MiamiRealEstateKing

Archive for the ‘Freddie Mac’ Category

5 Buyer tips for Distressed Properties

In bank-owned properties, Buyers, closing, credit, Distressed Sales, Downtown Miami, fannie mae, FHA, First-Time Buyer, Fl, florida, forclosure, foreclosure, Freddie Mac, government, Home Buyer, home sellers, HomePath, HomeSteps, HUD, Investing, Investor, lenders, Loan Program, miami beach, Miami-Dade County, mortgage, real estate, REO, Short Sales, South Beach on January 24, 2011 at 4:56 pm

Miami Beach, Fla. – Jan. 24, 2011 – Wenceslao Fernandez, Jr, a Florida real estate agent with Keller Williams Realty who specializes in Downtown Miami and Miami Beach properties, has come up with five tips to help distressed property buyers. These tips should work in virtually any U.S. market.

Wenceslao says that, “even seasoned investors don’t always follow or understand these practical tips”.

1. Work with a full-time Realtor(c). After the bust, many agents left the business so, not all real estate agents are in the business full time or even Realtors(c) any more. The term Realtor(c) can only be used by members of the National Association of Realtors (NAR), who adhere to their strict Code of Ethics. When it comes to distressed properties, a specialist is your best bet. Look for a Realtor(c) who is also a Certified Distressed Property Expert (www.CDPE.com), and who’s able to guide you with the right strategy for making offers on Short Sales or REOs. Many buyers assume that all agents have the knowledge to help them with these two distinct types of distressed property sellers. Like with hiring any professional (doctor, attorney, plumber, CPA), hiring the right agent to help you through this process, is key.

2. REO properties have the advantage of faster closings. Their disadvantage is that, more than 90% of the time, they only sell for cash and there may be multiple, competing offers on the table. On the other hand, although you can also pick up a Short Sale at a bargain price, there is nothing “short” about the amount of time they take to even be accepted. Some lenders negotiate quickly, others still drag their feet. It is not unusual to wait two or three months or longer, just to hear whether your offer was accepted by the seller’s lender – then the actual sales and closing process begins. Their advantage is that often, they are in better condition, especially if they are still being lived-in by the owner(s), and your offer may be the only offer the lender is considering for approval – minimizing the bidding wars of multiple offers often seen with REO sales.

3. Bargaining for less than the asking price will be a function of many factors. Many REO’s are listed well below market and attract a lot of attention. Making sure you offers wins the “bid”, may require a full-price offer and often, even a slightly more aggressive offer. Short sales may allow you a little more flexibility – as long as the offer is within reason for the property condition and local (building or area), market condition. Sellers of REO don’t typically want to hold these too long and are usually motivated. Lenders who have been going through a long, pre-foreclosure process are also motivated but may only be “servicing” the loan and the bulk of the decision, may be dependent on the investors behind the loan and/or mortgage insurance folk.

4. Avoid complicated offers. REO sellers typically prefer clean offers. The less contingencies you attach to your offer, the cleaner the transaction flow is expected, the better the chances are that they’ll agree with your offer. Lenders looking to approve a short sale may agree to some concessions. The worst that can happen is that they say no. In either case, sometimes lenders are quite accommodating – even REO lenders who already have possession of the property are known to give concessions if inspections reveal certain problems not previously known or problems which were not readily visible. Otherwise, most of these purchases are “as-is, where-is” and you should know what you are getting into. Being “handy” may not qualify you to throughly inspect and understand what you are about to buy.

5. Get the right pre-approval from the right lender. Regardless of which type of property you intend to buy (whether distressed or not), having this approval letter ahead of time will ensure you move forward. Most offers to be considered, must be accompanied by this letter. REO properties are typically sold for cash. However, properties now held by Fannie Mae, Freddie Mac or HUD, will often consider financing offers during the first 15 days a property is listed, as long as the buyer is an owner-occupant. Even if the REO or Short Sale property needs repairs, there are loans that allow the buyer to borrow additional funds for repairs. Make sure you lender understands FHA-203k, Home Steps and Home Path loans and that they have a thorough understanding of any other government program you may qualify for.

Want to know more? Contact Wenceslao Fernandez Jr HERE.

Advertisements

I Can’t Pay My Mortgage and I Don’t Know What To Do :-/

In Distressed Sales, fannie mae, FHA, First Time Sellers, florida, forclosure, foreclosure, foreclosure moratorium, foreclosure prevention scam, Freddie Mac, government, HAFA, HAMP, home sellers, homeowner, HomePath, HomeSteps, HUD, Industry trends, IRS, Market Report, miami beach, Miami-Dade County, modification, mortgage, NAR, National, option-arm, real estate, REO, scams, Sellers, Short Sales, South Beach, Tax Matters, Trends, Wenceslao on December 22, 2010 at 4:05 pm

About 75% of folk who lose their home to foreclosure, do so because they either do not seek help, or they get the wrong kind of help.

I am often asked legal questions to which I must invariably reply…I am not an attorney. The best I can do is speak from personal experience and remind them that it is imperative to seek competent and relevant legal and tax advise from active professionals.

In real estate for example, not all real estate agents are even Realtors.  Realtors are agents who as members of the National Association of Realtors(c) (NAR), they must adhere to NAR’s strict Code of Ethics. In addition, many are no longer in the business full-time nor are they truly keeping up with all the industry changes.

Homeoners looking to sell must always seek the assistance of full-time professionals. When in distress, they must take extra precautions in order to avoid falling victims of scams and even, downright fraud.

Below are some of the most common Frequently Asked Questions (FAQs) about foreclosure avoidance.  If you have further questions not addressed below, or would like additional information and resources, feel free to Contact Us.

Do I qualify for a short sale?

The qualifications for a short sale include any or all of the following:

  1. Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
  2. Monthly Income Shortfall – In other words: “You have more month than money.” A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
  3. Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

What is a mortgage modification?

A mortgage modification is a process through which your mortgage lender changes any or all of the following:

  • Your interest rate
  • Your principal balance (through a reduction)
  • Your loan terms (example: from an adjustable to a fixed rate)

This process can allow borrowers to stay in their property when they can no longer afford their current mortgage payments.

Why would a lender modify my mortgage?

Lenders have realized that in some cases it is better for them to work with current borrowers to lower payments or possibly improve terms in order to keep homeowners in their properties. The average foreclosure can cost a lender from 35-50% of the value of a property, so keeping borrowers in their homes is a good option for everyone.

What do I need to qualify for a mortgage modification?

According to the Making Home Affordable Web site (www.MakingHomeAffordable.gov), you will need the following information for your lender to consider a modification:

  • Information about your first mortgage, such as your monthly mortgage statement
  • Information about any second mortgage or home equity line of credit on the house
  • Account balances and minimum monthly payments due on all of your credit cards
  • Account balances and monthly payments on all your other debts such as student loans and car loans
  • Your most recent income tax return
  • Information about your savings and other assets
  • Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources

If applicable, it may also be helpful to have a letter describing any circumstances that caused your income to reduce or expenses to increase (job loss, divorce, illness, etc.)

How do I qualify for a mortgage modification?

The first call you make should be to your lender, have the information above ready to discuss with them and call your customer service line to ask them what options you have available. If the person you speak with does not understand what you are asking, you can ask to be referred to one of the following departments (different lenders have different names for these departments):

Prior to contacting your mortgage lender you can quickly complete an eligibility test atwww.MakingHomeAffordable.gov. This test will let you know if you are eligible for a modification through the government-sponsored Home Affordability and Stability Program (HASP). For a list of mortgage lenders and servicers, visit www.HopeNow.com.

What if I don’t qualify for a mortgage modification, can’t afford my home, and owe more than it’s worth?

You are not alone and foreclosure is not the only option. If your mortgage lender or servicer will not work with you to reduce your payment, you may want to consider a short sale. Agents like me, with the Certified Distressed Property Expert® Designation, have undergone extensive training in how to process and negotiate short sales. A short sale allows you to sell your home for less than what you owe and avoid foreclosure. Speak to your market expert to see if you may qualify.

What is a Home Affordable Refinance?

If Fannie Mae or Freddie Mac owns your mortgage, you may be eligible for a Home Affordable Refinance. This will allow you to refinance your home and often lower your payments.

What are the qualifications for a Home Affordable Refinance?

According to the resources released by the government, following are a list of qualifications:

  • You are the owner occupant of a one- to four-unit home
  • The loan on your property is owned or securitized by Fannie Mae or Freddie Mac (see Useful Links)
  • At the time you apply, you are current on your mortgage payments (you haven’t been more than 30 days late on your mortgage payment in the last 12 months, or if you have had the loan for less than 12 months, you have never missed a payment)
  • You believe that the amount you owe on your first mortgage is about the same or slightly less than the current value of your house
  • You have income sufficient to support the new mortgage payments, and the refinance improves the long-term affordability or stability of your loan

Courtesy:  ©2009 Distressed Property Institute, LLC. | All Rights Reserved

The Distressed Property Institute LLC is behind the Certified Distressed Property Expert (CDPE) designation that over 29,000 professionals now hold.

So You Want To Buy a Condo, huh….Get Ready Then to Take Some Responsibility

In Buyers, credit, fannie mae, First Time Sellers, First-Time Buyer, florida, forclosure, foreclosure, foreign nationals, Freddie Mac, Home Buyer, home sellers, homeowner, Industry trends, Interest Rates, international buyers, Investing, Investor, Lease-Option, lenders, Loan Originator, miami, miami beach, Miami-Dade County, mortgage, real estate, REO, second home, Self-Directed IRA, Sellers, Short Sales, South Beach, vacation home, Wenceslao on October 6, 2010 at 2:43 pm

Here’s the scary part…I don’t recommend anyone in particular – you must consider the professionals you work with carefully and examine several before you can make the right choice.

Once you’ve chosen which seller type you will pursue (there are at least three and some will argue, four – they are at least, those in distress, REOs and regular sellers), you’ll need to consider what strategy will work for each, and for this, you’ll need at least two professionals: a Realtor and a Lender/Broker

Like you, I have also worked with a number of professionals in different industries and, you get good and bad in each.

One of the first things you need to do BEFORE you find that “ideal” place you want to buy or BEFORE you decide to sell, is to interview several real estate agents. If you are buying, you must also choose, in a close second, a mortgage professional.

Focusing on your financing alternatives, you’ll need to choose between a mortgage broker and a traditional lender (typically a bank), and make sure they will treat you with honesty and a high degree of integrity and professionalism.

Your agent will not (normally), offer you the name of a lender who may have ever done something to jeopardize that agent’s license or relationship with a buyer.  Remember though that each, will have different experiences, access to different resources and each can be an asset to you in their own way. It is up to you however, to discover which among the many, many choices, is right for you and your needs.

In my humble opinion (and you know what they say: “Opinions are like noses….everybody has one”), mortgage brokers often have access to more than one source of funds and this is why I like brokers best. They’re not tied to what their boss says they must provide as an option to their clients/ borrower-applicants and they are actually…not the boogeyman the media has played them to be.

Remember that, a mortgage broker’s main job is to counsel you on loan alternatives, take your application, collect data and “shop” to find the best lender for your needs. In the end however, it is the actual lender who must evaluate the entire package submitted by the broker on your behalf, during a process called “underwriting” when the lender decides if they want to approve the loan.

Therefore, the funds do not come from the brokers, the brokers act as intermediaries. The funds come from the actual lenders who approve the loan.

These lenders then either keep your loan in their portfolio or sell them in the secondary market to any number of investors, including Freddie and Fannie. This is how our economy takes each dollar lent, and turns it into $10 in a process I now forget what is called.

Just the same, buyers must vett these brokers (or any lender for that matter – after all,  look at all the trouble they are ALL in), and ask all the right questions. Choose one, and keep a backup.

In the end, always remember that is not the company (mortgage brokerage or institutional lender), who provides you professional service, it is the broker/loan officer you select who provides you service on behalf of their employer and you need to vett them both.

Let them know a bit about the property you’re looking to buy, they’ll need to know about your financials, and at the appropriate time, they’ll need to pull your credit and obtain your tax returns, etc in order to give you a valid pre-approval/pre-qualification letter (which we’ll need to provide along with your offer).

Ask them how long have they been in business, how many lenders do they represent, how to find out about their company and their personal license (you can check the status and record of their license online), how do they determine which program is best for you, can they provide you more than one or two choices for the purchase you’re looking to make, how do they communicate with you, how do you keep track of your file, how do they handle your questions throughout, etc.

In short, you need to determine if they’re a good fit for you, just like folks may want to know about you and your services before they hire you – you’ll want to know about any service provider, including Realtors(c), attorneys, doctors and CPAs.

Brokers can only control how they qualify “you”, and as a second step, help you determine if a property you like, meets financing criteria. Once they can put a checkmark on both…we have the potential for a deal.

After that, or when they advise, you’ll need to complete a formal loan application (AKA: 1003 application), provide any additional documents they require from you, request a Condo Questionnaire from the association (which will typically cost you between $100-$150), verification of employment and domicile, request appraisal, etc.  In other words…that’s when the fun begins.

Up to the day of closing, they’ll need to re-verify that the building is not in worse financial shape than when the process began, that your credit has not dropped, that your DTI (debt-to-income) ratio is still within guidelines, that there are no new surprises (in conjunction with the title agent), that can affect closing (lien, open permits or other title issues that may come up), make sure property insurance coverage is in place, that you have condo association approval, etc.

In short, there’s a LOT of paper and behind-the-scenes work we all have to do (I also need to keep all parties communicating and all dots or links in the chain connected throughout), and working with a professional that will help you the way you expect them to, is critical.

A professional Realtor(c) (remember that, only a real estate professional who is a member of the National Association of Realtors, and who adheres to their strict Code of Ethics, can call themselves Realtor(c)), will want to make sure to guide you and empower you to make the right decision. By the same token, you nust make sure you are being served by the right professionals along the way, including the lender you choose – and the choice is yours.

Speak to them (there’s no charge or obligation for this process – we all get paid when we close the deal), reach them by email, ask them to call you, see how responsive they are, do they answer all your questions to your satisfaction and like in a beauty contest – you’ll need to then choose a winner  😉

With the situation in condo financing the way it is, you don’t want to waste your time using an agent who does not know how to qualify your buyer (if you are selling), or if you are buying, qualify and guide you as a buyer. Either can kill the deal and potentially cost you money.

Other points to consider is the recent Halt of all foreclosures by some of the major lenders (see previous post), and the fact that condo units in some buildings simply, can only be purchased with cash since no financing may be possible in many of them due to current market conditions.

In short, buying real estate is not like buying a can of beans at the supermarket. You  don’t just pick one, pay for it, and enjoy it. Most people find buying a car confusing. Buying real estate is no different and, being that this is among the largest purchase you’ll make, you should approach it responsibly.

###

Your comments / opinion welcomed

Freddie Mac now gives owner-occupant offers top priority, even if you already own a home

In bank-owned properties, Buyers, Distressed Sales, First-Time Buyer, florida, forclosure, foreclosure, Freddie Mac, government, Home Buyer, home sellers, homeowner, HomeSteps, Industry trends, Investing, miami, miami beach, modification, mortgage, new rules, real estate, REO, Sellers on September 16, 2010 at 11:04 am

Freddie Mac First Look Initiative to launch Sept. 17, 2010

Beginning Sept. 17, 2010, Freddie Mac will offer homebuyers and select non-profits an exclusive opportunity to purchase HomeSteps homes prior to competition from investors through the Freddie Mac First Look Initiative.

This on-going initiative offers owner occupant homebuyers, Neighborhood Stabilization Program (NSP) grantees and non-profits engaged in community stabilization efforts the ability to purchase HomeSteps homes during their initial 15 days of listing, without competition from investors. The purchaser does not need to be a first time homebuyer to be eligible, however, they must be buying the home as their primary residence.

The Initiative supports Freddie Mac’s mission to stabilize communities and support housing recovery through the creation of affordable homeownership opportunities.


Freddie Mac First Look Initiative
Initiative Questions and Answers


What is the effective date of the Freddie Mac First Look Initiative?

  • September 17, 2010

How does the Initiative work?

  • During the first 15 days (30 days in Nevada) a home is listed for sale in the MLS, only offers from owner-occupants, public entities or their designated partners will be considered. Offers from investors and second home purchasers may be submitted to HomeSteps, but they will not be considered until after the initial 15 days of the listing.

What homes are eligible to be included in the Freddie Mac First Look Initiative?

  • HomeSteps homes in listed status, listed on or after September 17, 2010, are eligible for inclusion in the Freddie Mac First Look Initiative.

How will a homebuyer or selling agent know if a home is eligible for the Freddie Mac First Look Initiative?

  • Buyers may contact their selling agent or the listing broker with questions regarding the eligibility of a property; this information will also be included in MLS property listing information.

How will the buyers prove that they are buying the property as their primary residence?

  • The buyer and the selling agent must sign an affidavit affirming that the buyer will occupy the home as their primary residence. Parties that fraudulently sign the affidavit may be subject to criminal or civil liability. The sale will be canceled and the earnest money will be forfeited.

What should the selling agent do if a non-owner occupant makes an offer during the Initiative’s 15-day time period?

  • Submit the offer to the HomeSteps listing broker.
    • Investors may submit offers at any time; however, the offers will not be considered for negotiation until after the 15-day time period.
  • Please note: Offers from non-profits, NSP grantees and community development organizations are eligible for the Freddie Mac First Look Initiative.

If a home has been on the market for less than 15 days on the Sept. 17 Initiative launch date, will this home qualify under Initiative guidelines?

  • No, homes listed prior to the launch date will not be included in the Initiative 15-day time period.


Important Notes

  • The 15-day Initiative time period is based on MLS days, not the date of the Listing Broker listing.
  • Multiple offers received during the 15-day Initiative time period are processed in the same manner as a normal transaction using the multiple offers procedure.
  • Second home purchasers are not eligible for Freddie Mac’s First Look Initiative.
  • In Nevada, Freddie Mac’s First Look Initiative window for buyers who plan to become owner-occupants is being extended to 30 days.
  • Interested home shoppers should contact their local real estate broker for more information about the Freddie Mac First Look Initiative.

###

To find out more you may contact me or visit the (Freddie Mac), HomeSteps website

%d bloggers like this: