Category Archives: Bank Foreclosure

Good advice for buying a bank foreclosure, REO Property.

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

Kathy Dyer Realtor CABRE #01723710

kdyer@KW.com  831-717-7047

KW Coastal Estates

Carmel Ca. 93923

Kathy Dyer Realtor with KW Coastal Estates serving the Monterey Peninsula area

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.

Kathy Dyer Realtor CABRE #01723710

kdyer@KW.com  831-717-7047

KW Coastal Estates

Carmel Ca. 93923

Kathy Dyer Realtor with KW Coastal Estates serving the Monterey Peninsula area

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

Kathy Dyer Realtor CABRE #01723710

kdyer@KW.com  831-717-7047

KW Coastal Estates

Carmel Ca. 93923

Kathy Dyer Realtor with KW Coastal Estates serving the Monterey Peninsula area

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.

Kathy Dyer Realtor CABRE #01723710

kdyer@KW.com  831-717-7047

KW Coastal Estates

Carmel Ca. 93923

Kathy Dyer Realtor with KW Coastal Estates serving the Monterey Peninsula area

 

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

Kathy Dyer Realtor CABRE #01723710

kdyer@KW.com  831-717-7047

KW Coastal Estates

Carmel Ca. 93923

Kathy Dyer Realtor with KW Coastal Estates serving the Monterey Peninsula area

How to Find out if your Landlord is in Foreclosure

How to find out in you land lord is in foreclosure

Finding out if your prospective landlord is about to go into foreclosure simply a good idea for any tenant who is contemplating renting. You don’t have to wait until the Sheriff shows up at your door with an eviction notice. You can be notified immediately when a Notice of Default is filed by your landlord’s lender, indicating that a foreclosure process has begun.

Here is how to find out if your landlord is in foreclosure.

  • Call a local title company and ask for customer service.
  • Give the customer service rep the property address and ask for a free copy of the first deed of trust to be emailed to you.
  • Print the copy of the deed of trust, because you will need to know the document number, book, page, name of beneficiary (the lender) and name of trustor (the landlord).
  • Go to http://www.foreclosureforum.com/forms/request_notice.pdf to access a free Copy of Notice of Default.
  • On your computer, fill in the blanks with the information above from the deed of trust, and enter your name and address in the space provided.
  • Print the Request for Copy of Notice of Default.
  • Sign it in front of a notary.
  • Attach a check for made payable your county’s Recorder. Check your counties website for more info.

The Request for Copy of Notice of Default will be recorded upon receipt. Then, if your landlord’s lender files a Notice of Default, you will receive a copy of it in the mail. Foreclosures in California take about 3 1/2 to 4 months to complete. This time period should give you ample opportunity to work out the problem with your landlord. You might also consider asking if your security deposit can be applied to rent because once the foreclosure is complete, your lease is no longer valid, and you might not get your security deposit back.

If you prefer to handle the entire procedure in person, you can go to your County Recorder’s office and pull a copy of the deed of trust. Take the Request for Copy of Notice of Default with you and fill it out at the Recorder’s office. Get it notarized, pay your money, it shouldn’t be much,  and you’ll go on record that afternoon or the following day.

Tenants in foreclosure should know that California law gives tenants the right to receive a 60-day notice.

Kathy Dyer Realtor CABRE #01723710

kdyer@KW.com  831-717-7047

KW Coastal Estates

Carmel Ca. 93923

Kathy Dyer Realtor with KW Coastal Estates serving the Monterey Peninsula area

7.5 million homeowners “underwater” Ask your lender for assistance now

Ask lender for mortage assistance and latest programs to get help

Home Owners are Underwater!

According to some estimates as many as 12 million borrowers may have negative equity in their home, meaning that they owe more on their mortgage loans than their homes are currently worth. However, according to statistics gathered by C.A.R. over the last 40 years, homeowners who purchase a house and keep it for at least five years have an average annual rate of return of nearly 12 percent.

Although California’s inventory of homes with high negative equity is higher compared with other states, lower home prices have increased affordability, making it easier for first-time home buyers to enter the market and others buyers to move up to larger houses or more desirable neighborhoods.

Borrowers who are facing foreclosure should work with their lender and apply for a loan modification program. Many financial institutions are offering homeowners the opportunity to rewrite an adjustable-rate mortgage into one that is fixed for 30 years. Some banks also are offering existing customers zero interest for a short period of time and lowering the principle balance on the loan to make payments more affordable. Call you lender to see if they will work with you. If you can not afford your mortgage anymore, contact your local short sale specialist who may be able to help you avoid foreclosure.

Kathy Dyer Realtor CABRE #01723710

kdyer@KW.com  831-717-7047

KW Coastal Estates

Carmel Ca. 93923

Kathy Dyer Realtor with KW Coastal Estates serving the Monterey Peninsula area

Countrywide Bank Loan Modification for Troubled Home Owners

Bank of America, which acquired Countrywide in July, said that nearly 400,000 troubled homeowners who have subprime mortgages and option adjustable-rate loans through Countrywide may be eligible for loan modifications. To be eligible for the Bank of America plan, homeowners must occupy the home as their primary residence; the mortgage must be seriously delinquent — or likely to become so; and the loan must have been serviced by Countrywide and originated prior to Dec. 31, 2007. Bank of America will help borrowers by restructuring first-year payments of principal, interest, taxes and insurance to no more than 34 percent of the borrower’s income; halting foreclosure sales against borrowers who are likely to qualify for a loan modification; and waiving restructuring fees and prepayment penalties.

To read the full story, please click here:
http://www.usatoday.com/money/economy/housing/2008-10-06-countrywide-mortgages-settlement_N.htm

Kathy Dyer Realtor CABRE #01723710

kdyer@KW.com  831-717-7047

KW Coastal Estates

Carmel Ca. 93923

Kathy Dyer Realtor with KW Coastal Estates serving the Monterey Peninsula area

What to do if you cant Afford your Mortgage Payment

What to do if your can’t afford your mortgage payment?

The majority of the mortgage modification programs from the larger lenders only are available to homeowners who either already are in default or are at risk of defaulting on What are my options if I cant get a loan modification?their primary residences. However, some homeowners, in particular those who may default on a vacation home or an investment property, have some options available.

Homeowners who are in default or at-risk of defaulting should contact a reputable credit counseling agency to discuss possible options other than foreclosure. When calling a credit counseling agency, the homeowner should have their loan number, most recent mortgage statement, bank statements and a letter demonstrating financial hardship. To find a credit counselor, visit the U.S. Dept. of Housing and Urban Development’s (HUD) Web site at: http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search&searchstate=CA or the non-profit organization National Foundation for Credit Counseling at http://www.nfcc.org/.

Homeowners should contact their loan servicer as soon as possible to try to work out potential solutions. According to the Federal Housing Finance Agency (FHFA), some borrowers who do not meet the requirements for an existing mortgage modification program may still be considered for a loan adjustment based on personal circumstances.

If a mortgage modification is not possible, homeowners may want to consider a short sale — sell the home for less than the amount of the mortgage. Although a short sale enables a homeowner to avoid foreclosure and often causes less damage to the homeowner’s credit score than a foreclosure, the lender must agree to accept the loss and in most cases the homeowner may not have to pay taxes on the difference. Also, many lenders are overwhelmed by the large number of short sales being submitted by homeowners, so it could take longer than usual to receive a short-sale acceptance from the lender. The home owner can stay in their home while the approval takes place. Sometimes home owners may qualify for moving assistance from 3,000 – 5,000.

If a homeowner cannot qualify for a mortgage modification or a short sale, some lenders will consider a deed in lieu of foreclosure, where the homeowner transfers the title to the lender in exchange for debt forgiveness. Home owners may qualify for Cash for Keys programs as well. Properties that have additional debt, such as home equity lines of credit or additional mortgages, may not qualify for a deed in lieu of foreclosure. Homeowners who have additional debt tied to the property must share this information with their lender for consideration when applying for a short sale.

Call an experienced Short Sale Realtor who is not only certified but has good results closing short sales.

Kathy Dyer Realtor CABRE #01723710

kdyer@KW.com  831-717-7047

KW Coastal Estates

Carmel Ca. 93923

Kathy Dyer Realtor with KW Coastal Estates serving the Monterey Peninsula area

Red Flags of Foreclosure Related Scams

Red Flags on Mortage related scams

RED FLAGS of FORECLOSURE RELATED SCAMS

With the high number of foreclosures lately, foreclosure-related scams have exploded onto the real estate scene. Many scams are aimed at homeowners in foreclosure, investors, buyers, tenants, and other people involved in the foreclosure process.

Once a person is late on their mortgage payment- a notice of default is filed and that notice becomes public knowledge. Anyone now can contact an unsuspecting person and lure them into a scam.

The following are some red flags to watch out for:

  1.  Asks for money upfront before providing any service
  2. Asks for payment only in the form of cash, cashier’s check, or wire transfer
  3. Asks for a transfer of title or an interest in the property
  4. Gives an unqualified promise to stop foreclosure or other assurances;
  5. Offers to buy a home for a price above its market value
  6. Asks for something to be done immediately without delay
  7. Asks for the homeowner to give a power of attorney
  8. Asks for signatures on a grant deed or deed of trust
  9. Asks for signatures without giving homeowner a lot of time to review the documents
  10. Asks for signatures on a document that has lines left blank
  11. Fails to provide copies of documents signed
  12. Refuses or fails to provide an oral promise in writing
  13. Instructs a homeowner to make mortgage payments to someone other than the lender
  14. Instructs a homeowner not to discuss the situation with the lender, housing counselor, accountant, attorney, family, friends, or others.

Avoiding Mortgage Scams

Making Home More Affordable Program

Kathy Dyer Realtor CABRE #01723710

kdyer@KW.com  831-717-7047

KW Coastal Estates

Carmel Ca. 93923

Kathy Dyer Realtor with KW Coastal Estates serving the Monterey Peninsula area

What is a Loan Modification?


A Loan Modification is a negotiation between a lender and a borrower whereas the loan terms are restructured without refinancing.  The rate and terms of your loan are restructured to fit your current financial situation.
 
In these market conditions, the banks and lenders have been mandated by the president to do everything they can to work out a payment plan with their borrowers. This is a great thing for today’s borrowers, especially for those who are running late on their payments or are having trouble making them on time. The banks and lenders would rather take less money and keep you in your home making a payment that you can afford, rather than go through the expense of foreclosing on the home, hiring a listing agent, rehabilitating the home, and letting it sit empty on the market for months, only to lose thousands in the process.

 We have referrals if you need any lenders help you with a loan re-modification, give us a call or email us.

 

Read below for more information:

Mortgage Modification Programs

Kathy Dyer Realtor CABRE #01723710

kdyer@KW.com  831-717-7047

KW Coastal Estates

Carmel Ca. 93923

Kathy Dyer Realtor with KW Coastal Estates serving the Monterey Peninsula area

Mortgage Modification Programs

Homeowners seeking information on existing mortgage workout
programs

 

Below is a snapshot on eligibility requirements and contact information for a loan workout. If a lender or loan servicer is not mentioned below, homeowners may wish to contact their lender or loan servicer to determine if a workout program is available. In general, the loan modification programs below and consumer information sheets are intended for primary residences only.
It’s important to stress to clients that mortgage loan modifications typically are handled on a case-by-case basis. Prior to calling a lender or loan servicer, homeowners should have the following information available:

·         Loan number

·         Income information and documentation

·         Most recent mortgage statement

·         Bank statements

·         Letter demonstrating financial hardship

Hope for Homeowners (H4H)

Designed for borrowers at risk of default and foreclosure. Provides new 30-year, fixed-rate mortgages insured by FHA, mostly via refinance.      Lender must willingly participate.

·         Loans originated on or before Jan. 1, 2008

·         Primary residence, owner occupied (Borrower may not own a second home)

·         Unable to pay existing mortgage without assistance and has made at least six payments

·         Current total monthly mortgage payments exceed 31 percent of gross monthly income as of March 2008

·         Homeowner has not been convicted of fraud in the last 10 years and did not knowingly or willingly provide false information to obtain existing mortgage

·         Contact your lender to check for participation in H4H program

·         Need to apply through participating lenders

Program timeline: Oct. 1, 2008 – Sept. 30, 2011

For a list of participating lenders visit the site: www.fha.gov

 

Countrywide Financial (Bank of America)

Homeownership Retention Program for Countrywide Customers Will modify troubled mortgages with interest rate and principle reductions.

 

·         Subprime or pay option adjusted-rate mortgage loans originated on or before Dec. 31, 2007.

·         Primary residence, owner occupied (one to four units)

·         Borrower is 60 days or more delinquent and current loan-to-value is 75 percent or greater.

·         Borrower is current today but becomes 60 days or more delinquent at any time before June 30, 2012, and loan-to-value is 75 percent or greater at the time of the modification.

·         Modifications would be designed to achieve sustainable payments at a 34 percent debt-to-income (DTI) ratio of principal, interest, taxes and insurance

·         Call BofA/Countrywide to check for eligibility

Program timeline: Begins Dec. 1, 2008 with no end date specified.

Call (800) 669-6650 http://my.countrywide.com/media/FinancialAssistanceEN.html

 

Citigroup, CitiMortgage – Citi Homeowner Assistance Program

Will preemptively reach out to homeowners in need of assistance and will not initiate a foreclosure or complete a foreclosure sale on any eligible borrower where Citi owns the mortgage.

·         No requirements on origination.

·         Must be first mortgage and must be a loan Citi owns.

·         Primary residence, owner occupied (owner may own a second home).

·         Borrower is working in good faith with Citi.

·         Borrower may not be currently behind on their payments but may require help to stay current.

·         Current total monthly mortgage payments exceed 38 percent of gross monthly income

·         Call Citibank to check for eligibility

Program timeline: Nov. 11, 2008 – May 2009

(800) 667-8424 www.mortgagehelp.citi.com 

 

Chase’s mortgage modification program

includes extending modification programs to Washington Mutual and EMC Mortgage Corp. customers. Program is designed to actively contact borrowers and work with them to develop viable and sustainable options.

·         No requirements on origination.

·         Must be first mortgage and must be a loan JP Morgan Chase owns.

·         Primary residence, owner occupied (owner may own a second home).

·         Targets Chase, Washington Mutual or EMC Mortgage Corp., borrowers with adjustable-rate mortgages (ARMs) including subprime and pay-option ARMs.

·         Modifications would be designed to achieve sustainable payments at 31 to 40 percent debt-to-income (DTI) ratio of principal, interest, taxes and insurance

·         Call Chase to check for eligibility

Program Timeline:  Chase expects to implement by Jan. 31, 2009 and will extend two years after implementation.

For help with Chase, WAMU or EMC loan, call (866) 550-5705 www.chase.com

  

IndyMac Federal Bank, FDIC

Program to modify troubled mortgages to achieve affordable and sustainable mortgage payments for borrowers, and increase the value of distressed mortgages by rehabilitating them into performing loans.

·         No requirements on origination.

·         Must be a first mortgage and must be a loan owned, or securitized and serviced, by IndyMac Federal

·         Primary residence, owner occupied

·         IndyMac borrower already seriously delinquent or in default.

·         IndyMac borrowers at risk of default due to payment resets or changes in the borrowers’ repayment capacities.

·         Modifications would be designed to achieve sustainable payments at a 38 percent debt-to-income (DTI) ratio of principal, interest, taxes and insurance

·         Call an IndyMac Federal customer service specialist to check for eligibility.

 Program Timeline: Aug. 2008 – no end date specified.

 Call (877) 908-4357 http://www.fdic.gov  http://www.indymac.com/ default.aspx?id=1178

 

Federal Government Loan Modification

Fannie Mae, Freddie Mac, Federal Home Loan Banks, Hope Now participants, Department of the Treasury, Federal Housing Administration and the Federal Housing Finance Agency, Wells Fargo

Designed to reduce preventable foreclosures with a simplified, streamlined loan modification program to put struggling homeowners into mortgages they can afford via a uniform process for loan modifications that the majority of lenders and servicers will use.

·         Borrower must have missed three or more payments.

·         Primary residence, owner occupied

·         Not filed for bankruptcy.

·         Modifications would be designed to achieve sustainable payments at a 38 percent debt-to-income (DTI) ratio of principal, interest, and association dues

·         Troubled homeowners should call with their lenders or servicers as to participation and eligibility for this new program.

 Program Timeline: Dec. 15, 2008, more details to follow.

www.fhfa.gov   http://www.hopenow.com/loan_services/servicer_Directory.php

 

For more info: http://www.car.org/legal/mortgage-workout-programs/

Kathy Dyer Realtor CABRE #01723710

kdyer@KW.com  831-717-7047

KW Coastal Estates

Carmel Ca. 93923

Kathy Dyer Realtor with KW Coastal Estates serving the Monterey Peninsula area

 

 

 

4 Fatal Errors Buyers Make on Buying Foreclosures

Top 4 Fatal Errors buyers make when making offers

Pricing is too low: The number 1 error buyers do when making an offer is a low ball price.  

Many buyers think when making an offer on a bank owned property that they can low ball the listing price. In most cases, banks sell at listing if not a little higher than listing price. Don’t automatically low ball a price. Have your Realtor do a market analysis and compare the comps that are nearby. Very often you will be bidding against other buyers, if the home is newly listed and is in good condition prepare for multiple offers and give it your best offer. If the home has been sitting on the market for some time- over 40 days, you may consider lowering the price. Once your offer is accepted, expect a counter offer. It may be a higher price than you expect but the banks have to demonstrate to their investors, shareholders, and auditors that they are trying to get the highest price possible. Your Realtor and you can do a counter to the counter offer. Sometimes this approval will take up to 5 days.

  1. Asking for repairs or inspection to be paid for: When making an offer on a bank foreclosure- never ask for repairs to be made or inspections to be paid for.  Banks always want to sell a property in “as is” condition. Most will provide a Section 1 pest certification, but not unless you include it in your offer and negotiate the point. They will allow you to get all the inspections you want (at your expense), but they may not agree to do any repairs. Your offer should include an inspection contingency period that allows you to terminate the sale if the inspections reveal unanticipated damages that the bank will not correct.
  2. Do not have a loan pre-approval letter:  Some buyers think that the bank will take their offer because they have a high FICO and will take their offer based on that. The highest percentage of buyers fall out of escrow because of some loan situation. Banks want to make sure the buyer will be able to close their loan on time. Getting a pre-approval letter means that the lender already has all the documents from the buyer, pulled credit, has picked out the loan and has done some of the underwriting already. This will speed up the loan process considerably. Have your lender state your FICO score on the loan letter along with the type of loan you are getting.  You will need to show verification of funds to be used in buying your home. Make a copy of the statement where your down payment is coming from. Make sure that the funds are accessible and within the state you are buying your home. Out of state checks can take up to 3 weeks to clear.
  3. Long Contingency Periods:   Most banks do not want to approve long contingency periods- Try shortening your contingency periods to 10-15 days. See if your lender can close within 15 days. Sometimes terms are more important to a bank than a little more money. We have seen banks take $15,000 less for a 15 day closing with a 5 day contingency period.

Make sure you work with a Realtor who has experience with distressed properties and  making offers on short sales or bank foreclosures. You have the greatest chance getting your offer accepted if the Realtor knows how you make your offers more competitive. They can also tell you the risks involved buying a foreclosure as compared to a short sale or regular equity sale.

What is the Difference Between a Bank Foreclosure and REO Property?

What is the difference from a Bank Foreclosure and a REO

What is the difference between a Bank Foreclosure and REO Property?

What is an REO?

An  “REO” is an acronym for “real estate owned” by banks.  A bank owns the property instead of individuals.  Once a property is foreclosed upon, the bank typically acquires title to its REO properties.

Once a homeowner neglected to pay a mortgage loan, the bank sells that property at a foreclosure sale, usually at an auction.  An REO sale, on the other hand, is the sale of property owned by a bank. An Example: Let’s say, Suzie Homeowner has a mortgage loan secured by his home.  If she defaults on her mortgage loan, the lender may initiate the foreclosure process and eventually acquire the property at a foreclosure sale.  Upon the lender’s acquisition, the property becomes part of the lender’s REO portfolio.  The subsequent sale of that lender-owned property is commonly called an REO sale.  Lenders will hire Realtors to sell those properties and list them on the MLS.

Why all the REO properties lately?

The recent high volume of foreclosure sales in recent years result in a high volume of REO sales.
A foreclosure in California is usually handled through a trustee’s sale. Those properties are sold to the highest bidder at auctions open to the public.  At this trustee’s sale, the foreclosing lender may make a credit bid in the amount of its unpaid debt plus foreclosure costs. The trustee on the other hand, typically requires cash or cash equivalent, on any other accepted bid.  Because of having to pay cash, rarely does anyone outbid the foreclosing lender at the trustee’s sale.  This property becomes part of the lender’s REO portfolio, once the foreclosing lender acquires title to the property by the trustee’s deed.

Why would someone wait to buy a property from an REO lender, rather than acquire it as the highest bidder at the trustee’s sale?

There is less potential for one to acquire property as the highest bidder at a trustee’s sale than the same property from the REO lender after foreclosure.  In most cases, people are not able to pay all cash for real property as is often required for trustees’ sales. That is not true for REO sales. Also REO properties are less risky, as compared to a foreclosure sale where these purchasers often have no opportunity to inspect the interior of the property before buying it, despite the possibility that the property may be distressed or occupied by tenants or previous owners.  Acquiring title to an REO property may also be less risky because an REO lender is likely to take care of certain title issues, such as unpaid property taxes.  Indeed, it can be very difficult for a buyer to obtain title insurance when acquiring property at a trustee’s sale, but not an REO sale.

Kathy Dyer Realtor CABRE #01723710

kdyer@KW.com  831-717-7047

KW Coastal Estates

Carmel Ca. 93923

Kathy Dyer Realtor with KW Coastal Estates serving the Monterey Peninsula area

8 Tips for Buying a Bank Foreclosure

Successful Businesswoman

There has been a trend for buyers to go look on their own when trying to find  a find a bank foreclosure. This practice in most cases will cause you to miss the boat and miss making an offer in a timely manner. After they find the right house, then they choose their Realtor. This seems backward.  That process may have worked before, but not now. These buyers are missing out on a lot of services that Realtors bring to the table. In a way, dealing with REO properties is like being in a seller’s market again. The good homes go fast, some times within 1 day, and most of the time with multiple offers. In this case the early bird gets the worm. So how does a buyer better position themselves to buy an REO property and get their offer accepted by the bank.

  1. WORK WITH A REALTOR

New properties first show up on the MLS usually at 4 AM each morning.  Realtors are the first ones to see a new listing show up. Each Realtor has what we call “A” clients, that they work with and will call them 1st -as soon as good listing shows up. An “A” client is someone that is working exclusively with that Realtor.

If you are an “A” client, you will get the call from that Realtor telling you about the great listing that just showed up.   Even better, a Realtor can put you on their MLS auto searches that get emailed to you every morning.  If you look at those listings every day, you can stay on-top of the new listing market.

If not, you can have your Realtor keep on the look out for you. If you want a Realtor to work for you and alert you to new listings ask them for this kind of service. So clients who work with agents will be first ones to know about a new listing. So you can be the early bird!

On the other hand, buyers who do their shopping on the internet by themselves, will  see a new MLS listing 24- 72 hours after it shows up on the private Realtor MLS sites. So buyers not working through an agent might see properties up to 3 days after those who choose to work with Realtors.  Finally, there are others who do their shopping in person, those who are professional open house lookers. These buyers are missing the boat.  Not all new listings have open houses right away. By the time these buyers take action- these home may already have multiple offers on it.

  1. GET PRE-APPROVED

Savvy buyers get pre-qualified if not pre-approved. If you are not pre-approved yet- make sure you do. If you do not know a good lender, ask your Realtor since they know who is good and will provide a smooth transaction. Most, if not all banks require a pre-qualification letter when you place an offer. Your offer will not be accepted or even considered without one. Most Realtors will not show you homes without a Pre-qualification letter.

  1. GET EDUCATED

By working with a Realtor, they can educate you about the home buying process. Once you find the right home, you will have to act fast.  Remember the early bird gets the worm. You will need to  know what payment you feel comfortable with, what your closing costs will be, and are you willing to pay any HOA or Mello Ross? Only your lender and Realtor can help you with that.

  1.    PUT AS MUCH DOWN AS YOUR CAN

An offer with the highest price is not always the best offer. Banks these days are looking for a strong buyer that has no problem qualifying. A buyer that has a 100% loan is considered a weaker qualified buyer than a person who puts down let’s say 20%.  So if you are putting less down and want your offer to be taken seriously, what should you do?  You need to up the ante if you can, offer more money for the home and maybe the bank will like your offer better.

  1. SHOW VERIFICATION OF FUNDS

Make a copy of where your down payment is coming form, a bank statement, an investment, a 1031 exchange property. Black out any personal account info on it. You can also have your bank write up a letter for you as well.

  1. MAKE YOUR OFFER A CLEAN ONE

Usually banks sell the property as is. Don’t ask for repairs. It is always best to keep your contingencies as short as possible. If you do not need a loan contingency, don’t use one. Ask your Realtor for advice on this one.

  1. MAKE IT YOUR BEST OFFER UP FRONT

You will be in competition with other offers, so if it is a good home, it may be priced lower to encourage bidding wars. I called about a home the other day that had 23 offers on it.

  1. MAKE YOUR OFFER ASAP

In some cases I see homes go pending the day the house comes on the market. How does that happen? Some investors actually buy homes sight unseen. They have their Realtors scout out the homes and then make multiple offers and see which ones stick and which ones don’t. So if you are a first time home buyer, you are competing with those savvy investors that act fast. So take action. Know the market and what you want- check out the homes in the areas you want to live in.  Once you know what you want, what you want to pay, what your closing costs will be, then you qualify to actually buy a home. 

First time home owners who are prepared and heed all 8 tips for buying a Bank Foreclosure  are the ones who have a better chance getting their offers accepted. Good LUCK!

Kathy Dyer Realtor CABRE #01723710

kdyer@KW.com  831-717-7047

KW Coastal Estates

Carmel Ca. 93923

Kathy Dyer Realtor with KW Coastal Estates serving the Monterey Peninsula area