First-Time Buyers! New 30-Year Mortgage From CalHFA!

If you are a first-time buyer, or if you haven't owned a home in the last three years, this may be your opportunity to shop the LOW prices in the market today!

The California Housing Finance Agency (CalHFA) announced this week the launch of a new fixed-rate, 30-year, FHA-insured mortgage program for low- and moderate-income home buyers.

CalHFA provides financing and programs for low- and moderate-income Californians. The program announced this week enables qualified, first-time homebuyers - defined under federal law as not having owned and occupied a home for the past three years - in California to receive a 30-year mortgage with a fixed interest of approximately 4 percent.

Borrowers are eligible to use the California Homebuyer’s Downpayment Assistance Program, which can provide up to 3 percent of the purchase price of the home for down payment or closing costs.

In addition to being a first-time home buyer, borrowers also must meet income limits, which vary by county and family size. Call me to see if you qualify. Borrowers also must purchase homes within FHA’s loan limit and CalHFA’s sales price limits. Mortgage loans are limited to $417,000 under FHA guidelines, while CalHFA’s sales price limits vary by county.

Additionally, borrowers must meet the minimum credit score requirements and maximum debt-to-income ratios and complete a HUD-approved home buyer education program.

For more information on whether or not this new CalHFA program can help you with your first-time home purchase, contact me!

Scam or Savior? Short Sale Negotiators

When an agent lists a property as a short sale, it involves working many long hours on very thick files. Since many agents do not know the proper protocol for handling short sales, this need was filled with a middle man: enter the "short sale negotiator." If you don't know a Certified Distressed Property Expert, how do you weed out the good from the bad?

Licensing: All negotiators need to be licensed real estate agents and their license number should be displayed. Don't let them tell you that they don't need a license to negotiate debt forgiveness, or to process paperwork. That goes for any agent who is handling your short sale.

Compensation: Your agent or negotiator should not hit you up for money before performing any services. Real estate agents get paid when the deal is closed. No close; no paycheck. If you are a buyer and a negotiator asks for compensation, say no and go look for another house. Trust me, you don't want to get into a contract like this!

MLS Issues: If you are a buyer and the listing agent of the property you want asks you to pay for the short sale negotiator, that may even be against MLS rules. I would find another property if I were you.

Track Records: It's usually a good idea, right? In this case, the short sale negotiator scammer may be very good at making up what the bank wants to hear about the sellers they represent, so their record may look impressive. Sure, they've closed a lot of deals. But are they ethical?

Short Sale Flips: I'm not against flipping. I've done a few. Buyers are happy, the contractors I hire to do repairs, carpet and paint get work, and I make a small profit. However, some bad eggs are using short sales to make big bucks. They arrange to have a "buyer" bid on the property at a very low price and do not show the seller or the bank any other real offers. The "buyer" buys at that very low price, and the negotiator and his "buyer" partner turn around and sell the property for a higher price. That stinks.

A Final Word! If you are in the distressing predicament of having to unload your property for less than you owe, the only way to be sure you are being taken care of in an ethical and legal manner is to hire a REALTOR who is also a Certified Distressed Property Expert. These professionals, of which I am one, have gone through training on how to take a seller through the process of getting their home sold so they will not have to go through the devastating effects of a foreclosure. I have personally helped many sellers in this position. Is it a lot of work? You bet. However, as long as there are sellers who need my expertise in this area, it is my mission to help all I can, despite the thick files and long hours needed to get these escrows closed satisfactorily.

Looking for Work and Behind on Your Mortgage?

California Housing Finance Agency (CalHFA) to the rescue!

The U.S. Treasury Dept. announced that it’s providing additional funding to a California program to help homeowners struggling to make their mortgage payments due to unemployment. The program will assist struggling borrowers make up to six months of mortgage payments. Lenders will be asked to match the government contribution.

KEEP THIS IN MIND

• The program aims to help 19,000 unemployed borrowers in California between its November launch and next July. An additional 23,000 borrowers will receive help over the next two years, according to CalHFA estimates.

• To qualify for the program, borrowers must be unemployed and eligible for unemployment benefits, and live in the home tied to the mortgage. Borrowers must be fewer than 90 days behind on mortgage payments and meet low- and moderate-income guidelines. Income requirements can be found at http://keepyourhomecalifornia.com/income.pdf.

• CalHFA is focusing on providing aid to unemployed borrowers struggling with purchase loans, excluding refinanced loans. According to CalHFA officials, it is too difficult to decide who “cashed out for a good reason and who didn’t.”

• More information about the CalHFA program, including eligibility, program summary, income requirements, and frequently asked questions, can be found at http://keepyourhomecalifornia.com.

Be sure to call me if you have any questions!

To read the full story go to: http://www.sacbee.com/2010/08/12/2953229/42000-of-californias-jobless-will.html

Part 2: Ask Yourself: Rent or Buy? Can You Really Afford This House?

In my last post, we saw that owning a home is generally a good thing for individual finances in the long run, even if only slightly. As a homeowner myself, there is also the relative security of knowing my landlord won't up and sell my home out from under me or raise the rent! Though homeownership carries more responsibility, for myself, it just feels good to have my home be .... well, my home!

To be sure, the recession illustrates that renters need to consider not just their desires, but also their financial realities before purchasing a home. Buying a home is a big financial responsibility - the biggest one you will ever make - and one that protects you against those rent increases. A home represents stability, the place where you want to settle down for at least five to seven years and raise your family, if you are inclined. Bottom line: You don't want to take on more square footage than you can maintain and enjoy.

Still not sure? This simple online survey (www.bankrate.com/calculators/mortgages/rent-or-buy-home.aspx) can help and so can your financial planner.

And when you are ready, of course, seek me out, Your Personal Realtor!

www.car.org/newsstand/crem/current-issue thank you to Paula Hess, senior editor of California Real Estate Magazine.

Ask Yourself: Rent or Buy? Part 1

Sixty-five percent of Americans prefer owning a home versus renting. Is this just some leftover remnant of "the American dream?" Is it a romantic notion, or can it make financial sense, as well? Is the time right for your family?

With all of the foreclosures, fragile economy and fear about where to put one's investment dollars, the question about whether it is good for your pocketbook is more important than ever.

You've heard "there may never be a better time to buy," what with home prices and mortgage rates at near historic lows. But the reason to buy should have more to do with you and your family's situation than with the market. Yes, prices are low - really low, but tighter lending requirements have made it harder to qualify for a home loan. Bottom line: You'll need a larger down payment and a higher FICO score.

Interestingly, declining home prices have made the differential between buying and renting - significant in years past - minimal in some regions. However, with a cash downpayment, buyers may be able to save an average of $100 per month paying a mortgage over rent for a comparable property.

Of course, homeowners qualify for tax breaks, most notably the mortgage interest and property tax deductions. A general tax benefit-analysis reveals that a buyer purchasing a median-priced home with 20% down and a 30-year conventional mortgage looks to save over $500 per year on taxes. Not a huge amount to be sure, but homeowners will take it, along with the knowledge that their payments can be building equity and not just going into the pocket of a landlord!

In Part 2, we'll look at the second consideration: Can you really afford this house?

Before You Walk Away From Your Mortgage ...

Fannie Mae Increases Penalties for Borrowers Who Walk Away

Seven-Year Lockout Policy for Strategic Defaulters

Fannie Mae announced policy changes designed to encourage borrowers to work with their servicers and pursue alternatives to foreclosure. Defaulting borrowers who walk-away and had the capacity to pay or who did not complete a workout alternative in good faith will be ineligible for a new Fannie Mae-backed mortgage loan for a period of seven years from the date of foreclosure. Borrowers who have extenuating circumstances may be eligible for new loan in a shorter time frame.

The purpose of this new policy is to highlight the importance of homeowners working with their mortgage company.

There is no doubt that walking away from a mortgage is bad for borrowers and bad for communities, not to mention the example that is being set for a whole generation watching mom and dad not do all they can to fulfill their responsibilities. Homeowners facing documentable hardship who make a good faith effort to resolve their situation with their mortgage provider will be able to preserve the option to be considered for a future Fannie Mae loan in a shorter period of time.

Fannie Mae says that it will also take legal action to recoup the outstanding mortgage debt from borrowers who strategically default on their loans in jurisdictions that allow for deficiency judgments, something that could hang over the heads of those who walk away from their mortgages for years to come.

As a Certified Distressed Property Expert, I can relieve homeowners in these situations from the burden of communicating with their mortgage providers - something that discourages many borrowers as banks are famous for not answering phone calls or refusing to speak with borrowers until they are behind on their mortgages. At the very least, I have the experience to help navigate the waters one step at a time for you. One of my clients actually was able to negotiate with his lender to keep his home after he had almost given up hope and we had it up for a short sale (owed more on the home than we could sell it for)!

In these troubled times, I am happy to be able to use my skills to help upside down homeowners develop a plan of attack rather than giving up. It does pay you in the long run, credit-rating-wise, to work things out with your lender, even if it means you end up selling your home for less than you owe.

Call me if you or someone you know needs help.

These policy changes were announced in April, in Fannie Mae's Selling Guide Announcement SEL-2010-05.

Buyer Turn-Offs: What to Do if YOUR House is a Turn Off!

We talked about the features buyers look for, and some things you can do and should NOT do to make sure you show your home's best side to buyers. Now, I want to talk about the top buyer turn-offs, and what to do if your house fits the description.

The top turn-offs for both men and woman are structural damage, bad odors, a busy street, and an awkward floorplan.
First of all, a homeowner must accept reality that if any of these features apply to their home, it will make their home less desireable than a home that does not have these features. Therefore, the home must be priced below a comparable home in size and location. A buyer will naturally buy the home that appeals to them the most within their budget. Reduce the price, and you appeal to a buyer who normally could not afford a home in your area, or a home with as much square footage, or a home with a beautiful yard, etc. There is a buyer for every home, I assure you!

1. Let's take Structural Damage. This often happens to homes that were rentals for a long time, or perhaps the home was owned by folks who became disabled and could no longer either afford to keep the home up or just didn't notice the problems occuring. Perhaps there was a leak in the attic or under the house that slowly caused damage. What to do?

You have three choices: Repair the damage before you put the house up for sale, or sell the house as it is with the knowledge that much of the repairs will need to be paid for by the seller in escrow, or sell to a cash-only buyer. The fact is that unless the price of a structurally damaged house is considerably below comparables, a buyer will not purchase the home without having the damage repaired. Most buyers do not have the capital to repair structural damage. Also, if the buyer is getting a loan on the home, most banks will not loan on a home with structural damage. As your agent, I would assess what the damage is when I list your home and make recommendations based on what I observe.

2. Bad odors. It's a fact of life that we all get used to the smells in our own home! Even some odors that would knock a visitor down seem to go undetected by the resident. Obviously bad odors are a turn off, and if a home is listed without the odor having been eradicated, buyers will run the other way. What to do?

Before you list, get rid of odors caused by cigarette smoking, animals and relaxed house cleaning. Often carpets need to be replaced and walls painted to get the home smelling show-ready. Ask a friend you trust to come over and give your home the sniff test. If you choose to sell your home as is - odors and all, expect to have to lower your price below the comparables to get any buyer interest.

3. A Busy Street. This is a tough one, but not impossile to deal with. Your sales price will have to be adjusted regardless of what you do, but it is possible to make your home appealing even on a busy street. I would recommend putting in dual-paned windows at least on the side of the traffic. Dual-paned windows are a great selling point all over the house, and I would definitely recommend replacing all windows if they are single paned.

Next, I recommend a fountain in your outdoor space. A nice tinkly one that distracts from the street noise. I actually live with a busy street behind my home, and we have a wonderful fountain outdoors. Visitors rarely comment about the street noise, and we rarely notice it.

Plant screening plants to block the view of the busy street from windows. And of course, make sure your home is clean and staged before listing!

4. And lastly, the Awkward Floorplan. If you've got it, you may not even know it, you are so used to it. Buyers are looking for open floorplans these days. If you have no remodeling $$$ to remove walls, you must know that your sales price will need to be below the comparables to make up for the floorplan. Sounds ridiculous, but buyers know what they want.

For floorplans that are set in stone - no way to change it - I would recommend focusing on the positive features of your home mentioned in my prior article. Make sure you have a killer backyard, or a killer kitchen. Something that stands out that buyers want that makes up for the floorplan. Make sure your home is clean and freshly painted. As your agent, I will help you arrange your furniture to distract from the floorplan.

There IS a buyer for every home. Sometimes it takes elbow grease, and often it takes being realistic about the features your home is lacking and the turnoffs your home has that you have no control over, and adjusting your price to compensate. As your agent, I will evaluate your home and take your home's best foot and put it forward and center in order to get you the best possible price in today's market!