Shannon@ShannonKochHomes.com 970.433.3831 C
christi@brayandco.com 970.260.9108 C
Bray Real Estate. 1015 N. 7th St. Grand Junction, CO 81503
Thursday, June 30, 2011
Same service, different company
Same service, different company! I have moved my business to work with Christi Reece of Bray Real Estate. Together, we are available to help with all of your real estate needs!
Tuesday, June 7, 2011
Shorter Sales - homebuyers can catch a break as banks make nontraditional purchases more accessible
June 2
By Eve Mitchell
--When it comes to short sales, the real estate transaction involving a mortgage that is worth more than the home it is tied to has long belied its name as a quick deal.
That is starting to slowly change, thanks to increased bank staffing, a Department of Treasury program that aims to speed up the transactions and more of a general acceptance of the deal.
Just ask first-time homeowners Michael and May Manlapeg, who were renting a house in Walnut Creek a few months ago. After signing a pending sales contract for a home in Pleasant Hill in late January, they thought it would take as much as six months for the deal to go through. Escrow ended up closing in slightly less than three months. Regular home sales typically take 30 to 60 days to close escrow after a pending sales contract is signed.
"I knew it could it could be a long, difficult process. It went faster than we expected," said Michael Manlapeg, 34, of the four-bedroom, three-bathroom property in Pleasant Hill they purchased in a short sale for $550,000.
The family moved to the Bay Area five years ago after Michael Manlapeg accepted a job as an information technology manager at an employee-benefits administration company in San Francisco.
The Manlapegs were looking for a home in the Walnut Creek/Pleasant Hill area that could accommodate their four young children, but they found places that fit the bill were out of their price range. So, they turned to a short sale, which allows
for a home to be sold for less than what is owed on the mortgage -- provided the transaction is approved by the lender.
Unlike foreclosures, which can sell at substantial discounts, short sales tend to be priced closer to fair-market value. Still, some short-sale bargains can be struck by negotiating down the price based on work that needs to be done on a property.
The $550,000 price the Manlapegs paid reflected a $50,000 negotiated discount to offset needed roof work and minor repairs.
The couple financed the property with a 30-year, fixed-rate Federal Housing Administration loan with a 4.75 percent interest rate and a 3.5 percent down payment. Their new home features a pool and creekside deck area; it was once listed as a regular sale for $1.1 million in 2008. "We got a great price," Michael Manlapeg said.
Short sales are taking less time to do now than a year ago, said Kevin Kieffer, a real estate agent with the Danville office of Keller Williams Realty, who represented the Manlapegs in their purchase. "Banks have staffed up and put systems in place," he said.
Still, Kieffer said time challenges can pose a problem for short sales. "I generally tell (buyers) to be prepared to wait up the 120 days to close, and it could go longer. Those who are renting can be the ideal candidate."
In April, short-sale transactions accounted for 18.6 percent of existing Bay Area home sales, up from 17.6 percent in April 2010 and up from 12.9 percent two years ago, according to MDA DataQuick, a real estate tracking firm.
While some short sales are not taking as long as they used to, there is room for improvement, said Colleen Badagliacco, head of the California Association of Realtors' short sales task force and an agent with the San Jose office of Altera Real Estate.
A California Association of Realtors survey conducted during the last two weeks of 2010 found that fewer than three of every five short sales in the Golden State closed last year. Sixty-three percent of those surveyed said that it took more than 60 days for lenders to provide a written response that approved or rejected an offer from a buyer.
However, many large lenders have begun streamlining the process in response to changes made earlier this year to a voluntary Department of Treasury program that aims to speed up short sales, even though that program has seen less than 5,500 short sales completed since it began in April 2010.
Banks participating in the Home Affordable Foreclosure Alternatives program, or HAFA, are making progress in speeding up short sales, Badagliacco said.
"One of the key components (of HAFA) is that lenders will give a response to an offer within 45 days. ... Because of that, they have had to streamline their processes, which is helping them respond faster to loans that are not in the HAFA program. That certainly is a step forward," she said, adding that most smaller lenders have not done as much streamlining.
HAFA provides financial incentives to lenders and $3,000 in relocation assistance to sellers to encourage short sales. It is geared to homeowners who qualified for a trial loan modification through the Home Affordable Modification Program but were unable to obtain a permanent modification. Homeowners struggling to pay their mortgages can request to be evaluated for the HAFA program.
When HAFA was launched in April 2010, there was no time requirement for participating lenders to provide a yes-or-no answer to homeowners seeking approval for a short sale. That changed Feb. 1, when a new requirement required an answer in 30 calender days, which has since been increased to 45 days starting June 1. The 45-day deadline also applies to homeowners not in the program who already received an offer and want it to proceed as a HAFA short sale.
The program applies to loans that are not backed by mortgage giants Fannie Mae or Freddie Mac. However, Fannie Mae and Freddie Mac rolled out their own short-sale programs in August. While some differences exist, a $3,000 incentive paid to sellers who close a short sale applies to all three programs.
Many homeowners who fell out of the Home Affordable Modification Program now are turning to short sales, said Anastasia Stephanopoulos, a real estate agent with the Walnut Creek office of J. Rockcliff Realtors, an East Bay brokerage. Most of the short sales her office is handling are not HAFA short sales, she said.
"The banks are becoming more automated with how they are approaching the process. (Short sales) are moving much more quickly," she said. "It's really more cost effective to accept a short sale than to let it go to foreclosure. ... I'm finding a lot more short sales and fewer foreclosures."
However, she noted, short sales can be complicated when there are two or more loans on the property.
Normally, when a loan amount is forgiven by the lender as a result of a foreclosure, loan modification, or short sale, of the amount is typically treated as taxable income. But a temporary change to the tax code revised that through tax year 2012, which means forgiven debt can be excluded from taxable income at the state and federal level if the loan was used to acquire, build or substantially improve the taxpayer's primary home. Consult a tax professional for more details.
The seller's credit score also may be affected, although not as much as it would be in a foreclosure, Stephanopoulos said.
Even though the seller may face some financial drawbacks from a short sale transaction, "They are able to sell their house and put some closure behind them. I think sellers are happy to put it behind them," she said.
emitchell@bayareanewsgroup.com
By Eve Mitchell
--When it comes to short sales, the real estate transaction involving a mortgage that is worth more than the home it is tied to has long belied its name as a quick deal.
That is starting to slowly change, thanks to increased bank staffing, a Department of Treasury program that aims to speed up the transactions and more of a general acceptance of the deal.
Just ask first-time homeowners Michael and May Manlapeg, who were renting a house in Walnut Creek a few months ago. After signing a pending sales contract for a home in Pleasant Hill in late January, they thought it would take as much as six months for the deal to go through. Escrow ended up closing in slightly less than three months. Regular home sales typically take 30 to 60 days to close escrow after a pending sales contract is signed.
"I knew it could it could be a long, difficult process. It went faster than we expected," said Michael Manlapeg, 34, of the four-bedroom, three-bathroom property in Pleasant Hill they purchased in a short sale for $550,000.
The family moved to the Bay Area five years ago after Michael Manlapeg accepted a job as an information technology manager at an employee-benefits administration company in San Francisco.
The Manlapegs were looking for a home in the Walnut Creek/Pleasant Hill area that could accommodate their four young children, but they found places that fit the bill were out of their price range. So, they turned to a short sale, which allows
for a home to be sold for less than what is owed on the mortgage -- provided the transaction is approved by the lender.
Unlike foreclosures, which can sell at substantial discounts, short sales tend to be priced closer to fair-market value. Still, some short-sale bargains can be struck by negotiating down the price based on work that needs to be done on a property.
The $550,000 price the Manlapegs paid reflected a $50,000 negotiated discount to offset needed roof work and minor repairs.
The couple financed the property with a 30-year, fixed-rate Federal Housing Administration loan with a 4.75 percent interest rate and a 3.5 percent down payment. Their new home features a pool and creekside deck area; it was once listed as a regular sale for $1.1 million in 2008. "We got a great price," Michael Manlapeg said.
Short sales are taking less time to do now than a year ago, said Kevin Kieffer, a real estate agent with the Danville office of Keller Williams Realty, who represented the Manlapegs in their purchase. "Banks have staffed up and put systems in place," he said.
Still, Kieffer said time challenges can pose a problem for short sales. "I generally tell (buyers) to be prepared to wait up the 120 days to close, and it could go longer. Those who are renting can be the ideal candidate."
In April, short-sale transactions accounted for 18.6 percent of existing Bay Area home sales, up from 17.6 percent in April 2010 and up from 12.9 percent two years ago, according to MDA DataQuick, a real estate tracking firm.
While some short sales are not taking as long as they used to, there is room for improvement, said Colleen Badagliacco, head of the California Association of Realtors' short sales task force and an agent with the San Jose office of Altera Real Estate.
A California Association of Realtors survey conducted during the last two weeks of 2010 found that fewer than three of every five short sales in the Golden State closed last year. Sixty-three percent of those surveyed said that it took more than 60 days for lenders to provide a written response that approved or rejected an offer from a buyer.
However, many large lenders have begun streamlining the process in response to changes made earlier this year to a voluntary Department of Treasury program that aims to speed up short sales, even though that program has seen less than 5,500 short sales completed since it began in April 2010.
Banks participating in the Home Affordable Foreclosure Alternatives program, or HAFA, are making progress in speeding up short sales, Badagliacco said.
"One of the key components (of HAFA) is that lenders will give a response to an offer within 45 days. ... Because of that, they have had to streamline their processes, which is helping them respond faster to loans that are not in the HAFA program. That certainly is a step forward," she said, adding that most smaller lenders have not done as much streamlining.
HAFA provides financial incentives to lenders and $3,000 in relocation assistance to sellers to encourage short sales. It is geared to homeowners who qualified for a trial loan modification through the Home Affordable Modification Program but were unable to obtain a permanent modification. Homeowners struggling to pay their mortgages can request to be evaluated for the HAFA program.
When HAFA was launched in April 2010, there was no time requirement for participating lenders to provide a yes-or-no answer to homeowners seeking approval for a short sale. That changed Feb. 1, when a new requirement required an answer in 30 calender days, which has since been increased to 45 days starting June 1. The 45-day deadline also applies to homeowners not in the program who already received an offer and want it to proceed as a HAFA short sale.
The program applies to loans that are not backed by mortgage giants Fannie Mae or Freddie Mac. However, Fannie Mae and Freddie Mac rolled out their own short-sale programs in August. While some differences exist, a $3,000 incentive paid to sellers who close a short sale applies to all three programs.
Many homeowners who fell out of the Home Affordable Modification Program now are turning to short sales, said Anastasia Stephanopoulos, a real estate agent with the Walnut Creek office of J. Rockcliff Realtors, an East Bay brokerage. Most of the short sales her office is handling are not HAFA short sales, she said.
"The banks are becoming more automated with how they are approaching the process. (Short sales) are moving much more quickly," she said. "It's really more cost effective to accept a short sale than to let it go to foreclosure. ... I'm finding a lot more short sales and fewer foreclosures."
However, she noted, short sales can be complicated when there are two or more loans on the property.
Normally, when a loan amount is forgiven by the lender as a result of a foreclosure, loan modification, or short sale, of the amount is typically treated as taxable income. But a temporary change to the tax code revised that through tax year 2012, which means forgiven debt can be excluded from taxable income at the state and federal level if the loan was used to acquire, build or substantially improve the taxpayer's primary home. Consult a tax professional for more details.
The seller's credit score also may be affected, although not as much as it would be in a foreclosure, Stephanopoulos said.
Even though the seller may face some financial drawbacks from a short sale transaction, "They are able to sell their house and put some closure behind them. I think sellers are happy to put it behind them," she said.
emitchell@bayareanewsgroup.com
Reverse mortgages can be complicated
Reverse mortgage a tricky way to pull money from home
By AL HEAVENS
Reverse mortgages allow people 62 and older to borrow against their home equity. Like marriage, the experts say, these are arrangements not to be entered into unadvisedly or lightly.
That's because reverse mortgages are actual loans that must be repaid in full - when you move, when you sell your house or upon your death, rather than in monthly installments.
But, said David Certner, AARP's legislative-policy director, it's something to consider "if you want to remain in your current home and don't have other options."
"If the one asset you have is your home, a reverse mortgage will let you turn it into a payment stream," Certner said. "Maybe you simply need a home-equity loan, or to sell the home and move to something smaller. For a lot of people who want to stay in their own homes, the reverse mortgage is one way to help accomplish that."
Though home values have dropped steeply since the real estate bubble burst in 2006, many older Americans have owned their houses for decades and have vast amounts of equity to tap into.
Yet of the millions of home loans originated between 1990 and 2010, just 660,000 were reverse mortgages, AARP says.
Why? Because reverse mortgages can be complicated, sometimes pricey affairs compared with the financial alternatives.
There are three kinds of reverse mortgages, but the lion's share - 95 percent - are Home Equity Conversion Mortgages insured by the Federal Housing Administration.
HECMs cost more than traditional mortgages. They have no income or medical requirements, and the cash can be used for any purpose, such as paying medical bills.
Currently, the national loan limit for a HECM is $625,500. How much you can borrow depends, among other factors, on your age, the appraised value of your home, and current interest rates.
The older you are, and the more equity you have in your house, the more you can borrow. Though 62 is the minimum age, many experts advise against reverse mortgages then - you may have a greater need to tap into your home equity later in life.
To qualify for HECMs, borrowers must own their properties outright or have small mortgage balances; occupy the properties as principal residences; and not be delinquent on any federal debts, such as income taxes.
Borrowers must participate in "consumer information sessions" provided by counselors approved by the Department of Housing and Urban Development. (These typically cost $125, Certner said.)
During the course of the reverse mortgage, you must pay your homeowners' insurance and property taxes, plus keep the house in good repair. If you don't, the loan can become due.
Advantages to reverse mortgages include:
-How you get the money is your choice: in fixed monthly payments, a lump sum, a credit line or a combination of the three. You can change the option any time for $20.
-Even if you receive more in payments than your home is worth, you will never owe more than the home's value.
-Loan advances are not taxable and generally don't affect Social Security or Medicare benefits.
-You retain title to your home.
The reverse mortgage must be repaid in full when the last surviving borrower dies or sells the home, or when it is no longer the primary residence. An HECM lets a borrower live in a nursing home or other medical facility for up to 12 months before the loan comes due.
After the home is sold and the reverse mortgage and fees are repaid, the remaining equity belongs to the borrower or heirs.
Among the disadvantages:
-Lenders, who must be FHA-approved, may charge servicing fees during the loan's term.
-Loans may carry variable interest rates tied to short-term indexes, although AARP says more than 70 percent now have fixed interest rates.
-If interest rates are fixed, you must borrow the maximum amount against your home's equity.
-Refinancing your existing mortgage or taking out a home-equity loan or line of credit may be a less expensive alternative to a reverse mortgage, which can have substantial upfront fees.
For example, the standard HECM loan charges a 2 percent mortgage-insurance premium up front on the home's value, not the amount borrowed. If you own a $400,000 house, the upfront premium would be $8,000, regardless of the loan amount.
You also will pay an origination fee to compensate the lender for processing the reverse mortgage. That fee can be up to $2,500 if your house is valued at less than $125,000. If your house is valued higher, lenders can charge 2 percent of the first $200,000, plus 1 percent of the amount over $200,000, with a cap of $6,000.
The HECM Saver Loan, which made its debut in October, charges only 0.01 percent of a home's value up front. But this loan usually carries a higher interest rate, and you can't borrow as much as you can with a standard HECM.
Closing costs for a reverse mortgage include an appraisal, a title search, and insurance, surveys, inspections, recording fees, taxes, and credit checks. You can pay for most such HECM costs through the proceeds of the loan. Though that means no out-of-pocket payments, it reduces the net loan amount available.
A lender may charge a monthly servicing fee of no more than $30 if the loan has an annually adjusting interest rate, $35 if the interest rate adjusts monthly.
Reverse-mortgage foreclosures have been rare - until recently.
"Because the borrower is responsible for paying taxes, insurance and upkeep," Certner said, tough economic times have "put a lot of people in trouble, especially in hard-hit markets like Florida."
By AL HEAVENS
Reverse mortgages allow people 62 and older to borrow against their home equity. Like marriage, the experts say, these are arrangements not to be entered into unadvisedly or lightly.
That's because reverse mortgages are actual loans that must be repaid in full - when you move, when you sell your house or upon your death, rather than in monthly installments.
But, said David Certner, AARP's legislative-policy director, it's something to consider "if you want to remain in your current home and don't have other options."
"If the one asset you have is your home, a reverse mortgage will let you turn it into a payment stream," Certner said. "Maybe you simply need a home-equity loan, or to sell the home and move to something smaller. For a lot of people who want to stay in their own homes, the reverse mortgage is one way to help accomplish that."
Though home values have dropped steeply since the real estate bubble burst in 2006, many older Americans have owned their houses for decades and have vast amounts of equity to tap into.
Yet of the millions of home loans originated between 1990 and 2010, just 660,000 were reverse mortgages, AARP says.
Why? Because reverse mortgages can be complicated, sometimes pricey affairs compared with the financial alternatives.
There are three kinds of reverse mortgages, but the lion's share - 95 percent - are Home Equity Conversion Mortgages insured by the Federal Housing Administration.
HECMs cost more than traditional mortgages. They have no income or medical requirements, and the cash can be used for any purpose, such as paying medical bills.
Currently, the national loan limit for a HECM is $625,500. How much you can borrow depends, among other factors, on your age, the appraised value of your home, and current interest rates.
The older you are, and the more equity you have in your house, the more you can borrow. Though 62 is the minimum age, many experts advise against reverse mortgages then - you may have a greater need to tap into your home equity later in life.
To qualify for HECMs, borrowers must own their properties outright or have small mortgage balances; occupy the properties as principal residences; and not be delinquent on any federal debts, such as income taxes.
Borrowers must participate in "consumer information sessions" provided by counselors approved by the Department of Housing and Urban Development. (These typically cost $125, Certner said.)
During the course of the reverse mortgage, you must pay your homeowners' insurance and property taxes, plus keep the house in good repair. If you don't, the loan can become due.
Advantages to reverse mortgages include:
-How you get the money is your choice: in fixed monthly payments, a lump sum, a credit line or a combination of the three. You can change the option any time for $20.
-Even if you receive more in payments than your home is worth, you will never owe more than the home's value.
-Loan advances are not taxable and generally don't affect Social Security or Medicare benefits.
-You retain title to your home.
The reverse mortgage must be repaid in full when the last surviving borrower dies or sells the home, or when it is no longer the primary residence. An HECM lets a borrower live in a nursing home or other medical facility for up to 12 months before the loan comes due.
After the home is sold and the reverse mortgage and fees are repaid, the remaining equity belongs to the borrower or heirs.
Among the disadvantages:
-Lenders, who must be FHA-approved, may charge servicing fees during the loan's term.
-Loans may carry variable interest rates tied to short-term indexes, although AARP says more than 70 percent now have fixed interest rates.
-If interest rates are fixed, you must borrow the maximum amount against your home's equity.
-Refinancing your existing mortgage or taking out a home-equity loan or line of credit may be a less expensive alternative to a reverse mortgage, which can have substantial upfront fees.
For example, the standard HECM loan charges a 2 percent mortgage-insurance premium up front on the home's value, not the amount borrowed. If you own a $400,000 house, the upfront premium would be $8,000, regardless of the loan amount.
You also will pay an origination fee to compensate the lender for processing the reverse mortgage. That fee can be up to $2,500 if your house is valued at less than $125,000. If your house is valued higher, lenders can charge 2 percent of the first $200,000, plus 1 percent of the amount over $200,000, with a cap of $6,000.
The HECM Saver Loan, which made its debut in October, charges only 0.01 percent of a home's value up front. But this loan usually carries a higher interest rate, and you can't borrow as much as you can with a standard HECM.
Closing costs for a reverse mortgage include an appraisal, a title search, and insurance, surveys, inspections, recording fees, taxes, and credit checks. You can pay for most such HECM costs through the proceeds of the loan. Though that means no out-of-pocket payments, it reduces the net loan amount available.
A lender may charge a monthly servicing fee of no more than $30 if the loan has an annually adjusting interest rate, $35 if the interest rate adjusts monthly.
Reverse-mortgage foreclosures have been rare - until recently.
"Because the borrower is responsible for paying taxes, insurance and upkeep," Certner said, tough economic times have "put a lot of people in trouble, especially in hard-hit markets like Florida."
Subscribe to:
Posts (Atom)