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The U.S. Treasury plan to help homeowners avoid foreclosure potentially applies to 75 percent of the mortgages in the U.S., including those backed by Freddie Mac or Fannie Mae (those two organizations are currently devising guidelines). The plan, which provides incentives for lenders and homeowners for completing Short Sales, is many-faceted: It provides incentives to lenders and borrowers for completing Short Sales It streamlines and standardizes the documentation necessary for Short Sales It limits the ability of subordinate lien-holders to obstruct the Short Sales process It sets limits on the time it takes lenders to approve or reject Short Sales requests It steps up pressure on lenders to make permanent the 650,000 trial loan modifications they started earlier in 2009 Incentives to Borrowers Under the plan, borrowers who complete a Short Sale are released from all mortgage debt. Additionally, they receive $1,500 for moving expenses. Incentives for Lenders The plan provides for pay

Homeowners across the United States who are undergoing financial hardship could avoid foreclosure under a plan announced on Nov. 30 by the U.S. Treasury Department. Under the plan, millions of at-risk homeowners could be free of mortgage debt without going through foreclosure, and given $1,500 for relocation. The Treasury plan, which potentially applies to 75 percent of the mortgages in the U.S., including those backed by Freddie Mac or Fannie Mae (those two organizations are currently devising guidelines), provides incentives for lenders and homeowners for completing Short Sales – transactions in which the lender agrees to a sale price that's less than the borrower owes on the mortgage. Short Sales are preferred to foreclosure because homeowners take less of a hit on their credit and lenders realize a smaller loss. However, Short Sales often get bogged down because of the complicated nature of the transaction. Deals can fall through because they take too long. Buyers are discourag

Don’t forget the cost of FHA mortgage insurance is going up. But there is a window of opportunity to get an FHA loan before the this happens. As long as the the laon in obtained before April 5, you can get an FHA loan with 1.75% upfront mortgage insurance (versus 2.25% AFTER April 5). Why This Is Happening: · FHA’s capital reserve requirement mandated by Congress has fallen below the minimum requirement. · FHA makes up 1/3 of all financing in today’s market What Will Change: · Increase in the up front MIP Fee to 2.25% from 1.75% · FHA is also asking Congress to increase its monthly premium which is one of the major advantages compared to a Conventional Loan’s PMI rate. (This has not been finalized yet). · Seller concessions will be lowered to 3% from 6% - currently viewed as a reason to inflate appraisals. · Minimum Credit Score of 580 – lower scores require 10% down · Most likely will not increase the amount the buyer needs to bring to the table, but by increasing the PMI it will incr

Knowing the Guidelines Solves the Mystery The appraisal process often baffles consumers. They may feel that their home is worth a higher dollar amount, and so the appraised value doesn't always make sense to them. It is important to know that the appraiser is completely independent from lenders, buyers, sellers, and real estate agents, and that the guidelines to which they adhere are dictated by the Uniform Standards of Professional Appraisal Practice (USPAP) and Fannie Mae. In most states, the mortgage lenders must also disclose the purpose of the appraisal, as each transaction carries its own set of rules. In essence, these important guidelines help appraisers put a fair market value on homes based on comparable sales in the same area, and the home must be bracketed in size and value. For example, there is no set dollar figure associated with a great view, pool, spa, bathroom upgrades, etc. If a homeowner installs a custom pool that cost them $30,000, but the local marketplace su

Recently I had a client call me to complain about how upset she was regarding the fact that she was only getting half of the $8000 tax credit. She had purchased a duplex a couple of months ago and was expecting to receive 10% of half of the sales price (since she was renting out the other half of the duplex and receiving rental income). She was, therefore, expecting to get $7500 (10% of $75K instead of 10% of the full purchase price of $150K) She was very upset because she had recently been to H&R Block to have her taxes done and they insisted on the fact that she was only entitled to half of the tax credit ($4000) rather than 10% of half of the purchase price ($7500). Now, I am not a tax accountant and don’t even pretend to be. But, I called the IRS and they confirmed that this is indeed wrong . She was indeed entitled to 10% of half of the purchase price ($7500), NOT half of the tax credit ($4000). So, don’t assume that H&R Block knows what they are talking about. If you

Selling a home can be challenging and time consuming for a seller. In today’s market, you must use “every trick in the book” in order to make your home appealing to the greatest number of buyers. Here are some handy staging tips that will help you prepare your home for selling... Get ready to move... Start packing! Before you show your home to any potential buyer be sure to go through your whole house with your agent to finish the Staging process. Meanwhile, here are some quick tips to help you start. Follow these general tips and your home will look better than the competition. Staged Homes sell faster and/or for more money! INSIDE • Clear all unnecessary objects from furniture throughout the house. Keep decorative objects on the furniture restricted to groups of 1, 3, or 5 items. In general, a sparsely decorated home helps the buyer mentally „move in‟ with their own things. • Rearrange or remove some of the furniture in your home, if necessary. Many times home owners have too much fu

Purchasing Tips It's critical to have the home professionally inspected before you make an offer or put down earnest money. The inspector will assess the structure's soundness and may uncover problems that would be very costly to repair. Banks usually sell foreclosed homes as-is, meaning they won't make any allowances for repair. And even in a short sale, they likely won't make any such allowances, because they're already losing money on the transaction. You should have your financing in order before pursuing a foreclosure purchase. Pre-approved buyers have the best chance of getting the property in case of multiple offers. Also, banks generally aren't interested in contingencies (for instance, needing to sell your current home before purchasing another). You might also consider hiring an appraiser who'll tell you what the house is worth. A qualified real estate agent can also perform a Comparative Market Analysis. To guide you through the process - from obt

Is a distressed property for you? Here are pros and cons of buying one: Advantages of Buying a Distressed Property First, you'll be dealing with a highly motivated seller – either a bank in the case of a foreclosure, or in a short sale, sellers who are in financial trouble and very interested in getting out of a mortgage they can no longer afford. These types of sales take much of the emotion out of the process. You won't be insulting anybody, for instance, if you make an offer that's lower than the asking price. (That's not to say that the low offer will necessarily be accepted, of course.) Lenders are extremely interested in getting these homes sold and off the liability side of their balance sheets. Many foreclosed properties can be purchased for only a percentage of what they would have commanded five years ago. (This situation is beginning to change, though; bidding wars are breaking out on some foreclosed properties these days, especially those that are moderately

Many of the homes for sale today - as many as half in some markets - fall under the category of "distressed properties." These are homes that have either gone through foreclosure or are being marketed as "short sales." In a short sale, the homeowner can't afford to maintain the mortgage, but the lender - rather than foreclosing - agrees to the sale of the property for less than the balance of the loan. These types of sales have different dynamics than traditional sales - with more paperwork, often a longer transaction process and, in some cases, more frustration. For these reasons, many buyers shy away from foreclosures or short sales.However, if you understand the potential pitfalls of purchasing a distressed property - and work with an agent who has a thorough knowledge of this market - you can get a great home at a great price. Many agents have been specially trained in working with foreclosures or short sales through the Certified Distressed Property Expert

A number of factors affect your credit score; improving the score requires you to take care of those factors such that you can manage your credit better. Follow these simple steps to improve your score: Improve your payment history: Avoid making late payments on your bills. Clear up all your past-due bills as soon as possible. Request your creditor for an alternative plan with low monthly payments. Negotiate with your creditors to remove charge-offs from your report and re-open those accounts. Request your creditors to erase late payment entries after you re-start paying in time. Reduce your outstanding debts: Pay off high interest debts first. Keep your balances low and try to keep your revolving debt to 50% of your available credit. Don't close old and unused accounts rapidly in order to lower your available credit. It will raise your debt-to-credit limit which has a negative impact on your score. Try to close accounts gradually over several months. Verify if the accounts closed