by M.C. Postins, Demand Media
Losing your home to foreclosure can be a stressful journey. But it doesn’t mean that you’re forever barred from owning a home ever again. Whether you are lent money again to buy a home is really up to individual lenders, who have their own underwriting rules and requirements when it comes to foreclosed homeowners. You can do a few things, however, to enhance your chances of getting another loan.
Timing
The longer you wait to attempt to purchase a home after foreclosure can work in your favor. In many cases, lenders put an emphasis on the past 2 years of your credit history. So, while the foreclosure doesn’t go away from your credit report for 7 years, it becomes less of a factor in your credit score, one of the chief determinants of whether you can finance a new home. A foreclosure can lower your credit score by anywhere from 200 to 300 points for the first 2 years afterward, according to
Mortgage Home Loan.
Credit Score
One way to improve your changes of buying a home after foreclosure is to improve your credit report. Liz Pulliam-Weston, a financial author, writes that you should start repairing your credit soon after your foreclosure with either an installment loan or revolving credit, such as a credit card.
Whatever type of credit you receive, you should make sure that it reports to all three credit bureaus on a monthly basis. By getting credit and making on-time payments, it will raise your credit rating and make it more likely you can acquire financing. The interest rate may still not be that great, since the foreclosure will still be on your report.
If The Home Is Yours
If your home is in foreclosure, be sure to check your state’s foreclosure guidelines. Even after your home is sold at auction, some states offer Right of Redemption, a time period in which you have the right to buy back the home, even though someone else has bought it. In California, right of redemption is a 90-day to 1-year period, depending upon how much the lender received at auction. In either case, you must pay the entire loan, plus late payments, fees and costs, before the period expires, or the auction winner keeps the property.
Type of Mortgage
It matters what type of mortgage you are applying for after foreclosure. For instance, if you are applying for a government-backed mortgage, such as a loan from Freddie Mac, Fannie Mae or a mortgage insured by the Federal Housing Administration, then you cannot apply for a period of 5 years. The waiting period is 2 years if you surrendered your home through a deed in lieu of foreclosure or sold your home in a short sale. If you’re applying for an unconventional mortgage, such as one with a variable interest rate, it’s up to the individual lender.
Down Payment
The amount of your down payment may determine whether you have the capital to buy a home after foreclosure. The down payment is really up to your lender. But, according to CNN Money, some lenders may seek as much as a 30 percent down payment from you if you went through foreclosure, especially if you did little to try and save the home, which lenders consider a walkaway foreclosure. So, if you intend to buy afterward, be aware of what you may need to save for a down payment.
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
Friday, March 29, 2013
Foreclosure victims buying homes again
By Pete Carey
LIVERMORE — R.C. and Stacy Davis lost their condominium to foreclosure in 2009, a bad break that seemed destined to keep them from buying another home for many years.
Yet on Wednesday — only three years after their foreclosure — the couple signed the papers to buy a four-bedroom house in Livermore.
Their avenue to homeownership? A loan backed by the Federal Housing Administration.
“We’re as happy as can be,” Stacy Davis said.
The ability to get an FHA loan so quickly after a foreclosure could be welcome news to thousands of people who lost their homes during the housing bust. In the coming 12 months, about 22,000 Bay Area foreclosures will hit the three-year mark.
While mortgage giants
Fannie Mae and Freddie Mac make people wait seven years after a foreclosure, the FHA will approve loans after three years, providing the buyer has established good credit and the ability to pay the mortgage.
“There’s definitely a movement of folks who have had a foreclosure to re-emerge and re-engage in the market,” said Dustin Hobbs of the California Mortgage Bankers Association. He said brokers around the state have picked up on the trend.
“It helps the housing market,” said Guy Schwartz of CMG Financial in San Ramon, which handled the Davis’ mortgage.
The FHA, which is self-supporting, provides mortgage insurance for loans with low down payments and more flexible household income requirements. The Davis loan came with a 3.5 percent down payment plus required monthly mortgage insurance and a 3.75 percent interest rate on a 30-year loan.
“An FHA loan is a good option for those who can qualify,” said Paul Leonard, California director of the Center for Responsible Lending. And there couldn’t be a better time to try, he said.
“We are at near substantial price corrections,” he noted. That, and low interest rates present “kind of a historic opportunity if people can qualify,” he said.
But it’s not clear whether there’s a flood or a trickle of new borrowers with foreclosures in their recent past.
The FHA said it doesn’t have data on how many of the loans it insures involve people who are buying homes after a foreclosure or short sale.
Wells Fargo, the country’s largest FHA loan originator and servicer, said it doesn’t break out those loans. In the first six months of this year, Wells Fargo has made more than $73 billion in FHA-backed loans compared with $47 billion last year, spokesman Jim Hines said.
Mason McDuffie Mortgage in San Ramon is working with foreclosure victims.
“We are making loans and have made loans to people who have corrected their credit,” said Bill Godfrey of Mason McDuffie. “It’s nice to see.”
The borrowers are “people who waited three years, have a job and qualify,” Godfrey said. “They have their credit, have a job and things are looking better. They may not be perfect … but that’s part of the way to move forward. Clearly there is some thawing in that area.”
Some listing agents complain FHA loans take a lot more time and work. “It’s a hard transaction to complete,” said Bob Barrie of Keller Williams in San Jose. Barrie said he is listing a home next week in Santa Clara, and if there are multiple offers, a buyer with an FHA loan will be at a disadvantage.
The Davis’ journey from foreclosure to new home began in 2005 when they bought a condo in Concord for $262,000 at the peak of the market.
The couple’s interest-only, 100 percent-financed loan was a classic bubble product that became a formula for foreclosure during the housing crash.
To make things worse, the condo was in a rough neighborhood, said Stacy Davis, who is a special-education teacher at Mission San Jose High School in Fremont. Her husband is a senior producer for the Golden State Warriors.
They tried to sell the condo after their daughter was born, but no one wanted to buy it, Stacy Davis said. “We decided we’re going to try to stick this out. We owned it and we would make it work.”
So they remodeled, put in a new kitchen and molding.
Meanwhile, the neighborhood deteriorated. Shopping carts piled up on the sidewalk, she said. Graffiti blossomed on walls.
After their son was born, they tried a short sale and found a buyer. “Within a week, an upstairs bathroom pipe busted open and flooded the whole place — the new kitchen, the molding, all destroyed. So the buyer backed out,” she said.
Their condo in ruins, they moved to a rented house in Dublin and the bank foreclosed. Their credit rating dropped to about 500, but they were able to build it back to about 700.
“Within a year we were getting credit card applications. We didn’t feel like it affected our lives at all,” she said.
The purchase of the house in Livermore completed, the Davis family will begin moving in early next month.
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
LIVERMORE — R.C. and Stacy Davis lost their condominium to foreclosure in 2009, a bad break that seemed destined to keep them from buying another home for many years.
Yet on Wednesday — only three years after their foreclosure — the couple signed the papers to buy a four-bedroom house in Livermore.
Their avenue to homeownership? A loan backed by the Federal Housing Administration.
“We’re as happy as can be,” Stacy Davis said.
The ability to get an FHA loan so quickly after a foreclosure could be welcome news to thousands of people who lost their homes during the housing bust. In the coming 12 months, about 22,000 Bay Area foreclosures will hit the three-year mark.
While mortgage giants
Fannie Mae and Freddie Mac make people wait seven years after a foreclosure, the FHA will approve loans after three years, providing the buyer has established good credit and the ability to pay the mortgage.
“There’s definitely a movement of folks who have had a foreclosure to re-emerge and re-engage in the market,” said Dustin Hobbs of the California Mortgage Bankers Association. He said brokers around the state have picked up on the trend.
“It helps the housing market,” said Guy Schwartz of CMG Financial in San Ramon, which handled the Davis’ mortgage.
The FHA, which is self-supporting, provides mortgage insurance for loans with low down payments and more flexible household income requirements. The Davis loan came with a 3.5 percent down payment plus required monthly mortgage insurance and a 3.75 percent interest rate on a 30-year loan.
“An FHA loan is a good option for those who can qualify,” said Paul Leonard, California director of the Center for Responsible Lending. And there couldn’t be a better time to try, he said.
“We are at near substantial price corrections,” he noted. That, and low interest rates present “kind of a historic opportunity if people can qualify,” he said.
But it’s not clear whether there’s a flood or a trickle of new borrowers with foreclosures in their recent past.
The FHA said it doesn’t have data on how many of the loans it insures involve people who are buying homes after a foreclosure or short sale.
Wells Fargo, the country’s largest FHA loan originator and servicer, said it doesn’t break out those loans. In the first six months of this year, Wells Fargo has made more than $73 billion in FHA-backed loans compared with $47 billion last year, spokesman Jim Hines said.
Mason McDuffie Mortgage in San Ramon is working with foreclosure victims.
“We are making loans and have made loans to people who have corrected their credit,” said Bill Godfrey of Mason McDuffie. “It’s nice to see.”
The borrowers are “people who waited three years, have a job and qualify,” Godfrey said. “They have their credit, have a job and things are looking better. They may not be perfect … but that’s part of the way to move forward. Clearly there is some thawing in that area.”
Some listing agents complain FHA loans take a lot more time and work. “It’s a hard transaction to complete,” said Bob Barrie of Keller Williams in San Jose. Barrie said he is listing a home next week in Santa Clara, and if there are multiple offers, a buyer with an FHA loan will be at a disadvantage.
The Davis’ journey from foreclosure to new home began in 2005 when they bought a condo in Concord for $262,000 at the peak of the market.
The couple’s interest-only, 100 percent-financed loan was a classic bubble product that became a formula for foreclosure during the housing crash.
To make things worse, the condo was in a rough neighborhood, said Stacy Davis, who is a special-education teacher at Mission San Jose High School in Fremont. Her husband is a senior producer for the Golden State Warriors.
They tried to sell the condo after their daughter was born, but no one wanted to buy it, Stacy Davis said. “We decided we’re going to try to stick this out. We owned it and we would make it work.”
So they remodeled, put in a new kitchen and molding.
Meanwhile, the neighborhood deteriorated. Shopping carts piled up on the sidewalk, she said. Graffiti blossomed on walls.
After their son was born, they tried a short sale and found a buyer. “Within a week, an upstairs bathroom pipe busted open and flooded the whole place — the new kitchen, the molding, all destroyed. So the buyer backed out,” she said.
Their condo in ruins, they moved to a rented house in Dublin and the bank foreclosed. Their credit rating dropped to about 500, but they were able to build it back to about 700.
“Within a year we were getting credit card applications. We didn’t feel like it affected our lives at all,” she said.
The purchase of the house in Livermore completed, the Davis family will begin moving in early next month.
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
Boomerang buyers return to market after foreclosure
By Les Christie @CNNMoney
Borrowers who lost homes to foreclosure during the housing bust are starting to buy again.
Since the housing bubble burst, 4.8 million borrowers have lost their homes to foreclosure, and another2.2 million gave them up in short sales, according to RealtyTrac. While many are still struggling to recover financially, a growing number are starting to bounce back — and they are looking for a new place to call home.
Susan Edwards and her husband, Dave, lost their Palmdale, Calif., home in 2010 after Susan’s severe arthritis made it impossible for her to work her medical device sales job.
The medical bills soon piled up and the couple could no longer afford their $2,300 monthly mortgage payment. In addition, their home’s value had plunged 40% below the $325,000 mortgage balance.
“We were living under such pressure,” she said. “We looked at the numbers and knew we had to default.”
After the foreclosure, Susan’s credit score had taken a 70-point hit; Dave’s score fell even further.
By paying all of the bills on time, they nursed their credit scores back to health. And in December, two years after they lost their old home, the couple was able to buy a new homewith a loan backed by the Veteran’s Administration. VA-insured loans can be obtained just two years after a foreclosure, according to the Mike Frueh, director of the VA’s Loan Guaranty Program.
The new house is a lot like the Edwards’ old one, with one big improvement: The mortgage payment is $1,150 a month — roughly half the amount they used to pay.
“[After bankruptcy], foreclosure is one of the things that hits your credit score the hardest,” said Anthony Sprauve, a spokesman for FICO.
Foreclosures and short sales usually knock about 85 to 160 points off a credit score. Scores suffer less if you pay at least the minimum on all your other bills on time and only allow your mortgage payments to go unpaid, said Jon Maddux, the CEO of YouWalkAway.com, which offers advice to defaulting mortgage borrowers.
Once the damage is done, it can take three to seven years for a score to fully recover. But some lenders are willing to work with borrowers earlier than that.
Mortgage giants Fannie Mae and Freddie Mac, for example, require defaulters to wait five years — and have a minimum credit score of 680 and put 10% down — before they can purchase a home again. If they don’t meet that criteria the wait is seven years, at which point the foreclosure is expunged from a person’s credit report.
If defaulters show that extenuating circumstances caused the foreclosure— such as a health issue that prevented them from working,a layoff, a divorce or other one-time event — the wait may be reduced to three years.
The Federal Housing Administration allows banks to issue FHA-insured loans to borrowers three years after a foreclosure or a short sale in which the borrower was in default.
Tony and Ginger Read, who live with their three kids outside of Boise, Idaho, took four yearsto rebuild their credit after they sold their home in a 2008 short sale. Tony had been laid offand the couple had already sold their camper and other valuables in a fruitless effort to keep their home. Eventually, a broker convinced them to sell.
“It was the hardest thing we ever had to do but we couldn’t afford the payments,” said Ginger.
Tony now has a job supervising a sand and water pumping crew for the fracking industry and the couple’s credit score has regained more than half of what it lost.
In January, they were approved for a 4% interest FHA loan on a $280,000 house in Fruitvale, Idaho. They close April 12.
Mike Edgar, the broker who worked with the Reads to sell their home and buy a new one, has worked with several clients to help them repair their credit and, when they’re ready, buy new homes.
In 2012, he worked with 15 “boomerang” buyers, about a quarter of his sales. He expects that numberto double in 2013.
Tim Duy, a business manager in Verrado, Ariz., and his wife Christina, lost their house in April 2011. They’re eager to become homeowners again, but for now they’re concentrating on repairing their credit. The foreclosure, which knocked Duy’scredit score down 200 points to below 600, has since rebounded to 730.
Meanwhile, the couple window shops. “We’re in the penalty box for another year, maybe,” said Duy. “I see houses just what we want selling for $185,000. I would jump all over that if I could.”
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
Borrowers who lost homes to foreclosure during the housing bust are starting to buy again.
Since the housing bubble burst, 4.8 million borrowers have lost their homes to foreclosure, and another2.2 million gave them up in short sales, according to RealtyTrac. While many are still struggling to recover financially, a growing number are starting to bounce back — and they are looking for a new place to call home.
Susan Edwards and her husband, Dave, lost their Palmdale, Calif., home in 2010 after Susan’s severe arthritis made it impossible for her to work her medical device sales job.
The medical bills soon piled up and the couple could no longer afford their $2,300 monthly mortgage payment. In addition, their home’s value had plunged 40% below the $325,000 mortgage balance.
“We were living under such pressure,” she said. “We looked at the numbers and knew we had to default.”
After the foreclosure, Susan’s credit score had taken a 70-point hit; Dave’s score fell even further.
By paying all of the bills on time, they nursed their credit scores back to health. And in December, two years after they lost their old home, the couple was able to buy a new homewith a loan backed by the Veteran’s Administration. VA-insured loans can be obtained just two years after a foreclosure, according to the Mike Frueh, director of the VA’s Loan Guaranty Program.
The new house is a lot like the Edwards’ old one, with one big improvement: The mortgage payment is $1,150 a month — roughly half the amount they used to pay.
“[After bankruptcy], foreclosure is one of the things that hits your credit score the hardest,” said Anthony Sprauve, a spokesman for FICO.
Foreclosures and short sales usually knock about 85 to 160 points off a credit score. Scores suffer less if you pay at least the minimum on all your other bills on time and only allow your mortgage payments to go unpaid, said Jon Maddux, the CEO of YouWalkAway.com, which offers advice to defaulting mortgage borrowers.
Once the damage is done, it can take three to seven years for a score to fully recover. But some lenders are willing to work with borrowers earlier than that.
Mortgage giants Fannie Mae and Freddie Mac, for example, require defaulters to wait five years — and have a minimum credit score of 680 and put 10% down — before they can purchase a home again. If they don’t meet that criteria the wait is seven years, at which point the foreclosure is expunged from a person’s credit report.
If defaulters show that extenuating circumstances caused the foreclosure— such as a health issue that prevented them from working,a layoff, a divorce or other one-time event — the wait may be reduced to three years.
The Federal Housing Administration allows banks to issue FHA-insured loans to borrowers three years after a foreclosure or a short sale in which the borrower was in default.
Tony and Ginger Read, who live with their three kids outside of Boise, Idaho, took four yearsto rebuild their credit after they sold their home in a 2008 short sale. Tony had been laid offand the couple had already sold their camper and other valuables in a fruitless effort to keep their home. Eventually, a broker convinced them to sell.
“It was the hardest thing we ever had to do but we couldn’t afford the payments,” said Ginger.
Tony now has a job supervising a sand and water pumping crew for the fracking industry and the couple’s credit score has regained more than half of what it lost.
In January, they were approved for a 4% interest FHA loan on a $280,000 house in Fruitvale, Idaho. They close April 12.
Mike Edgar, the broker who worked with the Reads to sell their home and buy a new one, has worked with several clients to help them repair their credit and, when they’re ready, buy new homes.
In 2012, he worked with 15 “boomerang” buyers, about a quarter of his sales. He expects that numberto double in 2013.
Tim Duy, a business manager in Verrado, Ariz., and his wife Christina, lost their house in April 2011. They’re eager to become homeowners again, but for now they’re concentrating on repairing their credit. The foreclosure, which knocked Duy’scredit score down 200 points to below 600, has since rebounded to 730.
Meanwhile, the couple window shops. “We’re in the penalty box for another year, maybe,” said Duy. “I see houses just what we want selling for $185,000. I would jump all over that if I could.”
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
Getting a mortgage after foreclosure
By Marcie Geffner • Bankrate.com
Buying a home is a challenging goal for most hopeful homeowners. But for those who have experienced a bankruptcy, foreclosure or short sale, the hurdles are even higher.
Still, it’s not impossible to buy a home after an adverse financial event, says Dan Keller, a mortgage banker with Hometown Lending in Everett, Wash. In fact, Keller says, people who have cleaned up their credit and are otherwise qualified to get a mortgage can buy a home as soon as they have outlasted a prescribed waiting period after the bankruptcy, foreclosure or short sale.
Wait a while
The waiting period can last one to seven years, says Kirk Chivas, chief operating officer at First Commerce Financial in Wixom, Mich. The one-year requirement applies to buyers who completed a Chapter 13 bankruptcy, have a spotless subsequent credit history and want to get a new loan insured by the Federal Housing Administration, or FHA, or guaranteed by the U.S. Department of Veterans Affairs. The seven-year requirement applies to buyers who experienced a foreclosure and want to get a new conventional loan that can be sold to Fannie Mae or Freddie Mac.
In between are a number of two-, three- and four-year timelines based on similar criteria and such other factors as whether the buyer’s previous mortgage was current at the time of a short sale or the size of the buyer’s new down payment as a percentage of the home’s purchase price.
Generally speaking, the waiting periods after a bankruptcy tend to be more black and white while the waits after a foreclosure or short sale have more gray areas, Keller says. And in some cases, a waiting period can be waived or shortened if the buyer’s bankruptcy, foreclosure or short sale was due to extenuating circumstances or a hardship beyond his or her control.
Technically, it is possible for a buyer whose prior loan wasn’t in default at the time of a short sale to get a new FHA-insured loan with no waiting period at all, Chivas says. But he adds that he’s never encountered anyone in that situation.
Clean credit
Buyers must have very clean or perfect credit histories before they can buy homes after bankruptcy, foreclosure or short sale. A slip-up as small as one late credit card payment could disqualify a post-bankruptcy buyer from some loan programs, even if the waiting period has been completed, Keller says.
“Bankruptcy is a serious word,” he says. “If you do it, it’s a get-out-jail-free card. But once you get out of bankruptcy, you need to be flawless in your credit. Don’t even drop a gum wrapper.”
Credit dings can be difficult to sort out for buyers who experienced a loan modification or short sale, in part because, as Chivas says, there’s “no consistency” in how lenders report those events to the credit bureaus. Buyers should review their credit reports and correct any errors or clarify the circumstances of adverse items.
Stable employment can be a plus, too, Keller says, noting that some loan programs are more lenient than others. “If there was a gap,” he says, “it needs to be explained.”
Consult a loan pro
Given these complexities, buyers are advised to consult a loan officer or mortgage broker early on for advice that applies to their personal situation.
“They may think they’re fine, but if they’re not talking to a professional, their hopes can get dashed or crushed,” Chivas says. “That’s why you want to speak to someone as soon as you start dreaming it up in your head” that you want to buy a home after a bankruptcy, foreclosure or short sale.
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
Buying a home is a challenging goal for most hopeful homeowners. But for those who have experienced a bankruptcy, foreclosure or short sale, the hurdles are even higher.
Still, it’s not impossible to buy a home after an adverse financial event, says Dan Keller, a mortgage banker with Hometown Lending in Everett, Wash. In fact, Keller says, people who have cleaned up their credit and are otherwise qualified to get a mortgage can buy a home as soon as they have outlasted a prescribed waiting period after the bankruptcy, foreclosure or short sale.
Wait a while
The waiting period can last one to seven years, says Kirk Chivas, chief operating officer at First Commerce Financial in Wixom, Mich. The one-year requirement applies to buyers who completed a Chapter 13 bankruptcy, have a spotless subsequent credit history and want to get a new loan insured by the Federal Housing Administration, or FHA, or guaranteed by the U.S. Department of Veterans Affairs. The seven-year requirement applies to buyers who experienced a foreclosure and want to get a new conventional loan that can be sold to Fannie Mae or Freddie Mac.
In between are a number of two-, three- and four-year timelines based on similar criteria and such other factors as whether the buyer’s previous mortgage was current at the time of a short sale or the size of the buyer’s new down payment as a percentage of the home’s purchase price.
Generally speaking, the waiting periods after a bankruptcy tend to be more black and white while the waits after a foreclosure or short sale have more gray areas, Keller says. And in some cases, a waiting period can be waived or shortened if the buyer’s bankruptcy, foreclosure or short sale was due to extenuating circumstances or a hardship beyond his or her control.
Technically, it is possible for a buyer whose prior loan wasn’t in default at the time of a short sale to get a new FHA-insured loan with no waiting period at all, Chivas says. But he adds that he’s never encountered anyone in that situation.
Clean credit
Buyers must have very clean or perfect credit histories before they can buy homes after bankruptcy, foreclosure or short sale. A slip-up as small as one late credit card payment could disqualify a post-bankruptcy buyer from some loan programs, even if the waiting period has been completed, Keller says.
“Bankruptcy is a serious word,” he says. “If you do it, it’s a get-out-jail-free card. But once you get out of bankruptcy, you need to be flawless in your credit. Don’t even drop a gum wrapper.”
Credit dings can be difficult to sort out for buyers who experienced a loan modification or short sale, in part because, as Chivas says, there’s “no consistency” in how lenders report those events to the credit bureaus. Buyers should review their credit reports and correct any errors or clarify the circumstances of adverse items.
Stable employment can be a plus, too, Keller says, noting that some loan programs are more lenient than others. “If there was a gap,” he says, “it needs to be explained.”
Consult a loan pro
Given these complexities, buyers are advised to consult a loan officer or mortgage broker early on for advice that applies to their personal situation.
“They may think they’re fine, but if they’re not talking to a professional, their hopes can get dashed or crushed,” Chivas says. “That’s why you want to speak to someone as soon as you start dreaming it up in your head” that you want to buy a home after a bankruptcy, foreclosure or short sale.
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
How Soon Can We Buy a Home After a Foreclosure or Short Sale?
By Elizabeth Weintraub, About.com Guide
A reader asks: “Can we still get a loan to buy a home after giving the bank a deed-in-lieuof foreclosure? I’m confused on the wait time. I would like to take advantage of today’s market, but my bank said that I have to wait 3 years. And I have talked to different mortgage brokers, and one says this and one says that. Can you help us out? How soon can we buy a home again after a foreclosure?”
Answer: Excellent timing on that question regarding the waiting period to buy a home after losing your existing home. Your timing is good because the waiting periods for conventional loans — the seasoning between the time the foreclosure was completed and when a buyer purchases another home — has changed. For that, we look to Fannie Mae.
What is Fannie Mae?
The entity that holds great power in the conventional mortgage market is Fannie Mae. Fannie Mae is America’s largest mortgage buyer, a private corporation, which buys mortgage loans in the secondary mortgage market. Because Fannie Mae would end up with the properties back if borrowers default, Fannie Mae has a strong interest in setting forth stringent guidelines to lessen the chance a borrower will go into foreclosure.
Fannie Mae revised its guidelines and now addresses separate waiting periods depending on the type of foreclosure.
Moreover, if you have documented extenuating circumstances, this will have a direct bearing on the number of years you will have to wait to get a conventional loan.
What is Documented Extenuating Circumstances?
Fannie Mae allows for extenuating circumstances such as:
· Death (not yours, of course)
· Illness
· Job Transfer
· Accident Resulting in Severe Injury
Generally, extenuating circumstances are things that happen beyond your control, which dramatically affect your ability to continue making payments on your mortgage.
With documented extenuating circumstances, the waiting period is less than without. I’m sorry to say that being unable to afford an increase in payment due to an interest rate increase on your adjustable-rate mortgage is not considered a circumstance beyond your control.
Waiting Period to Buy After Foreclosure
· Buying After a Foreclosure
The waiting period is 5 years up to 7 years.
· Buying After a Foreclosure With Extenuating Circumstances
The waiting period is 3 years up to 7 years.
· Buying After After a Deed-in-Lieu of Foreclosure
The waiting period is 4 years up to 7 years.
· Buying After a Deed-in-Lieu of Foreclosure With Extenuating Circumstances
The waiting period is 2 years up to 7 years.
· Buying After a Short Sale
The waiting period is 2 years. However, if a seller does not have a 60-day late pay, Fannie Mae says that seller may immediately buy another home but none of the major lenders will fund such a loan, so it’s kind of a fallacy. FHA has similar guidelines but, again, major lenders are not stepping up to the plate. I have heard of isolated instances in which a seller relocated for a job transfer and moved more than a certain distance to qualify to immediately buy a home after a short sale.
However, to answer your particular question, if you have no extenuating circumstances, you will need to wait four years from the date of completion, meaning the date your deed-in-lieu of foreclosure was recorded.
In addition to the waiting period, some loans require 10% down and a minimum FICO score. The home you purchase must be your principal place of residence, not a rental nor a vacation home.
Fannie Mae constantly issues new guidelines. The above policies are in effect for loan applications submitted after August 1, 2008.
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
A reader asks: “Can we still get a loan to buy a home after giving the bank a deed-in-lieuof foreclosure? I’m confused on the wait time. I would like to take advantage of today’s market, but my bank said that I have to wait 3 years. And I have talked to different mortgage brokers, and one says this and one says that. Can you help us out? How soon can we buy a home again after a foreclosure?”
Answer: Excellent timing on that question regarding the waiting period to buy a home after losing your existing home. Your timing is good because the waiting periods for conventional loans — the seasoning between the time the foreclosure was completed and when a buyer purchases another home — has changed. For that, we look to Fannie Mae.
What is Fannie Mae?
The entity that holds great power in the conventional mortgage market is Fannie Mae. Fannie Mae is America’s largest mortgage buyer, a private corporation, which buys mortgage loans in the secondary mortgage market. Because Fannie Mae would end up with the properties back if borrowers default, Fannie Mae has a strong interest in setting forth stringent guidelines to lessen the chance a borrower will go into foreclosure.
Fannie Mae revised its guidelines and now addresses separate waiting periods depending on the type of foreclosure.
Moreover, if you have documented extenuating circumstances, this will have a direct bearing on the number of years you will have to wait to get a conventional loan.
What is Documented Extenuating Circumstances?
Fannie Mae allows for extenuating circumstances such as:
· Death (not yours, of course)
· Illness
· Job Transfer
· Accident Resulting in Severe Injury
Generally, extenuating circumstances are things that happen beyond your control, which dramatically affect your ability to continue making payments on your mortgage.
With documented extenuating circumstances, the waiting period is less than without. I’m sorry to say that being unable to afford an increase in payment due to an interest rate increase on your adjustable-rate mortgage is not considered a circumstance beyond your control.
Waiting Period to Buy After Foreclosure
· Buying After a Foreclosure
The waiting period is 5 years up to 7 years.
· Buying After a Foreclosure With Extenuating Circumstances
The waiting period is 3 years up to 7 years.
· Buying After After a Deed-in-Lieu of Foreclosure
The waiting period is 4 years up to 7 years.
· Buying After a Deed-in-Lieu of Foreclosure With Extenuating Circumstances
The waiting period is 2 years up to 7 years.
· Buying After a Short Sale
The waiting period is 2 years. However, if a seller does not have a 60-day late pay, Fannie Mae says that seller may immediately buy another home but none of the major lenders will fund such a loan, so it’s kind of a fallacy. FHA has similar guidelines but, again, major lenders are not stepping up to the plate. I have heard of isolated instances in which a seller relocated for a job transfer and moved more than a certain distance to qualify to immediately buy a home after a short sale.
However, to answer your particular question, if you have no extenuating circumstances, you will need to wait four years from the date of completion, meaning the date your deed-in-lieu of foreclosure was recorded.
In addition to the waiting period, some loans require 10% down and a minimum FICO score. The home you purchase must be your principal place of residence, not a rental nor a vacation home.
Fannie Mae constantly issues new guidelines. The above policies are in effect for loan applications submitted after August 1, 2008.
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
Buying a Home After Short Sale, Foreclosure or Bankruptcy
By Shashank Shekhar
Mortgage Meltdown of 2007 and rapid depreciation in real estate prices post that, resulted in financial crisis for a lot of homeowners. As a result of which, several of them went through a foreclosure, short-sale or bankruptcy. If you are one of those you must be trying to find out – how soon you can buy a house again. By the end of this post, you would know when you can qualify for mortgage – conventional loan, VA Loans or loans insured by Federal Housing Administration (FHA).
When do I qualify for a mortgage to buy a house after short-sale?
A pre-foreclosure sale or short sale is the sale of a property in lieu of a foreclosure resulting in a payoff of less than the total amount owed, which was pre-approved by the servicer.
Qualifying for Conventional mortgage after Short-sale:
The following waiting period requirements apply for conventional mortgage backed by Fannie Mae
· Two years for transactions with a maximum Loan-to-value ratio (LTV) of 80%. So if you have 20% down payment you can buy a house 2 years after short-sale.
· Four-year for transactions with a maximum LTV of 90%
· Seven years for transactions with an LTV greater than 90%
For loans backed by Freddie Mac you can get a regular LTV loan after 4 years.
Qualifying for FHA Loan after Short-sale:
You need to wait for 3 years after short-sale to qualify for an FHA loan. Some exceptions may apply if you were not late on any mortgage or installment debt 12 months prior to the short-sale debt. One caveat to three year wait period is that, you should not have any bankruptcy or foreclosure prior to the short-sale.
Qualifying for a VA Loan after Short-sale:
You need to wait for 2 years after short-sale to qualify for a VA loan.
When do I qualify for a mortgage to buy a house after foreclosure?
Qualifying for Conventional mortgage after Foreclosure:
A seven-year waiting period is required, and is measured from the completion date of the foreclosure action as reported on the credit report or other foreclosure documents provided by the borrower.
Qualifying for FHA Loan after Foreclosure:
You need to wait for 3 years after the foreclosure to qualify for an FHA loan.
· If the loan secured by the foreclosed property was not an FHA loan, the foreclosure time frame is measured from the foreclosure completion date.
· If the loan secured by the foreclosed property was an FHA loan, the three year time frame is measured from the date FHA paid the insurance claim.
· Defaulted time share loans are not considered foreclosures
Qualifying for VA Loan after Foreclosure:
To qualify for VA loan after foreclosure, the wait period is two years.
When do I qualify for a mortgage to buy a house after bankruptcy?
Qualifying for Conventional mortgage after Bankruptcy:
With Chapter 7 bankruptcy you need to wait for 4 years before which you can qualify for a conventional mortgage. With Chapter 13 bankruptcy 24 months must elapse from the discharge date or 48 months from the dismissal date.
Qualifying for FHA Loan after Bankruptcy:
Wait period for an FHA loan after Chapter 7 bankruptcy is two years.
To qualify for an FHA loan after Chapter 13 bankruptcy, following guidelines apply:
· Document at least one year into the payout plan has elapsed
· Document all required payments have been made on time
· If borrower is still in repayment, obtain court permission to enter into the new mortgage
· If the borrower is still in repayment, include the Chapter 13 payment in the debt ratio
Qualifying for VA Loan after Bankruptcy:
Two years wait period is required after chapter 7. For Chapter 13 bankruptcy – one year into payment plan is required with all payments made on time. A court permission to enter into a new mortgage is required too.
If you have gone through any of these hardships in the past and considering to buy a home again, contact us so that we can help you qualify for a mortgage.
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
Mortgage Meltdown of 2007 and rapid depreciation in real estate prices post that, resulted in financial crisis for a lot of homeowners. As a result of which, several of them went through a foreclosure, short-sale or bankruptcy. If you are one of those you must be trying to find out – how soon you can buy a house again. By the end of this post, you would know when you can qualify for mortgage – conventional loan, VA Loans or loans insured by Federal Housing Administration (FHA).
When do I qualify for a mortgage to buy a house after short-sale?
A pre-foreclosure sale or short sale is the sale of a property in lieu of a foreclosure resulting in a payoff of less than the total amount owed, which was pre-approved by the servicer.
Qualifying for Conventional mortgage after Short-sale:
The following waiting period requirements apply for conventional mortgage backed by Fannie Mae
· Two years for transactions with a maximum Loan-to-value ratio (LTV) of 80%. So if you have 20% down payment you can buy a house 2 years after short-sale.
· Four-year for transactions with a maximum LTV of 90%
· Seven years for transactions with an LTV greater than 90%
For loans backed by Freddie Mac you can get a regular LTV loan after 4 years.
Qualifying for FHA Loan after Short-sale:
You need to wait for 3 years after short-sale to qualify for an FHA loan. Some exceptions may apply if you were not late on any mortgage or installment debt 12 months prior to the short-sale debt. One caveat to three year wait period is that, you should not have any bankruptcy or foreclosure prior to the short-sale.
Qualifying for a VA Loan after Short-sale:
You need to wait for 2 years after short-sale to qualify for a VA loan.
When do I qualify for a mortgage to buy a house after foreclosure?
Qualifying for Conventional mortgage after Foreclosure:
A seven-year waiting period is required, and is measured from the completion date of the foreclosure action as reported on the credit report or other foreclosure documents provided by the borrower.
Qualifying for FHA Loan after Foreclosure:
You need to wait for 3 years after the foreclosure to qualify for an FHA loan.
· If the loan secured by the foreclosed property was not an FHA loan, the foreclosure time frame is measured from the foreclosure completion date.
· If the loan secured by the foreclosed property was an FHA loan, the three year time frame is measured from the date FHA paid the insurance claim.
· Defaulted time share loans are not considered foreclosures
Qualifying for VA Loan after Foreclosure:
To qualify for VA loan after foreclosure, the wait period is two years.
When do I qualify for a mortgage to buy a house after bankruptcy?
Qualifying for Conventional mortgage after Bankruptcy:
With Chapter 7 bankruptcy you need to wait for 4 years before which you can qualify for a conventional mortgage. With Chapter 13 bankruptcy 24 months must elapse from the discharge date or 48 months from the dismissal date.
Qualifying for FHA Loan after Bankruptcy:
Wait period for an FHA loan after Chapter 7 bankruptcy is two years.
To qualify for an FHA loan after Chapter 13 bankruptcy, following guidelines apply:
· Document at least one year into the payout plan has elapsed
· Document all required payments have been made on time
· If borrower is still in repayment, obtain court permission to enter into the new mortgage
· If the borrower is still in repayment, include the Chapter 13 payment in the debt ratio
Qualifying for VA Loan after Bankruptcy:
Two years wait period is required after chapter 7. For Chapter 13 bankruptcy – one year into payment plan is required with all payments made on time. A court permission to enter into a new mortgage is required too.
If you have gone through any of these hardships in the past and considering to buy a home again, contact us so that we can help you qualify for a mortgage.
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
Buy a Foreclosure with a New Government Program
By Kimberly Palmer
Today’s guest post comes from Brandon Laughridge of Mortgage Loan Place, which specializes in educating consumers on all types of mortgages with an emphasis on government loan programs.
Prospective homebuyers can now get significant financial help to purchase foreclosed properties, thanks to a federal grant program aimed at revitalizing blighted communities.
These incredible deals for purchasers — with some down payments as low as 1 percent — may also spur a rebound for many cities devastated by deep recession and a flailing housing market.
“One of the most important competitive investments in the Recovery Act is the additional $2 billion we’ve invested in the Neighborhood Stabilization Program to help communities purchase and convert foreclosed and abandoned properties into new affordable housing, land banks, or other options that preserve neighborhoods,” U.S. Housing and Urban Development Secretary Shaun Donovan said during a recent speech in Chicago. “These competitive funds will not only turn foreclosed properties into homes again, but also ensure that communities go about the rehabilitation and purchase process in a smart, collaborative, and, above all, sustainable way.”
About $4 billion is available for municipalities and individuals nationwide. The Neighborhood Stabilization Program offers significant financial aid for low- and middle-income buyers interested in foreclosed homes.
Qualified buyers are required to put down at least 3 percent of the purchase price as a down payment, but only 1 percent of that has to come from the buyer’s own pocket. The remainder can be covered by approved external funding sources, including Federal Housing Administration loans.
Buyers can also pay for properties in cash.
The NSP loans can cover almost a quarter of a property’s purchase price. There is no interest, no monthly payment and loan balances are due upon completion of the loan agreement, which is anywhere from five to 15 years.
As with many governmental lending programs, there is a laundry list of eligibility criteria.
The program is restricted to foreclosed properties only. A potential site must be vacant upon listing and either a one-unit single family home, a condominium or a townhouse.
Buyers who own a primary residence must have been leasing the property for at least a year before applying for a Neighborhood Stabilization loan.
The NSP also aims to boost homeownership among low- and middle-income ranks. Prospective borrowers cannot have a gross income (before taxes) greater than 120 percent of the average median income for they county in which the property resides.
This could be a great opportunity to get a bargain basement price on a home with favorable terms. Contact your local HUD office to find a list of eligible properties in your area.
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
Today’s guest post comes from Brandon Laughridge of Mortgage Loan Place, which specializes in educating consumers on all types of mortgages with an emphasis on government loan programs.
Prospective homebuyers can now get significant financial help to purchase foreclosed properties, thanks to a federal grant program aimed at revitalizing blighted communities.
These incredible deals for purchasers — with some down payments as low as 1 percent — may also spur a rebound for many cities devastated by deep recession and a flailing housing market.
“One of the most important competitive investments in the Recovery Act is the additional $2 billion we’ve invested in the Neighborhood Stabilization Program to help communities purchase and convert foreclosed and abandoned properties into new affordable housing, land banks, or other options that preserve neighborhoods,” U.S. Housing and Urban Development Secretary Shaun Donovan said during a recent speech in Chicago. “These competitive funds will not only turn foreclosed properties into homes again, but also ensure that communities go about the rehabilitation and purchase process in a smart, collaborative, and, above all, sustainable way.”
About $4 billion is available for municipalities and individuals nationwide. The Neighborhood Stabilization Program offers significant financial aid for low- and middle-income buyers interested in foreclosed homes.
Qualified buyers are required to put down at least 3 percent of the purchase price as a down payment, but only 1 percent of that has to come from the buyer’s own pocket. The remainder can be covered by approved external funding sources, including Federal Housing Administration loans.
Buyers can also pay for properties in cash.
The NSP loans can cover almost a quarter of a property’s purchase price. There is no interest, no monthly payment and loan balances are due upon completion of the loan agreement, which is anywhere from five to 15 years.
As with many governmental lending programs, there is a laundry list of eligibility criteria.
The program is restricted to foreclosed properties only. A potential site must be vacant upon listing and either a one-unit single family home, a condominium or a townhouse.
Buyers who own a primary residence must have been leasing the property for at least a year before applying for a Neighborhood Stabilization loan.
The NSP also aims to boost homeownership among low- and middle-income ranks. Prospective borrowers cannot have a gross income (before taxes) greater than 120 percent of the average median income for they county in which the property resides.
This could be a great opportunity to get a bargain basement price on a home with favorable terms. Contact your local HUD office to find a list of eligible properties in your area.
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
Tuesday, March 26, 2013
Buying Foreclosure Properties: Tips and Considerations
According to the Mortgage Banker’s Association, one in every 200 homes winds up in
foreclosure, with as many as 250,000 new homeowners entering foreclosure each
quarter. Tough economic times typically see increases in the number of
foreclosures on single family homes. Part of the increase is due how many
homeowners already straddle the line between economic viability and financial
ruin.
Numerous studies and surveys of average
Americans bring to light some shocking statistics regarding the financial
health of the average family. More than half live paycheck to paycheck, with
almost as many having less than three month’s worth of bill money saved. In
fact, almost half of all Americans have less than $5,000 in cash, retirement
savings or other liquid assets. With so many struggling to stay afloat
financially, it is understandable that a tough economy brings on more
foreclosures.
Distressed Properties 101
Before jumping headlong into buying
foreclosed real estate, buyers should understand some key terms. Reading real
estate listings, watching commercials on television, or otherwise hearing about
the benefits of buying foreclosed homes often leads buyers to get ahead of
themselves. Without understanding the different types of distressed properties,
buyers can easily pay far more for a property than they would otherwise.
The three most common terms used regarding
distressed properties are short sale, foreclosure auction and Real Estate Owned
(REO). Many new buyers mistakenly associate all three as meaning the same or
similar things. In fact, each is very different and can have tremendous impact
on the purchase price of a home.
A short sale is a home offered for sale by
the owner, typically for less than what is owed. Acceptance of a bid depends on
the bank agreeing to the sale, usually in an effort to save on the cost of
foreclosure proceedings. A foreclosure auction is the first step banks take to
recuperate the balance owed on a mortgaged property.
REOs are homes which have already reverted to
the lender, typically after a failed foreclosure auction. While not always the
case, an REO is typically cheaper than a short sale or foreclosure auction.
Most often, the bank lists opening bids at a foreclosure auction based on the
balance owed on the mortgage. If a home has little equity, that typically translates
to a high initial bid at auction. Experienced realtors, investors and other
bidders know that waiting until the house becomes an REO usually results in a
lower price.
The Bidding Process
Making an offer, known as placing a bid,
varies from lender to lender. State laws may also dictate how the bidding
process works. Some sellers, such as HUD and Fannie Mae, limit who is allowed
to bid and when. For example, Fannie Mae offers a First Look program, a period
of time in which only those buyers who plan to live in the home are allowed to
place bids.
While the bidding process might vary, it
typically follows a similar pattern, depending on if the property is offered
via a foreclosure auction or as an REO. Typically, foreclosure auctions are
operated according to state law. A third party trustee is named and bids are
made through the trustee. Depending on the state, each bidder may have to
present either a cashier’s check for the full bid or a percentage of the total
bid. In this case, the buyer typically sets the bid amount, although some
auctions may list a minimum opening bid.
Most often, bids are submitted during an open
period, where sealed bids are collected for a specific period of time and
opened on a set date. The highest, most qualified bidder, if the bid amount
meets the bank’s terms, wins. In some states, foreclosure auctions operate more
like traditional auctions, with buyers increasing their bids in an attempt to
become the highest bidder. If the home is not sold at the foreclosure auction,
it becomes an REO. The lender then becomes the owner and decides how to accept
bids or offers to purchase.
Buying an REO
Once a property becomes an REO, potential
buyers must follow the lender’s guidelines for making an offer. Some sellers,
such as Fannie Mae and HUD, only allow certified realtors to make offers on
behalf of their clients. Other sellers leave it to the buyer to decide if they
want a realtor or a real estate attorney involved. With REOs, the bank
determines the selling price, usually based on market value. In some cases, the
bank will set the price lower than market value, in an attempt to attract
multiple buyers.
To prevent overpaying for a foreclosed home,
buyers should understand the home’s appraised value before engaging in any
bidding war. Likewise, if an appraisal is needed, buyers should understand the
process can take months. Contacting the appropriate parties early is crucial to
speeding up the process from offer to closing.
Tips for Finding and Buying
Buyers have numerous avenues for finding foreclosed
properties available for purchase. Realtors and some real estate attorneys have
access to listings, such as those listed in the HUD Home Store. Private buyers
can contact individual lenders to inquire about available properties. Most
lenders have entire departments devoted to handling foreclosure properties.
This is typically the same department with whom buyers must consult about
appraisals.
Before placing a bid or making an offer,
buyers should keep the following points in mind:
• Set
a reasonable bid limit
• Foreclosures
are not always a bargain
• Homes
are sold as-is, including damage, faulty systems, and other encumbrances
In many instances, buyers have the burden of
educating themselves on buying foreclosed real estate. While some trustees and
banks will offer details on their procedures, that is only part of the
equation. To truly understand the process, buyers should observe an auction or
employ the services of a realtor or real estate attorney.
My name is Scott Grebner and I have been helping my clients
realize their own personal real estate dreams. Real estate is a
relationship-based business that works best when client relationships are built
on trust and confidence. My goal is having clients be completely satisfied with
the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate
market functions in this country today. Gerharter Realtors is embracing these
new mediums of communication to better serve our customers. We have created our
e-family to better place important information in your hands to help you
with your housing needs. As a part of Gerharter Enterprises we have
access to a broader range of additional services and resources to better assist
you. Visit me
at my Web
Site, Blog, Facebook, Twitter, You
Tube or Pinterest. Please check out our
helpful resources on Sellers Tips, Buyers
Tips, Foreclosure
Tips, and Mortgage
Tips. For a personal consultation please visit our Office.
It seems that the dream of past
generations was to pay off a mortgage. The dream of today's young families is
to get one. I would love to hear from you, about your Real Estate Dreams and
questions.8 Tips for REO Foreclosure Offers
By Elizabeth Weintraub, About.com
Lots of savvy home buyers want to hit the jackpot and buy that REO foreclosure, many of which are often under-priced. When banks price REO foreclosures under the comparable sales, multiple offers are often the response. This means you could be up against stiff competition for that bank-owned home.
It’s not unusual for some REO foreclosures in Sacramento to receive 15 or 20 offers. Sometimes the bank will throw out all but two offers and then ask the selected buyers to resubmit what is called “Highest and Final” offer. Sometimes the bank simply accepts the best offer at inception.
If you’re wondering how you can make your REO offer shine above all the rest and be the winning offer, here are a few tips to help you select the right price and terms:
1) Get the Property History of that REO Foreclosure
Ask your buyer’s agent to find out the bank’s purchase price on the Trustee’s Deed or Sheriff’s Deed. Generally, it is noted on the document itself, which you can get from the tax rolls or a title company. Compare that price to the price the bank is asking.
Look at the amount of loans that were once secured to the property. Somewhere between the original mortgage balance(s) and the foreclosure sale price is the amount the bank will accept, if the home is under-priced.
2) Determine Comparable Sales for the REO Foreclosure
In many cases, the list price has little bearing on the value of the home. The market value carries the most weight. If you are up against competing offers, other buyers will offer more than list price.
· Look at the last three months of comparable sales, a mini CMA, for that neighborhood to determine how much this REO foreclosure is worth. Try to use only those homes that most closely match the REO regarding square footage, number of bedrooms, baths, amenities and condition.
· Look at the pending sales. Ask your agent to call the listing agents of those pending sales to try to find out the accepted offer price. Some will share that information and some will not.
· Look at the active listings. Those are most likely the listings other buyers will use to formulate a price because they are the only homes those buyers actually tour.
3) Analyze Listing Agent’s REO Solds
Most REO agents work for one or two banks. Some listing agents are exclusive listing agents for REOs, and they do not list any other type of property. Since REO agents deal in volume, they typically apply the same pricing principles to all their REO listings.
· Ask your buyer’s agent to look up the listing agent in MLS.
· Run a search using that listing agent’s name to find the last three to six months of that agent’s listings.
· Pull the history of those listings to determine the list-price to sales-price ratio. If most of those listings are selling for, say, 5% over list price, then you may need to offer 6% over list price, and vice versa.
4) Ask About Number of Offers Received for that REO Foreclosure
If there are no offers on the REO home, you can probably offer less than list price and get your offer accepted. However, if there are more than two offers, you will most likely need to offer above the asking price.
If there are 20 offers, bear in mind that some of those offers might be all cash. Banks like all cash offers. If you are obtaining financing, then you may need to increase the price on your offer to be considered.
5) Submit Preapproval Letter
It goes without saying that you do not want a prequal letter. You want a preapproval letter. Get preapproved from your choice of lender in advance.
Moreover, get preapproved by the lender who owns the property. Do not expect to use this lender for your loan, but submit the prepproval letter from this lender, along with the letter from your own lender. Banks don’t trust other lender preapprovals but trust their own departments.
6) Don’t Ask the REO Bank to Pay for Repairs / Inspections
Sometimes banks will pay for repairs, but typically will not agree to do so at the offer stage. If there are problems found during a home inspection, renegotiate after your offer has been accepted.
7) Shorten the Inspection Period
If other buyers ask for 17 days, for example, to conduct inspections, and you ask for 10, you will be deemed the more serious buyer.
8) Offer to Split Fees wit the REO bank
Some banks will not pay transfer fees, for example. If the buyer offers to split those fees, the bank will feel more amenable to accepting the offer. Same thing for escrow fees.
Many banks negotiate discount fees for title insurance. If the bank will pay for the owner’s policy, the ALTA policy might cost a bit more. But it’s still a good idea to let the bank choose title if you want your offer accepted.
Consider the Appraisal Consequences
If you offer over list price, bear in mind that the appraisal will need to substantiate that price. If you find yourself dealing with a low appraisal, you have options, so don’t despair. Remember, the bank will most likely run into this problem with the next buyer who obtains financing.
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
Lots of savvy home buyers want to hit the jackpot and buy that REO foreclosure, many of which are often under-priced. When banks price REO foreclosures under the comparable sales, multiple offers are often the response. This means you could be up against stiff competition for that bank-owned home.
It’s not unusual for some REO foreclosures in Sacramento to receive 15 or 20 offers. Sometimes the bank will throw out all but two offers and then ask the selected buyers to resubmit what is called “Highest and Final” offer. Sometimes the bank simply accepts the best offer at inception.
If you’re wondering how you can make your REO offer shine above all the rest and be the winning offer, here are a few tips to help you select the right price and terms:
1) Get the Property History of that REO Foreclosure
Ask your buyer’s agent to find out the bank’s purchase price on the Trustee’s Deed or Sheriff’s Deed. Generally, it is noted on the document itself, which you can get from the tax rolls or a title company. Compare that price to the price the bank is asking.
Look at the amount of loans that were once secured to the property. Somewhere between the original mortgage balance(s) and the foreclosure sale price is the amount the bank will accept, if the home is under-priced.
2) Determine Comparable Sales for the REO Foreclosure
In many cases, the list price has little bearing on the value of the home. The market value carries the most weight. If you are up against competing offers, other buyers will offer more than list price.
· Look at the last three months of comparable sales, a mini CMA, for that neighborhood to determine how much this REO foreclosure is worth. Try to use only those homes that most closely match the REO regarding square footage, number of bedrooms, baths, amenities and condition.
· Look at the pending sales. Ask your agent to call the listing agents of those pending sales to try to find out the accepted offer price. Some will share that information and some will not.
· Look at the active listings. Those are most likely the listings other buyers will use to formulate a price because they are the only homes those buyers actually tour.
3) Analyze Listing Agent’s REO Solds
Most REO agents work for one or two banks. Some listing agents are exclusive listing agents for REOs, and they do not list any other type of property. Since REO agents deal in volume, they typically apply the same pricing principles to all their REO listings.
· Ask your buyer’s agent to look up the listing agent in MLS.
· Run a search using that listing agent’s name to find the last three to six months of that agent’s listings.
· Pull the history of those listings to determine the list-price to sales-price ratio. If most of those listings are selling for, say, 5% over list price, then you may need to offer 6% over list price, and vice versa.
4) Ask About Number of Offers Received for that REO Foreclosure
If there are no offers on the REO home, you can probably offer less than list price and get your offer accepted. However, if there are more than two offers, you will most likely need to offer above the asking price.
If there are 20 offers, bear in mind that some of those offers might be all cash. Banks like all cash offers. If you are obtaining financing, then you may need to increase the price on your offer to be considered.
5) Submit Preapproval Letter
It goes without saying that you do not want a prequal letter. You want a preapproval letter. Get preapproved from your choice of lender in advance.
Moreover, get preapproved by the lender who owns the property. Do not expect to use this lender for your loan, but submit the prepproval letter from this lender, along with the letter from your own lender. Banks don’t trust other lender preapprovals but trust their own departments.
6) Don’t Ask the REO Bank to Pay for Repairs / Inspections
Sometimes banks will pay for repairs, but typically will not agree to do so at the offer stage. If there are problems found during a home inspection, renegotiate after your offer has been accepted.
7) Shorten the Inspection Period
If other buyers ask for 17 days, for example, to conduct inspections, and you ask for 10, you will be deemed the more serious buyer.
8) Offer to Split Fees wit the REO bank
Some banks will not pay transfer fees, for example. If the buyer offers to split those fees, the bank will feel more amenable to accepting the offer. Same thing for escrow fees.
Many banks negotiate discount fees for title insurance. If the bank will pay for the owner’s policy, the ALTA policy might cost a bit more. But it’s still a good idea to let the bank choose title if you want your offer accepted.
Consider the Appraisal Consequences
If you offer over list price, bear in mind that the appraisal will need to substantiate that price. If you find yourself dealing with a low appraisal, you have options, so don’t despair. Remember, the bank will most likely run into this problem with the next buyer who obtains financing.
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
Tips for buying bank foreclosures
by Albert Lee
There are many people out there who want to purchase real estate properties. The problem is, they just do not have enough money.
So, rather than enter into a binding contract to purchase a brand new house just to have it foreclosed because of failure to pay, why not purchase a foreclosed property right away?
Foreclosed houses are real estate properties that have been foreclosed by the lending companies or the government because of the failure of the owner to pay their loans or mortgages.
As such, whenever a banking institution or an agency end the long and complicated legal process with the foreclosure, they have to sell it off right away to get the proceeds and apply it to the terms of the contract.
This reality is actually one that most households face nowadays because of failure to properly manage finances and due to the difficulty in the economy.
Despite the sad picture of foreclosure, it should not keep you from purchasing these properties. Actually buying foreclosure houses is a good way to turn a sad thing into a wonderful opportunity. Make some good out of it.
Buying Foreclosure Houses
To secure a foreclosure house, it is best to utilize the various sources that will lead you to the perfect find.
Banks have listings of their foreclosures. There are also agents and brokers who can aid you in finding these properties. Government agencies also post announcements on their public auctions. The internet too is a good source of information.
These sources will lead you to venues and properties that can get you that foreclosure house. Do not hesitate to utilize these sources. You might just hit gold.
Some opt to survey for pre-foreclosure properties to purchase it directly from the owner. However, be cautious of doing this option. The case might be involved still in a long process.
To be sure, simply stick to the properties already foreclosed.
The good thing about buying foreclosure properties is that they can give you the best deals for houses that you can not ordinarily get at lower prices.
Most of the time, the foreclosed properties are sold at lower prices to be able to dispense with them more easily. On the average, they are sold only from 5 to 50 percent of their total fair market value.
Banks have to get the proceeds right away to apply it to the contract and put the money again into circulation.
Here are some tips to consider when buying bank foreclosure properties.
1. To Resell or to Keep?
When scouting for bank foreclosure properties, decide whether it is something you will resell or something you would like to keep.
This will aid you in picking the right find. Some houses can easily be repaired for reselling purposes because the next buyer can take care of the other details.
However, it may take considerable time and effort if the house is something you want to keep.
2. Repair and Resell
Foreclosed properties have previous owners who are in financial troubles, thus the upkeep is usually not maintained. This is one reason why they are also sold at lower prices.
Sometimes, this condition requires ordinary repairs and make over. Carefully consider this aspect in evaluating your purchase, whether it can give you enough room to earn.
3. Do a Little Research
Sometimes you cannot simply depend on the fact that foreclosed properties are sold at cheap prices. Do a little research to know if you can really make a good buy.
There are properties that sound inexpensively priced but they will not sell high as well despite the repairs because of their location or neighborhood.
Just take the extra mile to research. You can even seek help from an assessor to make sure that you have a good deal.
Conclusion
Bank foreclosure properties can definitely help you make a good buy in real estate properties and still have lots of savings. So do not hesitate to utilize this option. Make something good out of this promising venture.
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
There are many people out there who want to purchase real estate properties. The problem is, they just do not have enough money.
So, rather than enter into a binding contract to purchase a brand new house just to have it foreclosed because of failure to pay, why not purchase a foreclosed property right away?
Foreclosed houses are real estate properties that have been foreclosed by the lending companies or the government because of the failure of the owner to pay their loans or mortgages.
As such, whenever a banking institution or an agency end the long and complicated legal process with the foreclosure, they have to sell it off right away to get the proceeds and apply it to the terms of the contract.
This reality is actually one that most households face nowadays because of failure to properly manage finances and due to the difficulty in the economy.
Despite the sad picture of foreclosure, it should not keep you from purchasing these properties. Actually buying foreclosure houses is a good way to turn a sad thing into a wonderful opportunity. Make some good out of it.
Buying Foreclosure Houses
To secure a foreclosure house, it is best to utilize the various sources that will lead you to the perfect find.
Banks have listings of their foreclosures. There are also agents and brokers who can aid you in finding these properties. Government agencies also post announcements on their public auctions. The internet too is a good source of information.
These sources will lead you to venues and properties that can get you that foreclosure house. Do not hesitate to utilize these sources. You might just hit gold.
Some opt to survey for pre-foreclosure properties to purchase it directly from the owner. However, be cautious of doing this option. The case might be involved still in a long process.
To be sure, simply stick to the properties already foreclosed.
The good thing about buying foreclosure properties is that they can give you the best deals for houses that you can not ordinarily get at lower prices.
Most of the time, the foreclosed properties are sold at lower prices to be able to dispense with them more easily. On the average, they are sold only from 5 to 50 percent of their total fair market value.
Banks have to get the proceeds right away to apply it to the contract and put the money again into circulation.
Here are some tips to consider when buying bank foreclosure properties.
1. To Resell or to Keep?
When scouting for bank foreclosure properties, decide whether it is something you will resell or something you would like to keep.
This will aid you in picking the right find. Some houses can easily be repaired for reselling purposes because the next buyer can take care of the other details.
However, it may take considerable time and effort if the house is something you want to keep.
2. Repair and Resell
Foreclosed properties have previous owners who are in financial troubles, thus the upkeep is usually not maintained. This is one reason why they are also sold at lower prices.
Sometimes, this condition requires ordinary repairs and make over. Carefully consider this aspect in evaluating your purchase, whether it can give you enough room to earn.
3. Do a Little Research
Sometimes you cannot simply depend on the fact that foreclosed properties are sold at cheap prices. Do a little research to know if you can really make a good buy.
There are properties that sound inexpensively priced but they will not sell high as well despite the repairs because of their location or neighborhood.
Just take the extra mile to research. You can even seek help from an assessor to make sure that you have a good deal.
Conclusion
Bank foreclosure properties can definitely help you make a good buy in real estate properties and still have lots of savings. So do not hesitate to utilize this option. Make something good out of this promising venture.
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
3 Ways To Buy Foreclosure Properties
by Joe Sesso
Buying foreclosure properties is a great way to earn huge profits in real estate – if you know what you’re doing. Many novice investors think that just because a property is a foreclosure that it’s a good deal. Not true. In fact, many people lose a lot of money buying foreclosures. So, how can one maximize their profits and minimize his or her risk buying foreclosures? In this post, I’ll show you three unique ways to buy foreclosures, as well as the pros and cons of each.
1. Foreclosure Auctions: If you haven’t read my previous post about how I made $20,000 in 30 days from buying a foreclosure property, I recommend that you do. It explains how I used some basic techniques to maximize my profits while minimizing risks in a foreclosure auction purchase that I did a few years back. Foreclosure auctions are the least invasive way to buy property, but it can also be the riskiest. Foreclosure auctions are exactly that – auctions. The property goes to the higheset bidder. The terms for purchase are very basic: Cash is king. They don’t take mortgages or promissory notes. You need to have certified funds to buy property at foreclosure auctions. The terms are usually ten percent of the purchase price due the day of the sale with the remainder due within 24 hours. The pros of buying properties at auction is that there is no haggling or negotiating required. If you’re the highest bidder, you win. It’s also a very easy closing process. You don’t have to worry about signing your life away to buy the property. You just need to sign a few forms and that’s it…you’re the new owner. Of course there are also cons to buying property at foreclosure auctions.
One is that you’re usually not allowed inside the home prior to the auction. That’s because it technically still belongs to the foreclosed homeowner until the sale. I doubt that they will let you in their home prior to the sale, and I don’t recommend trying it. Another con is that since you can’t get inside, it’s really hard to determine how much it will cost to rehab the house. It might look nice from the outside, but inside it’s a real disaster. This is where the real risk comes in with buying properties at auctions. My advice is to talk to a contractor and ask how much it would cost to do interior repairs, assuming the worst-case scenario. This may be a very conservative approach, but it’s the smartest one. If you build in a $40,000 cushion and only need $5,000 to fix it up, you can make a huge profit. On the other hand, if you only leave a $5,000 cushion and need $25,000 for repairs, you will lose a lot of money. This is what makes buying real estate at foreclosure auctions so risky. Let’s take a look at another approach.
2. Buying from the Bank: This approach is what happens after a home goes up for a foreclosure auction and no one buys it. This is a much safer approach than buying from an auction for several reasons, but also is more competitive. The pros are that you can go inside the property, price out your labor and material costs, and negotiate directly with the owner (the bank). This will give you a great idea of how much repairs will cost as well as how much you can expect to profit from selling it. You can also finance the transaction, which means you can get a mortgage from a bank. In fact, the bank selling the home might even finance you!
The cons are that your competition can do the same. There are many more buyers involved with a transaction like this, because it’s easier to get a mortgage than to walk into an auction with cash in hand. The bank is looking to get the most money for their property, so the highest bid will usually win, unless you can come in with an all cash offer. This is where you really need to know how much it will cost to do repairs as well as how much profit you will be happy with. Some investors won’t buy a house unless they can profit at least $25,000. Others might be ok with only $10,000. This makes buying from the bank very competitive.
3. Buying from the Homeowner: A great way to make huge profits in real estate foreclosures is to buy directly from the owner before the house goes up for auction. This is what I specialized in for many years and it worked wonders. It can do the same for you. The pros of buying directly from the owner is that you can virtually eliminate your competition. Most people don’t want to deal with a homeowner going through a bad time in his or her life. They are afraid to approach the door. I always looked at this as an opportunity to help the owner. By doing this, I had very little competition and negotiated directly with the owner. In this market, the owner might not have much equity in their home, so you might have to deal with the bank anyway, only now the terms are different. You are now doing a short sale as opposed to a straight purchase. You can get a mortgage for a short sale and the bank will give you a list of what you need to do to make the deal happen. If they accept your offer, you get the house. If not, you can renegotiate or walk away from the deal. I’ve had banks turn down my short sale offer, and then I either purchased the house at an auction or bought it directly from the bank when nobody bid on it at the auction. That can work for you too.
The cons are that you have to deal with a stressed-out homeowner. Some people take foreclosure better than others. You have to come across as compassionate and wanting to help rather than as a vulture looking for scraps. A lot of people have apprehensions about cold calling or door knocking. If you are terrified to do this, it might not be for you. But this could be the best way to make a lot of money in foreclosures.
Foreclosed properties can be a great way to build your real estate fortune and empire. There are many different approaches to buying these types of properties, but all of them have pros and cons. Make sure that you do your homework before buying any type of home.
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
Buying foreclosure properties is a great way to earn huge profits in real estate – if you know what you’re doing. Many novice investors think that just because a property is a foreclosure that it’s a good deal. Not true. In fact, many people lose a lot of money buying foreclosures. So, how can one maximize their profits and minimize his or her risk buying foreclosures? In this post, I’ll show you three unique ways to buy foreclosures, as well as the pros and cons of each.
1. Foreclosure Auctions: If you haven’t read my previous post about how I made $20,000 in 30 days from buying a foreclosure property, I recommend that you do. It explains how I used some basic techniques to maximize my profits while minimizing risks in a foreclosure auction purchase that I did a few years back. Foreclosure auctions are the least invasive way to buy property, but it can also be the riskiest. Foreclosure auctions are exactly that – auctions. The property goes to the higheset bidder. The terms for purchase are very basic: Cash is king. They don’t take mortgages or promissory notes. You need to have certified funds to buy property at foreclosure auctions. The terms are usually ten percent of the purchase price due the day of the sale with the remainder due within 24 hours. The pros of buying properties at auction is that there is no haggling or negotiating required. If you’re the highest bidder, you win. It’s also a very easy closing process. You don’t have to worry about signing your life away to buy the property. You just need to sign a few forms and that’s it…you’re the new owner. Of course there are also cons to buying property at foreclosure auctions.
One is that you’re usually not allowed inside the home prior to the auction. That’s because it technically still belongs to the foreclosed homeowner until the sale. I doubt that they will let you in their home prior to the sale, and I don’t recommend trying it. Another con is that since you can’t get inside, it’s really hard to determine how much it will cost to rehab the house. It might look nice from the outside, but inside it’s a real disaster. This is where the real risk comes in with buying properties at auctions. My advice is to talk to a contractor and ask how much it would cost to do interior repairs, assuming the worst-case scenario. This may be a very conservative approach, but it’s the smartest one. If you build in a $40,000 cushion and only need $5,000 to fix it up, you can make a huge profit. On the other hand, if you only leave a $5,000 cushion and need $25,000 for repairs, you will lose a lot of money. This is what makes buying real estate at foreclosure auctions so risky. Let’s take a look at another approach.
2. Buying from the Bank: This approach is what happens after a home goes up for a foreclosure auction and no one buys it. This is a much safer approach than buying from an auction for several reasons, but also is more competitive. The pros are that you can go inside the property, price out your labor and material costs, and negotiate directly with the owner (the bank). This will give you a great idea of how much repairs will cost as well as how much you can expect to profit from selling it. You can also finance the transaction, which means you can get a mortgage from a bank. In fact, the bank selling the home might even finance you!
The cons are that your competition can do the same. There are many more buyers involved with a transaction like this, because it’s easier to get a mortgage than to walk into an auction with cash in hand. The bank is looking to get the most money for their property, so the highest bid will usually win, unless you can come in with an all cash offer. This is where you really need to know how much it will cost to do repairs as well as how much profit you will be happy with. Some investors won’t buy a house unless they can profit at least $25,000. Others might be ok with only $10,000. This makes buying from the bank very competitive.
3. Buying from the Homeowner: A great way to make huge profits in real estate foreclosures is to buy directly from the owner before the house goes up for auction. This is what I specialized in for many years and it worked wonders. It can do the same for you. The pros of buying directly from the owner is that you can virtually eliminate your competition. Most people don’t want to deal with a homeowner going through a bad time in his or her life. They are afraid to approach the door. I always looked at this as an opportunity to help the owner. By doing this, I had very little competition and negotiated directly with the owner. In this market, the owner might not have much equity in their home, so you might have to deal with the bank anyway, only now the terms are different. You are now doing a short sale as opposed to a straight purchase. You can get a mortgage for a short sale and the bank will give you a list of what you need to do to make the deal happen. If they accept your offer, you get the house. If not, you can renegotiate or walk away from the deal. I’ve had banks turn down my short sale offer, and then I either purchased the house at an auction or bought it directly from the bank when nobody bid on it at the auction. That can work for you too.
The cons are that you have to deal with a stressed-out homeowner. Some people take foreclosure better than others. You have to come across as compassionate and wanting to help rather than as a vulture looking for scraps. A lot of people have apprehensions about cold calling or door knocking. If you are terrified to do this, it might not be for you. But this could be the best way to make a lot of money in foreclosures.
Foreclosed properties can be a great way to build your real estate fortune and empire. There are many different approaches to buying these types of properties, but all of them have pros and cons. Make sure that you do your homework before buying any type of home.
My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate market functions in this country today. Gerharter Realtors is embracing these new mediums of communication to better serve our customers. We have created our e-family to better place important information in your hands to help you with your housing needs. As a part of Gerharter Enterprises we have access to a broader range of additional services and resources to better assist you. Visit me at my Web Site, Blog, Facebook, Twitter, You Tube or Pinterest. Please check out our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.
Email me at scott@gerharterrealtors.com.
Sunday, March 24, 2013
How To Do a Short Sale
By Elizabeth Weintraub, About.com Guide
A short sale in real estate is not always a pleasant
transaction.
There are many ways to lose a home but signing away
ownership in a manner that destroys credit, embarrasses the family and strips
an owner of dignity is one of the hardest. For home owners who can no longer
afford to keep mortgage payments current, there are alternatives to bankruptcy
or foreclosure proceedings. One of those options is called a "short
sale."More than half of my sales in Sacramento since 2006 to 2012 have been short sales. That's how prominent short sales have become. In recent years, even sellers who are not delinquent might qualify for a short sale, which has opened many more short sale doors.
When lenders agree to do a short sale in real estate, it
means the lender is accepting less than the total amount due. Not all lenders
will accept short sales or discounted payoffs, especially if it would make more
financial sense to foreclose; moreover, not all sellers nor all properties qualify
for short sales.
If you are considering buying a short sale, there could
be drawbacks. For your protection, I suggest that all borrowers:
·
Obtain legal advice
from a competent real estate lawyer
Call an accountant to
discuss short sale tax ramifications
As a real estate agent, I am not licensed as a lawyer nor
a CPA and cannot advise on those consequences. Except for certain conditions
pursuant to the Mortgage Forgiveness Debt Relief Act of 2007, be aware the I.R.S.
could consider debt forgiveness as income, and there is no guarantee that a
lender who accepts a short sale will not legally pursue a borrower for the
difference between the amount owed and the amount paid. In some states, this
amount is known as a deficiency. A lawyer can determine whether your loan
qualifies for a deficiency judgment or claim.
Although all lenders have varying requirements and may
demand that a borrower submit a wide array of documentation, the following
steps will give you a pretty good idea of what to expect.
· Call the Lender
You may need to make a half dozen phone calls before you find the person responsible for handling short sales. You do not want to talk to the "real estate short sale" or "work out" department, you want the supervisor's name, the name of the individual capable of making a decision.
Submit Letter of
AuthorizationYou may need to make a half dozen phone calls before you find the person responsible for handling short sales. You do not want to talk to the "real estate short sale" or "work out" department, you want the supervisor's name, the name of the individual capable of making a decision.
Lenders typically do not want to disclose any of your personal information without written authorization to do so. If you are working with a real estate agent, closing agent, title company or lawyer, you will receive better cooperation if you write a letter to the lender giving the lender permission to talk with those specific interested parties about your loan. The letter should include the following:
·
Property Address
·
Loan Reference Number
·
Your Name
·
The Date
·
Your Agent's Name &
Contact Information
·
Preliminary Net Sheet
This is an estimated closing statement that shows the sales price you expect to receive and all the costs of sale, unpaid loan balances, outstanding payments due and late fees, including real estate commissions, if any. Your closing agent or lawyer should be able to prepare this for you, if you do not know how to calculate any of these fees. If the bottom line shows cash to the seller, you will probably not need a short sale.
This is an estimated closing statement that shows the sales price you expect to receive and all the costs of sale, unpaid loan balances, outstanding payments due and late fees, including real estate commissions, if any. Your closing agent or lawyer should be able to prepare this for you, if you do not know how to calculate any of these fees. If the bottom line shows cash to the seller, you will probably not need a short sale.
·
Hardship Letter
The sadder, the better. This statement of facts describes how you got into this financial bind and makes a plea to the lender to accept less than full payment. Lenders are not inhumane and can understand if you lost your job, were hospitalized or a truck ran over your entire family, but lenders are not particularly empathetic to situations involving dishonesty or criminal behavior.
The sadder, the better. This statement of facts describes how you got into this financial bind and makes a plea to the lender to accept less than full payment. Lenders are not inhumane and can understand if you lost your job, were hospitalized or a truck ran over your entire family, but lenders are not particularly empathetic to situations involving dishonesty or criminal behavior.
·
Proof of Income and
Assets
It is best to be truthful and honest about your financial situation and disclose assets. Lenders will want to know if you have savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate or anything of tangible value. Lenders are not in the charity business and often require assurance that the debtor cannot pay back any of the debt that it is forgiving.
It is best to be truthful and honest about your financial situation and disclose assets. Lenders will want to know if you have savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate or anything of tangible value. Lenders are not in the charity business and often require assurance that the debtor cannot pay back any of the debt that it is forgiving.
·
Copies of Bank
Statements
If your bank statements reflect unaccountable deposits, large cash withdrawals or an unusual number of checks, it's probably a good idea to explain each of those line items to the lender. In addition, the lender might want you to account for each and every deposit so it can determine whether deposits will continue.
If your bank statements reflect unaccountable deposits, large cash withdrawals or an unusual number of checks, it's probably a good idea to explain each of those line items to the lender. In addition, the lender might want you to account for each and every deposit so it can determine whether deposits will continue.
·
Comparative Market
Analysis
Sometimes markets decline and property values fall. If this is part of the reason that you cannot sell your home for enough to pay off the lender, this fact should be substantiated for the lender through a comparative market analysis (CMA). Your real estate agent can prepare a CMA for you, which will show prices of similar homes:
Sometimes markets decline and property values fall. If this is part of the reason that you cannot sell your home for enough to pay off the lender, this fact should be substantiated for the lender through a comparative market analysis (CMA). Your real estate agent can prepare a CMA for you, which will show prices of similar homes:
·
Active on the market
·
Pending sales
·
Solds from the past six
months.
·
Purchase Agreement
& Listing Agreement
When you reach an agreement to sell with a prospective purchaser, the lender will want a copy of the offer, along with a copy of your listing agreement. Be prepared for the lender to renegotiate commissions and to refuse to pay for certain items such as home protection plans or termite inspections.
Now, if everything goes well, the lender will approve
your short sale. As part of the negotiation, you might ask that the lender not
report adverse credit to the credit reporting agencies, but realize that the
lender is under no obligation to accommodate this request. Credit report status
is not always negotiable.When you reach an agreement to sell with a prospective purchaser, the lender will want a copy of the offer, along with a copy of your listing agreement. Be prepared for the lender to renegotiate commissions and to refuse to pay for certain items such as home protection plans or termite inspections.
My name is Scott Grebner and I have been helping my clients
realize their own personal real estate dreams. Real estate is a
relationship-based business that works best when client relationships are built
on trust and confidence. My goal is having clients be completely satisfied with
the professional and caring service they have received.
The role of technology is rapidly changing how the real-estate
market functions in this country today. Gerharter Realtors is embracing these
new mediums of communication to better serve our customers. We have created our
e-family to better place important information in your hands to help you
with your housing needs. As a part of Gerharter Enterprises we have
access to a broader range of additional services and resources to better assist
you. Visit me
at my Web Site, Blog, Facebook, Twitter, You
Tube or Pinterest. Please check out
our helpful resources on Sellers Tips, Buyers Tips, Foreclosure Tips, and Mortgage Tips. For a personal consultation please visit our Office.
It seems that the dream of past
generations was to pay off a mortgage. The dream of today's young families is
to get one. I would love to hear from you, about your Real Estate Dreams and
questions.
Email me at scott@gerharterrealtors.com.
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