Short Sale Incentive Programs:

Wells Fargo/Wachovia Cash Back Short Sale Incentives-Wachovia’s Fast Track Program introduced in 2008 was the first lender incentive program, offering up to $5,000.00 back! Wells Fargo, after the merger offered $3,000.00 – $5,000.00. Wells Fargo has one of the fastest Short Sale approval ratings.

Bank of America is offering $2,500.00-$30,000.00 Short Sale incentives to qualified homeowner.

Chase Bank is now sending certain borrowers letters offering them the option of participating in a short sale for a significant incentive (often between $20,000 and $40,000 dollars).

While these are not all of the incentives available, they are definitely the most common ones. Now might be as good a time as any to consider a Short Sale.

Where to Find a Short Sale Incentive Program | Arizona ForeGolfProperties AZ golf communities specialist

Nationally we are seeing positive signs of recovery and a turning real estate market across all price points with the exception of a few weak housing markets.

USA Today reported that the number of existing homes for sale (inventory) dropped to 22% from a year ago.

The National Association of Realtorsreported a rise in home prices in 74 of the 146 housing markets they track in the first quarter of 2012 vs. declines in 72 areas.

Let’s look at some encouraging statistics for first quarter 2012:

• In Phoenix the March Inventory was down 64% from a year ago.
• The National Association of Realtors reported that there are a shortage of inventory of homes for sale in Phoenix,Orange County,California,Naples,Florida,Seattle, Suburban Washington, DC andNorth Dakota.
• According to TransUnion mortgage delinquency rates dropped from 6.19% in the last quarter of 2011 to 5.78% in the first quarter of 2012.
• Investors accounted for 22% of buyers.
• Condo prices rose 3.4%.
• All cash transactions made up 31% of all sales.
• Existing home prices were up 5.3% and are the highest level since 2007.
• The hardest hit markets are now among the top recovering markets.

Inventory Is Shrinking Causing List Prices to Rise | Arizona ForeGolfProperties AZ golf communities specialist

Home prices are down 34% since 2006 and mortgage rates are at historic lows. The mortgage rate reached a record low today.

Housing markets are beginning to stabilize, and in some cities, such as Phoenix we see the turnaround beginning as the once bargain home prices are starting to rise. Phoenix recorded an 8.4% jump in during the three months ended April 30, compared with the three months ended January 31, according to Clear Capital.

Some key indicators:

• Foreclosures are diminishing
• Demand for home is picking up
• Mortgage rates remain low

Foreclosure inventory is shrinking

The percentage of mortgage loans 90 days or more late, a good predictor of future foreclosures, is “falling fast.” That percentage dropped 15% year-over-year to 3.1% through the end of 2011, according to the Mortgage Bankers Association. And the decline is accelerating: More than 70% of the decline came in the last three months of the year.

Before things slow down, however, buyers should prepare for a temporary spike in the number of foreclosures as banks start expediting the processing of their shadow inventory.  That backlog should move more quickly now.

Investors have been key in the clearing out the foreclosure inventory in Phoenix, and many are still out there snapping up foreclosures and turning them into rental properties.

Home buying is now much cheaper than renting.

The demand for rentals escalated when hundreds of thousands of homeowners lost their homes and needed to find rentals for their families. This demand has caused the rental rates to rise over the last couple of years.

Mortgage Rates are at record lows.

Mortgage rates have been at or near historic lows for much of the past six months. The average interest rate for a 30-year, fixed-rate mortgage has not topped 4.5% since July 2011 and this week, it hit 3.84%, a new low. But rates aren’t expected to remain at these record-low levels much longer. This may be the last chance you have to get a 3.8% mortgage.

The Mortgage Bankers Association is forecasting that the 30-year fixed will hit 4.5% by the end of the year.

As housing markets stabilize and bargain home prices start to evaporate and jobs continue to grow, home buyers will be even more confident about buying….homes have never been more affordable and may never be this affordable again.

Bargain home prices still available | Arizona ForeGolfProperties AZ golf communities specialist

The value of your home is much more difficult to predict and the information available to home sellers can be untrustworthy. Online home valuation sites are fun to play with, but they are based on past sales, not current market factors. Newspaper listings give you some information, but houses are usually so different that it’s hard to compare.

The best method available to home sellers to learn their home’s current value so they can select the best sale price is a CMA, or Comparative Market Analysis. CMA is the term real estate agents use when they conduct an in-depth analysis of a home’s worth in today’s market.

The best part about a CMA is that it’s usually free!

Your Realtor will prepare a CMA for you before you list your home. Setting the price too low means you’ll get less money for your home; setting it too high means it might not sell at all. Every real estate agent in the country will want to complete a CMA on your home before helping you sell it. Sellers who haven’t yet chosen a real estate agent often ask several agents to complete CMAs so there is opportunity to meet different agents and to see how they work.

How much can you sell your home for? Probably about as much as the neighbors got, as long as the neighbors sold their house in recent memory and their home was just like your home.

Knowing how much homes similar to yours sold for gives you the best idea of the current estimated value of your home. The trick is finding sales that closely match yours.

What makes a good comparable sale?

Your best comparable sale is the same model as your house in the same subdivision—and it closed escrow last week. If you can’t find that, here are other factors that count:

Location: The closer to your house the better, but don’t just use any comparable sale within a mile radius. A good comparable sale is a house in your neighborhood, your subdivision, on the same type of street as your house, and in your school district.

Home type: Try to find comparable sales that are like your home in style, construction material, square footage, number of bedrooms and baths, basement (having one and whether it’s finished), finishes, and yard size.

Amenities and upgrades: Is the kitchen new? Is there a pool? Does your community have the same amenities (pool, workout room, walking trails, etc.) and homeowner’s association fees?

Date of sale: You may want to use a comparable sale from two years ago when the market was high, but that won’t fly. Most buyers use government-guaranteed mortgages, and those lending programs say comparable sales can be no older than 90 days.

Sales sweeteners: Did the comparable-sale sellers give the buyers down payment assistance, closing costs, or a free television? You have to reduce the value of any comparable sale to account for any deal sweeteners.

Agents can help adjust price based on insider insights

Even if you live in a subdivision, your home will always be different from your neighbors’. Evaluating those differences—like the fact that your home has one more bedroom than the comparables or an office—is one of the ways real estate agents add value.

An active agent has been inside a lot of homes in your neighborhood and knows all sorts of details about comparable sales. She/he has read the comments the selling agent put into the MLS, seen the ugly wallpaper, and heard what other REALTORS®, lenders, closing agents, and appraisers said about the comparable sale.

More ways to pick a home listing price

If you’re still having trouble picking out a listing price for your home, look at the current competition. Ask your real estate agent to be honest about your home and the other homes on the market (and then listen to her/him without taking the criticism personally).

Are foreclosures and short sales comparables?

If one or more of your comparable sales was a foreclosed home or a short sale (a home that sold for less money than the owners owed on the mortgage), ask your real estate agent how to treat those comps.

A foreclosed home is usually in poor condition because owners who can’t pay their mortgage can’t afford to pay for upkeep. Your home is in great shape, so the foreclosure should be priced lower than your home.

Short sales are typically in good condition, although they are still distressed sales. The owners usually have to sell because they’re divorcing, or their employer is moving them out of state.

How much short sales are discounted from their market value varies among local markets.
So you have to rely on your REALTOR’s® knowledge of the local market to use a short sale as a comparable sale.

Call us today at (480) 421-8116  for Your Personalized Market Analysis.

What is Your Home Worth in Phoenix? | Arizona ForeGolfProperties AZ golf communities specialist

According to data from Realtor.com’s: “First-Quarter Real Estate Trend Data Report”; the turnaround trend here in the Phoenix metro area has produced a 23.5% increase in the median home price from a year ago, bringing it to $179,000. The report analyzes data for 146 U.S. metros and includes single-family homes, condos, townhomes and co-ops.

The rise to the #1 market in the nation for rising home prices comes as no surprise to Realtors here in Metro Phoenix. Local Buyers Representatives have been experiencing Phoenix become a Seller’s market overnight. They have been scouring the Phoenix neighborhoods in the last couple of months in an effort to find homes for qualified buyers.

What happened to our inventory?

The glut of Foreclosure inventory has decreased dramatically due to the robust buying activity of investors, and the reluctance of our banks to release more foreclosures to the market at this time.

Sellers who did not have to sell immediately have been waiting until home prices picked up before putting their home on the market.

There are also too few new build homes available to meet demands. Builders are having difficulty finding skilled construction workers to keep up with demand.

As our Inventory of homes has decreased, the buyer’s demands for homes have not. It’s the age-old theory of supply vs. demand. Too few of anything that people want to buy causes the price to go up.

For homeowners who have been waiting to sell their homes, the wait is over. It’s now time to sell. It’s the spring selling season, the buyers are plentiful, and there are not enough homes on the market to meet demand.

Want another reason to expect your home to sell quickly?

How about buyers wanting to still get in on record low interest rates? The Federal Reserve policymakers wrapped up a two day meeting on Wednesday with an announcement that they intend to keep interest rates right where they are. In a statement, the Open Markets Committee said interest rates will likely need to remain at exceptionally low levels through late 2014.

Not convinced?

Here’s more from Realtor.com’s report: “The Phoenix metro area has had a particularly notable shift in fortunes. In March 2011, it was No. 4 in the top 10 metros Realtor.com tracks for year-over-year median list-price declines.

It’s Time to Sell: Phoenix Named #1 City for Rising Home Prices | Arizona ForeGolfProperties AZ golf communities specialist

The homes sold in March had a median sales price of $184,525. It was the second-straight month prices rose higher than the year-ago period. Before February, home prices landed below year-ago levels for 18 consecutive months. But home sales steadily picked up over the last nine months.

In March, home sales climbed 1.5% from last year and jumped more than 25% from February, according to the report.

“With buyers starting to jump into this market, this year’s selling season is shaping up to be the strongest we’ve seen in years,” said Margaret Kelly, CEO of RE/MAX. “Although we don’t expect home prices to rise in every market at the same rate, the worst is definitely behind us, and a slow, steady recovery is taking hold.”

The homes sold in March spent an average 101 days on the market, down from 104 last year.

Inventory also dropped to a 5.3-month supply, a roughly 2% dip from February and the 21st consecutive monthly decline. The shadow inventory of foreclosed homes or those on the verge of repossession spans into the millions, and is anticipated to begin growing again as the robo-signing freeze thaws.

But RE/MAX anticipates housing to rebound through the selling season.

“Following these trends, the spring and summer months should experience increased activity. With falling inventory and many markets witnessing multiple offers with bidding competitions, prices are likely to continue to rise in many areas,” according to the report.

Source: John Prior, Housingwire

RE/MAX: Home Prices Increased 5.8% in March | Arizona ForeGolfProperties AZ golf communities specialist

Beginning Saturday, April 14 Bank of America will be ready to approve short sales in 20 days.

The move could spare delinquent homeowners from months of limbo while the bank considers offers from buyers. No longer will the buyer have to wait up to 6 months for the Bank to approve the deal.

The new task flow in Bank of America’s short-sale management platform, Equator, will enable short-sale specialists to conduct tasks like document collection, valuations and underwriting simultaneously.
Bank of America has been working with Equator, a real estate software company, to develop a program that allows short-sale negotiators to approve the process faster.

When the changes to Equator take effect Saturday, five documents will be required to process short-sales initiated with an offer:

• A purchase contract including buyer’s acknowledgment and disclosure.
• HUD-1.
• IRS Form 4506-T.
• Bank of America short-sale addendum.
• Bank of America third-party authorization form.

Offer documents and supporting documents for all short-sales submitted with an offer must be uploaded before Friday, April 13, or files may be declined.

Major lenders are looking to save millions on court costs, lawyer fees and property taxes by avoiding foreclosure. Short-Sales also speed the process of getting bad loans off bank books and gets the properties back on the market faster.

To further sweeten the deals, many lenders are waiving the deficiency on the mortgages, which would allow homeowners to sell the house for less than they owe without having to make up the difference to the bank.

Speak to a Short-Sale Expert Today: (480) 421-8116

BofA Plans to Speed Up Short-Sales Process | Arizona ForeGolfProperties AZ golf communities specialist