Real Estate and Real Life in the Wine Country

In talking to people I have come to realize that some people have an interesting view on banks. You might blame the bank for offering you the ‘bad’ loan, however you might ask yourself: who ultimately signed? Also, banks are not social security, they have obligations to their share holders. I know, some ‘not so smart’ decision in life have dire consequences ;-(

One of the statistics I recently received from Bank of America was that 80% of all the loan modifications they did was in default again within 8 months. That is a poor success rate considering the time and effort put into this.

So when looking at you situation, figuring out what to do, ask for a loan modification, do a short sale (talk to your CPA when considering this), or wait for the foreclosure (might, depending on your job, cost you your job too), think what you would do with yourself should you be the bank.

When pursuing a loan modification think about this: if I were the final decision maker who was held accountable for my decision, would I offer myself a loan modification? If yes, it’s worth pursuing the loan modification.

Last week I had an interesting conversation with Darren Seliga from Seliga Financial, he mentioned some really good ideas to come up with when talking to the bank.

Any loan modification is hard work, doesn’t come easy but if it keeps you in your house and the result is a good mortgage, it’s worth it.

Oh…. and don’t forget the beautiful weather outside, enjoy it, despite all the hardships, it’s only money, spending time with friends and family that’s what’s really important. Don’t let your money worries keep you from being and enjoying time with your spouse, kids, friends, name it.

Have a wonderful day!

  Mirjam

The Small Business Administration’s most popular “loan product” is the 7(a). Like the SBA 504, the 7(a) may be used for real estate transactions, but offers a variety of other options:

• To acquire equipment, machinery, furniture, fixtures,supplies, or materials. For long-term working capital, including the payment of accounts payable and/or for the purchase of inventory.
• To refinance existing business indebtedness which is not already structured with reasonable terms and conditions.
• For short-term working capital needs, including Seasonal financing, contract performance, construction financing, export production, and for financing against existing inventory and receivables under special conditions; or

• To purchase an existing business.

Both programs offer great solutions for smal business owners. The recovery of or economy will also depend on the success of small businesses in USA.

Denise  Beeson

The 2009 American Recovery and Reinvestment Act has opened a wider door to the real estate market by increasing access to and lowering the cost of Small Business Administration financing to business owners. The act also temporarily waives borrower fees on SBA 504 Certified Development Company (CDC) loans, encouraging real estate buying now.

This will mean more capital available to small businesses at a lower cost

The SBA 504 program is a long term financing tool for economic development within a community, and provides growing businesses with long-term financing for purchases or refinancing of land and buildings.

A typical SBA 504 project includes a loan secured with:

1. A minimum down payment of 10 percent equity from the small business being aided— much lower than the usual 25 percent to 50 percent for standard commercial loans.

2. A maximum 50 percent senior loan (1st trust deed) from an SBA-approved lender.

3. A loan secured with a junior lien (2nd trust deed) from the SBA-certified CDC lender covering up to 40 percent of the cost or the maximum allowed, whichever is less.

In addition to lowering the cost of the SBA 504 application process, the 2009 American Recovery and Reinvestment Act also empowers SBA to establish a Secondary Market Lending Authority for pools of CDC-guaranteed “first lien” loans under the SBA 504 program. “First lien” loans from commercial lenders normally have no such guarantee. Nor are they usually assumable. Providing liquidity for these first mortgages will help encourage lenders to continue participatingin SBA’s 504 loan program, which provides a key source of capital for community development and other projects.

Some borrower qualifications

1. The owner’s business must occupy 51 percent of the building’s total area. 2. The business must be “for profit.” 3. Title can be held individually, in a family trust, or corporately. Most small business owners create a separate corporation or company, defined by SBA as an “EPC” or Eligible Passive Company. 4. The business must meet certain size requirements set by SBA guidelines.

Denise Beeson

This program was developed to help address first-time home buyers’ concerns about potential job loss and how such a loss would impact their ability to make their mortgage payment. Through the Mortgage Protection Program, first-time home buyers who lose their jobs due to layoffs may be eligible to receive up to $1,500 per month, for up to six months, to help make their mortgage payments. A qualified co-buyer also can participate in the program, and receive a monthly benefit of $750 per month for up to six months.

The first time home buyers tax credit ends in a few month, together withe the mortgage protection program this is a time to get serious about buying a home.

And the definition of a first time home buyer: someone who has not lived in his owner occupied home for 3 years. So technically, someone who owns rental property and has been renting the last 3 years is a first time home buyer.

The government pays you to buy a house, go for it!

    Mirjam