The 24 - Real Estate Blog

This is GREAT News for first time home buyers! As this market begins to correct itself and new underwriting and credit guidelines are being established, Fannie mae announced on May 16th, 2008 that it is replacing it's Declining Markets Policy with a new Down Payment Policy.

The Declining Markets Policy basically said that if a property was located in a "declining market", the maximum LTV/CLTV would be reduced by 5%. In a nutshell, if you previously would have qualified for a FLEX 100 or MyCommunity 100 - meaning 100% financing, you now have to come up with a 5% down payment.

The National Down Payment Policy states that there is a minimum down payment of 3% required for all loans approved through DU and 5% required for manually underwritten loans. This is consistent with what have long been FHA guidelines in regards to down payment requirements.

The elimination of FLEX 100 and MCM 100 is not the end of the world. The FLEX 97 and MCM 97 are both very aggressive programs for first time home buyers and home buyers purchasing a primary residence that may own other properties.

Down Payment Assistance Programs are allowed to cover the 3% down payment requirement and/or closing costs making this an incredible opportunity for home buyers.

For information about the Flex 97 and MCM 97 or information about Special Programs Specifically for California Teachers and Employees, contact me today!

I can be reached any time at:

Cell / Text: 714-336-8286
Email: Scott@MyPorchLightScott.com
AOL / Yahoo IM: PorchLightScott
MSN IM: PorchLightScott@hotmail.com

I can also be found at LinkedIn, Facebook, Twitter, FriendFeed, Plaxo and MySpace

If you are in the business of real estate or real estate finance you have been asked this question. Don't you wish you could just pop-off an answer like those folks on cable news being interviewed? Well, you can. Your answer is just as valid as most of theirs.

Real estate is local - no change of language or redefinition of words can change that. People are still buying, selling and refinancing home. From what I can tell judging by the number of calls we are taking a lot more people would like to be buying or refinancing than actually are doing so.

Why?

FEAR

People are still terrified. Gas prices are up, the cost of operating a small business are sharply up, some food prices are up and people are still being hammered with negativity every day. Some people say I'm just in denial because I truly believe it can and will get better soon.

The wrong president elect can set us way back. The problem is there are no strong candidates. Two of them are socialists so there is no chance in any either of those will get my vote. The one I am going to vote for is not my idea of a good candidate so I'm voting for the one I *hope* won't totally screw everything up. I already know which one I'm voting for because he already has the nomination of the party.

The few things I do know are this:
- interest rates are still crazy low compared to any other time in my life or yours
- interest rates will eventually get back up to 8 or 9 percent even on 80% loans for primary residences
- FHA is not the salvation of the world but it's the best we have to hang onto right now
- if you have some cash now is a fantastic time to invest in real estate in most areas in the nation
- 5% of $200,000 is more than 5% of $50,000 so in addition to the fact that most lenders don't want to loan that small buying a property valued at $50,000 in most major metro areas is not a fast track to wealth building
- the media has one job and that is to sensationalize the negative news with which we are daily bombarded and they are not going to stop

My advice is this: if you need to buy a home buy one. If you need to refinance do it. Don't let the fear frenzy of the media in a campaign year rob you of your liberty and joy. Even if your house goes down in value over the next 12 to 24 months it will eventually recover and in 5 years you'll be ahead of the game. Buy low and hold.

See you in the Winner's Circle!

Link: http://californiateachersandemployeeshomeloanprograms.com/

We have recently added the CalSTRS Home Loan Programs to the available Teacher Home Purchase programs that our company offers.

There is the Extra Credit Teacher Home Buying Program that is available through CalHFA to Teachers that work in Title 1 or High Priority Schools. This is a great program but it has it's limitations.

The first is that you must work in a "High Priority" school. The definition of this is that the API ranking must fall between 1-5.

Also, you must be a first time home buyer and not owned a home in the past 3 years and do not currently own any other properties.

CalSTRS is a much broader Home Loan Program that does not have these restrictions. Here is a quick summary of the features of these programs:

Conforming/Non Conforming loan programs allow for Purchase, Rate and Term Refinance and Cash Out Refinance options

95/5 - Zero Down Home Purchase Program. No first time home buyer requirement, No income restrictions, No School restrictions

80/17% - 3% Down Payment Home Purchase Program. If you contribut to CalSTRS it simply does not make sense to look at an FHA loan if you only have 3% down.

It is amazing to me that more teachers and school employees do not know that these programs are available to them. In addition to using Fannie Mae guidelines to qualify for these programs, the interest rates are among the lowest available in the market today!

There is also a free float down feature that allows you to reduce the interest rate one time for free if the rates drop during the process of buying your home.

For more information about these programs, you can contact me anytime.

Cell/Text: 714-336-8286
AOL/Yahoo/MSN IM: PorchLightScott
Email: Scott@MyPorchLight.com

Link: http://porchlightres.listingbook.com/?node=3

It is Important that you Understand what is happening on the other side of a short sale or short pay when you are considering making an offer on a home in this situation.

Read This First - And then come back and finish this article.

Ok, welcome back. I want to give you a perspective on buying short sales and short pays that will give you more control of the transaction.

Short Sales and Short pays are becoming more and more common in this real estate market and my best guess is that over 70% of what you are finding when you search for homes are either short pay / short sales or foreclosure / REO homes.

The seller and seller's real estate agent are an important part of the short sale process. The number one thing i hear from "agents" is that the bank foreclosed on the home without notice. I understand that there are some banks/lenders that are not cooperative and difficult to work with and I also believe that many times that is a self induced "difficulty" due to a lack of understanding of the process.

Much of the difficulty of the Short Sale / Short Pay process can be avoided with a simple matter of perspective by both home buyers and the Realtors® that represent home buyers.

You can make the process easier by understanding it. Your Realtor should be able to communicate with the seller's agent to determine whether or not they are communicating with the bank/lender.

Here is a "Perfect World" example of how to make an offer on a short sale / short pay and buy your new home.

The seller's real estate agent has educated the home seller on all of their options. The seller is communicating with the bank and has ensured that the bank will not foreclose on the home during the process. The seller's agent has already prepared and reviewed the seller's hardship package and is confident that the seller is a good candidate to ask for a short pay from the bank.

Your Realtor® has researched the comparable sales in the area and has recommended a fair offer price that the bank should be willing to accept. You should typically offer between 10% and 15% below current market value to accomodate for any further reduction in values over this (3 month) process.

Once the offer has been accepted by the seller, open title and escrow and order an appraisal. You know that the bank will order an appraisal or BPO before even considering your offer. Submitting an appraisal with the purchase offer and financing approval to the bank/lender you will make the negotiator's job easier.

Your Realtor® and the sellers agent are communicating and have a solid game plan on how to get you into this home. They work together to give you the best chance of buying and give the current home owner the best chance of selling their property to result in a Win/Win/Win for all parties involved.

Be willing to make an investment of $350 if you really want this home. It may be a good investment to pay for an appraisal if your offer seems much lower than they are asking. It is the single most pivotal component of your offer to purchase this home for less than what is owed on it.

An appraisal is an opportunity to get an independent third party report on the actual market value of the property. Once you have the appraisal, you will know if your offer is too high or too low and you can change it accordingly before submitting the package to the bank.

The Bank/Lender would prefer not to foreclose on a property unless they have determined that it is thier only option. I have seen banks postpone the foreclosure process for up to a year if some arrangement is made to make partial payments on the loan during this process. It is very expensive for a bank to forelcose.

Doing your homework will save you money. By making a fair offer to buy the home, you increase your chances of having the bank pay for closing costs. Many banks/lenders will pay up to 3% of the sales price toward your closing costs if your offer is fair. Make sure your Realtor® also verifies that the current home owner has made arrangements with the bank to prevent the home from going into foreclosure during the offer process.

Getting a good deal on a Short Sale / Short Pay is a matter of you being able to buy the home of your dreams and have a payment that you can comfortably afford. There are no magic deals out there, you can not buy a home at a HUGE discount unless you are an all cash buyer and the home needs a lot of work.

What they don't tell you is that the homes on TV that they buy, fix up, and sell for huge profits are cash purchases. Cash is king in Real Estate and there are incredible deals out there for investors. Investors do not buy short sales / short pays - they buy bank owned homes in poor condition that do not qualify for bank financing.

Now that you know the secret to buying a short sale / short pay home - be patient and find the home of your dreams. Buying a short sale or short pay is a long term commitment. Do your homework. Make sure your Realtor® does thier homework and most importantly - Enjoy the Process!

This is an incredible opportunity for home buyers. If you are armed with a good team going into this market - you will surely be the proud owner of a new home!

If you have any questions about homes in California - you can contact me anytime in any of the following ways:

Cell/Text: 714-336-8286
AOL/YIM/MSN: PorchLightScott
Scott@MyPorchLight.com

Link: http://brokerbryant.com

Hi folks. I am writing today to pick your collective brains a little. Have you heard that the House of Representatives recently passed a bill, H.R. 5830, named the Federal Housing Administration (FHA) Housing and Homeowner Retention Act?

From what I've read, and understand, this Bill will give distressed Homeowners an opportunity to refinance with FHA at 90% of value IF their current Lender will agree to a short payment.

One of the caveats is that the FHA will own a piece of the action. When the borrower sells they will either pay, from any profits, a 3% exit fee (a percentage of the original loan amount) to the FHA or a declining percentage of any net proceeds, attributed to appreciation, (from 100% in the first year to 50% in year 4 or after) whichever is larger.

I guess this FHA participation, in the appreciation, is to prevent speculators and second homeowners from participating. This Bill is designed specifically to keep folks in their homes.

My first thought is WOW!!! How great would this be to assist folks that are facing foreclosure who are in a short sale position? How receptive will lenders be to accepting a short sale at 90% of value?

Then I start thinking about FHA owning a piece of the appreciation. Basically they would now be an equity partner to the homeowner.

OK, I need to get my head around this. You can find Bill H.R. 5830 here. Please help me to understand the pros an cons of this Bill.