Bruce Lee and Longstreet

http://www.youtube.com/watch?v=Tg2oeP3-yKk

Qualifying for FHA Loan Will Get Tougher

In an effort to shore up its disappearing reserves, the Federal Housing Administration has issued new loan standards which will go into effect this summer. FHA is an important source of loans for first time homebuyers and those who have struggled to get credit scores into range to be able to qualify for a home loan. The tighter standards will affect the number of people who receive loans starting this summer.

Specifically, applicants will be expected to have

· Higher credit scores. FHA has not required a minimum score to date, but will require a minimum of 580 under the new guidelines. Those with scores at the lower end will need to make at least a 10% down payment.

· Fewer acceptable seller concessions. Presently sellers can help with closing costs up to 6% of the property value. The new maximum will be 3%.

· Higher insurance costs. The new insurance premium will be 2.25% of the value of the loan. Currently the premium tops out at 1.75%. For example, in a $150,000 home the premium that will need to be paid at closing is $3,375, up from $2,625 under current guidelines. The additional expense can be rolled into the cost of the loan.

Why Short Sales Are Becoming the Preferred Solution to Foreclosure

Short Sales are fast becoming the preferred method of resolving foreclosures for Lenders. According to a survey by Campbell/Inside Mortgage Finance Monthly Survey 15.9% of homes purchased in January were Short Sale transactions. The Campbell Survey is based on a poll of over 1500 Real Estate Agents nationwide. In November 2009 Short Sales accounted for 12.4% of home sales.

By contrast, bank owned real estate sold during January which was move-in ready was 13.8% of the transactions, and damaged bank owned property accounted for 13.8% of sales.

First time homebuyers appear to be the primary purchasers of Short Sale properties. First time buyers are more able to wait out the time required to close a Short Sale than those with existing property to sell.

The study shows that Short Sales on average sell for around 91% of the list price while REOs sell for 99% of list price. Since Short Sales require less time and expense than REOs they are gaining in popularity among Lenders and there is a little more room for negotiation in the price usually.

Negative Equity Continues to Grow

Despite some slowing in the housing price decline in most markets, the number of mortgages that are now larger than the home value continues to grow. First American CoreLogic estimates the number of U.S. households with underwater mortgages as of the end of 2009 was 11.3 million, or 24% of all households with mortgages. Americans owe a combined $801 billion more than the value of their property.

Another 2.3 million households have less than 5% equity in their homes. Considering that many predict that home values will decline further in many markets, many of these mortgages will slip into the negative category during the coming year.

Homes with negative equity are far more likely to fall into foreclosure than others as many conclude they have nothing to lose to walk away from the mortgage. The negative equity problem continues to be a major drag on the economy and a major reason why the economy continues to be fragile.

In a separate report from Zillow this past month, even the White House lost value in 2009 to the tune of 5.1%. The January 2009 Zestimate for the White House was $308 million, based on the size and physical attributes, the Washington, D.C. market and its historical value. The Zestimate for 2010 was $292.5 million, a $15.6 million drop. This lets you know, even the white house is not above the this sluggish market.

Real Estate Investors Only!

Hey Guys, I found a free site for investors only and it's free. When you join you get a free website and other educational e books, did I mention it's free. https://www.connectedinvestors.com/?invitation=thetone1

Hot New Property

Is the FDIC on our side?

Is The FDIC Killing Short Sales? Is The FDIC Killing Short Sales? As some of you already know, I blogged recently about being interviewed recently by our local NBC news affiliate. To read the blog, click here. Basically, IndyMac Bank (now OneWest Bank), is holding one of my clients hostage, demanding a $75k promissory note, or they will proceed to foreclosure. For the life of me, I couldn't figure out why they were doing this. The BPO came in at the contract price of $275k, with a net to IndyMac of $241k. What advantage could there possibly be for them to proceed to foreclosure? Yesterday, I figured it out. You see, IndyMac was taken over by the FDIC and sold to OneWest Bank in March/2009. Guess who the investors are behind OneWest? George Soros, Michael Dell, Steve Mnuchin (former Goldman Sachs executive), and John Paulson (hedge-fund billionaire). Now, listen to the deal they got from the FDIC.... Basically, they purchased all current residential mortgages at 70% of par value (70% of the outstanding loan amounts). They purchased all current HELOCS at 58% of Par Value!!! Next, in order to "sweeten the pot", the FDIC stepped in and guaranteed the following: For any residential mortgages where OneWest experiences a loss, the FDIC will step in and cover anywhere from 80%-95% of the loss. The loss is calculated using the ORIGINAL LOAN BALANCE, not the amount that OneWest paid for the loan. Let's use my clients situation as an example: Loan Amount is $478,000, plus 6 months of missed payments, for a grand total of $485,200 OneWest pays $334,600 for the loan We have an all cash offer of $241,000, net to OneWest. So, let's do the math, shall we? The net loss, according to the FDIC formula is the ORIGINAL LOAN AMOUNT minus the amount of the offer. In this case, $485,200-$241,000, or $244,200. Next, the FDIC, according to their Loss Share Agreement, writes a check to OneWest for 80% of the so-called "net loss". So, in this case, OneWest gets a check from Uncle Sam for $195,360 (.80 X $244,200). Add the $195,360 to the sales price of $241,000, and you get a grand total of $436,360. Remember, OneWest paid $334,600 for the loan. So, OneWest puts $101,760 in their pocket, thanks to the FDIC. Folks, that is over $100k of our hard-earned tax dollars! So, you ask...Why does this program hurt short sales? Because, our brilliant government offers this SAME PROGRAM FOR FORECLOSURES! The only difference is, the government picks up 80% of the tab on all of the extra costs associated with a foreclosure (BPO's, upkeep, utilities/maintenance, legal fees, etc.) So, If I'm OneWest, why would I want to waste my time negotiating through a Short Sale, when I can make the same amount of money (if not more) by just letting it go to foreclosure? And we wonder why nobody can get a Loan Modification? Why would OneWest approve a loan modification for this guy, when they can foreclose and make over $100k? And, to add injury to insult, they have held this loan for 6 months! Not a bad ROI, huh? What infuriates me the most is that in my particular case mentioned above, they have the guts to hold my client hostage for a $75k promissory note, after they are already making more than $100k on the sale!!! This is his primary residence, 1st Position loan, and OneWest has NO RECOURSE! Imagine if they could make $100k, then get a deficiency judgement! Talk about making some big bucks! Can you say "GREED"? The scary thing is that over 50 banks have Shared Loss Agreements in place with the FDIC. Some of them include: Bank of America (go figure), CitiMortgage, Wells Fargo, etc. This entire agreement between the FDIC and OneWest can be found here, on the FDIC website. It's all there, for the world to see! They have it all layed out. All of the formulas, worksheets, etc. Now, it's up to us to bring it to the attention of our elected officials and the media. Enough is Enough! UPDATE 9/18/09: I JUST READ AN AWESOME ARTICLE ON THIS, THAT GOES INTO WAY MORE DETAIL THAN MY BLOG ABOVE. TAKE THE TIME TO READ IT WHEN YOU GET A CHANCE! CLICK HERE TO READ IT. Wait, it gets better...The FDIC just announced that it needs to start borrowing money from the U.S. Treasure in order to replenish it's deposit insurance fund (the same fund being used to pay all of these banks in the Loss Share Agreements). Go Figure! Click Here to read it. Robert G. Hertzog Phoenix Real Estate Consultant

Twitter / itisgrp

Twitter / itisgrp

Hey Monica,

I really like your twitter page. How did you get it to look so good you sexy beautiful woman you! (smile)

New contact number 616-308-6688