Downsizing and Saving Money – Good Trend

Do you want to DECREASE your living expenses?

Do you want to own your own condo or house at a low price, low payment and still be able to be financially secure?

I remember many years ago when we bought our first house; sold it at a profit 8 years later, bought up again, and again. Made some profit for sure; isn’t that what we were supposed to do?

My husband and I also continued to buy “stuff”, because with a bigger house, you need to buy more things to fill it. It also meant buying two cars, commuting to work, etc. Many of us only realize after we buy the big house and the closets of clothing and toys that we have too much stuff and too many financial obligations. Unwinding ourselves from the financial burdens of a big house payment or car lease can be difficult, especially in this economy.

Therefore I have been noticing some changes not only in my family and friends but clients as well who want to downsize. How does one do that?

Make small changes little by little, not all at once. Do not discard all everything at once.

Think about what you want, not what you think you’re supposed to want.  Do not care about the Joneses. We used to want to be like the Joneses, and that only got many of us into debt.  Live below your means because you want to.

Save your money. Even if you earn little interest, at least you saved it.

Depend on spending as little as possible weekly so it is considered a fixed expense. The rest is yours to do whatever you want to do with it – save in savings account, and so on.

You will have less debt, perhaps live in a smaller home or condo and have less obligations. No doubt, you will be happier!

Hafa Short Sale and Seller Relocation Costs

I am currently working on a short sale that has 2 loans and a homeowner association lien on it.  The second loan is that of a credit union equity line.

The first loan was approved by the lender, and in this approval the seller is receiving $3000 towards relocation costs when the sale is finalized; in California we say when it closes escrow. So, I then proceed to get approval of this sale from both 2nd and third lien holders.

Unfortunately both 1st  land 2nd liens or lenders have to approve and agree on the terms and the dollar amounts. In this case, the credit union is not allowing the seller to receive any funds at all. If they do not agree, this property will go to foreclosure, and the second loan will receive NO MONEY at all. Neither will the HOA.

I take my work very seriously and I am very honest with all involved – my seller, the buyer, other agents, all lenders. We need to prevent another property from becoming distressed, run down condition, vandalized.  By offering the sellers financial aid in selling, they are maintaining the homes until the buyer takes possession. This particular home is being very well maintained by the seller and due to the regulations or rules of this credit union, it will go to foreclosure.

I think that is a pity.

Again, that is just MY opinion! What do you think?

Short Sale Superstars

Lately, I have been spending much of my time on this blog entitled “short sale superstars”.

More specifically, I have been reading and participating in the blog entitled “Bank of America Short Sales”. I found this web site quite by accident. One day I decided to google “Bank of America” help……

Google found many articles for me and this is the best one yet. Basically, anyone with a question can post their issue and any other broker can log in and post a reply. It has given me valuable phone numbers to the office of

the President of Bank of America and more. It has helped me in working on my own short sale assignments  / listings. If you are a home owner and are aware of the difficulties your agent / broker may be facing, just

have her/him go to this site. There is lots of help there. Agents from across the country are more than willing to help each other. Good luck!

Renovation Lending: FHA 203K

I learned more about this program when I was in Dallas. This program was offered to all of the brokers. Some chose to study other subjects. However, it is my opinion that we really need to KNOW how to use this loan because of the type of property we need to finance.

You see, when the typical buyer wants to buy a property – house or condo – it is usually in decent condition. It is not trashed. Unfortunately however, many of the bank owned properties are in bad condition for one reason or another. No one wants to buy a property that needs alot of money to repair it unless you can pay very little for it.  An entry level buyer is forced out of the market to a cash investor buyer.

The question arises: Who will finance this property?  The FHA 203 K program offers a solution. This loan will finance new paint, new carpet, appliances, windows, kitchen, roof and more. The repairs are financed into the new loan. The property is appraised as if it were repaired. Therefore if you find a property that has no kitchen or no bath and you want to buy it, YOU CAN get a loan.  Therefore, when you visit a house for sale and want to make an offer, the term “All repairs to be in buyers’ loan” should be in your contract offer. This is a great program, and I continue to work towards obtaining my certification. I do not do loans but I really think every broker should know how they work so that we could all be of best service to our clients who need us.

Foreclosure News in California

According to Foreclosure Radar.com, foreclosures are down in California. However, the numbers are not accurate. Reasons being that many owners have vacated the property and are  not working to modify their loan or complete a short sale. It takes lenders two months longer to foreclose then it did a year ago.

The only significant increases from the prior year in ForeclosureRadar’s report were cancellations, up 141.3 percent, and time-to-foreclose, up 30.5 percent from May 2009. The company says it now takes lenders 235 days to complete a foreclosure in California, from the filing of the default notice to the auctioning of the property.

While extended foreclosure timelines may be skewing resolution numbers, it should be noted that newly initiated foreclosures declined significantly last month in California.

Notices of default filed against delinquent homeowners – the first step in the foreclosure process – fell 17.25 percent from April to May, according to ForeclosureRadar’s market data. They were down 43.34 percent compared to May 2009.

Notice of trustee sale filings, which serve as the homeowner’s final notice before the home is auctioned, dropped 11.88 percent on a month-to-month basis in May, and were 35.78 percent below year-ago levels.

ForeclosureRadar reports that banks took back 13,775 properties in May, 5.75 percent fewer than they did in April.

The company puts California’s total REO inventory at 87,964 homes, down from 90,000 in April and 18 percent lower than it was a year ago.

Reo2010 EXPO, Dallas Texas

I just returned from Dallas. I went for two different events. One is the Five Star REO and Short Sale Summit where many real estate agents, brokers, asset managers, services and more came to meet and network.

There were many panel meetings on different subjects affecting our business today. Excellent speakers including Emmett Smith, football player and dancer on DANCING WITH THE STARS.

At the Summit I attended two days of sitting in a “classroom” learning about REO, or real estate owned properties and how to work with the banks and asset managers more effectively.  There was an additional day of study and certification of SHORT SALES.

Even though I have been working in the field, some asset managers insist that the agents and brokers they hire need to have these specific designations, and so I sat through the 3 days and took the examinations for the two different certifications. When I came home I found the same classes are being offered all across the country, and coming to a town near me. Since I did not fly to Dallas, (grave error), you can imagine how I felt when I read my mail. However I did make a family trip out of this and driving through New Mexico and Arizona was really beautiful.

I met quite a few brokers who also work in the REO and Short Sale business of listing and selling property, and they are from all over the United States. Of course, we exchanged ideas, and business cards so we can contact each other after the EXPO/ Conference.  I always love to learn new things and believe strongly in education. My goal is to be the best BROKER / REALTOR for my clients and therefore I shall continue to study to benefit them.

Fannie Mae and Adjustable Mortgages in the News

April 30, 2010 – Friday- was not a good  trading day. The government brought criminal charges against Goldman on Thursday and every stock was beaten down due to their economic connection with one of the formerly strongest investment banking firms in the world. Did not matter. Banking, investment banking, manufacturing, real estate– all down.

Goldman, a household investment banking giant, had a $240/share stock price in Dec 2008 when Lehman and Bear Stearns started the downslide in the market. Now, at $145/share, the company has lost billions of value for their stockholders and clients. What makes it worse is that their top executives told Congress that they are not responsible for their clients’ decisions.

So, amidst this telltale story of Wall Street greed, you may have missed the small press release that Fannie Mae sent out.

Basically, Fannie Mae said it will tighten lending standards on adjustable-rate mortgages and “interest-only” loans that helped fuel the housing bubble and have led to a disproportionate share of losses for the mortgage-finance giant.

The changes, which will take effect in September, will require lenders to qualify borrowers based on whether or not they can afford potentially higher payments once adjustable-rate loans reset, and will require much more stringent criteria for interest-only borrowers.

During the housing boom, borrowers increasingly used adjustable-rate mortgages with low initial rates to buy bigger homes and banked on ever-rising values to refinance before payments rose higher. When prices stopped rising, more borrowers weren’t able to sell or refinance to avoid higher payments. That sent defaults soaring.

Fannie said it will require borrowers to have credit scores of at least 720 and 30% equity. Borrowers must also have at least two years worth of cash reserves remaining after closing.

For adjustable-rate mortgages that reset within their first five years, lenders will have to qualify borrowers under higher payment levels, using the greater of either the current interest rate plus two percentage points, or the current interest rate plus the extra margin charged by the lender.

If you have the money to buy, just  hope that the markets remain volatile so  that you can find underpriced properties worth purchasing! Good news for investors and buyers.

I Want to Help Those With Credit Issues

Last night I sent an e-mail to the Suze Orman staff asking permission to reprint information I had read on her website about IDENTITY THEFT. It was very detailed and explained step by step what to do if you found out that you were a victim of identity theft.

They responded this morning that I could not reprint that because it was licensed.

This really upset me because the information needs to be read. There are just too many people with IDENTITY THEFT problems and do not know what to do to resolve them. Other than just tell people to go to Suze’s web site, I wanted to have that information right here. I am trying to figure out how to put the information on this site without breaking the law of copyright. I suppose I could just name the credit companies, addresses and phone numbers as well as government entities. That would be a way to help the public a little bit.

My good friend and web site master mind, Mr. Mark Burrell was reviewing articles that I had prepared to put on the site, and Mark alerted me to the fact that I could be sued for copyright. By the way, if you know anyone who needs lessons in how to do your own web site, he is the best! His website is www.BurrellGroup.com

Stay posted. I am waiting to hear back from Suze Orman’s staff since I did reply back to them this morning. If anyone out there reading this post has any ideas on the subject, please let me know. Thank you.

I Just Attended a Wonderful Webinar!

I am a student of Harris Real Estate University and attend classes online weekly. Today, we had a great speaker being interviewed from the National Association of Realtors.
His name is Jeff Lischer.

This is the man who is responsible for working with the Treasury Dept. to formulate the New HAFA PROGRAM about which I have written here. Mr. Lisher represents the National Association of Realtors of which I am so proud to be a member. Our annual dues contribute to lobbying in Washington for buyers and sellers.

Mr. Lischer clarified for us how the HAFA plan works. Please feel free to contact me anytime if you are a distressed homeowner having financial difficulty and need advice. It would be my PRIVILEGE to help you. If I do not have the answers, I do have the resources and will find the answer for you.

SHORT SALES and The New HAFA Program April 5, 2010

Short sales have become more appealing to homeowners who are behind on their mortgage and are looking to get out without going into foreclosure. But the time it takes to process these type of sales, the sales have been thought of as long rather than short. A new federal program goes into effect APRIL 5, 2010 and will provide more guidelines to allow the stressed homeowners to enter into a short sale and more quickly get on their way to a more affordable living arrangement.

 It is called The Home Affordable Foreclosure Alternatives program which  will provide certain incentives to lenders, and to home owners who chose to do a short sale, rather than wait until the bank takes the property.

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