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The Real Estate Puzzle - An Educational Seminar

by Doug & Gwen Campbell at Sun Bay Associates

For those of you who are in the Palm Harbor, Dunedin and Clearwater or Tarpon Springs area, we, Sun Bay Associates at Keller Williams Realty, are hosting a real estate seminar at the Palm Harbor Library on 2330 Nebraska Avenue in Palm Harbor on Tuesday, October 26 to present real information about the real estate market and to correct some of the most common misconceptions, especially in this challenging market.

This is a free event and there is absolutely no obligation.  It is an educational session for our community.

We will have a title expert from Star Title, Mimi Patrick, to explain the purpose and function of a title company in a real estate transaction.  We will have a mortgage company executive, Brian P. Forrester, with Van Dyk Mortgage, to go into the details of getting a mortgage loan and some of the pitfalls to avoid.  We will also have an experienced real estate consultant explain the function of a realtor in the entire process.  Gwen Campbell, with Sun Bay Associates at Keller Williams Realty, has over 15 years experience in real estate and will address the top ten real estate misconceptions.

If you know anyone who is thinking of selling a home, or anyone who is buying a home, or someone who simply wants to gather accurate information about the current real estate market, be sure to attend.  The seminar will be at the Palm Harbor Library, 2330 Nebraska Avenue, Palm Harbor and runs from 6:30 to 7:30 PM.  There will be plenty of time for questions and answers.  This is going to be a very information packed seminar so be sure to attend!!

 

FHA is Changing the Rules

by Doug & Gwen Campbell at Sun Bay Associates

Effective September 7, 2010, FHA is adjusting its rates and these will impact home buyers and the value they get for their payment.  Also, FHA is going to reduce the amount of closing costs sellers can pay to 3% from 6%.  All this is addressed in the video below. 

Click here for the very latest in what FHA is up to for home buyers.

Foreclosure is Avoidable with HAFA

by Doug & Gwen Campbell at Sun Bay Associates

The latest government initiative to combat the millions of foreclosures across the country is called the Home Affordable Foreclosure Alternatives Program, or HAFA.

HAFA is the program put in place to benefit homeowners who do not qualify for HAMP, or Home Affordable Mortgage Program.  HAFA was released in April of 2010 and is designed to expedite the foreclosure avoidance options for homeowners in need. HAFA, using the short sale process, can potentially save millions of homeowners the financial devastation of a foreclosure.  Since the statistics tell us that 1 in 7 homes are in default, right in your neighborhood there are people who need help with avoiding foreclosure.  A short sale process is simply selling a property for less than the mortgage amount due in order to avoid foreclosure.

Here is how someone can qualify for the HAFA Program.

They must:

1. Be delinquent on the mortgage or face imminent risk of default

2. Occupy the property as the primary residence

3. Have a mortgage that  originated on or before January 1, 2009

4. Have an unpaid principle balance no greater than $729,750 for a one unit property; AND

5. Have total monthly mortgage payments exceeding 31 percent of the gross income.

The HAFA short sale process is the primary solution to avoid foreclosure, salvage one’s credit score and move on with dignity through the process.  The following link shows lenders currently participating in HAFA: 

http://www.makinghomeaffordable.gov/contact_servicer.html

If you know anyone who is in need of expert guidance to navigate the short sale process, be sure they contact someone who is an expert, such as a Certified Distressed Property Expert, or CDPE.

 

Is Now The Time to Buy Real Estate in Tampa Bay?

by Doug & Gwen Campbell at Sun Bay Associates

Is now the time to buy real estate in Tampa Bay??  Judging by today's interest rates for regular mortgages and jumbo loans at a local bank, the answer is a resounding yes.

A 30 year mortgage with no points can be had for an APR or 4.7%.  This is for a normal loan, that is less than $417,000.  For a 15 years mortgage, the rate can be as low as 4.38% with no points. 

If someone wants to go to the higher priced homes for a jumbo loan, the rates are still terrific.  A $500,000 mortgage with 20% down could be a low as 6.721 APR for a 30 year note.  For a 15 year jumbo loan with 20% down and no points, the interest rate can be as low as 6.015%.  And with points, the rates can go even lower.

These are historically low rates and can't continue forever.  Yes, this is a great time to buy real estate in the Tampa Bay area.

VA Home Loans - a Great Opportunity

by Doug & Gwen Campbell at Sun Bay Associates

Remember when getting a home loan was NOT impossible?  Thanks to the creation of the Appraisal Management Company or AMC for appraisals, experienced appraisers are a dying breed.  Well, VA home loans are a great opportunity to get a loan.  Why, you may ask?  Here are a few reasons.

100% financing - NO down payment for loans less than $417,000 as long as the veteran is fully entitled.

Monthly mortgage insurance is NOT required??  This means a lower monthly payment.

The seller can pay ALL or the buyers' closing costs AND can the seller can use the 4% seller concessions allowed to pay the VA Funding Fee or credit card debt to help the buyer qualify for the loan.

ASSUMABLE.  If the buyer qualifies for the loan, the loan may be assumed.  This is a wonderful resale option if interest rates at the time of resale are higher than the VA loan.

There are NO prepayment penalties.  The borrower may payoff the loan at any time with no penalty or restriction.

With these very attractive options, 100% financing, no mortgage insurance, 4% seller concessions and all closing costs covered, ASSUMABLE and no pre-payment penalties, it is well worthwhile to look at a VA loan.

And there is one more huge benefit, VA has its own experienced appraisers and does not use Appraisal Management Companies or AMCs.

HAMP or HAFA and Your Mortgage

by Doug & Gwen Campbell at Sun Bay Associates

At last, the federal government is taking real action to provide homeowners assistance with their mortgages.  A new initiative, Home Affordable Foreclosure Alternatives Program, or HAFA, is now in effect to help homeowners.  The details are complicated, and you, the homeowner, need to clearly understand these new solutions to gain the most benefit.  This is a critical issue, especially for the Tampa Bay real estate market since this market has been so hard hit by the economic downturn.  As a Certified Distressed Property Expert (CDPE), Sun Bay Associates is in a position to explain the nuances and benefits of the HAFA process.

In March 2009, the Home Affordable Modification Program or HAMP, was introduced to provide homeowners assistance if their mortgage payments exceeded guidelines for income levels (above 31% of income).  Most homeowners, however, are facing such financial hardship that the HAMP can't provide them deep enough discounts on the mortgage and either don't qualify or in the end will default on the modified mortgage anyway.

Enter the HAFA program.  This is specifically designed for homeowners who don't qualify for HAMP aid.  HAFA is supposed to speed up the foreclosure avaoidance options for those homeowners who need this help.  HAFA can help same millions of homeowners from the financial disaster of foreclosure by getting either a short sale or a deed in lieu of foreclosure accomplished relatively quickly.  A short sale is when the home is sold for less than the outstanding mortgage amount and a deed in lieu is when the property is completely turned over to the lender because the homeowner cannot continue making payments.  Then the bank will sell the house to salvage as much of the loan balance as possible.

A critical item in qualifying for the HAFA program is that the loans are NOT owned or guaranteed by Fannie Mae or Freddie Mac and applies only to the first lien mortgage.  HAFA does offer incentives to lenders for those homeowners who have second, third or more mortgages on their homes.  Also, HAFA prevents lending participants from pursuing deficiency judgments against the homeowner after the short sale or deed in lieu has been completed.  If you are in the Tampa Bay area and need to avail yourself of the HAFA program, or are seeking financial help with your mortgage and don't know where to turn, contact us.  We will send you a report that clearly outlines the HAFA process.

With the detailed training and ongoing education as CDPE, we will be able to explain your options.  We can walk you through the various programs available to assist you, whether it is to keep your home by loan modification or going through the short sale or even deed in lieu process as quickly as possible so life can return to normal without the financial stress of a crushing mortgage payment.

FHA Changes Will Cost the Buyer

by Doug & Gwen Campbell at Sun Bay Associates

As reported in the Los Angeles Times recently, the Federal Housing Administration, or FHA, is making changes that will cost the consumer a few more dollars to buy a home.  The FHA needs to make these changes, or increases, to provide a buffer for it's low cash reserves.

Among the coming changes are:  increased mortgage insurance premiums, higher FICO credit scores and down payments and a reduction in allowable seller concessions to 3% from the current 6%.

HUD Secretary Shaun Donovan outlined the FHA proposals in December.  The higher down payment requirement will now require a minimum FICO credit score of 580 instead of the present 500 for a 3.5% down payment on a new home.  Home buyers with FICO scores below 580 would have to have a 10% down payment.  This may not have much impact since most lending institutions already require a FICO score of at least 620. 

Also, the FHA wants to increase the mortgage insurance premium to 2.25% of the loan amount, up from 1.75%.

Florida Beats Out California-in Foreclosures

by Doug & Gwen Campbell at Sun Bay Associates

Florida has moved into second place, behind only Nevada, and edging out California.  Unfortunately, it is NOT for something good.

Florida edged out California for the second place in the national foreclosure rate, lagging behind only Nevada in the percentage of home mortgages in default. Florida’s November figure was 7.6 percent higher than November 2008 and 2.0 percent higher than October 2009.  One out of every 165 homes was in some stage of foreclosure proceedings, according to a national report released by RealtyTrac.  Nationally, 306,627 homes, one out of every 447 homes, were in foreclosure, up 18.4 percent from November 2008. But the national rate represented the fourth straight month of national declines. James Saccacio, RealtyTrac chief executive, credited the drop to loan modification efforts and an extension of the federal first-time homebuyer program.  But long-term stability may be more elusive as the industry recovers from its worst slump in decades.  “A full recovery will only come when unemployment recedes to normal, healthy levels and when availability of credit reaches a more rational balance between the extremes of the past few years,” Saccacio said in a statement.  With 52,935 Florida properties receiving foreclosure statements, reversing a two-month trend of fewer defaults than the previous month.  Two Florida cities were among the top 10 metro areas in the nation. Cape Coral/Fort Myers held the 4th spot with one out of every 96 homes in foreclosures while Orlando/Kissimmee ranked 8th with one in every 120 homes in default.

Short Sale Myths

by Doug & Gwen Campbell at Sun Bay Associates

There are a number of short sale myths floating around.  Today I'll "de-myth" a couple and explain why.  The following summary information is courtesy of the Distressed Property Institute.

Myth:  Banks want to foreclose instead of taking a short sale.  NOT true.  Banks are in the lending business, not property management and much prefer to get the property off their books.  If a person is qualified for a short sale, banks must consider the short sale.  Banks come out ahead with a short sale because they lose far less, almost always, than going through the entire foreclosure process.

To qualify for a short sale a person must 1. exhibit financial hardship; 2. have a demonstrated monthly income shortfall; and 3. insolvency, that is you do not have sufficient liquid assets to pay down your mortgage.

Myth:  You must be behind on your monthly mortgage payments to negotiate a short sale.  NOT true.  In the past, before short sales became so common, this may have been the case, however no longer.  Lenders are now looking for a verifiable hardship, montly cash flow shortfall or pending shortfall and insolvency.

Myth:  There is not enough time to negotiate a short sale before foreclosure on my property.  Again, not true.  Although a short sale is a lengthy process, it is just that, a process.  There is time, unless a seller has waited until the last second when the home is being auctioned on the courthouse steps.  Many lenders will delay foreclosure proceedings with a phone call from an owner explaining an honest attempt to sell, and if there is a legitimate contract, this almost always forestalls the foreclosure.

Next time, we'll address a few more myths about short sales.  Remember the parts to qualifying for a short sale:  1. financial hardship; 2. monthly income shortfall; 3. insolvency.

For more details, contact your local Certified Distressed Property Expert.

Forebearance of Mortgage Agreement

by Doug & Gwen Campbell at Sun Bay Associates

Forebearance agreement

 

Previously, we talked about different options to avoid foreclosure on a mortgage.  Today we will address a forebearance of mortgage agreement.  This is not a definitive discussion and we strongly suggest you consult with an expert in your area. 

 

A forebearance agreement is only one of several ways to avoid foreclosure.  It is simply an agreement between the bank and the borrower or homeowner to delay payment of the monthly payment for a specified amount of time.  The borrower usually has to be able to make a payment of at least 50% of the delinquent amount and can pay back the full amount due within two years.  If there is a lot of equity in the house, the borrower might be able to refinance the house to cover the amount due.  Refinancing could salvage the house, but is very likely to result in a much higher interest rate on the new mortgage.  The higher interest rate may be worth it to save the equity in the house.  Of course, if there is little or no equity in the house, refinancing is not likely.

 

Unfortunately, national statistics show that it is very likely that the borrower/homeowner who has fallen behind on the present mortgage is going to default on the new note within just a few months to a year.

 

Next time, we will address the relative merits of seeking a forebearance agreement or going with the short sale option.  To learn more about the short sale option to avoid foreclosure, visit www.YourHouseOptions.com.

Displaying blog entries 1-10 of 11

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Photo of Gwen and  Doug Campbell - The Campbell Team Real Estate
Gwen and Doug Campbell - The Campbell Team
at Keller Williams Realty
30522 US Hwy 19N, Suite 107 S
Palm Harbor FL 34684
Doug's Cell 727-741-4189
Gwen's Cell 727-741-7260
Fax: 888-447-7908