When can I buy after a short sale?

Do you ever wonder how long your clients need to wait until they can get a loan after a short sale or foreclosure?

Your timeline to buy after a short sale all depends on the kind of loan you had, if it was an inventment home, or if you went bankrupt. Look at the chart below to see where you fit in.

We have real estate attorneys that can help you figure out the best way you should go it you are facing a future short sale. Make sure you give us a call for any questions you may have concerning a short sale.

2016-05-27_19-59-05

short sale time line to buy again

 

Status of Debt Relief Act of 2007 for 2015

x Froegiveness act of 2015Historically speaking since the Real Estate Crash of 2006,  people who lost their homes to short sales or foreclosures or even did loan modifications, received a 1099 for the forgiven debt. The lenders sent them the 1099 identifying how much debt that was forgiven. The state of California treats the forgiven debt as taxable income and reported on your tax return and subject to income tax.

This could of been devastating to the already millions of distressed home owners. To provide relief, Congress passed the Debt Forgiveness Relief Act of 2007 which provided a tax exemption for personal residences. The Act expired in 2009 and then extended. Most states matched the Feds in approving the relief. Again the Act expired in 2013 and again it was extended to the end of 2014.

To this date there is no relief for 2015. There are 2 bills on the table for tax relief in 2015.

For any home owners who may be facing a future short sale in 2015, it is important to talk with are tax professional to see if they qualify for exemption from this tax because of their hardship and debt status. Some may find out that they will not owe any tax even if the Debt Forgiveness Relief Act of 2007 is not extended again for this year.

Feel free to contact me if you are upside down on your home and can’t afford to make payments on your mortgage. There are other programs that can help you keep your home.

When can I buy after a short sale?

When can I buy a house after a short sale or foreclosureWondering when you can qualify for a home after a short sale? If you are like most people who got caught in the down turn or had a significant downturn with your finances and had to short sale, here are some guidelines to help you with your future buying plans. I highly suggest that you talk with a lender as soon as your are thinking about getting back into the market. A lender will go over your credit report to make sure their are no mistakes and give you suggestions on correcting or improving your credit score.

Waiting periods are based on the loan guidelines of which lender your go with. Most loans are sold to Freddie Mac and Fannie Mae, and if so, your situation would have to conform to their lending guidelines. Below are their guidelines.  You would be able to be able to buy sooner if you use a portfolio lender. They do not usually sell their loans out to Freddie and Fanny. You would need to provide a real hardship to qualify for the portfolio loan product. If you want suggestions for portfolio lenders, feel free to give me a call and I will help you find one.

buy after short sale

New Rules for Buying after a Short Sale- August 16, 2014 deadline!

Purchase after Short Sale guidelines has been that Fannie Mae allowed a Short Sale Repurchase changes after August 16 2014purchase after 2 years seasoning with a 20% down payment. Starting August 16 2014, if you short sold you home over 2 years ago and saved for a 20% down payment you would now have to wait 4 years instead of 2!

You can still get it done now if you act fast! If your application date and underwriting is done prior to August 16th 2014, the loan may still close after August 16th, 2014 , as long as 2 years has passed and the loan either receives an Approve/Eligible or the loan qualifies for manual underwrite guidelines.  Not Short Sale Repurchase changes after August 16 2014all lenders can do this. Call us for a lender that can get this done for you now while you still have a chance.

Please note, Fannie Mae does approve extenuating circumstances for a 2 year repurchase. Call now to see if you still qualify for a 2 year purchase after a short sale.

If you are planning on doing a short sale in the near future and have a real hardship, keep records of your hardship, so when you plan to buy again, you can demonstrate your hardship for a 2 year repurchase.

Current Guidelines for Eligibility after a short sale for FHA is 3 years, VA is 2 years, and USDA is 3 years.

Call the Kathy Dyer Monterey Penninsula Short Sale Specialist to help you find your home now.

Hope for Underwater Home Owners

Upside Down Home Owners starting to see some equityHope for Underwater California Home Owners

In the first quarter in 2014, only 11% of the homes that have mortgages were upside down. So that means that 1 out of every 9 mortgaged home owner owes more on their mortgage than the value of their homes. At the end of the 4th Q in 2013, the percentage of underwater homes were 12.6% compared to the 1st quarter in 2013 which was 21.3%

The majority of the underwater homes are located in the inland areas. Underwater Homes starting to see equityThese owners are not able to contribute to the economy since an excessive portion of their income goes to debt repayment and above market interest rates. These owners are making mortgage payments greater than the price of what that same home would rent for.

The future forecasts prices slipping back down, so expect to see a rise in the number of underwater homes plunge back down again. According to Core Logic, don’t expect of a full recovery until 2020.

Notice of Defaults “NOD’s” are still high. A notice of default happens when a home owner misses 3 or more mortgage payments. Statistics reveal as of Q1 2014, 38% of NOD recorded go onto foreclosure, as the rest are short sales or Loan Mods.

How long will it take for most homeowners to be solvent again? Home owners who stick it out in their homes, seeing positive equity may take between 10-15 years to see the light of day. It all depends on when they bought their home. For those who purchased at the height of the boom, it may take to 2020 for homeowners to see positive equity just start.

Some people were not able to wait it out to see the light of day. As a Short Sale Realtor who specializing helping people get out from the burden of a house payment that is killing them. The stress is just worth it any more, so most just give up after using up savings and going into more debt and even making things worse. These people always paid their bills on-time and would never dream on defaulting on their mortgage. It is a devastating decision to stop paying or to receive that Notice of Default.  I see it happen with Doctors, Professionals, Pastors… they are not alone.

Read my related LIFE AFTER A SHORT SALE 

 

Life after a Short Sale

Buying after a short saleThere is life after a short sale.  Even though it is a horrendous decision to make the decision to default on your home,  there is hope for a brighter tomorrow once the smoke clears.

Being a Realtor who Specializes in Short Sales in the Monterey Penninsula Ca area, I have successfully closed many short sales for my clients within the last 5 years. excitedly,  I am starting to see many of my former clients  return back into the market as new buyers!   Even though it is rewarding to help someone stay out of foreclosure,  I get way more satisfaction helping these clients celebrate as they dig their way back and  move into their new homes!

I wanted to share this incredible story about one of our very happy clients.

Our client bought their home at the peak of the 2006 housing boom. They paid $693,000 for their home in a nice neighborhood. Hard times fell upon them after a job change. They found themselves no longer able to afford their loan after the interest rate reset 5 years later. They were forced to short sell it in 2011.  Now 2 years later, they have saved enough money to do a conventional loan with 20% down.

We just closed on their new home!  The good news is that they were able to buy their new home with the same floor plan,  plus it had $30,000 worth of upgrades and a pool.  This home  sold only for $454,000!  Their mortgage payment in 2011 was $4,200 and now it is $2,296. We were happy to help them out of their nightmare.  They were not able to keep paying on their old home, and their savings were dwindling down to nothing and a forclosure was heading their way! So after so much stress, a short sale was the best decision for them. I negotiated with the bank on the short sale and the bank accepted the amount  on the offer as full payment. There were no deficiencies owed to the bank.  The bank forgave them for the difference of what they received and what was owed on the mortgage.  With the new loan, they will only pay $276,047  interest over the 30 years life of the loan as compared to $675,000 in interest  they had with the home that they short sold.

Life after a short saleI was very elated to see a happy ending to their story. I often cry along with my clients when they lose their home and have to short sale. I remind them that this time will pass fast and they should  look forward to re-entering the market in better shape.  And at that time, we all celebrate as they open the door to their new home!

$5000 Moving Assistance with Ca. Short Sales

Cash for Short Sales

Up to $5,000 plus more for Transition Assistance for Short Sales

Distressed California Homeowners May Qualify for California’s Keep Your Home California Transition Assistance Program (TAP)

If you know someone who can no longer afford their home and they are pursuing a short sale or a deed in lieu of foreclosure, they may be eligible for financial help with their moving expenses.

The money comes from the Transition Assistance Program (TAP), part of the Keep Your Home California Program.

5,000 in transition assistance is being provided by The state of California to qualified homeowners who can no longer afford to stay in their homes.

  •  Apply for the funds through their state’s website or by calling 1.888.954.5337.
  • Continue to maintain your property until your house has sold or a negotiated deed in lieu of foreclosure.

For qualifie$5000 Moving incentive for Short Sales TAP Programd homeowners, these state funds may be used in addition to any other transition assistance that the homeowner may receive by participating in the Federal Home Affordable Foreclosure Alternatives (HAFA) program or in any other pre-offer short sale program.

To learn more about the Transition Assistance Program’s guidelines, and how you may qualify, visit the program’s website at http://keepyourhomecalifornia.org

You can call: 888-954-5337 for more information.

Once you know that you qualify for TAP, make sure you call a Realtor who is a Short Sale Specialist. They will know if you qualify for any more programs your lender may approve. Don’t waste time and call now or before the TAP money is paid out.

 

I’m Late with My Mortgage Payment- HELP!

Short Sale Repurchase changes after August 16 2014Home Affordable Modifications

Avoid Foreclosure- Free Counseling

Are you having a hard time making your loan payment? Are you hearing about all those loan modification programs on the radio and TV and do not know who to trust?

Afraid of Fraud?  Did you know that there is free counseling that is available to you through government programs?

You may not be alone- one out of every 10 families who are just like you who have either missed one or more of their mortgage payments and still desperately want to keep their personal residence. If you can no longer afford to make your monthly loan payments, you may qualify for a new government loan modification program called HAMP.

 Am I eligible for a Home Affordable Modification? Answer these questions:

  1.  Is your home your primary residence?
  2. Is the amount you owe on your first mortgage equal to or less than $729,750?
  3. Are you having trouble paying your mortgage?

    For example, have you had a significant increase in your mortgage payment OR reduction in your income since you got your current loan OR have you suffered a hardship that has increased your expenses (like medical bills)?

  4. Did you get your current mortgage before January 1, 2009?
  5. Is your payment on your first mortgage (including principal, interest, taxes, insurance and homeowner’s association dues, if applicable) more than 31% of your current gross income?

 If you answered yes to these questions- you may qualify for a loan affordable modification Click here to view the government loan modification survey. Fill it out and see if you qualify.

If you do not qualify for a  loan mod, you may want to see  if you qualify for the government HAFA short sale program and the 3,000 moving expenses if you complete a short sale.

Kathy Dyer wants you to keep your home. Call her for any questions and we will direct you to people who can help. If you can not get a loan modification, call us to see if a short sale if right for you.

Avoiding Mortgage Scams

Now is the Time to Buy!

Home Market is RecoveringBuyers Market is Now!

Hard-hit areas, such as Sacramento, Las Vegas, parts of Florida and California’s Inland Empire, appear to be among the first cities in the nation to reach the early stages of recovery, as investors and first-time buyers compete for bargain-priced foreclosures and short sales.

·       By some indications, the market could be close to a bottom.  Pending home sales – homes that are under contract, but have not yet closed – and construction spending rose in March 2009.

·       When a market reaches bottom, foreclosures usually stop piling up and banks become more willing to issue loans, confident that the collateral backing them will not continue to decrease in value.

·       The first-time home buyer tax credits from the federal and state governments, coupled with favorable home prices and near record-low interest rates, led to an increase in home sales in March.  Sales of existing, single-family homes rose 63.8 percent in March compared with the prior year.   Monterey County reported a sales increase of 248.7 percent and the High Desert region saw sales increase 172.7 percent compared with last year, according to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

·       The median price for the state also increased in March, rising 2.2 percent in month-to-month comparisons.  March marked the first monthly increase since August 2007, while the statewide median price has remained in the $250,000 range for the past three months.

Avoiding Mortgage Scams

Mortgagee Scams

AVOID MORTGAGE SCAMS!

Fraudulent foreclosure “rescue” professionals use half truths and outright lies to sell services that promise relief, but fail to deliver. In reality, they make a quick profit by charging high fees or collecting mortgage payments, and keeping the money, rather than passing it on to the lender. Usually they use advertising messages like “Stop Foreclosure Now!” They are also known to use a variety of tactics to take your money, and sometimes your home as well. Knowing what types of scams are most common is the best way to avoid being conned.

 Types of Mortgage Scams:

Phony Counseling:   Some scam artists tell their victims that they can negotiate a deal with their lender if they pay a fee first. They tell them not to contact their lender and to let the “negotiator” handle the details. Once the fee is paid, the crook takes off with their money without contacting the lender.

Bait and Switch: Other con artists trick their victims into signing documents for a new loan to make the existing mortgage current. Unfortunately the distressed homeowner could be surrendering the title of the house to a scam artist in exchange for a worthless or expensive “rescue” loan.

Rent-to-Buy Scheme:  Some victims are told to surrender the title of their home as part of a deal that allows them to stay in the home as a renter, and buy it back during the next few years. But deals like this usually are so expensive that buying back the home becomes impossible. In the end, they lose their home and the scam artist takes off with the equity that they had built up.

Bankruptcy Foreclosure: A few of the fraudsters may promise to negotiate with the victim’s lender or get refinancing on their behalf if they pay a fee in advance. Instead, they pocket the fee and file for bankruptcy in the homeowner’s name — sometimes without their knowledge.

How to Find Legitimate Help?

Homeowners who are having trouble paying their mortgage should contact their lender immediately. They may be able to negotiate a new repayment schedule. For more information, read “Mortgage Payments Sending You Reeling? Here’s What to Do,” at http://ftc.gov/bcp/edu/pubs/consumer/homes/rea04.shtm

To learn more about shopping for mortgages, visit http://www.ftc.gov/credit and click on “Mortgages/ Real Estate.”

Who to Contact if you’ve Been the Victim of a Mortgage Scam?

The U.S. Federal Trade Commission works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or to get free information on consumer issues, contact: http://www.ftc.gov/ or 877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261.

In general, be suspicious of:

• Anyone who wants the deed to your house for any reason, whether it’s to clean up your credit or obtain special” financing from an investor.

• Anyone who offers to rent your house back to you until you can get back on your feet.

• Lenders who encourage you to borrow more than you need or more than the value of your home.

• Terms that change at the last minute or offer next-day approval based on prepayments or up-front fees.

• Forms you do not understand or that contain blank spaces “to be filled in later.”

• Beware of phony credit counseling agencies charging high fees for financial counseling services you can get for little or no charge through non-profit agencies.

Red Flags for Mortgage Scams

VA Mortgage Options for those in Financial Distress

42-15560571Enhanced VA Mortgage Options Now Available for Veterans Of Potential Benefit to Those in Financial Distress

Veterans with conventional home loans now have new options for refinancing to a Department of Veterans Affairs (VA) guaranteed home loan. These new options are available as a result of the Veterans’ Benefits Improvement Act of 2008, which the President signed into law on October 10, 2008.

“These changes will allow VA to assist a substantial number of veterans with subprime mortgages refinance into a safer, more affordable, VA guaranteed loan,” said Secretary of Veterans Affairs Dr. James B. Peake. “Veterans in financial distress due to high rate subprime mortgages are potentially the greatest beneficiaries.”

VA has never guaranteed subprime loans. However, as a result of the new law VA can now help many more vets who currently have subprime loans.

The new law makes changes to VA’s home loan refinancing program. Veterans who wish to refinance their subprime or conventional mortgage may now do so for up to 100 percent of the value of the property. These types of loans were previously limited to 90 percent of the value.

Additionally, Congress raised VA’s maximum loan amount for these types of refinancing loans. Previously, these refinancing loans were capped at $144,000. With the new legislation, such loans may be made up to $729,750 depending on where the property is located.

Increasing the loan-to-value ratio and raising the maximum loan amount will allow more qualified veterans to refinance through VA, allowing for savings on interest costs or even potentially avoiding foreclosure.

For more information, or to obtain help from a VA Loan Specialist, veterans may call VA at 1-877-827-3702 or visit www.homeloans.va.gov.

VA Reaching Out to Vets with Mortgage Problems

 VA is reaching out to veterans — both those who use the VA’s home-VAloan guaranty program and those who don’t take advantage of the guaranties — to keep people in their homes,” said Secretary of Veterans Affairs Dr. James B. Peake.  “I’m proud of our solid record of success in helping veterans and active-duty personnel deal with financial crises.”
  

According to the VA website, VA Counselors can assist other veterans with financial problemsCounselors have helped about 74,000 veterans, active-duty members and survivors keep their homes since 2000, a savings to the government of nearly $1.5 billion.

 Depending on a veteran’s circumstances, VA can intercede with the borrower on the veteran’s behalf to pursue options — such as repayment plans, forbearance, and loan modifications — that would allow a veteran to keep a home.

 

To obtain help from a VA financial counselor, veterans can call VA toll-free at 1-877-827-3702.  Information about VA’s home loan guaranty program can be obtained at www.homeloans.va.gov.

 

Making Home Afforable Program for Struggling Home Owners

Making Home Affordable Program for Struggling Home Owners

Making home more affordable

Act now to get the help you need through the Making Home Affordable
Program
. This part of the President’s Homeowner Affordability and Stability Plan was created to help millions of homeowners refinance or modify their mortgages to a payment that is affordable, both now and in the future.

If you can no longer afford to make your monthly loan payments, you may qualify for a loan modification to make your monthly mortgage payment more affordable.

Millions of borrowers who are current, but having difficulty making their payments and borrowers who have already missed one or more payments, may be eligible.

Am I eligible for a Home Affordable Modification?

Answer these questions:

  1. Is your home your primary residence?
  2. Is the amount you owe on your first mortgage equal to or less than $729,750?
  3. Are you having trouble paying your mortgage?

For example, have you had a significant increase in your  mortgage payment or reduction in your income since you got your current loan or have you suffered a hardship that has increased your expenses (like medical bills)?

  1. Did you get your current mortgage before January 1, 2009?
  2. Is your payment on your first mortgage (including principal, interest, taxes, insurance and homeowner’s association dues, if applicable) more than 31% of your current gross income?

If you have answered yes to all of these questions, you may qualify for a loan modification program.  Only the servicer of your loan can tell you if you qualify. To qualify, you will generally need to show that you have adequate income to make the reduced payments on an ongoing basis and that modification is an appropriate option given the characteristics of your mortgage and the value of your home.

The next step is to gather the information you will need when you speak to a housing counselor or the servicer of your mortgage.  The number should be on your statement.

This includes:

Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources.

Checklist:

  1. Your most recent income tax return.
  2. Information about your savings and other assets
  3. Information about your first mortgage, such as your monthly mortgage statement.
  4. Information about any second mortgage or home equity line of credit on the house.
  5.  Account balances and minimum monthly payments due on all of your credit cards.
  6. Account balances and monthly payments on all your other debts such as student loans and car loans.
  7. A letter describing any circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.) if applicable.

If you are struggling with making your mortgage payment, seek the advice from your mortgage servicer to see if your qualify for any government loan modification programs. If not, seek out an experienced Realtor who specializes in short sales.

 

 

Snag a Deal on a Short Sale

reasons to buy a short sale

Reasons to buy a short sale!

As more homeowners find themselves underwater — owing more on their mortgage than their home is currently worth — and unable to make the monthly mortgage payments, many are turning to short sales, which allows a homeowner to sell their home for less than owed on the mortgage. With the lender’s approval, home buyers can purchase properties in desirable neighborhoods and at favorable prices.

KEEP THIS IN MIND

•  As of July 2014, the percent of Roseville homeowners underwater on their mortgage is 14.5%, which is lower than Sacramento Metro at 20.0%.

• Unlike foreclosed properties, which may be run-down and vacant for many months, short-sell properties are likely to be better maintained as many owners may still live in the home.

• In a short sale, the homeowner must receive approval from the lender before the sale of the property can proceed. With many lenders overwhelmed by short-sale transactions, it can take between two and six months to execute.

• Working with a REALTOR® who has experience with short sales can help both sellers and home buyers during the transaction. A seasoned REALTOR®  in Short Sales will be able to serve as the mediator between the seller and the lender and lead to a successful transaction, while a buyer’s agent can help with offers, counter offers, home inspections, closing, and more. Make sure you work with a Realtor that knows how to qualify what properties to make offers on. Some properties will never get closed. It depends on many factors:

1.      How many loans are on the property?

2.      How far away is the foreclosure sale date?

3.      Who the loan is serviced by?

4.      Who the investor is that owns the mortgage.

5.      If the seller qualifies for a short sale.

An experienced Realtor will know which properties you should make offers on and which ones that are a waste of time.

• It is important to remember that although the seller may be anxious about selling the property and willing to accept any offer, it is ultimately up to the lender to determine if, and at what price, the property can be sold. Therefore, home buyers should work closely with their REALTOR® to submit a realistic offer.

• Buyers should ask the lender to pay for some of the closing costs as part of the contract. The contract also should specify that the buyer will not conduct an appraisal or inspection of the property until the offer is approved. This added guarantee can protect home buyers from spending money on a home they may not purchase.

 

Fed Adopts Program to Stem Foreclosures

This week’s C.A.R. Mortgage Update contains information Freddie Mac, curbing foreclosures, credit unions, and financial roadblocks to home ownership.

Fed adopts program to stem foreclosures  holding head

The Federal Reserve recently announced it will seek to renegotiate mortgages it owns that might otherwise enter foreclosure, according to Federal Reserve Chairman Ben S. Bernanke. Under the program, the Fed could reduce what a homeowner owes on a mortgage; lower the interest rate; lengthen the term of a loan; or take other steps to prevent a loan from defaulting.

The Federal Reserve’s program will focus on reducing the amount of principal owed by those at risk of foreclosure, especially those with loan balances exceeding 125 percent of the estimated value of their property. It is unclear how many homeowners could benefit from the program, and most individual borrowers will likely not know if their mortgages are owned by the Federal Reserve. If eligible for a loan modification, the homeowner would work with mortgage servicer and not the government directly.

For any questions concerning your real estate situations feel free to give us a call and we can put you in touch with professionals to help you through this tough time. Kathy Dyer 831-717-7047