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California Legislation May Set Precedent

California legislators are working on giving homeowners a break from the leftover debt after a short sale or a foreclosure. The banking lobbyists want to retain the right to collect that debt and borrowers as well as the real estate industry wants that debt to be forgiven like it was in the depression era. The thinking is that it’s enough punishment to lose one’s home.

But bankers want to be able to collect the debt, especially where the homeowner refinanced, got cash out of the house to buy boats, cars, vacations, etc.

New York Times Article

I see the point — nobody should borrow more than they can, but then these loan programs led borrowers to believe that the banks thought they could afford the loan, the home, and the cash out.

Who’s ultimately responsible? I have to call out the banks. It was shocking to me even then, back in 2001-2004, to hear the sales pitch of some of the lender reps that came to our office. The requirements to qualify borrowers kept getting looser and looser, allowing low credit scores, no income documentation, high loan to value, and high debt ratios which all contributed to this mess we are in now.

I think both borrowers and banks have to take responsibility, but the greater weight should be on the banks and investors who led us down that now-spiky path.

Lynette Hensley,  Associate Broker

Keep Your Credit Report Healthy

Most people would rather think about water skiing or tulips than credit scores, at least until they apply for a mortgage or some other kind of loan. But it’s a good idea to pay attention, however briefly, to your own credit situation.

Here’s How It Works
Credit scores give lenders an idea of your ability to repay loans. But your score isn’t determined by the lender; rather, several credit information bureaus compile and calculate them. Your credit report shows all of your outstanding debts: credit cards, mortgages, student loans, car loans etc. The report also provides your payment history with respect to each of these debts.  

Things to Know
Each time you apply for credit, your credit report is checked which can cause your score to drop slightly. So when you receive those junk mail “pre-approvals” don’t be tempted to apply simply because they are offered to you. Too many open credit cards, credit cards charged to the hilt, or 30+ days late payments can cause credit headaches. Judgments and collections will cause bigger problems and need to be paid before a mortgage lender will close a loan.  Please call us, we’re never too busy to offer guidance with your credit. There are often very simple solutions.

Now the Serious Stuff
It makes sense that mortgage foreclosures, bankruptcies and vehicle repossessions tend to give lenders pause. However, if enough years have passed and a clean credit history has replaced any “kisses of death”, lenders will take that into account.  

No Need for Hypochondria
People who tend to be very careful with credit often think that being a few days late on a utility bill is going to sink their credit scores into bad credit risk territory. Not so! Payments made after the next due date are considered 30 days late. However, you’re still better off paying your bills on time–who wants to pay credit card fees or risk a slow mail delivery?!  

Yearly Checkups
It’s a great idea to get a copy of your credit report yearly. Even when you know you’ve been careful with your payments sometimes the wrong information shows up on credit reports. A similar name or an incorrectly entered social security number can appear without your knowledge. You can challenge the error with the creditor, or with the credit reporting agency. Either way, it’s important to fix it as soon as possible. 

Lynette Hensley
Associate Broker

Loan Modifications

Has your income dropped since you first bought your home?  Are you having trouble making your payments? Is your interest rate about to reset? Could you keep your home if you could lower your interest rate or change your interest only payment into a fully amortized loan that won’t reset? By significantly reducing your monthly payments, what if you could transform your problem payment into a property worth keeping?

Our loan modification specialists have negotiated and closed many transactions like these.  They are 100% professional, ethical and DFI (Department of Financial Institutions) compliant, boasting a phenomenal track record helping homeowners who have reduced income yet still wish to keep their home.  It’s time to take action and find out whether you are qualified! 

Fill out the form HERE and you will be connected with a real person who will give you real results.

Heading Towards Foreclosure?

Do you know someone who is fretting over how to make their mortgage payments?

Call Today . . . 425 772 7231

As short sale listing agent specialists, we have the expertise to save their credit, focus on a plan of action which will relieve worry and, most of all, help a family. Through the process of a short sale, we can save most people from going into foreclosure.

Unfortunately, we do not have a free get-out-of-your-mortgage card.  Nobody does.  Please do not fall prey to those false promises.

Take action now! Time is not your friend.

Call us today at 425-772-7231 for a private and confidential consultation to get you started on the path to recovery.

______________________________________________

Larry and Lynette are dedicated to assisting property owners with loan modifications & short sale solutions.

We have developed a far-reaching network of  mortgage companies, lenders and Realtors®, loan modification and debt .  The strength of our business is based on experience, knowledge and relationships and is invaluable.

Larry and Lynette are here to help you move forward. Regardless of your circumstances, we have powerful solutions available for you.  Call 425-772-7231 to get started today.  

Lynette Hensley
Associate Broker
Larry Baumgartner
Real Estate Professional, CNE
425.772.7231 Lynette | 206.291.4117 Larry
ComeBuyAHouse.com
L2@comebuyahouse.com
Asset Realty Group

Home Affordable Foreclosure Alternatives (HAFA) Program

Here is Obama’s program that we may be able to utilize in your short sale.  Call me and let’s see. –Lynette 425 772 7231

Home Affordable Foreclosure Alternatives (HAFA) Program

Short Sales Focus

Our local Seattle real estate market is continuing to require agents who know how to handle short sales. To that end, Larry and I now have systems in place to handle short sale listings and purchases. This is a new additional niche for our business.  This kind of listing or purchase requires a special focus and knowledge about short sales because, to be clear—it’s the Wild Wild West out there. The guidelines and rules can be very different from lender to lender.

To begin, here’s a definition of “short sale”.

Watch for more updates and information right here.We’ll keep you informed as issues develop.

Best to you!

Wild West Gunslingers……Lynette & Larry

Buying vs. Renting

If you’re still renting because you don’t think you can afford to buy, try this:

Take your current rent and multiply that by 12 (months in a year). Then take that number and multiply that by 30 (number of years for a typical mortgage). If the result is greater than the average price of homes in your area, you can afford to buy!

By the way, the median home price in King County last year (2009) was $380,000. The median price in Snohomish County was $299,950.

When to Buy?

This is a GREAT time for buyers. Home prices are down, and interest rates are still at or near record lows. This makes now an affordable time to enter the market.

The Investment

Build up your equity. Don’t pay rent and help your landlord build up his equity. Homeowner tax advantages include interest and property tax deductions. Payments to principal put money back in your pocket. Money spent on rent is just gone.

The Dream

Start small. Your first house may not be your dream home, but smaller houses typically appreciate considerably faster — about 20% – than larger ones. It’s an advantage to become a homeowner sooner rather than later.

At your service!
Lynette Hensley
Associate Broker

203K Loans Expand Possibilities

Renovation and Remodeling loan programs can offer you some options when buying a home, particularly a home that needs updates or repairs where the seller is unable or unwilling to make the repairs before closing. There are so many bank owned properties on the market that are great deals, but banks don’t typically fix anything during the sale process. This has put a speedbump in more than one transaction in the recent past.

To overcome this obstacle, you might consider a renovation or rehab loan, otherwise known as a 203K loan. David Hatlen at Homestreet Bank offers four products:

• FHA 203K
• Fannie Mae
• Portfolio Owner Occupant
• Portfolio Investor

The easiest one to use, and the one that is used most often is the FHA 203K streamlined loan. This is what I’m going to cover in this post.

Here’s a brief explanation of how this works:

• The cost of work must not exceed $35,000, and must be at least $5000
• A final inspection is only required for repairs exceeding $15,000
• Work must be completed by 6 months after closing
• Changes can be for improved function and modernization
• Health and safety issues can be included
• Repair or replace plumbing, heating, AC and/or electrical
• Roofing, gutters, downspouts may be included
• Floor coverings
• Energy conservation and weatherization
• Handicapped accessibility
• New kitchen appliances
• Interior and exterior paint
• Repair/replace or add exterior decks, patios, porches
• Basement finishing and remodeling which does not involve structural repairs
• Window and door replacements and exterior wall re-siding
• Septic system and/or well repair or replacement

Here are a few interesting uses for a 203K you might not have thought about:

• Use on 1-4 dwelling units
• Convert a one unit dwelling to 2-3-4 units or vice versa
• Convert non-residential to residential use
• Move an existing home to another site
• Place a detached garage or an ADU onto the site
• and more….

Does this get your ideas goin’?

Here’s how it goes: You come to an agreement with the owner of the house you’d like to buy. You have the inspection and get all your bids (we can help with that) and put your bids together into a proposal for the 203K loan. Once they are approved the rest of the loan process is very similar to a regular sale. After closing all the work needs to be done within 6 months. Any unused money will be applied to the loan balance.  In a streamlined 203K you may also do some of the work yourself.

Contact us for more information or David Hatlen for inquiries

Side Sewers and You

From Seattle Utilities: Good info for Homeowners

Homeowners and building owners are responsible for maintaining and repairing this section of pipe that carries wastewater from your home or building’s plumbing system to the public sewer main (usually located under the street). As the property owner, you are responsible for replacing any sidewalks and roadway removed during the repair, potentially costing thousands of dollars. Maintenance is important. The primary problem associated with side sewers is sewer backups into homes or businesses. Some causes and solutions include:

• Tree root penetrating pipes, especially older ones made of clay. Rooter services
can unclog a side sewer.
• Fats, oils and grease improperly disposed of down drains also cause blockages.
Instead, they should be properly disposed of in a sealed container in your trash.

When there is a problem it is best to call a private company first, such as a rooter service or plumber, because the problem is likely in your private side sewer line and critical time may be wasted contacting the city. However, if sewage is coming into your home when you are not using water, you should call for a Seattle Public Utilities’ maintenance crew immediately at (206) 386-1800.

You can also learn more by visiting www.seattle.gov/util/sidesewer. Some Seattle residents may qualify for a low-interest loan from the Seattle Office of Housing’s HomeWise program to help fix their side sewer problem. For information about program guidelines or to request an application, email homewise@seattle.gov or call
(206) 684-0244.

Residents may qualify for a low-interest loan from the Seattle Office of Housing’s HomeWise program to help fix their side sewer problem. For information about program guidelines or to request an application, email (206) 684-0244.

Buying Now VS Waiting ~ pro’s and con’s

The chart below may look foreign to you. PLEASE contact me if you don’t understand–you need to fully understand this graph. I will be glad to explain in person, by phone, by email. Below is based on $180,000 loan amount –

• If you bought today with a rate of 5% your payment would be $966 before taxes and insurance
• If house values went down 10% and rates go back up to 6% (the average for 30 year fixed loans) the payment would be $971 before taxes and insurance.
• If house values didn’t appreciate over next 12 months and rates go back up to 6%, the payment would be $1,079 before taxes and insurance.
• If house does appreciate (which it will, appears market is stabilizing, especially in price range below 400k) and values go up 5% and rates go back up to 6% which is 30 yr fix average the payment would be $1,079 before taxes and insurance.

Bottom line…Historically low rates, Home prices at 2004/2005 levels, now is the time to buy.
Other items to consider:

• $8,000 tax credit if you’re in contract by April 30th and closed by June 30th. You can amend your 2009 tax return and get an $8,000 check back.
• Standard interest write off – Check with your CPA for exact amount. It’s based on your income / estimated interest paid on the $180k loan amount you should receive $2,000 to $3,000 back at end of year.
• If you’re a 1st time buyer you qualify for an additional tax credit “MCC program“, this is offered through WSHFC – again, based on your income / sale price this will be $2,000 to $2,500
• Down payment assistance available up to $10,000
• No house payment for 30 to 59 days

Once you take into account the tax savings $4,000 to $5,500, your actual payment once you receive the refund is $333 to $458 less per month. Granted you don’t receive this until the beginning of next year, unless you amend your W4 withholding you can start receiving right away.

( *this is for illustrations purposes only, rates and payments subject to change…had to put the disclaimer in there;)
Kudos to K. Carlson of ARG for the compilation