Short Sales Help

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 owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure¹ proceedings. One of those options is called a "short sale."
More than half of my sales in Sacramento over the past few years are short sales. That's how prominent short sales have become.
When lenders agree to do a short sale in real estate², 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 sales³.
If you are considering buying a short sale⁴, 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 ramifications⁵

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 2007⁶, 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 judgment⁷ 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 Authorization
  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.
• 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.
• 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.
• 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.
• 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 analysis⁸ (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 Agreement⁹
  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 plans¹⁰ 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.

Forest Hills Homes

Is it time to buy a home?

Aside from the government tax credit that is still available to homebuyers and in some cases homeowners there are many great reasons to purchase a home. If you are currently renting a home or apartment you are throwing your money away. Basically you are paying the mortgage of your landlord, or you are linging their pockets with profit. That does not do much for your bottom line. Here are some great reasons to buy a home now:



1. Pride of Ownership
2. Appereciation
3. Mortgage Interest Deductions
4. Property Tax Deductions
5. Capital Gain Exclusion
6. Preferential Tax Treatment
7. Mortgage Reduction Builds Equity
8. Equity Loans



For more information on any of these reasons click here. If you are ready to start your search for a home it is time to take the next step and contact a realtor. Sure you can find a home on your own using the internet, but you would be putting yourself at a disadvantage. Realtors are your best source for information regarding the most current availabilities in the housing market. Realtors can also help you to negotiate the best possible price, help you connect with excellent service providers and make sure you are not taken advantage of. So are you ready to move? Talk to a realtor today

Home Security Answers

Home Security, Don't Leave Home Without It
By: Brian Bees

Depending on your age or where you grew up, you probably remember never locking the door to your house. It seems like just yesterday, but those days are long gone. Our way of life has changed rapidly. Churches, schools, and neighborhoods are no longer social institutions linking entire families into a single community. People do not know their neighbors as well as they once did.

Crime and fear of crime threatens a community's well being. People become afraid to use streets and parks and suspicion erupts between young and old. Crime in turn feeds on the social isolation and lack of community ties.

The following are some crime facts in neighborhoods today.

- Burglary and thefts from auto's are the most prevalent neighborhood crimes.
- Household burglary is one of the easiest crimes to commit, and to prevent.
- Most home burglars are young amateurs looking for easy targets.
- In over one-half of household burglaries, there was no forced entry involved.
- Most home intrusions occur during daylight hours while homeowners are away. The burglar will in many cases watch your home for a few days to see when you are out.

Is the choice either to be burgled or turn your house into a high tech security fortress? Not at all. The first step is to know the ways burglars break into your home and what to look out for to reduce your chance of being burgled. Inexpensive precautions like installing better locks will make your dwelling more secure while at the same time a less desirable choice for the criminal. Install outdoor motion sensor lights. This is an inexpensive way to reduce the risk of someone coming onto your premises at night. Surveillance cameras have become quite affordable. Some models are wireless. Simply mount the small camera to monitor a particular area and the image can be viewed on your TV set. Make sure you do not make it obvious that you are away. Have a neighbor pick up your mail. Make a list of all your valuable items. Neighborhood Watch is a proven crime-reduction program. Members watch out for their neighbors and report suspicious activities to their local police department. Neighborhood Watch has helped to restore the "front porch" by bringing neighbors into contact with each other once again for a common purpose - to make our homes and streets safe.

What about installing a home security or surveillance system? Undoubtedly the largest benefit you receive when an alarm is installed in your home is the peace of mind in knowing that the percentage of homes that are broken into with an alarm is 97% less than homes that do not have an alarm. The homeowner should have a basic knowledge of the types of systems available to make the most cost effective choice. Perimeter sensors protect each door and window and detect an initial entry attempt. Motion sensors detect an intruder moving inside the house. Systems are either hardwired or wireless, using radio signals. Once an intrusion is detected the alarm system can sound a local alarm or contact an alarm monitoring company. The security representative surveying your home and living patterns can make recommendations for your best protection.

With the level of home intrusion increasing everyday there has never been a better time to make sure your home is secure.

Keyword Articles: http://www.keywordarticles.org


For more information I suggest reading The Ultimate Guide to Home Security E-Book. It is an instant-download that you can print. Visit www.home-security-solutions.net Brian Bees has 30 years experience in electronic security systems.

Mortgage Rates are going UP???

NEW YORK (CNNMoney.com) -- If you want to refinance your mortgage into a loan with a sub-5% interest rate, better hurry. Your window of opportunity is closing fast.

Lenders are still advertising rock-bottom interest rates, but for most borrowers, rates are rapidly rising into the 5%-plus category.

During the week of Dec. 31, the average 30-year, fixed-rate loan closed at 5.14%, according to mortgage giant Freddie Mac. That is significantly higher than the 4.71% it averaged at the beginning of the month, and experts say rates will go higher yet.

"Interest rates are up and they're not going to go down below 5% again," said Mark Zandi, chief economist for Moody's Economy.com, not for a while at least.

While homebuyers are still excited about these low mortgage rates, people who already have a loan and want to lower their costs are scrambling to lock in.

Refinancers act when the difference between the rate they're currently paying and the new one is at least a point or two wide, otherwise the costs of going through the refinancing wipes out any savings. In fact as rates rose in December, refinancings plunged, down more than 30%, according to the Mortgage Bankers Association.

A big reason for the jump is that a government program that has kept rates very low is winding to a close. The Federal Reserve has been purchasing mortgage-backed securities (MBS) since early 2009, scooping up as much as $1.25 trillion worth. That has dampened rate increases by providing a ready market for the MBS.

But the Fed's program lapses on March 31, when it cedes the playing field to private investors, who will almost surely demand higher rates to buy MBS. The Fed has already been slowing its purchasing, and that has correspond with the recent rate increases.

As Treasurys go . . .

Not just mortgage rates have turned north. Treasury yields have as well, another indication that mortgage rates are headed skyward.

The yield on the benchmark 10-year Treasury has grown steeply over the past few weeks. It stood at 3.2% at the beginning of December and has soared to 3.84% as of Tuesday, a 20% jump.

Mortgage interest does not track Treasury yields in lockstep, but the two tend to mirror each other's movements. "It's very unusual for mortgage rates and Treasury yields to go in different directions," said Stuart Hoffman, chief economist for PNC Financial Services.

MBS rates are always higher than Treasury yields because MBS investors demand a premium above practically risk-free Treasurys to compensate them for taking on more risk.

The difference between the mortgage rates and bond yield is usually somewhere near 1.7 percentage points, according to Keith Gumbinger of HSH Associated, a publisher of mortgage information. The current spread of about 1.2 percentage points is quite narrow.

That's bound to change, according to David Crowe, chief economist for the National Association of Home Builders. He believes mortgage rates will go up to about 5.5% by late summer. But other factors could push them into a larger-than-expected jump.

Economy bouncing back

For example, as the economy improves (it's hoped), businesses will expand production, hire new workers and open new sales outlets. All that requires borrowing in capital markets and the demand for lending will expand interest rates of all kinds.

A recovering economy also boosts corporate profits, making stocks a better bet for investors.

"Stocks tend to do better when the economy improves," said Hoffman. "Mortgage rates will rise to attract investment."

Hoffman's forecast is for rates to stay quite constant the rest of the winter and then elevate gradually during the spring buying season, the busiest time of year for home sales. He said they should hit about 5.5% by the end of June.

After that, the increases will slow, according to Hoffman, but still approach 6% toward the end of the year. He believes they'll cap at around 5.75% and are not likely to fall back to the 5% level again.