Real Estate Information Archive

Every short sale situation is unique, so it’s impossible to give a one-size-fits-all definition. However, there are some factors common to all of them that we’ll attempt to explain below.

Short sales are a complex process primarily used by those who find themselves in a financially distressed situation and are seeking to avoid foreclosure in order to alleviate supplementary fees and costs to the creditor and borrower. While short sales have consequences to one’s credit standing, the alternative – foreclosure – is worse still.

Short sales in Ann Arbor and elsewhere typically involve Home sales where the current owner is unable to repay loans and/or liens against the property. So, any proceeds resulting from the sale will inevitably be less than the homeowner owes on those loans and/or liens. 

Creditors in a short sale often not only have to take less than what is owed to them via the debt, but they also sanction the termination of their lien. This is not, however, a guarantee that the homeowner will have his or her financial obligations wiped clean, unless each party agrees to those terms.

Perhaps the only sure thing in a short sale is that before creditors agree to a short sale, they will require proof that the borrower’s financial or economic hardship is preventing him or her from paying the deficiency.

A short sale should not be entered into lightly. A central consideration is the credit impact for the seller; the impact can be significant negative damage to the homeowner’s credit report. Nevertheless, in some situations a short sale is unavoidable because the impact of an actual foreclosure is worse.

HAMP or Home Affordable Mortgage Program Information

For several years now we have been waiting for a government assist program that would allow homeowners who are upside down (owe more on home than the market value) on their mortgage to at Lease refinance to lower current rates.  Unfortunately, the banker lobbyists would not allow the administration to mandate this type of relief if the amount of the mortgage exceeded 110% of of the market value.  Frankly, they would make more money getting TARP contributions if they foreclosed, so not much incentive to take a long term rate hit.  

With the Occupy Wall Street movement, the coming elections etc, talk has gotten serious again about creating a program that would allow homeowners who do pay make timely payments to refi their higher rate mortgage.  Keep in touch with this governement web site To Get Information on HAMP or Home Affordable Mortgage Program for the latest developments.  

On a related side note, check out this video about a passive way to protest and support the Occupy Wall Street Movement

High inventories of homes for sale have plagued many markets, but in a recent analysis of metro areas, inventories were found to be shrinking sharply during the second quarter, The Wall Street Journal reports.

About 2.34 million homes were listed for sale on the multiple-listing service by the end of June, the lowest level for that time of year since at least 2007, according to Realtor.com. What’s more, some inventory levels even reached their lowest levels since the housing crisis began five years ago, which has prompted some markets to even say their facing a shortage of homes on the market.

While a drop in inventories can often signal more demand — and ultimately a boost to Home prices — some analysts aren’t so sure this signals a complete turnaround for the real estate market quite yet.

“While sales are picking up in some cities, analysts say the sharp decline in inventory also reflects the slow pace at which banks are processing foreclosures,” The Wall Street Journal reports. (The number of homes in foreclosure — a backlog of 2.1 million — is near a high.) Also, some sellers are taking their homes off the market due to low offers and waiting until they put it back on the market.

In its analysis, The Wall Street Journal found that of the 28 major metro areas evaluated inventory levels had dropped in all 28 — except for three. What’s more, they found that inventories had dropped by double digits in 16 of those markets during the second quarter when compared to a year ago. For example, inventories dropped in Miami by 43 percent from a year ago; 30 percent in Washington, D.C.; and more than 20 percent in cities like Charlotte, N.C., Seattle, and San Francisco.

Click the "Property Search" or "All MLS Listings" link above to view current Real Estate Inventory. 

In a mortgage market that changes as quickly as this one, today’s fact is tomorrow’s fiction.  For buyers, misinformation can be the difference between qualifying for a Home loan or not. Sellers and owners, knowledge is foreclosure-preventing, smart decision-making power! Without further ado, let’s correct some common mortgage misconceptions.

1.       Myth: Buyers with bad credit can’t qualify for home loans. Obviously, mortgage guidelines have tightened up, big time, since the housing bubble burst, and they seem likely to tighten even further over the long-term. But just this moment, they have relaxed a bit.  In the last couple of weeks, two of the nation’s largest lenders of FHA loans announced that they’ve dropped the minimum FICO score guideline from 620 (which allows for some credit imperfections) to 580, which is actually a fairly low score. 

At a FICO score of 620, buyers can qualify for FHA loans at many lenders with only 3.5 percent down. With a score of 580, the lenders are looking for more like 5 to 10 percent down – they want to see you put more of your own skin in the game, and the higher down payment lowers the risk that you’ll default.  However, if your credit has taken a recessionary hit, like that of so many Americans, this might create a glimmer of hope that you’ll be able to take advantage of low prices and interest rates without needing years of credit repair.

2.     Myth: The Mortgage Interest Deduction isn’t long for this world.  Homeowners saved over $85 billion in 2008 by deducting their mortgage interest on their income tax returns. A few months ago, the National Commission on Fiscal Responsibility and Reform caused a massive wave of fear to ripple throughout the world of real estate consumers and professionals when they recommended Mortgage Interest Deduction (MID) reform, which would dramatically reduce the size of the deduction.

Fact is, the Commission made a sweeping set of deficit-busting recommendations to Congress, a few of which are likely to be adopted.  Fortunately for buyers and sellers, MID reform is not one of them.  Very powerful industry groups and economists have been working with Congress to plead the case that MID reform any time in the near future would only handicap the housing recovery.  Congress-folk aren’t interested in stopping the stabilization of the real estate market.  As such, the MID is nearly universally thought of as safe – even by those who disagree that it should be.

3.       Myth:  It’s just a matter of time before loan guidelines loosen up.  The US Treasury Department recently recommended the elimination of mortgage industry giants Fannie Mae and Freddie Mac. I won’t get into the eye-glazing details of it here, but the long and the short is that (a) this is highly likely to happen, and (b) it will make mortgage loans much harder and costlier to get, for both buyers and homeowners.   It’s possible that loans are as easy to get as they’re going to get.  So don’t expect that if you hold out, zero-down mortgages will come back into vogue anytime soon. Fortunately, Fannie and Freddie aren't likely to disappear for another 5-7 years, so you have a little time to pull your down payment and credit together. If you want to get into the market, the time to get yourself ready is now!

4.       Myth: If you don’t have equity, you can’t refi. Much ado is being made about how stuck so many people are in their bad loans, because they don’t have the equity to refinance their way out of them.  If you’re severely upside down (meaning you own much, much more than your home is worth), stuck may be the situation. But there are actually a couple of ways homeowners can refi their underwater home loans.  If your loan is held by Fannie or Freddie (which you can find out, here), they will actually refinance it up to 125% of its current value, assuming you otherwise qualify for the loan.  That means, if your home is worth $100,000, you could refinance a loan up to $125,000, despite the fact that your home can’t secure the full amount of the loan.

If your loan is not owned by Fannie or Freddie, you might be a candidate for the FHA “Short Refi” program. While most mortgage workout plans are only available to people who are behind on their loans, the Short Refi program is only available to homeowners who are current on their mortgages and need to refinance up to 115 percent of their homes’ value.  So, if you owe $250,000 on your home, you can refinance via an FHA Short Refi even if your home’s value is as low as $217,000. If you think you’re a good candidate for a short refi, contact your mortgage broker, stat – there are some in Congress who think that this program is so underutilized (only 245 applications have been submitted since it rolled out in September – no typo!) that its funding should be diverted to other needy programs.

5.       Myth:  If you’ve lost your job and can’t make your mortgage payment, you might as well mail your keys in.  Until recently, this was essentially true – virtually every loan modification and refinancing opportunity required that your economic hardship be over before you could qualify. And documenting income has always been high on the requirements checklist. But there are some new funds available in the states with the hardest hit housing and job markets, which have been designated specifically for out-of-work homeowners.

The US Treasury Department’s Hardest Hit Fund allocated $7.6 billion to the states listed below – all of which are now using some portion of these funds to offer up to $3,000 per month for up to 36 months in mortgage payment assistance to help unemployed homeowners avoid foreclosure.  Contact the state agency listed below if you need this sort of help:

• Alabama: http://www.hardesthitalabama.com/
• Arizona: https://www.savemyhomeaz.gov/
• California: https://www.keepyourhomecalifornia.org/
• Florida: https://www.flhardesthithelp.org/
• Georgia: http://www.dca.state.ga.us/housing/homeownership/programs/hardesthitfund.asp
• Illinois:http://www.ihda.org/
• Indiana: http://www.877gethope.org/
• Kentucky: http://www.kyhousing.org/
• Michigan: http://www.michigan.gov/mshda/buyers/save_the_dream/helping+hardest+hit+homeowners+-+contact+your+mortgage+servicer+for+assistance
• Mississippi: http://www.mshomecorp.com/firstpage.htm
• Nevada: http://www.nahac.org/
• New Jersey: http://www.state.nj.us/dca/hmfa/home/foreclosure/homekeepers.html
• North Carolina: http://www.ncforeclosureprevention.gov/
• Ohio: http://www.savethedream.ohio.gov/
• Oregon: http://www.oregonhomeownerhelp.org/
• Rhode Island: http://www.hhfri.org/
• South Carolina: http://www.scmortgagehelp.com/
• Tennessee: http://www.thda.org/
• Washington D.C.: http://www.dchfa.org/

New data from RealtyTrac shows that foreclosure filings nationwide dropped 14 percent between January and February, as overall activity last month sunk to its lowest level since February of 2008.

RealtyTrac says total foreclosure filings – including default notices, scheduled auctions, and bank repossessions – were reported on 225,101 properties in February, a 27 percent decrease from a year earlier and the biggest year-over-year decline since the company began issuing its report in 2005.

One in every 577 U.S. housing units received a foreclosure filing last month, as default notices, auction announcements, and new REOs all hit their lowest readings in more than a year and a half in RealtyTrac’s study.

On the surface, all good news for an industry trying to get a handle on delinquencies and property repossessions, but RealtyTrac says the sharp decline is likely the result of processing delays following last fall’s robo-signing problems.

“Foreclosure activity dropped to a 36-month low in February as allegations of improper foreclosure processing continued to dog the mortgage servicing industry and disrupt court dockets,” said James Saccacio, RealtyTrac’s CEO. “[T]he bottom line is that the industry is in the midst of a major overhaul that has severely restricted its capacity to process foreclosures.”

Saccacio added, “We expect to see the numbers bounce back, but…monthly volume may never return to its peak in March 2010 of more than 367,000 properties receiving foreclosure filings.”

A total of 63,165 U.S. properties received default notices (NOD, LIS) for the first time in February. Foreclosure auctions (NTS, NFS) were scheduled for the first time on 97,293 homes last month, while lenders completed foreclosure on 64,643 properties.

Nevada posted the highest state foreclosure rate for the 50th straight month with one in every 119 homes there receiving a foreclosure filing during the month, despite a 22 percent decrease in the state’s overall activity.

Arizona claimed the nation’s second highest foreclosure rate at one in every 178 housing units with a foreclosure filing. California took the No. 3 spot with a foreclosure rate of one in every 239 homes.

One in every 273 Utah housing units had a foreclosure filing in February, the nation’s fourth highest foreclosure rate. Idaho had one in every 298 of its homes receive a filing, giving it the nation’s fifth highest rate.

Other states with foreclosure rates ranking among the top 10 in February were Georgia, Michigan, Florida, Colorado, and Hawaii.

Drilling down to the metro level, RealtyTrac says for the second month in a row, no Florida cities posted foreclosure rates in the top 20. That’s in stark contrast to 2010, when the state accounted for nine of the top 20 metro foreclosure rates.

Nevada, California, and Arizona cities, on the other hand, continued to dominate RealtyTrac’s metro list, accounting for all top 10 metro foreclosure rates and 15 of the top 20 metro foreclosure rates in February.

More Ann Arbor foreclosure and Short Sale Listings can be found here.

3818 Century Ct, Ypsilanti, MI  48197

Pittsfield Township Taxes, Ann Arbor Schools.  

2600 square foot 4 Bedroom Home with 2.5 Baths.  This home backs to a common area in Palisades Subdivision.  Features include Granite kitchen counters, hardwood floors in master bedroom, family room and foyer leads to a stylishly updated powder room.  Located on a quiet cul du sac and close to shopping, parks and Freeway access making it a popular commuter area.

RECOMMEND VIEWING FULL SCREEN BY CLICKING THE FOUR ARROWS BOTTOM RIGHT CORNER. 720P HD RESOLUTION

2600' 4B$/2.5B home with plenty of hardwood floorS, granite counters along with an updated powder room. Located on quiet cul du sac and backs to subdivision common area for plenty of setback from the neighbors and space for the kids to play.

Call Listing agent Tom Stachler for more information at (734) 996-0000 or visit his website at www.TheRealtyTour.com

CLICK HERE FOR MORE HOME ON 3818 CENTURY COURT, PITTSFIELD TOWNSHIP, MI  48197

Welcome to 2011, it is going to be a great year and I'm excited to see where it takes us!

Changing Short Sale Rules - The HAFA program has been a mixed bag, but last week the Treasury Department changed the rules to make short sales easier. 

Here are the primary changes to HAFA: 

- Those seeking a short sale must get an answer within 30 days
- Lender Servicers are no longer required to verify a borrower's financial information
- Lender Servicers are no longer required to determine if the debt-to-income exceeds 31%
- Though Second lien holders no longer must accept 6% of the unpaid balance - 

Overall, these changes should help expedite short sales, which is good news for Home owners, realtors, investors and ultimately the banks.

If you are looking for a way to sell you home that you feel is worth less than you owe on it, we can help.  Please contact us on this link or try the chat button at the bottom of the page.  You can also stop by this helpful short sale information site as we by clicking here.  

Here is to a healthy, wealthy, and exciting 2011!

Here are 4 things Home buyers need to know about this breaking real estate news, and how it impacts them. 

1.  What is robo-signing is, and what all the fuss is about?  The phrase robo-signing refers to what we’re now realizing has been a very common practice in the banks’ foreclosure document processing divisions, where one person was essentially given the job of signing as many 10,000 foreclosure documents per month, by hand.  These individuals were supposed to be reviewing the files, making sure grounds for foreclosure actually existed, signing the docs in front of notaries. But because of the volume of documents, what they actually did was just sign thousands of documents at a time, without even reading them, and ship them off somewhere else to be notarized.

If you do the math on an 8 hour workday, you'll see that that only gives the staffer 1.5 minute to review each file and documents to make sure the foreclosure is warranted.  That's not humanly possible, which is how these staffers got the nickname “robo-signers”
    
Government regulators are very concerned that the banks may have been taking people's homes without following the proper legal procedures.  As a result, 40 states' attorneys general are teaming up to launch a multi-state investigation, and the federal Comptroller of the Currency and federal attorney general may also get involved in investigating this issue. 

2.  Will the freeze will make the banks cancel buyer contracts on REO properties? Currently, the freeze impacts bank-owned properties that are owned and/or serviced by Ally Financial/GMAC Mortgage, JP Morgan Chase, and some properties that were owned by Bank of America. Generally, contracts to buy these homes are being put on hold and extended for 30 days.  As well, the banks are often reaching out directly to buyers and offering them the option to cancel their contracts and recoup their deposit money.

3.  Is it safe to buy a foreclosed home? There's lots of talk right now about the "clouds" that this scandal will create on the titles to homes that were foreclosed by the banks' foreclosure mills. And that makes sense: if the home wasn't properly foreclosed on in the first place, then the legitimacy of the bank's resale can be called into question.  Normally, I'd say: Don't worry about it, buyer - that's why you'll get title insurance!  But last week, 3 of America's largest title company insurers declared that they will not offer title insurance on a number of the homes that may have been involved in this scandal.

In the vast majority of cases – when the foreclosure was justified and a bona fide purchaser, someone who was not involved in the bank’s wrongdoing, has purchased the home, courts will not reverse these foreclosures or their sale to buyers.  But if you’re in the market for a foreclosure, get clear on which bank owns the place as soon as you can, and run the property past your title insurer before you get too far into the transaction to make sure they can write a policy of title insurance on the property before you spend too much money on inspections and appraisals.  (And see my Bonus Buyer Advice at the end of this blog post!)

4.  How the foreclosure freeze will impact American home values, say after you buy.  In the short term, these freezes might cause prices to stabilize, as we expect to see the supply of foreclosures for sale start to shrink.  However, if these freezes stretch out for a long period of time, they could simply be delaying many inevitable foreclosures, which could delay the recovery of the housing market and home prices, over time.  I wouldn't expect to see the freezes cause prices to drop much beyond where they are now, but if they stretch out, they could keep appreciation flat for a longer period of time.

P.S. - Bonus Buyer Advice : Don’t underestimate the deals you can get on non-foreclosed properties. You can often get just as good of a price on a better property with more flexibility on the seller’s part in terms of repairs and other negotiation points if you buy a home from an individual seller, as opposed to a bank-owned property.  

P.P.S. - Click here for more direct access to the broker MLS system and listings.

 Help for the Hardest-Hit Housing Markets 

1. $1.5 Billion to Work with State Housing Agencies to Innovate and Help Address the Problems Facing the Hardest-Hit Housing Markets 

• There will be a formula for allocating funding among eligible states that will be based on Home price declines and unemployment. 

• HFAs must submit a program design to Treasury. 

• Programs may include:  Measures for unemployed homeowners; 

 Programs to assist borrowers owing more than their home is now worth; 

 Programs that help address challenges arising from second mortgages; or 

 Other programs encouraging sustainable and affordable homeownership. 

2. Accountability and Transparency for these Housing Programs 

• All funded program designs posted online. 

• Accountability for results – program effectiveness measured and results published online. 

• Effective oversight under the Emergency Economic Stabilization Act of 2008.

Click here for more information on this program.