HUD recently announced it is implementing new FHA condo requirements and new certification and re-certification programs.
Condominium and townhome developments must have FHA approval to qualify for a FHA loan (purchase or refinance) due to rules implemented in February 2010. Spot approvals for individual units are no longer permitted. Condominiums approved prior to Oct. 1, 2008, must be re-certified by Dec. 7, 2010. The re-certification process may be performed by HUD via an HRAP Submission or by a lender with Direct Endorsement authority (DELRAP submission).
In addition to this certification requirement, beginning Jan. 1, 2011, in order for an FHA loan to fund, the condominium development also must meet the eligibility requirements at the time of underwriting to qualify for an FHA loan. Eligibility requirements can be found at Mortgagee Letter 2009-46B.
In response, C.A.R. subsidiary Real Estate Business Services (REBS) is launching Clarus FHA Approval™, powered by FHA Pros LLC. Clarus FHA Approval™ offers condominium certification services at discounted prices to condominium associations that work with a REALTOR®. Further details about this service may be found at: http://clarus.getfhaapproval.com/CLARUS-FHA-Approval.pdf or by calling (818) 338-6588.
Clarus FHA Approval™ services will be expanded in the coming weeks to include a unique searchable database to allow C.A.R. members to determine FHA loan eligibility status by individual property address. This service will help members and their FHA clients avoid failed transactions and non-recoverable costs due to undetermined FHA loan eligibility status.
Further information about the new condo requirements may be found at:
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NEW FHA CONDO REQUIREMENTS AND HELP
Wednesday, November 24th, 2010Tips On How Buyers Can Sift through Housing Inventory Effectively and Efficiently
Thursday, November 18th, 2010
How can buyers find their way in the current marketplace, with its shifting home prices and an extensive inventory that includes many distressed properties?
-Looking enough to get to know your local market. Don’t be mislead by your own inflated expectations. Each local market has its own character and you must adjust your expectations accordingly. Otherwise you will continue look for a home that doesn’t exist. Do a fair amount of looking to get an understanding of the market and the confidence to make a decision.
-Let your emotions help you. Too often today, buyers aren’t letting themselves fall in love with a home. Leaving emotions out of the equation makes it difficult for a buyer to commit to a purchase. Looking only at price and condition contributes to uncertainty.
-Decide if a distressed property is really right for you. Foreclosures and short sales offer great value when it comes to price per square foot, but these properties tend to have their own limitations. Foreclosures often, though not always, have serious condition issues and are almost always sold “as is,” meaning the seller won’t do any repairs. As a result, buyers may need to carry out extensive repairs after purchasing. Short sales, while usually in better condition, can take months to get to the closing table, and in at least some cases these transactions eventually fall apart because the lienholder, seller and buyer can’t agree. As a serious buyer, you must decide if you have the patience and flexibility to pursue a short sale and the skills or resources to deal with repairing a foreclosure..
-Don’t focus too heavily on price. When you focus exclusively on price you may fail to consider the other benefits of purchasing—the tax deductions you get when they own rather than rent, the amazingly low mortgage interest rates currently available and the benefits of living in a home and a community that fit your family.
-Be ready to negotiate. You can miss out on a great home if you don’t initiate a negotiation. When you find a home you like, make a reasonable offer at a price you are comfortable with, even if it is well below the listed price. At worst, the seller won’t negotiate, but in this market that is unlikely. Sellers don’t want a viable buyer to walk away. If a negotiation is initiated, it often ends up in a place that makes the buyers happy because in this market sellers have to do most of the compromising.
-Get plenty of advice but trust the professionals. The current housing market is complex and can be confusing. Not all the advice has equal value. Talk to friends and family about a potential purchase, but at the same time, that advice should be taken with a grain of salt because unless the advice comes from a local real estate professional—a lender, agent, inspector or appraiser—it won’t be grounded in detailed knowledge of the current market.
-Don’t let negative comments about the housing market scare you off. Those who mean well may wish to warn you about the downside risks of the housing market. Don’t lose sight of the many positives in the current market, such as the fact that home affordability is at its highest in decades and that investors are flocking into the market to snap up bargains in all-cash purchases. Focus on the numbers that directly impact you—property prices, interest rates and how those translate into monthly payments.
Conceive, Believe and Achieve – 3 Tips To Help You Clarify And Achieve Your Goals
Monday, November 15th, 2010What do you think is the single most important factor is in determining the success or failure in business, life and relationships? Most people will say something about the necessity of hard work and product knowledge, education or the importance of a positive attitude. While these factors are certainly key components of achievement, the critical ingredient in determining success is the ability to stay focused on the accomplishment of meaningful goals.
Unfortunately, far too many people look at the goal setting process as a burdensome numbers drill. Unsuccessful people don’t set goals and have a common tendency to blame circumstances, events and other people for their lack of focus and determination.
Here are three tips to help you clarify and achieve your goals:
1. Determine where you want to go and chart your course. Your goals must be realistic and believable, while at the same time, challenging enough to compel you to put forth your best effort and give you pride in their accomplishment. Avoid setting conflicting goals such as “I want to double my income and spend more time at home.”
2. Write your goals down and visualize their accomplishment. Anything that is worth achieving begins with a written plan. Because the mind thinks in terms of pictures, rather than numbers, create a vision board. For example, a vision board with pictures of a world map, college graduation pictures, expensive car, athletic body, wedding ring and a retirement home at the beach.
3. Review your goals and make adjustments as required. After takeoff, due to the ever-changing weather patterns, pilots must make minor adjustments to their airspeed and heading to stay on course for their destination. Review your goals daily and make minor adjustments as needed on a monthly basis.
Tips To Keep Your Home Safe And Sound
Sunday, November 7th, 2010The well-being of our family is a priority all year, but is especially considered during the holidays when statistics about accidents abound. If you’re buying or selling a home, here are a few tips for safety and security that ensure a safe and happy home during the holidays, and all year long.
1. Protect little ones - Whether you are preparing for a visit from your grandkids, nieces and nephews, or you have kids of your own, a child-proofing kit makes safety easy with grip-and-twist doorknob covers, latches and plug protectors.
2. Mark and secure entries – The holidays can be prime time for burglaries, but updating your locks with an electronic deadbolt system can provide added peace of mind. If you install a set with a numeric keypad, you’ll never have to worry about leaving keys for your guests again. Mark your entry with path lights that clearly guide the way to the door.
3. Clear the air – Place an air purifier in the guest room and common areas to remove allergens (especially pet dander) and prevent the spread of cold and flu germs. Choose one with a true HEPA filter for maximum effectiveness.
4. Be fire smart – With holiday lights, candles and lots of cooking in the kitchen, it’s important to be prepared. Safeguard your family by keeping an extinguisher on hand for small fires, and install smoke and carbon monoxide detectors throughout your home. Check the batteries frequently to make sure they are in working order.
5. Equip your bath – It’s a snap to convert your guest bath into a safer place for older guests and young children. Add a grab bar to make getting in and out of the tub easier, and a durable bath mat to help prevent slips in the shower.
The Price Of “No-Cost” Loans
Tuesday, November 2nd, 2010Some home buyers who may be concerned about paying high closing costs might be tempted by a “zero-cost” or “no-cost” loan option, which requires no cash outlay, but typically adds a half percentage point to the rate. However, some financial consultants say these loans tend to be most beneficial to buyers planning to have the loan for less than five years.
MAKING SENSE OF THE STORY FOR CONSUMERS
One of the primary differences between a no-cost loan and similar loans is that no-cost loans do not tack on closing costs to the balance, but instead increase the rate.
With no-cost loans, third-party fees including the appraisal, credit report, title insurance, recording, and the use of a mortgage broker are paid by the lender. The fees, including the amount the broker is being paid, are disclosed on the closing statement.
Home buyers who bypass a broker and work directly with a lender may encounter less transparency, as loan officers are not required to disclose the amount the bank is making on the loan.
Borrowers weighing their loan options are advised to use a mortgage amortization calculator to compare the costs for a conventional loan compared with a no-cost loan. The Federal Reserve provides an amortization calculator on its Web site at www.federalreserve.gov.
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Home Buyers Still Waiting OnThe Sidelines?
Thursday, October 28th, 2010Potential home buyers still waiting on the sidelines for home prices or interest rates to decline further might want to consider that conditions for buying a home are better today than at any time in recent history.
The average rate for a 30-year, fixed-rate mortgage for the week ending Oct. 21 was 4.21 percent and 3.64 percent for a 15-year-fixed, according to Freddie Mac. By comparison, the average 30-year-fixed mortgage was 5.09 percent in January and approximately 6 percent two years ago.
In August, the median price of an existing, single-family home in California was $318,600. At this week’s 4.21 percent rate for a 30-year-fixed mortgage, the monthly principal and interest payment on a median-priced home in California would be $1,555 – likely the same or possibly less than the amount paid monthly in rent.
Seller Do’s and Don’ts
Monday, October 18th, 2010
It would be unrealistic to say that the real estate market is utterly rosy right now, but neither is it thorn-f
illed by any means. In fact, things are decidedly looking up: July got some good news, when the National Association of Realtors reported that pending home sales rose 5.2% from downwardly revised June levels, beating economists’ expectations. This is good news for both buyers and sellers.
While challenges still exist—for instance, getting the best price when selling, or securing financing when buying—there are some once-in-a-lifetime opportunities out there, and plenty of happy results can be had for both buyers and sellers. The key for both groups is to remain flexible, adaptable and diligent. To that end, here are some dos and don’ts for sellers:
DO’S:
Be flexible. Often it’s the little things that push a buyer into the “yes” zone. If the buyer goes on and on about how much they love your icemaker, throw it in. If the closing has to be pushed ahead more than you expected, try to be as flexible as possible and pack the moving van a little quicker.
Clean up. One person’s prize doll collection is another person’s cluttered nightmare. Similarly, a living room filled with Beanie Babies could elicit a reaction of fear, rather than “Aw, how cute!” from a buyer. Put away any personal collections that not only cause clutter, but also make it hard for a buyer to see the home as his or hers, rather than yours.
DON’TS?
Don’t be greedy. The market—not your emotions—dictates your home’s price. If comparables in the area, and several trusted real estate agents tell you your home is worth $400,000, you’re not fooling anyone by pricing it at $500,000—and you’re only doing yourself a disservice. Pricing it at market, even a little below, could generate a bidding war, and ultimately get you more money.
Don’t get personal. If you’re selling your house for a certain amount, and someone offers something much lower, don’t take this as a personal affront and refuse to counteroffer. Letting your emotions get in the way can potentially ruin the deal. What’s the harm in making a counteroffer?
Don’t procrastinate. In the current climate, you might be scared to try to sell your home, as you may have to face a lower selling price than you may have gotten before the recession. But remember, the house you buy might be even lower, commensurately. It’s all relative. So if you’re serious about selling, consider doing it now. Also, acting before the cold months come is a good idea, as the winter months are historically harder for home sales.
Four Reasons Buying A Home Now Presents The Opportunity Of A Lifetime
Friday, October 15th, 2010If you are looking to take advantage of the opportunity of a lifetime, now is the perfect time to get off the sidelines. Playing by your own terms may be the name of the game today. Ask for price reductions, improvements, closing costs—whatever—and sellers, who seriously want to sell, are very likely to work with you. If all the pieces are in place—you’re qualified to buy a home, the purchase makes sense for your situation and you’re prepared to live in the home for at least five years the following reasons should be motivation enough to get you back in the market.
1. You have a large inventory to choose from?In many places it is taking months to sell a home, which is creating a lot of inventory for those looking to buy. A large selection of homes on the market gives buyers more choices and drives down prices as well.
2. Builders are offering big discounts?Homebuilders are getting even more aggressive with their pricing today. Look at completed new homes first because builders are offering steep discounts. Plus, you’d have a warranty not only on the home itself, but also on the home’s appliances, he said. Walk in with a preapproval for a mortgage and make an offer. Chances are a builder will consider that offer rather than let a potential buyer get away.
3. Mortgage rates are historically low?It’s not just the price of the home that will affect affordability; mortgage terms will also affect your monthly payments. Rates on the popular 30-year fixed-rate mortgage came in at 4.54%; 15-year fixed-rate mortgages were down to 4.00% and 5/1 ARM mortgages were as low as 3.78%. You’ll still need good credit, a substantial down payment and a willingness to document your income in order to qualify for these great rates. In addition, low mortgage rates serve as an equity shock absorber. When buyers borrow at today’s record-low rates, they start building equity as soon as they close. This allows new homeowners to have a little give to absorb any ups and downs as housing market continues to gain traction.
4. Houses are in move-in condition?Many homeowners have decided to wait out to the market and instead stay in their current home and take care of home improvement projects to make the home feel like new again. Because of this, many homes coming onto the market today are in good condition and ready for buyers to move in.
If all the pieces are in place—you’re qualified to buy a home, the purchase makes sense for your situation and you’re prepared to live in the home for at least five years the following reasons should be motivation enough to get you back in the market.
Some Ideas To Help With Credit Fitness To Take Advantage Of Low Interest Rates
Monday, October 11th, 2010Many home buyers now and into the foreseeable future will face tight lending standards and the need to improve their credit score to get pre-qualified or pre-approved for mortgages. START NOW with the following steps for some speedy credit repair to gain lender approval and the best possible rates:
Credit Card Wisdom
-Paying revolving credit cards down is generally more beneficial than, for example, paying down student loans, mortgage or auto loans.
-Always leave a 30% or higher gap between what you owe on the card and the card’s limit. Lenders look for this minimum gap.?-Use cards with care even if you pay off balances each month because depending upon statement dates, the lender may see big balances.
-Pay down the cards closest to their limits first for speedier credit repair. The lending bank will then see the “gap” it wants to see.?-Do not ask a creditor to lower credit limits. Generally, carrying smaller balances on several cards is better than one large balance on one card.
-Check your credit card limits to make sure the report is correct. Limits may not be reported on all cards.?-Never make a late payment on credit cards or any loan.
Protesting Items
-Protest any unjust negatives, such as late payments, collections that are not yours, and any items not reported as “paid as agreed,” if you paid on time and in full.
-Protest items listed as unpaid that were included in a bankruptcy, and items older than seven years (10 for bankruptcy).
-Focus first on the larger, newer negatives listed on the report.
It is important not to worry about smaller items like incorrect address information or an old employer listed as current. This is, of course, unless there is the possibility of identity theft or the file is mixed with someone else’s.
Any increase in credit card balances or other credit purchases (car, motorcycle, RV, boat, furniture, etc.) can change your credit score and will increase your monthly debt. Your total monthly debt is used to determine your ability to qualify for a loan. A higher monthly debt will lower the amount of your loan qualification.
Fannie Mae Delinquencies Decline Housing Market On The Rebound?
Friday, October 1st, 2010I read an article that Fannie Mae, the nation’s largest mortgage financier is shrinking its mortgage investment portfolio.They reported this week that its holdings declined at a compound annualized rate of 4.1 percent in August, while its total book of business fell by 1.3 percent.
Fannie Mae’s single-family serious delinquency rate dropped 17 basis points in July to 4.82 percent (Fannie Mae reports delinquencies with a one-month lag time). The multifamily serious delinquency rate declined 6 basis points to 0.74 percent in July.
Fannie’s single-family delinquencies are still 65 basis points above the rate recorded in July 2009, but they have been dropping now for five straight months.
Does this mean we’re out of the housing mess? It’s really impossible to tell. It does show that we are moving in the right direction. Especially when you consider the Government Sponsored Enterprise (GSE) and its regulator attribute improvements to the company’s loss mitigation efforts and the fact that newly acquired loans are of much higher credit quality than in the recent boom years. There are skeptical analysts who suggest the lower past-due numbers are merely the consequence of an increase in GSE foreclosures. However, they need to also consider Fannie’s sibling government-backed mortgage firm, Freddie Mac is seeing the same trends come to light in its mortgage business.
Freddie’s single-family serious delinquency rate dropped 6 basis points to 3.83 percent, according to its August figures. It too, shrank its portfolio by 5.2 percent.
As of the end of August, Fannie Mae’s total mortgage portfolio stood at $3.2 trillion.