It's not easy turning a potential foreclosure into a successful
affordable mortgage modification -- from either side of the table.
Homeowners, facing confusing documentation requirements and
conflicting advice from both honest and dishonest corners, become
intimidated and drag their heels or bury their heads.
Lenders, grappling with voluntary provisions in ever-evolving
regulatory adjustments, skilled worker shortages and disoriented
homeowners, not surprisingly develop an edge of ambivalence.
To help clear some of the sludge out of the Obama Administration's Home Affordable Modification Program (HAMP) the U.S. Treasury Department and Department of Housing and Urban Development (HUD) recently announced plans to speed up trial mortgage modification conversions to help homeowners obtain a permanent mortgage modification.
A more recent addition to the plan also calls for ban on
mortgage lenders canceling trial modifications that are due to expire
before Jan. 31, 2010, giving homeowners more time to convert.
A mortgage modification
occurs when the lender reworks the terms of your existing home loan,
typically to lower payments and make the home more affordable for you.
Lower payments can result from a lower interest rate, extended loan
term, reduced principal or any combination of those approaches.
Under the HAMP plan, borrowers who sign up for mortgage
modifications begin with a trial modification of up to five months.
That gives them time to submit a stack of paperwork, including proof of
income, assets, debts, hardship affidavit and other documents, to make
the modification stick. The trial period also gives them time to
determine if the modified monthly payment is sustainable.
Approximately 60 percent of the 375,000 borrowers who have
begun trial modifications are scheduled to convert to permanent
modifications by the end of the year, but have not completed the
paperwork, according to the Feds.
The mortgage modification conversion effort includes provisions that have already:
• Extended the period for trial modifications started on or
before September 1, 2009 to give homeowners more time to submit the
required information.
• Streamlined the application process to minimize paperwork and simplify the submission process.
• Ordered federal officials to meet regularly with servicers
(banks and lenders) to identify necessary improvements to borrower
outreach. Servicers failing to meet certain obligations could be
subject to monetary penalties and sanctions.
• Developed operational metrics to hold servicers accountable for their performance, which will soon be reported publicly.
• Enhanced borrower resources on the MakingHomeAffordable.gov
website and the Homeowner's HOPE Hotline (888-995-HOPE) to provide
direct access to mortgage modification tools and housing counselors.
New resources on MakingHomeAffordable.gov include:
• Links to all of the required documents and an income
verification checklist to help borrowers request a modification in four
easy steps.
• Information about how the trial phase works, what borrower responsibilities are to convert to a permanent modification, and new instructional videos which provide step-by-step instructions.
Watch more MakingHomeAffordable.gov YouTube videos.
Published: February 4, 2010
Realty Times
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Property information
Cond. Varadero, Isla Verde
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Announcing a price reduction
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Property information
Agency trying to shore up finances, prevent possible need for bailout
WASHINGTON - The Federal Housing
Administration is raising fees and tightening lending standards to
shore up its strapped finances and avoid a taxpayer bailout.
The
government agency has seen its losses rise with the foreclosure rate.
Its reserves have sunk below the minimum level required by Congress. A
healthy FHA is vital for the housing market because it insures roughly
30 percent of new loans, and is the largest backer of mortgages to
first-time buyers.
The
changes, which will go into effect in the first half of the year, "are
among the most significant steps to address risk in the agency's
history," FHA Commissioner David Stevens said in a prepared statement.
The
FHA does not make loans, but rather offers insurance against default.
Borrowers are willing to pay for the insurance because FHA loans only
require down payments of 3.5 percent of the purchase price — and that
didn't change.
The
new policies, to be announced Wednesday, are designed to bring more
revenue into the agency, while at the same time keeping loans available.
Under the changes, homebuyers will:
- Pay
an upfront mortgage insurance premium of 2.25 percent of the total loan
amount, up from the current level of 1.75 percent. A borrower taking
out a $200,000 mortgage would pay a $4,500 fee, for example, rather
than the current fee of $3,500. Borrowers will still be able to wrap
these fees into the total amount borrowed. FHA officials also plan to
ask Congress to increase the maximum annual premium that FHA can charge.
- Need
a credit score of at least 580 to qualify. Many FHA lenders already
require a higher score, but there had been no standard requirement
across the program. Borrowers with a score lower than 580 will need a
down payment of at least 10 percent.
The
changes come as borrowers with loans backed by the agency have
increasingly been falling into default. More than 18 percent of FHA
borrowers are at least one payment behind or in foreclosure, compared
with 14 percent for all loans, according to the Mortgage Bankers
Association.
Click for other content in real estate
Mortgage
lenders "will find the new rules painful but necessary," said Howard
Glaser, a mortgage industry consultant and former housing official
during the Clinton administration.
There
also have been fears that unscrupulous operators have shifted their
business to the FHA after the subprime business went bust. Last week,
the agency served subpoenas on 15 mortgage companies with suspiciously
high default rates for FHA loans, part of a broad crackdown on dubious
lenders.
The
agency has already taken action against several problem lenders. One of
the nation's biggest mortgage bankers, Taylor, Bean & Whitaker
Mortgage Co. of Ocala, Fla., was banned from the FHA program in August
and filed for Chapter 11 bankruptcy protection. Another mortgage
company, Lend America, was kicked out in November.
The Associated Press
Low interest rates and fast appreciation lure hunters to homes facing foreclosure. You may pay less than market value, but not too much less -- and the reasearch can be daunting.
With interest rates at record lows and the stock market looking too
perilous for small investors, many people are putting money in an asset
they understand -- real estate.
One of the best places to invest is in foreclosures and bargain residential real estate.
The
current market conditions make it a perfect time for a small investor
to purchase one or more foreclosure properties for their private
residence, rental or resale. During economic downturns, more upscale
homes go into foreclosure, so the notion that foreclosure homes are
only available in crime-ridden areas is inaccurate. Beachfront and
homes in affluent areas are part of the mix of foreclosed properties
available.
But anyone considering buying a foreclosed home should forget about paying pennies on the dollar.
"You
can buy foreclosures for as cheap as 30% or 40% below market, but most
foreclosures sell for 5% below market," said John T. Reed, editor of
Real Estate Investor's Monthly, a newsletter based in Alamo, Calif.
Yet
the savings may be twofold if the property is purchased from the lender
who holds the mortgage that's in default. That lender may be willing to
waive some closing costs, maybe even offer a break on the interest rate
or the down payment.
Investment of time
A novice must learn to navigate the
foreclosure process. But Todd Beitler, owner of the Real Estate Library
in Boca Raton, Fla., says the time and effort can translate to savings.
"If somebody spends 10 hours a week for five weeks to do research, it's
worth it."
For most consumers, however, the foreclosure process can
prove daunting, Reed says. Good buys are available, but they require
research, preparation, patience and persistence.
The foreclosure
process starts when a property owner falls behind on mortgage payments.
Many owners of homes that go into foreclosure have been struggling
financially for almost a year before they give up, which usually means
that the house has not received needed repairs or general maintenance
for a while.
This may include everything from missing light bulbs
to roof leaks. Tree limbs in front yards, broken appliances and
windows, and dirty carpets, floors and walls are found in even
very-affluent area foreclosures.
This can be a boon -- or
boondoggle -- for a buyer. Houses in poor condition might fetch bargain
prices, but repairs can boost the cost again. The first rule of real
estate, "location, location, location," applies in these situations. If
there is trash in every room of the house, but the foreclosure is in a
good area with high property resale values, hold your nose, walk
through the entire house and consider making a low offer.
Reading assignments
When a lender decides to foreclose on a property, a notice of default or a
lis pendens
(Latin for "lawsuit pending") is filed, depending on the state. This
document is a public record, and for buyers, it's the first step in
locating a property in foreclosure. A buyer looking for foreclosures
also can buy magazines and newsletters that list properties in default.
Once
a home has been located, search public records. Look for liens on the
property, since they can drive up the purchase price. Liens typically
are placed on a house for unpaid property taxes. Also check assessed
values and sale prices of neighboring properties.
Research local
state foreclosure laws, since they differ. Some states -- such as
Florida, New York, Ohio and Pennsylvania -- require the lender to sue
the borrower and get a court order for the sale of the property, a
process known as judicial foreclosure. Other states -- including
California and Texas -- follow the non-judicial foreclosure process,
which doesn't require a lawsuit.
For novice investors, buying
from the lender is the safest way to buy. Most foreclosures are taken
back by the bank during auction, Beitler says. While well-located homes
in good shape generally don't sell for deep discounts, rundown
properties can be sold more cheaply.
Often, the banks hire a real
estate agent and sell foreclosed homes in the traditional manner, Reed
says. But sometimes buyers can succeed by pestering bank loan officers
with low offers.
Buyers might try low-balling the lender's REO
(for "real estate owned") officer shortly before the nonperforming
assets have to be reported to supervisors, Beitler says.
The safest deals
Bank-owned
properties offer the safest deal for inexperienced foreclosure buyers,
Beitler says: "There's no risk. There are no taxes, no liens, no
tenants to evict."
A lender that's eager to sell might be willing to
offer attractive terms, says George Tribble, broker of record at
Jetstream Mortgage in Oakland, Calif., and past president of the
California Association of Mortgage Brokers.
The lender might
offer to finance the property at a below-market rate or with a
lower-than-usual down payment. Because the bank already has done an
appraisal, the buyer might not have to pay an appraisal fee, Tribble
says. And lender deals typically include title insurance, which removes
much of the risk that accompanies buying homes earlier in the
foreclosure process.
Hidden foreclosures
Not all foreclosures are previously owned
homes. Some foreclosed homes are new. These homes are not as easy to
identify and rarely appear on national lists. In some areas, the slow
economy has left many builders of new midscale and upscale homes at the
end of their construction-loan periods without finding buyers for their
homes.
In these cases, the banks that issued the construction loans
take possession of the homes and attempt to sell them, using
real-estate agents to handle the deals.
These, too, are
foreclosures. They are "hidden" foreclosures because no one associated
with the sale of these properties will refer to them as foreclosed
homes.
More daring investors can find other points in the process
to buy homes, like just before foreclosure. The buyer finds a homeowner
about to go into default. The homeowner doesn't want to lose all of the
equity in the property, so accepts a portion of the difference between
the equity and the home's market value.
Pre-foreclosure buys
offer bargains but demand persistence. That's because creditors are
often hounding owners at this stage. "Trying to get through to the
homeowner is virtually impossible," Beitler says.
If the
homeowner is contacted, the buyer could be in for a surprise, Reed
adds. Homeowners in default might not have phones or electricity, and
they might have a variety of personal and legal problems. What's more,
they probably need somewhere to live before they can move out of the
property the buyer wants.
This is a high-risk, high-reward proposition, and it's not for first-time foreclosure buyers, Beitler says.
The auctioneer
Most
auctions take place at the county courthouse steps, and they pose
disadvantages: Buyers might not be able to inspect the property, and
they'll have to put up the entire purchase price the same day.
The
U.S. Department of Housing and Urban Development also runs auctions to
unload homes it has acquired through defaults on federally backed
mortgages. There aren't a lot of steals in this process, according to a
study by Tim Allen, a real estate professor at Florida Atlantic
University.
Allen tracked sales at a HUD auction in Florida in
1998; he found that buyers paid prices very close to assessed value.
Beitler agrees that there's a "frenzy" at HUD auctions that can push
prices to unreasonable levels.
The cost of getting started
With
good credit, many banks will loan the full price of the foreclosure or
more. If the home is to be used as a rental, many banks will require
only a 10% down payment.
Individuals with a large amount of equity in
another home may get a line of credit from their bank to purchase a
foreclosure. When they convert the line of credit to a mortgage, no
down payment may be required.
Foreclosure homes bought in good
areas at below market values that appreciate annually can be a sound
investment strategy for many investors. The appreciation of the homes
is tax-exempt until the home is sold. If the home is a primary
residence, the appreciation may be tax-free.
Homes used as rental
properties give most investors valuable tax deductions while the house
increases in value and builds equity. With many stock portfolios down,
foreclosure real estate investing may be the alternative many people
are seeking.
From CNN Money
Ask Extra Realty, Inc for its portfolio of foreclosed homes for sale. Its a different story! Homes can be bought a a very resonable price compared to market value.
FHA is tightening up its standards for home buyers - but the changes
are not as tough as some analysts had feared - especially on
downpayments.
FHA commissioner David Stevens outlined the agency's new
underwriting policies last week, including an increase in the "upfront"
mortgage insurance premium charged all borrowers, and a decrease in the
amount of financial inducements a home seller can provide a buyer.
The tightening of the rules come in the wake of findings by an
independent auditor last Fall that FHA's insurance fund capital
reserves have fallen far below the congressionally-required minimums.
HUD Secretary Shaun Donovan promised in response that FHA
would take steps early this year to begin building up its reserves with
higher premium revenues and ratchet up its credit standards for some
borrowers.
Under the new plan, which will take effect shortly, FHA
applicants will be charged a higher entry fee on insurance: An upfront
premium of two and a quarter percent (2.25%) of the loan amount,
instead of the current one and three quarters (1.75%)percent premium.
On a $200,000 home purchase with a $193,000 loan amount, the new premium will add about $965 to an FHA borrower's costs.
There will be no immediate increase to FHA's current annual
insurance premiums of zero point fifty five percent (0.55). But Stevens
said the agency plans to ask Congress for a higher limit on annual
premiums, which get tacked onto borrowers' monthly mortgage bills.
Once FHA gets Congress's okay, Stevens said he expects to boost
the annual premiums and reduce the upfront premiums. That, in turn,
will lower the cash borrowers need to bring to the table, and stretch
out the higher premium charges over multiple years.
Stevens also announced that applicants with FICO credit scores
below 580 will now have to make downpayments of at least 10 percent, up
from three and a half percent currently.
That change shouldn't have much of an impact, however, since
most of the largest lenders offering FHA mortgages already require a
minimum credit score of 620 for all applicants.
Now for the good news on downpayments: Though mortgage
industry analysts had expected FHA to raise its minimum cash down
requirement to five percent, Stevens said 3.5 percent will remain the
standard.
On the other hand, Stevens also announced that the agency is
lowering its "seller concessions" ceiling from six percent to three
percent, effective immediately. Concessions include contributions at
settlement from the seller to the buyer to help cover loan fees and
closing costs. Critics say the concessions often get lumped onto the
house price -- thereby raising FHA's loss exposure.
From Realty Times
There are many programs and home loan products that allow homeowners to
take advantage of the equity they've built up in their homes. One
resource qualified FHA mortgage holders have at their disposal is the
Home Equity Conversion Mortgage (HECM) loan, also known as an FHA
reverse mortgage. FHA HECM loans are like other home equity loans--they
let you cash in on part of the value a home has built up over the
years. But the FHA reverse mortgage is unique because FHA borrowers
don't make any payments on FHA HECM loans until they stop using the
home as their principal residence. There are no mortgage payments due
until you stop using the home as a primary residence.
Since a "principal residence" is defined as the place where the
borrower does the majority of their dwelling, using summer homes, time
shares or RVs doesn't disqualify you from an FHA HECM loan. As long as
you meet the requirements for an FHA HECM loan and use the property as
your main address, you can take the cash value of your home's equity to
use in any number of ways.
QUALIFYING FOR FHA REVERSE MORTGAGE OR HECM LOANS
To qualify for an FHA reverse mortgage, you must be at least 62 years
old. You must own your home, or have a low enough balance that the FHA
reverse mortgage loan will pay off the outstanding amount when the HECM
loan is approved. Like other FHA loans and FHA mortgages, the property
must be either a single-family residence or a one to four unit property
where the borrower occupies one of the units.
Condos and manufactured homes qualify, but only if they meet FHA requirements.
FHA reverse mortgages are also different than conventional reverse
mortgages or HECM loans because the borrower is required to get
financial counseling from an approved HECM counselor. This is a
condition of the loan and is non-negotiable. The Department of Housing
and Urban Development recommends searching for an approved counselor by
calling the Housing Counseling Clearinghouse at 1-800-569-4287.
NON-FHA HOMES
It doesn't matter if you purchased your home with a conventional loan
or an FHA mortgage. As long as you meet FHA and HUD requirements for
approval, you can use an FHA reverse mortgage to claim the cash value
equivalent for the equity in your home.
One of the conditions of the FHA reverse mortgage is that you aren't
allowed to owe more than the home is worth. The amount of your loan is
determined by interest rates, your credit report, and by the appraised
value of the property. If you are approved for an FHA reverse mortgage
or HECM, you must pay off any remaining balance at closing time on your
new loan. As with any other FHA home loan, you are still responsible
for paying property taxes, insurance, and related bills.
Like other FHA mortgage products, your application must be made through
an FHA approved lender. If your current financial institution does not
participate in FHA loan programs, look up the local FHA-approved banks
in your area to get started.
From FHA.com
The VA Loan became known in 1944 through the original Servicemen's
Readjustment Act also known as the GI Bill of Rights. The GI Bill was
signed into law by President Franklin D. Roosevelt and provided
veterans with a federally guaranteed home with no down payment. This
feature was designed to provide housing and assistance for veterans and
their families, and the dream of home ownership became a reality for
millions of veterans. The GI Bill contributed more than any other
program in history to the welfare of veterans and their families, and
to the growth of the nation's economy.
With more than 25.5 million veterans and service personnel eligible
for VA financing, this loan is attractive and has many advantages.
Eligibility for the VA loan is defined as Veterans who served on active
duty and have a discharge other than dishonorable after a minimum of 90
days of service during wartime or a minimum of 181 continuous days
during peacetime. There is a two-year requirement if the veteran
enlisted and began service after September 7, 1980 or was an officer
and began service after October 16, 1981. There is a six-year
requirement for National guards and reservists with certain criteria
and there are specific rules concerning the eligibility of surviving
spouses.
VA will guarantee a maximum of 25 percent of a home loan amount up
to $104,250, which limits the maximum loan amount to $417,000.
Generally, the reasonable value of the property or the purchase price,
whichever is less, plus the funding fee may be borrowed. All veterans
must qualify, for they are not automatically eligible for the program.
VA guaranteed loans are made by private lenders, such as banks,
savings & loans, or mortgage companies to eligible veterans for the
purchase of a home, which must be for their own personal occupancy. The
guaranty means the lender is protected against loss if you or a later
owner fails to repay the loan. The guaranty replaces the protection the
lender normally receives by requiring a down payment allowing you to
obtain favorable financing terms.
From VALoans.com
November home sales leap
NEW YORK (CNNMoney.com) -- After surging 10% in October, sales of existing homes jumped again in November, growing 7.4% compared with October to an annualized rate of 6.54 million units, according to the National Association of Realtors.
"This clearly is a rush of first-time buyers not wanting to miss out on the tax credit," said NAR's chief economist, Lawrence Yun.
In addition, the tax credit was expanded to cover people who already own a home. They can qualify for a $6,500 tax credit if purchase a new house before the end of June. That should encourage "trade-up" buyers.
November was originally going to be the last month in which sales to first-time homebuyers would qualify for a federal tax credit of up to $8,000. However, that deadline was extended through June.
The strength of sales in November surprised the industry. A panel of experts compiled by Briefing.com had forecast month-over-month sales growth of just 2.5% to 6.25 million from 6.1 million a month earlier.
The sales total was also a huge improvement over a year ago. Sales rose 45.7% over the paltry annualized rate of 4.49 million units during November 2008.
The contribution made by first-time buyers is evident in a separate survey NAR conducted of its members. They estimate that 51% of sales in November were by newcomers to the market, up a point from 50% in October. Normally, first timers account for about 40% of sales.
Also propelling sales higher were rock-bottom interest rates. The average for a 30-year, fixed-rate loan during the month was just 4.88%, down from 4.95% in October and 6.09% a year ago.
With rates that much lower, homebuyers can save more than $150 a month on a $200,000 mortgage.
The industry expects home sales to slacken December, partially because of the tax credit's originally scheduled demise. That caused some buyers to push up their closing, stealing sales from December.
However, sales will not fall off a cliff, though, according to Walter Molony, a NAR spokesman. "The psychology seems to be turning around," he said. "Potential buyers, who had been staying on the fence, now believe we're at or near the market bottom."
One X-factor, however, is the vast numbers of homes that may come to market over the next few months. There is a large "shadow inventory" -- homes owned by banks and mortgage companies -- that have not yet been put up for sale. It could be as many as 1.7 million units, according to First American CoreLogic.
In addition, another spate of foreclosures could be hitting the market as a number of option-ARM mortgages are set to default.
All that may drive prices down, according to Shari Olefson, author of "Foreclosure Nation: Mortgaging the American Dream." And the impact of these renewed price declines could again alter the market psychology.
"People think that prices have bottomed," she said. "I don't think they have. People will see price declines and that will discourage them from buying."
Mike Larson, a real estate analyst with Weiss Research has preached all through the bust that price declines are what will "fix" the housing crisis.
"We needed to see prices fall to make ownership competitive with renting again, and to restore the normal relationship of house prices to income,"
he said. "That has now happened and you're seeing buyers come out of the woodwork as a result."
Still, they will have to come out in large numbers to offset the inventory overhang in some of the worst markets, according to Olefson. In the Florida condo market, for example, there is a 35-to-40 month supply of units at the current rates of sale, she said.
By Les Christie, staff writerDecember 22, 2009: 12:40 PM ET
CNN Money.com
"Michael" wanted to know how long he can expect to sell his home in today's economy.
Kevin Kieffer, a Northern California agent with Keller Williams
Realty, explained a well-priced, well-prepared and staged property can
sell within weeks, longer for more expensive properties. In the San
Francisco Bay Area, homes priced $500,000 and below sell quickly, but
as the price increases so does selling time.
"Mary" asked if there was a way to get the $8,000 first-time
home buyers federal tax credit in advance to use toward down payment
and closing costs.
Allan Glass, a broker at ASG Real Estate in Los Angeles told
her yes, she could, through the Independent Cities Finance Authority's
short-term loan which is paid off when a qualified buyer receives his
or her tax credit from the federal government.
Got a question?
Ask a Realtor.
Sponsored by the National Association of Realtors (NAR) and launched by Realtor.com, "Ask a Realtor"
offers homeowners, sellers and buyers a forum to get professional
answers to real estate questions from local Realtors who know and
understand the local market.
"The concept is great," said Sandy Haney, CEO of the Monterey County Association of Realtors.
"Real estate is local and in Monterey County we have micro
markets. We are looking to see if we can get involved in this," she
added.
It's free, it's anonymous and only licensed real estate professionals do the answering.
As is the case with most question-and-answer services, the
answers are general in nature, and not based on knowledge about your
specific circumstances.
For information specific to you, it may be necessary to follow
up with verified information based on your personal circumstances.
The answers can, however, can get you pointed in the right
direction if you are buying, selling, refinancing or just troubled by
some homeownership issue.
Participating San Francisco Bay Area Realtor, Kevin R.
Kieffer says, "Ask a Realtor is a great way for anyone to ask
questions about our real estate market and to connect with a Realtor
who has local experience and connections."
Questions can be on any real estate-related topic ranging from
local market trends, mortgages and home values to buying, selling, home
inspections and more.
"I like the concept. People want to gather information without
feeling trapped," said Kim DiBenedetto, president of the Monterey
County Association of Realtors.
"If you haven't started working with a Realtor yet, it may be a
more comfortable to get your information online without being obligated
to anyone," added DiBenedetto, also an agent with Coldwell Banker Del
Monte Realty in Carmel.
Questions are forwarded to a local participating Realtor or to
a professional specializing in the area of expertise most relevant to
your question.
Answers are emailed directly to you, with some of them posted on the homepage of Realtor.com Blogs for anyone to peruse.
Questions and answers are also searchable and archived on site
and listed chronologically and by subject, for future reference in the
knowledgebase.
"Ask a Realtor creates an informal yet highly informative, free
service for anyone interested in or involved in real estate," said
Realtor.com President Errol Samuelson.
"Because homeownership is often one of the biggest investments
consumers make in their lives, Ask a Realtor was developed to help
people navigate real estate, establish relationships with local
Realtors, and as a convenient method to ask questions that'll be
answered by licensed professionals with hands-on experience in the
local market," Samuelson added.
by Broderick Perkins
Realty Times
Filed under: Realtor, Puerto Rico, selling, vendiendo, House, extra realty, vendo, warren, corredor, sell, condo, real estate agents
How to attain curb appeal
A house should have curb appeal, they say, but what exactly does that mean?
What it means is that, if a buyer drives past a house at 5 or 10
m.p.h., the front of the place should be alluring enough for that buyer
to stop the car. If the seller has done the job properly, the buyer
should then get out of the car and write down the real estate agent's
name and number.
You can achieve curb appeal - which the National Association of
Realtors says sells 49 percent of all houses - whether you have a city
townhouse with no front yard or a suburban house with trees and a lawn.
If the other yards are filled with rubbish and junk cars, good luck to you.
One facet of curb appeal you may not be able to control is the
condition of your neighbors' houses and yards. If they all look nice,
then the buyer will become as intrigued with the neighborhood as with
your house. If the other yards are filled with kids' toys, and the
buyer has children, that means potential playmates.
If the other yards are filled with rubbish and junk cars, good luck to you.
From my personal curb-appeal file, here's how to handle prettying up city and suburban (or semi-suburban) houses for sale:
The yardless townhouse: It
is 1987, the real estate market is beginning to deflate, and there is a
surplus of townhouses for sale downtown. There is the added
disadvantage of living near a public-housing project with the
accompanying perception of high crime.
The advantages: Close-knit
neighborhood with nice, well-done townhouses, a school around the
corner, a turn-of-the-century social club being renovated as
apartments, children playing in the street serve as a deterrent to
criminals, no abandoned cars, and lots of street trees.
In this case, I touched up the blue paint on the trim and on the front door, and added shutters to the living room window.
I bolted a flower box to
that window ledge and a half-barrel on the side of the two marble steps
up to the front door and filled both - and a small area around the tree
in front of the house - with impatiens.
I made sure the steps were washed and bleached white.
On open-house days, I
rewarded the children with ice cream if they kept the noise down to a
roar and sat on someone else's steps for two hours.
Results: The ultimate buyer
was at the first open house, even though the house was on the market
for five months and two real estate brokerages.
Lessons learned: Give all
the kids ice cream. I missed one, who erroneously, and loudly, reported
that someone had stolen her bike during an open house.
The city house with front
yard: It is June 2001, the real estate market is unstoppable, and there
is a shortage of housing in the $150,000-to-$300,000 range.
The advantages: There's the
shortage, of course. The semi-suburban neighborhood is beautiful,
filled with trees, the azaleas are in bloom, the street is open again
after a year of railroad-bridge replacement, and my neighbors are tired
of my writing about them and would do anything to see me go.
The disadvantages: The beer
distributorship at the corner produces a lot of trash. The street is a
main route between two major city avenues.
The solution: Touch up the
front of the house, including washing the mildew from the porch columns
and rails. Put a new coat of paint on the porch floor, keep the hedges
trimmed neatly, plant plenty of flowers, and use lots of dark mulch
that you should water regularly.
Repaint the concrete bench under the dogwood. Replace and paint the stairs to the porch. Repair the sidewalk.
Make sure the lawn is mowed
once a week and watered regularly. Dead-head the flowers. Pick up trash
not only in front of your house but in front of your neighbors' houses.
Wash the windows.
Results: House is on the
market for a weekend. Eighteen couples have appointments on day two, 50
groups appear at open house on day three. Seven offers, two at asking,
five over.
Lessons learned: A lot of
ugly houses sold over asking price last spring, but you can't assume
that your ugly house will. Never take risks, but don't go overboard
trying to pretty up.
Remember, at first contact, it is not how good the house feels but how good it looks.
But once you get them through the door, you better be real sure that what's inside looks as good as what's outside.
New 'Good Faith Estimate' will help borrowers save nearly $700
WASHINGTON - For the first time in more than 30 years, the U.S. Department of Housing and Urban Development today issued long-anticipated mortgage reforms that will help consumers to shop for the lowest cost mortgage and avoid costly and potentially harmful loan offers. HUD will require, for the first time ever, that lenders and mortgage brokers provide consumers with a standard Good Faith Estimate (GFE) that clearly discloses key loan terms and closing costs. HUD estimates its new regulation will save consumers nearly $700 at the closing table.
In announcing HUD's final changes to the regulatory requirements of the Real Estate Settlement Procedures Act (RESPA), HUD Secretary Steve Preston said that changes in the housing market and increases in home foreclosures demands action.
"It has been a long road but today we can finally announce a better way to buy homes in America," said Preston. "Consumers need and deserve to know what they're getting themselves into before they sign on the dotted line. After carefully considering the concerns of consumers and the different businesses in the housing sector, we have developed an approach that empowers the average family to shop for the most appropriate loan to meet their needs."
Last March, HUD proposed reforms to the longstanding regulatory requirements of the Real Estate Settlement Procedures Act (RESPA) by improving disclosure of the loan terms and closing costs consumers pay when they buy or refinance their home. Last May, HUD extended the rule's comment period to June 12th to allow for more opportunity for comment on the Department's proposed GFE form.
Brian Montgomery, HUD's Assistant Secretary of Housing, Federal Housing Commissioner, said, "We have carefully considered the concerns expressed from every corner of the mortgage market in developing this rule. I am convinced that we successfully balanced the needs of consumers with those in the business of homeownership. None of us can lose sight of the fact that millions of Americans simply don't understand all the fine print of their mortgages and this, in many respects, is at the heart of today's mortgage crisis."
Since 1974, little has changed about the process Americans endure when they buy and refinance their homes. Now, HUD's final reform will improve disclosure of the key loan terms and closing costs consumers pay when they buy or refinance their home.
HUD received approximately 12,000 comment letters following the proposal of its new RESPA rule. In considering those comments, the Department made considerable modifications to its proposal. For example, HUD originally proposed that settlement agents read a closing script at the closing table and that a copy be provided to borrowers. HUD ultimately discarded the script in favor of a new page on the HUD-1 Settlement Statement that allows consumers to easily compare their final loan terms and closing costs with those listed on their Good Faith Estimate.
Most industry commenters said HUD's proposed four-page GFE was too long. HUD shortened the GFE form to three pages including an instructional page to help borrowers understand their loan offer. HUD continues to believe that consumers need to be aware of the key aspects of their loan as well as associated settlement costs.
HUD agreed with many commenters who suggested the new GFE allow consumers to compare their estimated closing costs with the actual costs included on their HUD-1 Settlement Statement. To facilitate comparison between the HUD-1 and the GFE, each designated line on the final HUD-1 will now include a reference to the relevant line from the GFE. Borrowers will now be able to easily compare their estimated and actual costs in very much the same manner as many of the commenters suggested.
HUD will require the new standardized GFE and HUD-1 beginning January 1, 2010. To view these documents, click on the following links:
HUD's standard Good Faith Estimate
HUD-1 Settlement Statement
From HUD.com
Your credit score, a numerical rendition of your creditworthiness - or lack thereof - should be at 760 or above if you want the best interest rate, according to FICO, the leading credit scoring system provider.
Mortgage lenders as well as other creditors take a hard look at your credit score when you want to borrow against your home, refinance or buy anew.
If you are struggling financially as a homeowners you may be considering some of the new ways to make your mortgage more affordable, but beware.
Look beyond the savings you can net on a mortgage modification, workout or short sale and carefully consider how those savings could affect your credit score.
According to FICO, if you:
● Get a mortgage modification or short sale, expect some negative impact. There are many variables here: how the lender reports the deal; what's already on your credit report (negatives compound), etc. A loan modification or short sale are certainly less damaging than a foreclosure or bankruptcy.
Consumer Reports' Money Advisor suggests that before you enter a mortgage modification or short sale, ask how the lender will report it so you can weigh your priorities. If you need the break, take the deal sooner rather than later, even if it will hurt your credit score. Negatives on your credit file are removed after seven years. The sooner you get the clock ticking, the better.
● Are rejected for a loan several times, expect a small negative. It's the inquiries the credit scoring model sees, not the rejections. Too many rejections may indicate you are trying to pile up a lot of credit in a short time and that's deemed risky behavior.
Consumer Reports advises loan shop within a 14 to 30 day period. FICO counts all mortgage inquiries within that period as one inquiry. Also consider applying for credit in person so you can ask about the lender's requirements and your chances for approval. If one lender's underwriting standards are too tight, seek a more lenient lender, Consumer Reports also advises.
● Have a subprime or adjustable rate mortgage (ARM) on your credit report, expect zero impact. The FICO scoring system isn't privy to the underwriting terms of your loan. Keep making payments on time and or refinance to a lower fixed rate if you can and you'll keep your score intact or boost it over time.
● Get debt relief from a credit counselor, expect a ding. That's because you aren't living up to the original terms of the credit agreement. Get the help if you need it, again, the sooner you begin to correct credit problems, the sooner they leave your credit file.
Consumer Reports advises working with certified counselors from the Association of Independent Consumer Credit Counseling Agencies or the National Foundation for Credit Counseling. For housing issues, see counselors certified by the U.S. Department of Housing and Urban Affairs.
● Get a "goodwill correction" from your lender, expect a positive effect on your credit score. If, say, you were late once on your mortgage and never again in several years, it can't hurt to ask your lender to remove the one ding.
● Pay the mortgage but fall behind on other bills, expect black marks that negatively effect your credit score. FICO doesn't weigh your payment history on one type of loan more than another.
Consumer Reports says there are no "less important" creditors when it comes to your credit score. Call creditors before you get into trouble and try to work something out.
Consumers tend to have some misconceptions about the appraisal process.
If you've ever watched "Antiques Roadshow" on PBS, you're already familiar with the concept of an appraisal. The idea is similar in the realm of real estate valuations. Each property is unique, and the appraiser relies on his or her general expertise and specific research to arrive at an opinion of value. Appraisals are an infrequent experience for most consumers, who consequently tend to have some misconceptions about the process and the results.
Here are some myths and facts:
Myth: The primary purpose of an appraisal is to make sure the buyer doesn't pay too much for the house.
Fact: An appraisal provides valuable information for the buyer and the seller, but the appraiser's primary mission is to protect the lender. Lenders don't enjoy owning overpriced property any more than they relish lending money to irresponsible borrowers. That's why the appraisal takes place before the lender grants final approval of the buyer's loan.
Myth: Appraisers use a specific formula, such as one using the price per square foot, to figure out exactly how much each home is worth.
Fact: Appraisers weigh the location of the home, its proximity to desirable schools and other public facilities, the size of the lot, the size and condition of the home itself and recent sales prices of comparable properties, among other factors.
Myth: Good housekeeping can improve a home's valuation.
Fact: Appraisers aren't interested in dirty dishes or dusty dressers, but they do notice such signs of neglect as cracked walls, chipped paint, broken windows, torn carpets, damaging flooring and inoperable appliances.
Myth: Anyone who has a clipboard and business cards can be an appraiser.
Fact: Federal law requires states to establish minimum standards and licensing practices for real estate appraisers. In California, for example, trainees must take several courses, pass an examination and complete 2,000 hours of supervised experience.
Myth: Appraisers have no obligation to reveal home defects to buyers.
Fact: If the buyer is applying for a mortgage that will be insured by the Federal Housing Administration (FHA), the appraiser must survey the physical condition of the home and disclose potential problems to the buyer. No such obligation exists for non-FHA mortgages.
Myth: An appraisal is identical to a home inspection.
Fact: The FHA disclosure requirement notwithstanding, an appraisal isn't a substitute for a professional home inspection. The appraiser formulates an opinion of the property's value for the lender, while the inspector educates the buyer about the condition of the home and its major components.
Myth: If the appraiser's opinion of value is lower than the purchase price, the buyer won't be able to purchase the home.
Fact: A transaction can sometimes survive a "low" appraisal if the seller reduces the purchase price, the buyer makes a hefty downpayment or a separate escrow account is set up to fund repairs that will increase the value of the home. On rare occasions, an appraiser will reconsider his or her opinion if new evidence supports a higher valuation.
Lagoon and ocean view
• 3,000 sq. ft., 3 bath, 4 bdrm apartment
-
$1,550,000
- OBO
Ashford 1000, Condado
-
Astonishing Lagoon and Ocean Views, Well Appointed Finishes, Appliances and Equipments.
UNIQUE- Fully Remodeled Sky Residence with Exquisitely Appointed Interior Design.
Spacious and Cozy BEDROOMS - All Maple Natural Wood Floors/Closets/Library w. Built-In Desk and New Cherry Wood Doors. All "Valli & Valli" Stainless Steel Levers and Knobs.
Four bedrooms - 3.5 bath + DEN, ENTIRE FLOOR (3,000+ sq. ft.)
Expanded BATHROOMS - All Maple Natural Wood Cabinetry. "Lutron" lighting system. All Bathrooms equipped with new Open Shower, Jacuzzi and Porsche toilets. All "Boffi", Italian Stainless Steel Hardware and Accessories. All Countertops with "Serena" Stone. All New "Miele".
Ample KITCHEN - Appliances and Cabinets by "Santos" with Basaltina Stone Kitchen Tops and Stainless Steel Mosaic Tile Backsplash by "Stone Source", NYC. New Sub-Zero Refrigerator/Freezzer & Wine Storage Unit.
This Prestigious Residence has Private Elevators and 24 Hour Security. Among other great interior features, the residence has Floating Ceiling w. Track Lighting Ilumination and Surround Sound Stereo System Connections. All "Trane" A/C throughout apartment, full capacity electric generators and water cistern, 3 parking spaces.
"TURNKEY" Rental Options available Furnished or Unfurnished, includes Maid and Repair Services.
Fortunate guest can conveniently choose to bring just personal belongings, move-in, and immediately enjoy Condado's Ultra-Luxury Lifestyle at Condado's Most Priviledged Residential Address. A MUST SEE!
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