Houses for $100 down!!!

That's all you'll need for a down payment to buy a foreclosure offered for sale by the government. 

This sounds like a heck of a deal: HUD now only wants $100 down to close the deal.

Yes, the U.S. Department of Housing and Urban Development has brought back the $100 down payment plan in Southern and Western states. It could be a tremendous opportunity for some people -- first-time homebuyers or perhaps those who are close to retirement and are looking to downsize to a smaller home. (Some of these are modest homes in locations where jobs may be scarce. Others are large homes in metro areas.)

Summary:

• The $100 down program is available only for people who will live in the home, not investors.
• Your real-estate agent has to submit a bid for the house online.  
• You have 12 months to get in on this deal.
• Your financing must be FHA-insured.
• You might have to have more skin in the game. 
  Explanation: The $100 down payment incentive is only available if the purchase price of the home is equal or less than the appraised value of the home. If you have an accepted bid for over the appraised value of the home you must bring the difference as down payment to the closing.
   

So, what might you buy with $100 down? You can find a database of HUD-owned homes here. (Click on each state in the map to see what's available.) There's quite a range, judging from the descriptions and photos of the properties. And the list can change every day.

Please contact us if you are seeking a home, investment property and financing.

 

California Home Sales Statistics

California home sales slowed in September, but the local housing market saw a record number of short sales. Buyers purchased 380 single-family homes last month, down 19% from August. Home sales often taper after Labor Day, and September sales were down just 2% from a year earlier. But buyers and sellers last month signed contracts on 175 short sale properties, those homes where the proposed sales price is less than the amount owed on the mortgage. Another 151 such contracts were signed in August. By comparison, for most of the past three years, the number of such deals hasn't exceeded 100 per month. Typically many of those agreements don't result in a final sale.  But demand for homes has reduced the short sale inventory to its lowest level in three years - less than a two-month supply at the current pace. In September, the county's median price for all single-family homes rose 6% from August to $350,000. A year ago the median price reached $366,500, but in the months since it has stayed in a range between $315,000 and $354,200. Home prices peaked in the county in the summer of 2005, when the median hit $619,000. From there, the median price plunged to $305,000 in February 2009.

Many home sellers this year seemed to stick to the seasonal pattern of marketing homes in spring and summer. The inventory of homes on the market rose steadily this year and peaked at about 2,000 homes in June. Since then inventory has fallen and by the end of September was down to about 1,600 homes - slightly more than a four-month supply at the current pace of sales. But last month the inventory of short sale properties on the market fell below 300, the lowest level in three years. A year ago that inventory amounted to nearly 600 such homes. The median price for a short sale last month was $305,500, compared to $269,450 for a bank-owned foreclosure property and $409,000 for homes where the seller still has some equity. Foreclosures and short sales made up 45% of all sales last month. To date this year, buyers have purchased slightly more than 3,400 single-family homes in the county. The pace is similar to last year, which was slightly below average.

Please click on Short Sales, Investments, and mortgages for more information.

UNDERWATER HOME OWNERS CAN REFINANCE - HARP Refinance Program Expanded

Borrowers who are current on their home loans may be able to refinance for lower interest rates, even if they are seriously upside down. The Federal Housing Finance Agency (FHFA) announced that it will broaden the scope of the Home Affordable Refinance Program (HARP) by removing the current 125 percent loan-to-value cap for fixed-rate mortgages backed by Fannie Mae and Freddie Mac. Other program enhancements include, among other things, reducing certain fees, eliminating the need for a new property appraisal if the FHFA has a reliable automated valuation model (AVM) estimate, and extending HARP until the end of 2013. New federal guidelines for the HARP changes should be released to mortgage lenders and servicers by November 15.

The basic eligibility requirements for an enhanced HARP loan are as follows:

• Existing mortgage loan must be owned or guaranteed by Fannie Mae or Freddie Mac. To check whether a borrower has a Fannie Mae or Freddie Mac loan, go to http://www.makinghomeaffordable.gov/get-assistance/loan-look-up/Pages/default.aspx.
• Existing mortgage loan must have been sold to Fannie Mae or Freddie Mac before June 1, 2009.
• Existing mortgage loan cannot have been refinanced under HARP previously (except for Fannie Mae loans refinanced between March and May 2009).
• Current loan-to-value (LTV) ratio must be more than 80%.
• Existing mortgage loan must be current, with no late payments in the past six months, and no more than one late payment in the past 12 months.

More information is available from FHFA at http://www.fhfa.gov/webfiles/22721/HARP_release_102411_Final.pdf.

Please contact us to discuss how this will benefit you and whether you qualify! We will publish more details as they come out.

How Fall Changes the Housing Market - and What to Do About It

The fall housing market is a very different beast from the spring market. The spring is traditionally a boom market, with plenty of homes up for sale and plenty of opportunities to bid on the right home. Spring markets also bring bidding wars, though, and it tends to be more of a seller's market than a buyer's market, so spring is a great time for variety but not necessarily for getting the best deals.

The fall and winter housing market is an entirely different entity. In the fall, people are settling in for winter. They're winterizing homes, kids are starting schools and people are preparing for the long, cold months ahead. Homeowners with kids are far less likely to sell at this time of year and disrupt schooling, and even in the warm climates the winter months are full of holidays and other obstacles that present difficulties for selling.
In short: the fall and winter pickings are slim.

The cold months do have an advantage, though; people who sell during fall or winter are typically more motivated to sell, and are doing so because of a life change. People who put their homes up for sale in the spring or summer may just be looking to see what the market will bring. People selling in fall and winter typically really need to sell, which means you might just get a better deal on a home.

Ultimately, you'll have fewer choices in the fall and winter. That doesn't mean you can't still find your dream home, though. You'll just need to look a little harder, and be a bit more aggressive. It helps to have an experienced professional on your side, though; one who knows the fall and winter market and where to find some of the best deals during the long, cold slow months. That's where we come in.

Don't miss out on the great deals you can find in the fall and winter just because they're more difficult to come by. Fill out one of our Creative Homeowner Solution Requests and we'll get on the job. We know where to find great deals, and can help you get the financing you need to buy the home you've always wanted. Take advantage of the slower months to get your dream home - today.

Please CLICK HERE and see our current listings.

California Law Regarding Deficiency Recourse for Short Sale and Foreclosure

Last January the California Legislature passed SB931 which barred first lenders that consent to short sales from having any deficiency recourse against the borrowers. However, they quickly learned that it is junior lenders (seconds, HELOCS, etc.) that control the success of short sales. So on July 15th, the Legislature passed SB458 imposing the same recourse bar on junior lenders plus they barred any lender from requiring a money contribution from the sellers. These law changes created and then amended California Code of Civil Procedure Section 580e.

The conclusion at this point is that there is still a lot of uncertainty in the market, particularly amongst lenders trying to understand and respond to SB458. However, here are the main benefits emerging:

1. SB458 forces junior lenders to evaluate right now whether or not they could collect from a borrower if they waited for the first lender to foreclose and then sued as a sold-out junior lienholder. Prior to SB458, the junior lender could get some money in the short sale while holding out for recourse on the balance. They could then wait this out for several years and hope the borrower gets solvent. Not any more. Clearly this makes the borrower’s hardship application and particularly their net worth statement even more important in the decision making process.

2. SB458 appears to have brought an additional liability protection for borrowers who agreed to a prior short sale with deficiency recourse. The first Paragraph of the new short sale law begins: “No deficiency shall be owed or collected, and no deficiency judgment shall be requested or rendered…..” Nothing in SB458 states that it only applies to short sales after July 15th.

No doubt there will be a lot more debate and analysis and litigation concerning SB458 and its impacts. As with any law, it will be subject to judicial review in the courts and further change, expansion, and clarification by the Legislature. But for now, CCP580e is the law of the State of California.

The information presented in this Article is not to be taken as legal advice. Every person’s situation is different. If you have specific questions about dealing with upside down loans or real estate, be sure to contact a real estate attorney in your State.

Please Click Here if you have additional questions and if we can assist in Selling your home.

Home Affordable Refinance Program Extended

The FHA has decided to once again extend the Home Affordable Refinance Program (aka HARP.) Perhaps now is the time to look into whether or not this is an option for you. It is a program created to help the millions of Americans who have had trouble refinancing due to decreased home values. When it is successful, it has similarities to a loan modification, but you actually get new mortgage with new terms (lower interest and lower monthly payments.)


HARP may be an option if:

• You are current on your mortgage payments (no 30 day late payments over the past year)
• Your home is worth less than what you paid for it.
• Your first mortgage is not greater than 125% of your home's current market value.
• Your loan is owned by Fannie Mae or Freddie Mac.

The best way to find out if you qualify for a Home Affordable Refinance Program loan, is to contact a HARP lender. Not every lender is equipped to assist you. Here is a way to check and see if you quality for a HARP loan through a trusted HARP mortgage lender. Simply complete this mini-application online.

Getting a Home After a Bankruptcy or Foreclosure

While the rules have changed drastically with regard to mortgage lending, it is still possible to get a home after a bankruptcy or foreclosure. The three keys to this are:

1. Credit Restoration. Goes without saying.

2. Documentation of what caused you to have the bankruptcy or foreclosure.

3. A new positive house payment history. Before you get a mortgage, the best thing to do is find a home with creative financing to re-establish yourself. Save all of your cancelled checks as this will be your new "alternative" credit.

A few great creative financing options are:

1. Owner Financing. If the owner has equity, and a heart, you might land a deal here. The best about this is that you will likely have equity when you go to refinance, and a refinance loan is scrutinized less than a purchase loan.

2. Renting With the Option to Buy. You will likely pay slightly above market rent with a rent credit going towards your down payment. Ideal for those who need to save towards a down payment.

3. Lease-Purchase. Similar to a rent with option, in a lease-purchase, you normally establish the price up front, and you become responsible for the property as if you owned it. The key to success here is having enough time to get your credit cleared up to get approved for a traditional mortgage at the end of the lease term.

These deals exist, especially now that there are so many sellers trying to unload investment properties. Just make sure you do your homework so you know you are dealing with the owner and not a "contract owner" as this could cause you more trouble than it's worth - including the loss of your money and the house.


If you need assistance in understanding any of the above strategies of buying a home, than please CLICK HERE to contact us.