Short-Term Help or A Step in the RIght Direction?

 How does the $250 Billion Bank Stabilization Program have anything to do with real estate?  

In my opinion the two go hand in hand, and if we want to actually see substantial growth and rebound in our market, both real estate and financial institutions need to be on the same path.

 This plan’s goal is to stabilize the United States banking system.   In essence, this legislation will allow the government to purchase stocks in 9 major banks around the country.   Then, as financial markets start to recover, these banks will buy the stock back from the United States government.

Housing Help for the United States Armed Services

This  past week, the President of the United States,  signed legislation which would make it easier for Veterans’  who want to purchase a home and  assist others who already own an existing home.   Below, I have included three key  terms that are included in this piece of legislation.

 Veterans™ Benefits Improvement Act of 2008

1.  This law will make the process of  refinancing from sub-prime loans  to safer more realistic loans backed by the VA, more attainable for Veterans.

2.   Adjustable-rate mortgages can also be offered by the VA.

3.   This law will   allow an extension of the VA loan limit through 2011.

Buy and Bail

FHA loans have become as common as conventional in today’s market.   The guide lines for FHA loans are constantly changing.  

The limits of certain types of FHA loans are going to drastically change as of the end of the year.   This  could greatly reduce your potential buying power in today’s market.  

Another change that is happening in the market concerning FHA loans is; trying to eliminate the ability of buyers who buy a new home and then bail on their previous residence.   This change in FHA focuses on buyers who choose to rent their previous residence and use that income to qualify for a FHA loan when trying to by a new home.  

 Please let me know if you need any additional information about these changes.

It’s not just sellers feeling the pain…

In August new home sales fell to the lowest level in more than 16 years.      In our area, new home builders are either choosing to sell  inventory at a substantial discount or stop building all together; waiting for the market to come back.

And now, the crisis Wall Street’s is experiencing, has put the  brakes on  all kinds  of lending.   Home loans are not an  exception.

We are seeing  some very well-qualified home buyers getting turned down for mortgages.   For the past two years it has just been the seller’s who have felt the pain from our nation’s foreclosure crisis.   (Foreclosures and shortsales  flooded the market and in effect sent home prices plunging.)  

As of tomorrow, NEAMIA, will no longer be an option.   The rules for FHA loans are changing too.  

Don’t count traditional sellers out, just yet…

   If you are buying, do not make the mistake of ignoring traditional sellers.  

In real estate for the past two years, it is very common for buyers to want that  foreclosure or short-sale deal and choose to ignore traditional sellers altogether.

By doing this, in my opinion, you are selling yourself short.   The majority of the traditional homes that are for sale are beautiful, clean and attainable without the high risk of a foreclosure and short-sale purchase.  

Our sellers are more than willing to negotiate for the most part, and you don™t have to wait weeks to get a response.   There are some great deals on the market right now, that are for sale by traditional sellers.   Don™t hold out for that deal¦It might never come, and sooner or later things will turn around and you don’t want to find yourself left behind.

Another SMALL Step in the RIGHT Direction

This past August filings for foreclosures did increase as compared to the same time last year.   How can this be good news?  

Reports that have come out today, say that filings have been dramatically slower than in the past few months.  

Finding relief from this real estate crisis is a step by step process.   If you are an avid reader of my blog, you know that in my opinion, their are many different factors that have led to our real estate crisis.  

The next few months will be very critical for our nation.   A new President will be  elected.  We will see how the new housing bill will effect the market. Other factors will also come into play: How will  tighter restrictions on loans effect the market?   How will  the government handle the take over of the two  biggest mortgage giants in our country?  

Only time will tell, but in my opinion we are taking the steps to put us onto the road to recovery.


Community Information for Investors, Families and Tax Payers

Last Thursday evening, I had the opportunity to meet with the Brentsville District Supervisor, Wally Covington.   Fortunately, we have done much needed work to our roads  in the area over the past 2 years.   Unfortunately, Mr. Covington expressed concerns about future budget  cuts  coming from the Governor’s office  in the future.

We spoke about future projects coming to our area.   I know this information is very valuable to my clients who are looking to the future for investments.   I also get calls about future schools to deal with overcrowding issues.   I have also included information on potential projects that will greatly effect our area.

The Arts Center that is under construction  across from George Mason is under construction.  George Mason is also in the process of acquiring more land to expand the Freedom and Aquatic Center.   They are also very interested in putting in student housing in the coming  years, and this is only the begining.      The road network in this area is going to work well with businesses, the college campus and the community.    Mr. Covington expressed that the future development of this area is slated to be modeled after  the communities you  would see in  Blacksburg or Charlottesville.      

 Here is some more information that you might find useful:

*A new  high school  is being planned  on Kettle Run.   (Projected  to open in 2011)  

*The movie theatre and other high-end restaurants are in the process of going up at Wellington and Linton Hall.   The movie theatre has been delayed due to the fact that it was bought out by another company.  

*The construction on Linton Hall and 28  should be completed by the end of the year.  

*The New Wegman’s grocery store, on 29,  is scheduled to open in November.

*A Fire Station is being planned to be built close to the Freedom and Aquatic Center.

*The REAL work on 29 and 66 is scheduled to begin on 2010.

Do we really want to learn from our mistakes?

The topic  I will be discussing is a very hot topic among real estate professionals  all over the country.      

The Housing stimulus law will take effect on October 1st.   A key provision of this plan, in my opinion will actually play a major part in helping to end our foreclosure crisis in Northern Virginia.  

FHA can NO longer insure mortgages that have the seller or another interested party who pays the buyer’s down-payment.   (For example:   We have all seen New Home Builder’s signs for “Zero Down Payment”.     The builder is actually paying the buyer’s down payment.)   As of October 1st, this will not be legal.   The National Association of Realtors is reporting that more than 28% of these types of loans ended up in default.   This is approximately 3 times greater than FHA loans without seller funded payment assistance.

Down payment assistance from government programs, family members  or charities that are not seller funded will still be allowed.

I believe this is going to greatly effect the New Home industry.   I do think this is unfortunate. On the other hand, I can’t tell you how many new home communities I have been in lately that have 3 to 4 or even more foreclosures on each street.  

This provision will keep some from buying, which is unfortunate,  but it should help prevent future foreclosures….isn’t that our goal?   There are many factors that have caused this foreclosure crisis we are in.   If you have read my prevoius blogs, I speak about how we are headed to recovery, but it will be slow.   There is NOT just 1 factor that has caused this real estate downfall.   If this was the case , we could just fix the problem and go on.   The good news is that our nation is fixings the problems that have contributed to  this crisis.  We do want this crisis to come to an end.   We want to learn from our mistakes not repeat them.

Buyer’s Are Here!!!Why Is Your Home Not Selling?

I know I have said this before, but if your home is for sale and you are getting little to no traffic….. your home is NOT priced to Sell.  

We are now seeing multiple offers on not only single family detached homes but now w/ townhomes.   Not LOWBALL multiple offers, but LIST PRICE OR BETTER.   (Don’t believe me….give me a call,   I will show you the proof, or let’s schedule an appointment and I will take you out and actually show you what is going on in today’s market.

It is a tough market especially for traditional sellers.   If you price it correctly you will get a buyer.   (When I say this my clients always say or think…Candice that means price it low.)  

Now let’s think about this.   If your price is too high and you are getting little or NO traffic and you are LUCKY enough to get an offer, it will probably be LOW and on top of that they are going to ask for 3% closing and then expect YOU to pay for every little thing at home inspection time.   Now if you have it priced WELL… will get lots of traffic and probably get multiple offers at the price you have it listed at….Not a low-ball offer.   You the seller are now in the driver’s seat and your buyer feels that he has gotten a deal….That means your buyer is less likely to ask for closing costs or repairs.   Why, because they are getting a “deal”

In the end, you, the seller, are saving the money.

Sweeping it Under the Rug

Don™t be shocked next week if you hear reports in the media that the foreclosure rate is becoming stagnant or even that the percentage of foreclosures on the market is declining.

Don™t get too excited just yet.

Why I do believe things are beginning to get better. Try to remember that in the past few months and even just a few weeks ago there have been laws past and new programs implemented to help homeowners faced with foreclosure delay the process. Many of these programs are just delaying the foreclosure process to help homeowners get back on their feet, but realistically don™t be surprised if in another month or two we see another surge of foreclosures in our market.

I™m certainly not trying to be too negative, just realistic.

On a positive note, I am seeing many more short sales on the market as compared to last year at this time, when all I saw were foreclosures. Banks are working with homeowners and they are tightening up the way they do business. This is a great sign and in my opinion is another step in the right direction.

Frequent Questions Buyers Have about Buying a Foreclosure…

When buying a foreclosure it is important to know that each REO property is different depending on the financial institution that own it.       Almost anything can happen all the way up to settlement, sometimes even after settlement occurs!     Let™s look at some questions that often arise in foreclosure transactions.

 1.           Are there any consequences if the Seller™s addendum states that the Buyer must waive their write to receive a Property Owner™s Association Package?

2.       Will I, the Buyer, receive a copy of the signed Regional Sales Contract back from the bank and the bank™s counter addendum?

 3.           As a buyer, what are the risks related to the bank being able to void the contract at anytime and for any reason?

 4.         Do I, the buyer have to use the settlement company that the listing company recommends?   Will this help my offer?

 5.       What does œAS IS really mean?

 6.         Should I, the Buyer, plan on countering the Bank™s counter offer?   Or is it a waist of my time?

 7.         What if I, the Buyer choose not to sign the Bank™s Addendum?

As as buyer, you don’t want to wait till you are writing an offer on the home of your dreams for these and other questions to arise.   If you are in the market for a new home and you have a real estate question, please don’t hesitate to call me. I specialize in foreclosures and have had the opportunity to be on both sides on the transaction.

In A Nut Shell-Housing and Economic Revovery Act of 2008

This past week the President of the United States signed the Housing and Economic Recovery Act of 2008. The purpose of this bill is to help many of the 400,000 homeowners refinance their loans into more affordable loans that are backed by the government.

For first time home buyers, this bill will offer a temporary tax credit.

Also included in this bill, is reform focused on modernization of Freddie Mac and Fannie Mae. In addition, there will be permanent increases in conforming and FHA loan limits.

Housing Bill to the Rescue…Do You Qualify?

The House of Representatives, the Senate and the President are all on board to approve a $300 billion dollar bill which would help homeowners on the brink of losing their home avoid foreclosure.  

If you are interested in applying for this voluntary program talk to your current mortgage servicer.   You can also contact a FHA approved lender for help.   If you would like a list of these lenders, let me know.   I can give you additional information.

But who qualifies?   Below are just a few of the  qualifications that are being reported by  media outlets around our nation.  

* Your home loan had to be issued between Jan. 2005 and June of 2007.

*Borrowers that are planning on getting a home equity loan, must have FHA approval.   Your debt cannot be greater than 95% of your home’s appraisal value.

*Before you can get a FHA backed mortgage, the borrower must get rid of  lines of credit or  a home equity loan.   Borrowers will not be allowed to take  out  a home equity loan for 5 years.   There is  an exception to this last statement.   A borrower may take out a home equity loan only if it is used to pay for the upkeep on the home.  

*You don’t have to be in default yet!   Now you do have to prove that you will not be able to pay your existing mortgage.

*If you are already in default, you much prove that you are not purposely defaulting just to take advantage of the lower rates this program may offer.

Of course,   I am not going over the entire program.   It will be very interesting to  see how this program, once it is approved, will effect our nation’s housing crisis.   Let me know what you think!