Mardi Boettcher's Blog

If you are planning to use an FHA loan, here is some important information you need to know.A property must be FHA eligible.  That means it cannot have any “health and safety issues.”  Your real estate agent should be able to advise you as to which properties will not qualify.  This will save you a lot of time and disappointment.  If your agent is not sure, s/he should consult with your lender.  FHA does not require a pest report or section 1 clearance unless the appraiser makes negative comments about the property that would cause the lender to want to know more information.  So, if your agent knows, going into the loan process, that there is going to be a potential issue, then s/he needs to make sure that it’s possible to get a section 1 clearance or to get the repairs done prior to the appraisal process.

I was very surprised to learn that industry estimates find that half of all homeowners who lose their homes to foreclosure have no contact with their loan servicers.  If you are at risk of default or already behind on your mortgage payments, I recommend that you  contact your servicer at the first sign of trouble.  Ask to speak with someone in the home retention department.   

You may be able to work out a loan modification, short-sale, or repayment plan.  Servicers will ask you to explain the reasons why you can no longer make the mortgage payments.  You should be honest and realistic.  The servicer also will need to verify your current income, unemployment benefits (if any), household expenses, tax returns, property taxes, hazard and flood insurance premiums, and condo or HOA dues.

 Whether the loan servicer requests it or not, you should include a letter authorizing the servicer to speak with your REALTOR®, another family member, or perhaps your attorney, as this can help speed up the process.

If you have any questions about this process, please don’t hesitate to contact me.  I’m here to help.

Fannie Mae has announced a new Deed for Lease™ program.  The new program allows borrowers to voluntarily transfer their property back to the lender and then lease back the house at market rate.  The lease period is for up to 12 months, with month-to-month contract extensions after that period.  The program is designed for borrowers who do not qualify for or have not been able to obtain other loan-workout solutions, such as loan modifications.  

To participate in the program, borrowers must live in the home as their primary residence and must be released from any subordinate liens on the property. Tenants of borrowers in this circumstance also may be eligible for leases under the program. Borrowers or tenants interested in a lease must be able to document that the new market rental rate is no more than 31 percent of their gross income.

Homeowners thinking of participating in the Deed for Lease™ program should visit Fannie Mae’s loan look-up Web site at http://loanlookup.fanniemae.com/loanlookup/ to see whether their loan is owned or guaranteed by Fannie.  Mortgages backed by the Federal Housing Administration and other government agencies are not eligible for the Deed for Lease ™ program.

 To read the full story, please click here.

In this market, where homeowners have to compete with the “fire sale” prices of bank owned homes, it more important than ever for homeowners to be realistic about their home’s values.  It often is difficult for homeowners to objectively value their homes, which often reflects their sense of personal style.  However, by consulting with a REALTOR®, using online resources, investigating neighborhood trends, and soliciting the opinion of friends, homeowners can arrive at a reasonably accurate appraisal.  If they cannot accept the reality of the situation, I recommend that they wait for a more favorable selling climate.  On the positive side, they will often more than make up the loss from the savings on their new purchase.  It is important to have their agent help them “crunch the numbers” before making the final decision.

If they are having financial difficulties, it is critically important for them to consult with their real estate consultant to get accurate information on all their options and the possible consequences.

I recently had a conversation with a client who wants to wait a couple of years to purchase because she thinks prices will continue to go down with more bank owned homes coming on the market.  I told her that, in this area, the inventory of bank owned properties has really slowed down.  One colleague of mine described it as “drying up.”  Perhaps that is just a temporary situation.  Time will tell.  In the meantime, the lowest priced homes are getting multiple offers with the winners offering as much as $20,000 or more over the asking price.  The consensus among the local Realtors is that we have passed the bottom and are headed back up. 

Below, is an article from C.A.R. with the latest data for the state, but bear in mind that we are a unique local market here.  The areas that had massive growth are the areas that seem to be hurting the worst.  Our lack of housing keeps our prices elevated.  That’s why there were ten offers (6 of them first-time buyers) on a house I tried to get for some clients last weekend.  (They didn’t want it badly enough to bid as high as I recommended and they didn’t win.)    Here is the article…..

Foreclosure filings decrease less than 1 percent in August
Foreclosure filings, including notices of default, scheduled auctions, and bank repossessions were reported on 358,471 U.S. properties in August, a decrease of less than 1 percent from July, and an increase of nearly 18 percent from August 2008.  The report by RealtyTrac^® also shows one in every 357 U.S. housing units received a foreclosure filing in August.

“The August report demonstrates that there still is an ample supply of properties filling the foreclosure pipeline even while the outflow of bank-owned REO properties onto the resale market is being more carefully regulated,” said James J. Saccacio, chief executive officer of RealtyTrac. “After hitting a high for the year in July, REOs dropped 13 percent in August, but we also saw a record high number of properties either entering default or being scheduled for a public foreclosure auction for the first time.”

California documented the nation’s third highest state foreclosure rate, with one in every 144 housing units receiving a foreclosure filing.  California REOs declined 32 percent from the previous month, but continued to post the highest overall total of any state, with 92,326 properties receiving a foreclosure filing in August. California’s total was down 15 percent from the previous month and was also down 9 percent from August 2009—he first year-over-year decrease in California foreclosure activity in RealtyTrac’s monthly reports.

Six California metro areas documented foreclosure rates among the top 10 in August. Stockton posted the nation’s second highest metro foreclosure rate—one in every 74 housing units received a foreclosure filing—followed by Merced at Number 3 (one in 78), Riverside-San Bernardino-Ontario at No. 4 (one in 80), Vallejo-Fairfield at No. 5 (one in 82), Modesto at No. 6 (one in 84), and Bakersfield at No. 10 (one in 94).

With housing prices down, mortgage rates at a 30-year low and foreclosures soaring, you have plenty of incentives to jump into the real estate market.  

“Time is of the essence”  right now because the $8,000 tax credit stimulus expires at midnight, Nov 30, 2009.  In order to be sure you make the deadline, you need to be in escrow by October 1, 2009.  So get your pre-approval letter and select your home ASAP.

While foreclosures can offer you big discounts, many bank-owned properties require substantial repairs.  You will need to know what you are getting into and I can guide you safely through the search and buying process.

For a free list of foreclosed properties go to www.bankownedweekly.com/mendocino

Get the most current bank owned foreclosure inventory for Mendocino County at
http://www.BankOwnedWeekly.com/MendocinoCounty