Homeowners. … know your options
April 1, 2010
One of the most common things we are running into with today’s economic environment is homeowners not knowing their options. As Realtors, we can’t best help determine your best options if we don’t know the situation you are facing.
A lot of homes are on the market today with sellers that are facing difficult times. A lot of these issues are beyond the seller’s control. Don’t be afraid to ask for help from your Realtor. Make sure your Realtor knows the complete issue that you are facing and has experienced dealing with such things. Although most situations are unique, a Realtors experienced with all aspects of today’s challenging environment, can help you development a plan to make the best of a bad situation.
The more you communicate with your agent and keep them informed, the better they are going to be able to help. We can’t find out today that 25 days ago you received a foreclosure notice. If you are behind or feel like you may soon be, let us know as soon as possible. An experienced agent CAN help.
Don’t be afraid to talk to us. Those of us that have experience helping homeowners facing difficult times can provide options to you that you may not be aware you had. Make sure your agent has experience with more than just selling houses, you may have options that are better for you.
If you are facing troubles and want to find out your options… EVEN if you DON’T want to sell, call us.
Jeremy and DeAnna Nichols
PLATINUM Real Estate Marketing
256-585-6355
Info@platinumrem.com
Platinum Real Estate Marketing – Huntsville Homes For Sale
March 25, 2010
Jeremy and DeAnna Nichols are pleased to announce the launch of a new real estate brokerage, Platinum Real Estate Marketing.
With the real estate market changing so much over the last few years, we feel this is the right time to introduce some innovative and creative real estate marketing ideas.
The brick and mortar real estate companies are a thing of the past. Technology has taken the place of large offices and staff. Platinum Real Estate Marketing has the ability to operate their office from anywhere.
Call us today to see how we are selling homes 40% faster than the average agent in North Alabama and can save you thousands of dollars in the process.
Platinum Real Estate Marketing
www.PlatinumREM.com
256-585-6355
How Will the New FHA Requirements Affect You
January 23, 2010
The FHA has decided to change some of their lending requirements. The is due to falling below their required reserves. The changes the Federal Housing Authority are making will not affect most borrowers. Only borrowers with the lowest credit scores are going to be affected and the changes should help build the FHA’s capital cushion.
Just a few years ago, the government agency was just insuring around 3% of loans. With lending practices still much more liberal than conventional loans, the agency is insuring over 30% of loans today. FHA lending practices allowed borrowers to finance home purchases with as little as 3.5% down while conventional mortgage without the government backing costs a buyer from 10%-20%. With the rising number of FHA loans in default, the agency’s reserves have falling below the requirements set by congress.
One of the steps taken to increase the FHA reserves is that the upfront mortgage insurance premium has been raised from 1.75% to 2.25%. The won’t affect most borrowers since the upfront MIP is frequently rolled into the mortgage amount. On a median prices home, this will increase a borrower’s payment by less than $10 per month. They have also asked permission to increase the annual premium which is currently as high as is allowed by law.
The second step taken is to raise down payment requirements. The really isn’t going to affect most buyer’s. The increase is only for those borrowers whose credit score is below 580. Anyone below a 580 will now be required to make at least a 10% down payment. Anyone with a score above this will still be able to get an FHA backed loan with the normal 3.5% down payment. With the average credit score of conventional borrowers currently being in the mid 700′s, this is still a great program for most borrowers. One thing to keep in mind with the increased down payment requirement is that most banks are not currently loaning money to borrowers with credit scores under a 600. So the change to the down payment requirement really won’t affect current lending practices.
The final step taken that directly affects borrowers is that the seller concessions allowed has been reduced from 6% to 3% of the sales price. This will affect how much of the closing costs a seller can pay for the buyer.
Other steps that the FHA is taking is to monitor its approved lenders more closely to make sure they are following the agency’s guidelines. The FHA will start including lender scores on its website in February. Some congressional leaders are still pushing to tighten the FHA’s lending requirements even further. However, most feel that the changes that have already been made are a great step for the agency to secure its finances without impacting the housing market adversely.
With the changed the FHA has made to the 90 flip rule and their move to make sure they have the finances to continue insuring mortgages, the future looks great for the long term. Many analysts believe we have seen the bottom of the current housing market crisis. We are still in a great buyers market and rates are still at or near all time lows.
Scridb filterMortgage Woes of the Wealthy
January 21, 2010
I’m usually not in the ‘mood’ to talk about the problems the average wealthy American has when there are so many middle class Americans struggling to get by. However, this bit of information caught my attention.
Around 12% of U.S. mortgages of $1 million or larger were late during the Fall of 2009. Thats double the rate for loans under $250,000 and almost triple the default rate on million dollar mortgages 12 months earlier, according to First American CoreLogic Inc., a California-based research firm.
Lenders have tightened on standard conforming loans, but have tightened even more on the jumbo and non-conforming loans. Banks can’t sell these loans through the traditional means of Fannie Mae or Freddie Mac. Lenders consider these the highest risk and are now requiring as much as a 40%-50% down payment. Even the borrowers with the down payment, perfect credit and plenty of income are having problems.
A lot of these loans made over the past few years were adjustable rate or had balloon payments that are now coming due. The wealthy had been able to get loans with payments that didn’t even cover the interest due with the promise to make higher payments later. Although rates are lower, some jumbo loan borrowers are facing catch up payments. With the decline in home values hitting high end homes even harder than the average home, these borrowers are faced with the decision to take a loss, foreclosure or try to refinance in a market that is almost impossible for them to do so. Currently, more than 73% of interest only loans are underwater. The rich are finding it easier and more financially beneficial to walk away from a lot of these bad loans.
Wealthy Americans have the kind of financial privileges…… and problems…. that the rest of us can only dream about. Granted, the most difficult problems the wealthy are having with mortgages is on second and vacation homes.
One important fact to keep in mind: the top 20% of U.S. earners account for 60% of consumer spending. The is a huge fact as we continue to face economic recovery. If even a small percentage of the wealthy are having trouble paying their mortgages, that affects what they can purchase in general consumer goods.
Aren’t most of us so relieved that we don’t have that problem to deal with.
Scridb filterFHA Suspends 90 Day Flip Rule
January 21, 2010
Looks like FHA has suspended the 90 day flipping rule for the next 12 months. Starting February 1st, FHA borrowers can get loans to purchase homes recently bought by investors. So for the next year…. investors won’t have to wait 90 days to resale to FHA buyers. Of course there are some rules to this…
Scridb filterObama Plan Falling Short
January 21, 2010
President Barack Obama’s plan to fix the foreclosure crisis has not quite worked out as intended. Hopefully this won’t put the housing recovery at risk.
Last February in Arizona, President Obama unveiled his plan to slow foreclosures and help the housing market get back on track. Looks like that plan was a bit over hyped. Here we are almost a year later and just a fraction of the original 3 – 4 million that were projected to get help, have actually been helped. Most are having trouble even completing the application process. Those that are trying can’t get help from the bank that is supposed to be helping them. The more borrowers that can’t be helped, the more foreclosures we will be seeing in the months and years to come.
RealtyTrac reports that 2009 foreclosure notices were up 20% from 2008. In addition, home prices are down 30% from their high mid-2006. If the current estimate of foreclosures this winter happens, the average price will continue to fall. Foreclosures still are the biggest threat to our housing market and to our economic recovery.
Obama’s plan was to help borrowers by lowering their interest rates and making their payments more affordable. The temporary modification was supposed to become permanent after the borrower made three payments on time and completed all the required paperwork. As of December, only 7% of those who are in the program have completed it, according to the Treasury Department. Another 5% have dropped out of the program entirely because they missed a payment or were found to be ineligible otherwise. The rest are still waiting for an answer from their lender.
Of course the banks are blaming the homeowners for not getting paperwork returned on time, but of course from what we are seeing, banks tend to ‘misplace’ a lot of paperwork or you can just never get through to the department you need.
Bank of America, has completed modifications for less than 2% of the estimated 200,000 borrowers that have enrolled in the program. Wells Fargo, another large lender, is aslo having very little success in converting their borrowers that have been approved for modifications.
Most lenders are approving very few of their applicants. However, Ocwen Financial Corp. and Carrington Mortgage Services, have modified loans for 40 percent of their enrolled borrowers and rejected only a few. So is this a problem with the government formula for loan modification or a failure of the lenders?
Scridb filter