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Short Sales: A Viable Alternative to Foreclosure

May 14, 2012 By Leave a Comment

By John Voket

One of the things we hope to see less of in 2012 is short sales.

This brings me to a blog by Bion Grady, (bionsellshomes.com) who specializes in loan modification assistance and short sales in Paulding County, Ga. Grady says if the only alternative for distressed homeowners is to walk away from their property, a short sale may still be a viable alternative for a number of reasons .

Grady advises homeowners to remember these four things:

1. Debt Eraser. The upside down debt is erased in most cases. If you are selling because of a financial hardship, then the upside down debt will be automatically erased in most cases. If your loan is owned or insured by Fannie Mae, Freddie Mac, FHA, and/or VA, and you are short selling because of a financial hardship, their policies state that your debt will be erased.

2. Faster Rebound. You are eligible to buy another home much sooner compared to a foreclosure. The most common loan program, Fannie Mae, stipulates that you can buy another home under their program in two years. FHA, a popular low down payment loan program stipulates that you can qualify for an FHA loan within three years.

3. No Cost to You. According to Grady, all of the expenses are paid for by your lender. That includes the title insurance, any county taxes or fees on the sale, attorney fees, and the real estate agent. If the lender foreclosed on the house and then tried to sell it, they would have to pay all the costs.

4. Less Credit Damage. Upon completion of the short sale, Grady says your credit score will drop between 50 and 100 points. However, it will rebound fairly quickly, and you will have a lower debt to income ratio, which will boost your credit. In addition, anything and everything bad on your credit can be fixed through the dispute process.

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The Housing Recovery Is Slow Going, but Things Are Improving

April 30, 2012 By Leave a Comment

There has been a flurry of media stories regarding the latest housing data that suggest the recent momentum in the housing market has stalled and the industry is heading toward another downturn.

Although the latest monthly housing data showed modest declines, the less volatile quarterly data have continued to show modest improvement. Consequently, there is plenty of evidence for retaining a cautious optimism for a gradual recovery. While the February new-home sales rate dipped a nominal 1.6 percent, sales are still running 11.4 percent above their year-ago level and at the rate expected for the slow recovery. Meanwhile, the inventory for new-homes for sale remains at an all-time record low.

While combined U.S. housing starts lost some ground in March, this was almost entirely due to typical month-to-month volatility on the multifamily side. The fact is that single-family and multifamily starts and permits were all stronger in the first quarter of 2012 than they were in the fourth quarter of 2011, indicating that the market continues to slowly strengthen, albeit in fits and starts.

We are also seeing the long-term improvement in housing conditions continuing to take hold in a growing number of local markets. The April NAHB/First American Improving Markets indicates that 101 individual metros are showing measurable and consistent signs they are heading in the right direction.

Total job growth continues upward, providing added consumer confidence and pushing personal income up.

No one is anticipating that an upward path for housing will run in a straight-line trajectory. The economy is in an uneven recovery and we can expect some corresponding ups-and-downs in the housing market in the months ahead.

However, the National Association of Home Builders (NAHB) believes that on the whole, we can expect a slow and gradual recovery in housing starts, home sales and the overall housing market in 2012. We will provide more details on our perspective on national and regional housing trends at the Spring NAHB Construction Forecast Webinar on Wednesday, April 25 from 2 p.m. to 4 p.m. Eastern time.

Those who wish to register can do so by logging on to www.nahb.org/cfw.

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Tips to Avoid Becoming a Victim of Mortgage Fraud

April 16, 2012 By Leave a Comment

According to the Federal Bureau of Investigation (FBI), mortgage fraud is an escalating problem. It is the fastest growing white collar crime in the U.S. The FBI estimates annual losses of $4 billion to $6 billion in mortgage-related fraud, and the numbers are expected to increase. While there are legitimate programs to help ailing homeowners, there are also many scams that capitalize on these programs. Money Management International (MMI) offers the following tips to avoid falling into a foreclosure trap:

• Talk to your mortgage lender first. If you think you are unable to make a payment, contact your lender right away. They may be able to help you identify options to bring your loan current.

• Don't pay upfront fees. Someone asking you to pay an upfront fee in exchange for help should be a red flag that the person or company may not have your best interest at heart.

• Get promises in writing. Oral agreements relating to your home are usually not legally binding. Protect your rights with a written contract signed by the person making the promise.

• Make mortgage payments directly to your lender or mortgage servicer. Do not trust anyone else to make your mortgage payments for you.

• Be careful about transferring your title. Foreclosure scams often require you to sign ownership of your home over to a third party. Never sign over your deed without seeking legal advice first. Understand the terms of the deal you are making. By signing over your deed, you lose rights to your home and any equity.

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Increase in All-Cash Home Purchases

April 11, 2012 By Leave a Comment

According to a recent report in Real Estate Economy Watch, nearly one out of three home sales in December 2011 went to buyers who paid all cash, adding credence to the belief that investors are key to the recovering real estate market.

The report was based on the findings from the Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, which surveys approximately 2,500 real estate agents nationwide each month. According to the survey, in December, the overall proportion of cash buyers in the housing market surged to a record 33.2 percent, up from 29.6 percent a year earlier, and 74 percent of investors used all cash to buy homes. Investors accounted for 22.8 percent of home purchases in December 2011, up from 22.2 percent a month earlier.

The combination of all cash and shorter closing timelines convinced many sellers to accept lower bids. The survey found that cash buyers are able to bid significantly lower—and successfully—on many properties because they offer a shorter and more reliable closing timeline. This is particularly true for bids on distressed properties, because mortgage servicers selling foreclosed properties generally prefer transactions that can settle within 30 days.

The total share of distressed properties in the housing market in December, as represented by the HousingPulse Distressed Property Index (DPI), continued at a high level of 47.2 percent, using a three month moving average. This is the 24th month in a row that the DPI has been above 40 percent.
While investor bids may not be the first offers accepted, they often end up winning properties after other homebuyers are eliminated because of mortgage approval or timeline problems.

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What You Need to Know about Short Sales

March 30, 2012 By Leave a Comment

In the previous segment, we looked at reasons to consider a short sale. But in this segment, we'll hear from Charlotte, N.C. REALTOR® Jon Widdifield about what you need to know if you're considering buying a short sale property in 2012:

1. The list price may not be the sales price; the bank may ask for more than the list price.

2. The bank makes the final decision, not the homeowner.

3. The home will typically be sold as is. If the homeowner does not have enough to pay the mortgage, they probably do not have enough to do repairs.

4. A short sale is not owned by the bank. However the bank must approve the sales price.

5. A short sale is not a short process; it can take several months to get to the closing table.

6. There will be bumps in the road when purchasing a short sale; you must be patient if you plan on purchasing one.

7. You can get really great deals on a short sale; just keep in mind it can be an arduous process.

8. Do not set your hear on a particular short sale until the deal is closed; the deal can fall through at any time.

9. Don't give up. The process is difficult but these homes do get sold. And most importantly, if you're considering transacting a short sale in 2012, Widdefield says…

10. Make sure you have an agent that is experienced in Short Sales. You need someone that knows what to do to get the deal closed.

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New CRS Course Focuses on Buyer Side of Distressed Properties

March 13, 2012 By Leave a Comment

Far too many REALTORS® avoid the distressed property market—which includes foreclosures and short sales—because they do not have the necessary skills, strategies or information they need to guide their buyer clients through one of these transactions successfully.

But distressed properties accounted for 34% of fourth quarter 2010 home sales, up from 32% a year earlier, according to data from the NATIONAL ASSOCIATION OF REALTORS® (NAR), and these homes sold at a discount of 10-15%. This presents a big opportunity for buyers and to those REALTORS® who are qualified to assist them through these often tricky transactions.

To prepare agents to serve this growing need, the Council of Residential Specialists (CRS) has developed a new course, Guiding the Buyer in the Distressed Property Market (CRS 112), that gives agents the practical tools and skills they need to counsel clients about distressed property transactions.

Building upon the success of CRS's existing Short Sales and Foreclosures:
Protecting Your Clients' Interests course (CRS 111), the new course's program focuses on the buyer side of distressed property transactions. "This course is a direct response to market demand," says CRS education director Mary Beth Ciukaj. "Agents realize that when more than one-third of all existing-home sales involve distressed properties, it's time to learn how to serve consumer demand in that area. This course aims to help them do just that," she says.

Developed and taught by senior instructors Frank Serio, CRS, and Leroy Houser, CRS, the course includes specific sales strategies which will help both new and experienced REALTORS® represent their buyers in the most professional manner possible. Course attendees will gain the knowledge they need as they build confidence in their ability to navigate the many complex processes involved in a distressed property transaction.

"At a time when so many residential properties are distressed, there's a good chance that agents will work with a buyer client who wants to buy one of these homes in the near future," says course co-author and 2011 CRS president Frank Serio, CRS. "Short Sales and Foreclosures: Protecting Your Clients' Interests is the perfect course to teach agents the techniques they need to better serve these clients who must navigate the tricky transactions prevalent in today's market."

Upon successful completion of this course, REALTORS® will be able to:
- Counsel and prepare their clients to purchase a distressed property.-
- Find and select those distressed properties that meet their clients' specific needs.
- Successfully prepare and negotiate an "offer to purchase" contract.
- Finance REO and short sale properties.
- Qualify and work with the listing agent in order to avoid unnecessary delays and problems.
- Successfully sell REO and short sale properties.

Guiding the Buyer in the Distressed Property Market (CRS 112) earns attendees eight units of CRS education credit toward the CRS Designation, and it has been approved as a qualifying core course for NAR's Short Sales and Foreclosure Resource Certification (SFR).

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Considering a Short Sale? Answer These Questions First

March 2, 2012 By Leave a Comment

While you may have heard that selling your home as a short sale can be a long, frustrating, and sometimes futile process, the tide may be turning as lenders have become increasingly more amenable to short sales. Many lenders, says real estate professional and educator Gee Dunsten, are viewing short sales in a more favorable light after suffering through failed loan modifications and countless foreclosures.

Before embarking on the short sale process, however, talk to a REALTOR® who is experienced in the area of distressed properties. Dunsten asks all his clients to start by completing the following questionnaire. One of the top reasons short sales fail is because the home seller never actually qualified for one in the first place. Answering the following questions accurately and thoroughly will determine whether your home is eligible for a short sale:

  1. Is your property currently on the market? Is it listed with an agent?
  2. Is this your primary residence?
  3. When was the property purchased?
  4. What was the original purchase price?
  5. Who holds the mortgage?
  6. What kind of loan do you have? (FHA, VA, Conventional)
  7. Do you have any other liens against your property?
  8. Who is on the title (or deed) for the property?
  9. Who is on the mortgage?
  10. Do you have mortgage insurance?
  11. Are you current with your payments? If not, how far in arrears are you?
  12. How much do you owe?
  13. Why do you need/want to sell?
  14. What caused you or will be causing you to miss your mortgage payment obligation?
  15. Do you have funds in accounts that could be used to satisfy the deficiency?
  16. Are you currently living in the property? If not, where are you living and is the property being maintained?
  17. How soon do you need to move?
  18. Are you up to date on your condo or HOA payments (where applicable)?
  19. Do you owe any back taxes?
  20. Are you considering filing for bankruptcy protection?
  21. Are you currently pursuing a loan modification with your lender?
  22. Who is occupying the property?
  23. Do you hold or are you subject to any type of security clearance related to your job?
  24. What are your plans after you sell?
  25. Are you looking to receive any money from the sale of your home?
  26. How much income are you currently making from all sources?
  27. Do you anticipate any income change up or down in the not-too-distant future?

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Consumer Attitudes Improve in December 2011

January 27, 2012 By Leave a Comment

Americans' attitudes on a variety of issues are marginally better than one month ago, according to results from Fannie Mae’s December National Housing Survey. Despite overall low levels of optimism among Americans, consumer sentiment trended in a positive direction in the final months of 2011.

Americans who say the economy is on the right track rose by 6 percentage points since November, while the percentage who say the economy is on the wrong track dropped by 6 percentage points. When asked about housing, more Americans expect home prices to increase compared to November and, on average, Americans expect home prices to increase by 0.8 percent over the next year, up from an expected 0.2 percent increase last month. On the personal finance side, for the first time since February 2011 more respondents say their financial situation will get better over the next year than say it will stay the same. In turn, the share of consumers who say their income is significantly higher than it was a year ago rose 5 percentage points since last month.

“December attitudes have rebounded from the lows seen during the debt ceiling debate and economic deterioration of Europe this past summer. There is marked improvement in consumer sentiment regarding the direction of the economy, personal finances, and future home price expectations,” says Doug Duncan, vice president and chief economist of Fannie Mae. “This improvement is in line with the modest fourth-quarter pickup in the U.S. economy. However, while December results show that more Americans think the economy is on the right track, consumer attitudes are still at depressed levels, with more than two-thirds saying that the economy is on the wrong track.”

The survey shows that 22 percent of Americans say the economy is on the right track (up by 6 percentage points since November). The percentage who say the economy is on the wrong track dropped to 69% (a decline of 6 percentage points).

For the first time since February 2011, a larger share of respondents (40 percent) say their personal financial situation will get better over the next 12 months than say it will stay the same (39 percent).
Additionally, 21 percent of respondents say their income is significantly higher than it was 12 months ago (up 5 percentage points since November), while 59 percent say it has stayed the same (down 7 percentage points).

Eleven percent say their household expenses have decreased over the past 12 months (up 3 percentage points since November), while 39% say their expenses have increased significantly. 49% report that their expenses are about the same compared to 12 months ago (down 5 percentage points since November).

On average, Americans expect home prices to increase by 0.8% over the next 12 months, up from 0.2% in November.

Twenty-six percent of respondents expect home prices to increase over the next 12 months (up 4 percentage points since last month), while 18% say they expect home prices to decline (down 4 percentage points since last month). 52% say prices will stay the same.

Findings portray that 36 percent of Americans say that mortgage rates will go up over the next 12 months, up 3 percentage points from November and even with October.

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The Beach Town of Cocoa Beach

January 27, 2012 By Leave a Comment

The Town of Cocoa Beach was established on June 5, 1925. Gus C. Edwards was elected[citation needed] as mayor and served as a commissioner along with J.A. Haisten, and R.Z. Grabel. On July 27, 1925, Cocoa Beach held its first official meeting at the Cocoa Beach Casino, and adopted the City Seal. A little less than a month later, plans for a pier became official.

Cocoa Beach is all about the beach, known as small wave capital of the world it is perfect for beginning and experienced surfers alike. You can show off your moves in the water at the Cocoa Beach Pier, or see and be seen in the latest surf attire from Ron Jon Surf Shop or the Cocoa Beach Surf Company. Within a short walk of these two shops you'll find plenty of restaurants and places full of clothing and seashells. You can rent and buy beach gear, and even get a tattoo! There are so many things to do in Cocoa Beach and because there are so many great hotels, you can stay on the beach at the end of your day of fun in the sun.

It's been called the quintessential beach town, and Cocoa Beach, an hour's drive east of Orlando on Florida's beautiful Space Coast, offers endless ways to enjoy recreation and leisure. Whether you are planning a family beach vacation, leisure travel, a business trip, a weekend getaway, or just a day at the beach, you'll find everything you need in Cocoa Beach and the Space Coast area to make your stay one to remember.

One of the more affordable vacation spots in all of Florida, there is never a lack of exciting things to do and see in and around Cocoa Beach. Besides offering the best of "sun and fun," while on the Space Coast you can go deep sea fishing or parasailing, try your luck aboard a casino cruise ship, or take a fabulous eco-tour to get up close and personal with Florida's awesome wildlife.

Education
The city has three public schools:

• Freedom 7 Elementary
• Theodore Roosevelt Elementary
• Cocoa Beach Jr./Sr. High School

94% of all residents 25 years or older are high school graduates. 38.6% have a Bachelor's Degree or higher.

Landmarks
• Cocoa Beach Pier
• Alan Shepard Beachfront Park
• Thousand Islands Conservation Area
• Cocoa Beach Aquatic Center and Pool Complex
• I Dream of Jeannie Lane

Cocoa Beach Pier
It’s an adventure 800 ft. over the ocean! This historical landmark on the Space Coast was established in 1962. Home to 5 restaurants, 4 bars, gift shops, free live musical entertainment and an 800 foot long fishing pier so YOU can land the big one! The pier also offers beach rentals, fresh water showers, regulation beach volleyball courts, lifeguards year round and some of the BEST surfing on the east coast! Annual events include beach concerts and surf festivals throughout the year! The Beach Boys, UB40, Ali Campbell, Julian Marley, Maxi Priest & more!

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‘Normal’ Home Prices Are Stabilizing

January 18, 2012 By Leave a Comment

Prices of “normal” homes—those that aren’t foreclosures or short sales—are stabilizing and the numbers of future foreclosures are falling. That “sliver of good news for consumer spending” was included in CoreLogic’s July report on housing and market trends.

In May 2011, the firm’s Home Price Index excluding distressed sales only dropped 0.4 percent from a year ago, compared to a decline of 7.4 percent for the all transactions measured by the HPI. Even while including distressed sales, the HPI increased between March and April —the first time in more than six months—and was up again between April and May.

“These increases represent the resumption of seasonality in home prices and are a positive sign for the market. When disaggregating median prices by type of sale for the first complete month of the spring home buying season, it is clear that despite the whipsaw impact of the federal homebuyer tax credit, state homebuyer tax credits and increases in FHA premiums, non-distressed median existing and new prices are back to 2009 levels,” the report said.

Although the distressed sales share remains high, the geographical sources of distress are shifting and becoming more dispersed. As of December 2008, four of the top five largest distressed sales markets were all located in California, and the top five markets averaged a distressed sale share of 68 percent. As of April 2011, only two of the top five markets are in California and, more importantly, the top five average distressed share was 56 percent — a 12 percentage point decline relative to top markets in late 2008.

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