My Thoughts on the Current Real Estate Market: Mortgage Reform, Refinance, Really?
With interest rates at the lowest rate in history, and foreclosures bursting through the ceiling still at this writing, I ask myself, why is this still happening? How does the 1-in-4 upside-down homeowner out there, staring at their bank and scratching their head, get help to avoid walking away?
The empty promises, or the so-called “helping hand” being offered by the banks and the government, is still a joke to say the least. For the people who sold their home in recent years, they are in a position to buy or have already bought another home and recovered from that stress of “What do I do?” while taking advantage of the low interest rates and prices.
It still is not too late to make that leap and start over–because the faster you do, the faster you will recover. Property values are not expected to go anywhere for at least two more years, and the laws for selling short sales that protect homeowners will expire at the end of this year. Laws allow a purchase after two years of selling a short sale. With a consultation with me and strategy, you could pay off most of your unsecured debt, while not paying your mortgage. This can only be done with someone who has had experience with this. I have done this with clients that have recouped while living in their home for over 3 years without paying a mortgage.
The latest reform laws are offering a glimmer of hope; however, when and how these guidelines are implemented by the banks and government is clear to not happen for awhile. The state governments will have to also be on board. At this time, California is weighing the settlement being offered for unlawful foreclosure practices from five of the larger banks that have agreed to pay a settlement.
My opinion is that any settlement should accompany a mandate that the banks must reduce every upside-down property out there to fair market values, to allow the homeowner an opportunity to keep their home; granted that the home is not dilapidated to the point that the owner does not have the funds to repair the home or care for it after the refinance. This exclusion is warranted to the extent that a home that is in bad shape is only dropping or keeping the values low in the neighborhood and should be taken care of. In a perfect world, the banks would allow the homeowner funds after the refinance to repair the home–heck, let’s go for it all!
As always, my gratitude to you for reading my blog. Please share your opinions or questions–I look forward to any questions I can answer or help I can give!
John A. Silva, Realtor
(619) 890-3648 | www.JohnASilva.com
With signs that sales are on the rise for residential real estate, mortgage rates have again dropped to their lowest point in history this week at 3.88% for a 30-year fixed rate mortgage, while 15-year fixed rate mortgage averaged in at 3.17%.
For more details, read Freddie Mac’s article here: “30-year Fixed-rate Mortgage Averages 3.88 Percent“.
Are you still resting comfortably on the fence or are you doing the same thing over and over again–which is the description of insanity!! Get out there now! Prices are great, interest rates are great! What else is there? Oh year, you need a great real estate agent to guide you! Well, since you are reading this and you know I am one with over 20 years’experience, I promise I will not bite!
On the other side of the coin, if you are struggling to make your house payments or about to, I will meet you one on one to go over your situation and help you explore all the avenues to keep your home at no cost. This offer is never made by the so-called gurus or big producer agents personally; you will only meet with their assistants. I have contacts in the legal and accounting arena that are also at your disposal for free, but you will need to contact me for that offer to be complete.
In listing a new property yesterday, the owners that I conferred with were so relieved to know that they have their best option after I counseled and reviewed their situation in detail. The relief and clear mind that was produced cannot have a value placed on it. there are so many options with consequences out there to keep or sell your home, that a consultation is the best prescription.
I am here to help.
There are some additional hurdles for homeowners who have gone through a foreclosure, short sale or bankruptcy, but a little patience and some financial hard work will go a long way.
Buying a home is a challenging goal for most hopeful homeowners. But for those who have experienced a bankruptcy, foreclosure or short sale, the hurdles are even higher.
Still, it’s not impossible to buy a home after financial difficulties, says Dan Keller, a mortgage banker with Hometown Lending in Everett, Wash. In fact, Keller says, people who have cleaned up their credit and are otherwise qualified to get a mortgage can buy a home as soon as they have outlasted a prescribed waiting period after the bankruptcy, foreclosure or short sale.
Wait a while
The waiting period can last one to seven years, says Kirk Chivas, chief operating officer at First Commerce Financial in Wixom, Mich. The one-year requirement applies to buyers who complete a Chapter 13 bankruptcy, have a spotless subsequent credit history and want to get a new loan insured by the Federal Housing Administration or guaranteed by the U.S. Department of Veterans Affairs. The seven-year requirement applies to buyers who experienced a foreclosure and want to get a new conventional loan that can be sold to Fannie Mae or Freddie Mac.
In between are a number of two-, three- and four-year timelines based on similar criteria and other factors such as whether the buyer’s previous mortgage was current at the time of a short sale or the size of the buyer’s new down payment as a percentage of the home’s purchase price.
Generally speaking, the waiting periods after a bankruptcy tend to be more black and white while the waits after a foreclosure or short sale have more gray areas, Keller says. And in some cases, a waiting period can be waived or shortened if the buyer’s bankruptcy, foreclosure or short sale was due to extenuating circumstances or a hardship beyond his control.
Technically, it is possible for a buyer whose prior loan wasn’t in default at the time of a short sale to get a new FHA-insured loan with no waiting period, Chivas says. But he adds that he’s never encountered anyone in that situation.
Buyers must have very clean or perfect credit histories before they can buy homes after bankruptcy, foreclosure or short sale. A slip-up as small as one late credit card payment could disqualify a post-bankruptcy buyer from some loan programs, even if the waiting period has been completed, Keller says.
“Bankruptcy is a serious word,” he says. “If you do it, it’s a get-out-jail-free card. But once you get out of bankruptcy, you need to be flawless in your credit. Don’t even drop a gum wrapper.
Credit dings can be difficult to sort out for buyers who experienced a loan modification or short sale, in part because, as Chivas says, there’s “no consistency” in how lenders report those events to the credit bureaus. Buyers should review their credit reports and correct any errors or clarify the circumstances of adverse items.
Stable employment can be a plus, too, Keller says, noting that some loan programs are more lenient than others. “If there was a gap,” he says, “it needs to be explained.”
Consult a loan pro
Given these complexities, buyers are advised to consult a loan officer or mortgage broker early on for advice that applies to their situation.
“They may think they’re fine, but if they’re not talking to a professional, their hopes can get dashed or crushed,” Chivas says. “That’s why you want to speak to someone as soon as you start dreaming it up in your head” that you want to buy a home after a bankruptcy, foreclosure or short sale.
This article is by RealEstate.MSN.com, and is viewable here: “Getting a mortgage after foreclosure.”
This popular festival, which celebrates the 14th to 17th centuries, welcomes everyone from history buffs to Shakespearean scholars, not to mention those who love a good costume party. Hang out with Queen Elizabeth and her royal court, or spend the day in the pirate’s area. The Renaissance Faire, which returns on Nov. 5 and 6, also features battles, treasure hunts, storytelling, and giant turkey legs. Details: Escondido Renaissance Faire. 10 a.m. to 6 p.m. Saturday and Sunday.
Felicita Park, 742 Clarence Lane, Escondido. $8 to $17; free for ages 4 and under. (805) 496-6036 or goldcoastfestivals.com.
SignOnSanDiego.com has even more ideas for your weekend here.
Need some activities to scare you silly this October–just in time for Halloween? San Diego Magazine put up a great list of Halloween to-dos (available here: “Halloween Events in San Diego“).
But one that looks particularly thrilling to me it the San Diego ghost tour with Haunted San Diego. You can take a 2-hour, fully narrated tour through some of the area’s scariest locations. Here’s the details on the tour:
Journey with us on an entertaining history tour with a haunted theme. You’ll learn about the individuals who lived here, died here, and are still said to haunt San Diego to this very day.
For more spooky events, you can view San Diego Magazine’s list here: “Halloween Events in San Diego“.