Category

Mortgage

May 05
0

Refinancing your home – beware of scams

By | Mortgage, Sonoma County info | No Comments

How many letters with offers to refinance your homeMailboxes did you receive in the mail last week? Was one of them from the bank your current mortgage is with? The last one seems like a good option to refinance your loan. There is the promise of an easy process and you would think there would be less paperwork involved… NOT.

Recently I am hearing more and more homeowners frustrated by their bank: the promise of less paperwork, less hassle is an empty one. You will end up working with a junior loan officer who quite frankly doesn’t have the wherewithal to help you with the process.

BETTER option: contact your favorite mortgage person, or if you don’t have one, ask your realtor. First of all, working with a lender who knows what he/she is doing is not more expensive – I have done the math- but more important, you are sure you have the best mortgage product that suits your situation. Besides this, the whole process less frustrating, as a matter of fact it will be a pleasant experience.

Locally, yours truly can highly recommend a few local lenders who are really good at what they are doing, one of them is Darren Seliga, he is a Mortgage Broker. Just give him a call and tell him I told you to do so. His phone no: 707-577-8737.

Mirjam

May 22
0

Loan Modification: are you sure?

By | Foreclosure, Making Home Affordable, Mortgage, Short Sale, Sonoma County info | No Comments

I had a meeting with a homeowner who accepted a perfect loan modification last week. Some thoughts to share:

A Loan Modification is what a lot of homeowners in distress are wishing for. However they can be quite stressful and very difficult to obtain. Percentage wise, only a few are working out. The Pro Publica website has some interesting numbers.

The most successful loan modifications are the ones where the loan has adjusted to a high interest rate and the only thing that makes the payment affordable again is a rate adjustment. These are quite often successful. However, according to CoreLogic in the last quarter of 2011 about 22% of all residential properties with a mortgage are ‘Upside down’ or owe more on their house than it would currently sell for.

What I see more and more happening is that a bank will recast the borrowers loan amount down to the current market value of the house and the deferred amount will be due when the borrower sells the house… That is a great option yes???? Or maybe not????

If you are planning to stay in your house and have no intention of moving, this is a good solution. It will take a very long time to regain some equity in your property but then again, you have to live somewhere…

But what in case you need to sell? Maybe next year? And the house is still not worth what you owe on it? Then you should still a short sale… This is a good option, however, keep in mind that any forgiveness of debt is a taxable event. So if the bank agrees with the short sale, you still owe taxes on the amount forgiven. Right now, under the Mortgage Debt Relief act a lot of home owners do not have to pay taxes on the forgiven amount. For now the Mortgage Debt Relief act ends December 2012. This means that as of right now, if you end up selling your house next year, you’ll end up paying taxes on the amount forgiven: Say the bank takes a $100,000 loss, that is considered regular income…

Something else to keep in mind: for a bank to accept a short sale, you need to have a hard ship. The fact that your house is to small/large due to a change in family situation is NOT a hardship. Side note: the average home owner in USA moves about every 6-8 years.

Bottomline, I see more and more that a loan modification is not the best solution for many home owners. It totally depends on your situation. Weigh your options carefully before accepting the loan modification.

Mirjam

Nov 27
0

Deficiency: shortage, deficit… or paying back what you owe…

By | Foreclosure, Mortgage, Sellers, Short Sale, Sonoma County info | No Comments

short-sales.jpgThe majority of people who buy a home need a mortgage or a loan. The home is yours, you pay the mortgage back over the life of the loan. When you sell the home you pay off the remainder of the loan… This is the case in about 50% of the sales in Sonoma County right now.

The remaining 50% is about 25% short sales and 25% foreclosures. The latter is quite often called ‘walking away’ from a home, the homeowner stops paying their mortgage and the bank forecloses… And in case when there are 2 mortgages against the home: the first ‘lien holder” (bank) forecloses, HOWEVER, the second ‘lien holder’ (bank) will pursue repayment…

This is the same in case of a short sale… A home owners sells their home, the bank agrees to take a loss. When there is a second loan, this bank needs to agree with the sale, and usually keeps the right to go after the difference… This CHANGED as of July 1st in CA… but ONLY for short sales. Per July 1st 2011, the 2nd lienholder cannot pursue the deficiency any more. This means, at time of closing you are  DONE. You walk away from a very difficult situation and can start over again. See my blog posting a few months ago.

Bottomline, right now in CA, there is a huge benefit in pursuing the short sale option. Rather than ‘walking away’ it behooves distressed home owners to take action, contact their banks, their trusted Realtor, mortgage advisor, CPA. Going through the short sale process is more work, but it’s worth it.

It is my experience that not enough home owners know about the benefits of pursuing a short sale. Please spread the word and also feel free to contact yours truly.

Mirjam

Nov 28
0

I want to buy your house! But…

By | Buyers, Disclosures, Economy, Mortgage, Sellers, Sonoma County info | One Comment

Ahh the ‘buts’ or the contingencies. As a proud home seller, you received the offer and if everything goes well, you’ll close escrow  in 30 days…

99.9% of all offers are made with contingencies: Inspection contingencies and loan contingencies are the usual mile stones. While inspection contingencies are easy to negotiate, the loan contingency can be a very different story. About 5 years ago, acquiring a mortgage loan was a very easy process and just about anyone could qualify. Today, with more than 1 in 7 mortgages 60 delinquent or worse, banks have begun to tighten lending qualification requirements, making the simple loan approval a thing of the past.

What this means to buyers and sellers is a potentially longer escrow process with more challenges and hurdles to jump through along the way. Many buyers schedule the moving truck and pack their bags, only to come to a sudden and screeching halts days before closing due to additional pre closing lender conditions related to income, credit and appraisal. New last minute lender conditions have become especially prevalent with conforming loan amounts over $417,000 and Jumbo loan amounts over $655,000. Ironically in my personal experience, traditionally difficult FHA loans have become easier and quicker to close.

In our area, just about everything happens on the day of closing.  The loan gets funded on the eve of closing, the escrow closes/records, the sellers moved out and buyers move in. While that has been the traditional picture, sellers might consider a different strategy. One option to consider is to deliver possession to the buyers 1 or 2 weeks after close of escrow. This means that the seller has more latitude in coordinating their packing and moving process, with less pressure to vacate the day of the sale. While this may not be the ideal situation for all buyers and sellers, it does lessen the potential stress that could occur if there were any last minute lending or funding issues that delayed the closing date.

Of course, the above applies to a regular sale, in case of a short sale, the majority of the home owners have stopped paying their mortgage anyway so in their case it would mean that they can stay in a home ‘for free’ longer.

To keep everything in perspective, the above are just hurdles in the sales process, things to expect and opportunities to find good solutions for all parties. In the grand scheme these are minor.

Mirjam

Nov 07
0

Reverse Mortgage – a way to foreclosure proof your house.

By | Aging in Place, Foreclosure, Mortgage, Retirement, Reversed Mortgage, Sonoma County info, Visit WineCountry, Wine Tasting, Winery with picnic place | 10 Comments

A few days ago I had coffee with David Carter, he is a reverse mortgage specialist at BofA. When I initially heard about reverse mortgage I thought is was some sort of a scam… I was wrong. As with any loan product, a reliable specialist is key and David is a specialist.

Recent legislation and changes in the marketplace are increasing the use of reverse mortgages. Here are three factors that make reverse mortgages an improved retirement-planning tool.

1. Fees are lower. The government, with support from lenders, has revised how reverse mortgages are structured.

2. Loans are more flexible. New loans let borrowers take money as they need it instead of all at once.

3. Selling isn’t always wanted, someone likes to stay in his/her house but need some extra income.

You can make payments on your mortgage but you don’t have to. This basically means that you cannot be foreclosed on when you don’t pay the mortgage.

You have to be 62 or older. For more information, contact David Carter: 707.235.8786.

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Fall is beautiful in the wine country, visiting wineries, taste and discover new wines… Found a great winery with a deck where you can enjoy a picnic as well as the views: Everett Ridge  Winery in Healdsburg

Have a great day!

Mirjam