The 'Other Side' of the Loan Modification Story

Loan Modifications Hit Credit Scores
Applying for a mortgage modification and being in a months-long trial period can devastate a home owner’s credit score.


Under the government plan, troubled borrowers can have their mortgage payments reduced to 31 percent of their pre-tax income. They are first put in a trial modification for several months to test whether they can meet the requirements of the new mortgage.


Borrowers who were previously current on their mortgages will see their FICO scores fall about 100 points while they are in the trial period, according to the Treasury Department. Borrowers who were previously late or missed payments will see their scores fall more, the government says.


The longer a borrower is in the trial period, the greater the impact on their credit scores, Once the modification is approved, the borrowers’ mortgage credit status will be listed as current and that should improve their scores, the Mortgage Bankers Association explains.


Even so, the delinquency remains on credit reports for up to seven years and can make getting credit for something else like a car difficult and expensive, borrowers report.

Source: CNNMoney.com, Tami Luhby (12/28/2009)

Selling Your Home-These low cost ideas may help!

10 Big-Impact, Low-Cost Remodeling Projects

If you have decided to sell your home; here are 10 budget-minded enhancements that may make your home stand out, sell faster and for more money.

1. Tidy up kitchen cabinets.

"Potential buyers do open kitchen cabinets and look inside," says Morrissey. "Home owners can add rollout organizing trays so when buyers peek in, they feel like there’s lots of room for their stuff."

2. Add or replace tile.

"By retiling very inexpensively, you make a room look way cleaner that it was," says Javier Zuluaga, owner of Home Repairs and Remodeling LLC in Tempe, Ariz. "Every city has stores that offer $1 to $2 tile, so home owners have to pay only for the low-cost tile and labor to replace a dated backsplash or add a new one. We also use inexpensive tile to upgrade bathrooms."

3. Add a breakfast bar.

When a wall separates a kitchen from a family room, suggest cutting out an opening to create a breakfast bar. "In one home, there was a cutout in the wall between the kitchen and living room," explains Matthew Quinn, a sales associate at Quinn’s Realty & Estate Services in Falls Church, Va., who handles estate and real estate sales for family members whose loved ones have passed away. "We left the structure of the cutout, added an oversized granite breakfast bar, and put chairs in front of it. That cost about $600."

4. Install granite tile instead of a slab.

"Everybody is hot for granite kitchen countertops, but that can be a $5,000 upgrade," says John Wilder, a general contractor and owner of Fence and Deck Doctor in New Castle, Ind. "Instead, home owners can put in 12-inch granite tiles for about $300 in materials and get very high impact for little money."

5. Freshen up a bathroom without retiling.

"With a dated bathroom, I recommend putting in a new medicine cabinet for $100 to $150, light fixtures for about $100, a faucet for $50 to $75, and a vanity for $200 to $300," says Wilder. "And instead of replacing the tile, the existing grout can be lightly scraped and regrouted, which leaves a haze that can be buffed out and will make the tile look brand new. Also install glass shower doors. A French door adds a lot of panache and elegance for $250, and people will notice the door, not the tile. With all that, you’ve done a bathroom remodel for $1,000 to $2,000."

6. Freshen up the basement.

"If home owners have cement block or poured concrete walls in the basement, suggest they have a contractor fill in cracks with hydraulic cement and then paint with waterproofing paint," recommends Wilder. "They can then add a top coat to add color. They can also paint the basement floor with a good floor paint, which spiffs it up. The basement may not be finished, but it’s no longer a damp dungeon."

7. Add a room.

Look for large spaces that can be enclosed to create a new bedroom for just the price of creating a wall. "One time, we closed off a half-wall to an office and added a door to the other side of the room, thus creating another bedroom," says Quinn. "That $400 procedure, which took a contractor one day, netted about $40,000 in the sales price." Zuluaga has also added bedrooms inexpensively. "In a two-bedroom house, there was an archway that led to a third room that was used as a den," he explains. "It had a dry bar where there would have been a closet, so we took out the dry bar and created a closet so the owners had a third bedroom."

8. Spruce up cabinet fronts.

Suggest home owners update tired-looking kitchen cabinets. Reconditioning is the least expensive move for under $1,000. "If the wood is starting to look shabby from use or contaminants in the air, we take out the nicks and scratches, recondition it with oil, and put new hardware on," explains Heidi Morrissey, vice president of marketing and sales at Kitchen Tune-Up in Aberdeen, S.D. For $1,500 to $4,000, owners can replace the cabinet doors and drawer fronts, and for $4,000 to $12,000, they can have all the cabinets refaced. "With refacing, owners can change the color of the cabinets by replacing the door and having a new skin put on the boxes," says Morrissey. "If they have oak cabinets today, they can have cherry the next day."

9. Replace light fixtures.

"In a foyer and in bathrooms and kitchens," says Wilder, "replacing overhead light fixtures provides a lot of pop for a little money." If the kitchen has track lighting, Zuluaga suggests the home owner spend $450 to $600 to have an electrician replace it with recessed canned lights on a dimmer switch to add ambience. For about $700, Zuluaga also suggests installing pendant lights over a kitchen island or peninsula.

10. Tech-up the garage.

"Sometimes we replace the garage door opener with a remote touchpad entry system," says Zuluaga. "That costs about $425 and makes it look like a high-end system."

Source:G.M. Filisko is a freelance writer for REALTOR® magazine.

Buy a New Home for LESS than $85,000-- Consider Purchasing a Condo.

New FHA Guidelines Could Aid Condo Sales

In an effort to continue to support the recovery of the Real Estate market in our neighborhoods, the Federal Housing Administration has provided new condo-loan guidelines that took effect Dec. 8 could make it much easier for condo buyers to get a loan. (Hooray!)

Under previous guidelines, half the units in a new condo development had to be sold before the FHA would underwrite a mortgage in the complex. New guidelines cut the requirement to 30 percent and raise the ceiling on FHA loans in a development to 50 percent from 30 percent.

The new rules also allow condo associations to turn down an accepted offer if they agree that it’s too low—unless they will be violating the Fair Housing Act. This is expected to motivate many associations to seek FHA-approved status for their buildings.

Even if they solve the vacancy problem, FHA loans can be a tough sell in some buildings, says Miami-area practitioner Madeleine Romanello, an associate with Douglas Elliman Florida.

"An FHA loan still has the connotation of being low-income. Condo boards say, 'No, we don't do FHA.' They don't understand that the FHA is the only game in town. We could be moving tons of condos if we could get their buildings FHA-approved," Romanello says.

Round 3: Short Sale Structure

Government Announces Short Sales Guidelines
After a long, difficult year for banks, struggling to handle the slew of homeowners trying to gain permission to sell their home for less than they owe, the U.S. Treasury Department announced new guidelines this week designed to make short sales go more smoothly.

To qualify under these new guidelines:

• The property must be the home owner’s principal residence.
• The home owner must be delinquent on the mortgage or close to defaulting.
• The loan must have been made before Jan. 1, 2009, and be for less than $729,750.
• The borrowers’ total monthly mortgage payment must exceed 31 percent of their before-tax income.

Under the plan, borrowers will receive $1,500 from the government for selling homes for less than the amount of their mortgages. Mortgage-servicing companies will get $1,000 for each completed short sale. Second-mortgage holders can receive up to $3,000 of the sales proceeds in exchange for releasing their liens. Investors who hold the first mortgage can collect up to $1,000 from the government for allowing the payments.

Borrowers who complete a short sale under the program must be "fully released" from future liability for the debt, according to the guidelines.

For individuals seeking to purchase a home, this is great news; the home purchase could now occur more easily as a result of these new guidelines. In addition, this is a promising outlook for distressed homeowners looking to sell in 2010; a winning solution for all.

Survey Says

Tampa is #8 on the list of areas with the Most Overpriced Properties

Despite having no luck selling their properties, homeowners in some parts of the country have clung tenaciously to their notions of the value of their homes.

Forbes magazine ranked markets it considered the most overpriced based on the ratio of the median initial list prices compared to the median list prices at the time the properties actually sold. It also factored in how long the properties stay on the market.

In addition, the magazine considered expert forecasts of price increases in the areas, which could be what encourages homeowners to price high.

The top 10 areas where Forbes found the most over-priced properties were:

1. Orlando

2. Miami-Fort Lauderdale-Pompano Beach

3. Jacksonville, Fla.

4. Baltimore-Towson

5. Chicago-Naperville-Joliet

6. San Antonio, Texas

7. Denver-Aurora

8. Tampa-St. Petersburg-Clearwater

9. Indianapolis-Carmel

10. Austin-Round Rock

Government Homebuyer Tax Credit FAQ!

Many taxpayers are asking "Can someone explain how I may benefit from the Homebuyer Tax credit revisions which now include more than First time homebuyers. Read below:

How does a current home owner qualify for the $6,500 credit?

Buyers must have lived in their homes for at least five out of the last eight years. The home they buy must become their primary residence, but buyers don’t have to sell their previous home. They can use the previous home as a rental or a second home and still claim the credit.

Does the new home have to be more expensive than the one the buyer currently owns?

No. It is fine to use it to downsize. If the property sells for more than $800,000, the buyers don’t qualify.

Can buyers who are building a new home claim the credit?

Yes, although the contract must be in place by April 30 and the buyer must move in by July 1.

Can buyers claim the credit if they purchase a home from a relative?

No. The legislation prohibits taxpayers from claiming the credit if the sale is between “related parties,” including parent, grandparent, child, or grandchild.

Many more home buyers can now receive the credit provided by the government. Let's see how you or someone you know may qualify for the tax credit. Call Char today!

Buying a new home? Be aware of these changes to builder standards

Home builders are compromising on construction details, including some basics, as buyers seek to pay less for new homes.

Here are some of the common ways to economize, estimated savings to the builder, and the issues for the buyer to consider:

• 17-foot double garage saves $5,000 to $8,500. The recommended width is 20 feet. Narrower makes it harder to get in and out of the cars.
• Textured walls and ceilings. $450 on a 3,000-square-foot home. Hard to repaint and repair.
• Smaller central air. $1,000. It takes a long time to cool the home.
• Advanced framing. $10,000. Advanced engineering studies say placing studs at 24-inch intervals rather than 16 doesn’t affect structural integrity. Actually, it leaves more room for insulation, which is a good thing.
• Fixed windows. $200 per window. Not being able to open windows is a huge inconvenience for many people.

Straight from Washington:

Senators reached a compromise to extend the $8,000 tax credit for first-time home buyers, a boost the housing industry expects will help it pull out of its two-year-old downturn.

Lawmakers in Washington also added a $6,500 tax credit for other primary-home purchasers and raised the qualifying income limits to $125,000 for single taxpayers and $225,000 for joint taxpayers, housing-industry sources said.

Under the Senate compromise, buyers must have sales agreements in hand by April 30, but they will have until June 30 to go to settlement, the sources said. The measure still faces votes in the full Senate and the House.

The tax credit is no longer only for first time home buyers. Homeowners can now "move up" to a larger home and receive a tax credit. Nice...Really Nice!

Things to Consider when Selling Your Home, in this Market

How to Sell Your Home, Fast!
If you’re trying to sell your home, you already know it’s a challenging market. Not only are there a lot of other homes on the market competing with your house, but some buyers are finding it difficult to obtain mortgages. Plus, with distress sales—foreclosures and short sales—accounting for half of all home sales in some parts of the nation, it’s hard to compete on price alone.

There are things you can do, however, to better make your home stand out. Here are some tips:

Price Your House Right. This is probably the most important thing you can do. With the market so competitive these days, buyers will completely ignore your home if it’s not priced realistically. Buyers today don’t care what your neighbor sold his home for a few years ago. A realistic, fair market price—or even a price slightly lower than fair market value—is the best way to attract buyer interest. This is where a qualified real estate agent can provide invaluable assistance.

Get Out Quick. Short sales are notorious for being, well, not short. Banks may take months to evaluate a short sale offer, and the potential buyer is left waiting helplessly during this time. By offering a fast closing, however, a buyer—who perhaps has children she wants to enroll in school—can move in and get settled quickly. That’s a huge advantage over waiting for a short sale to be approved.

Offer Curb Appeal “Plus.” Foreclosures often need substantial repairs because they’re frequently abandoned by their owners. Often, they are sold “as is” by the banks that own them. A home that is in move-in condition can save a buyer time and money. Consider doing some minor renovations or improvements to update your home and make it more attractive to potential buyers.

For more support in Selling Your Home, Call Char at 813-841-2382 today!

Moving Tips:

It’s a well known fact that moving can be one of the most stressful experiences of our lives. But it doesn’t always have to be. With a little advance planning, organization and some attention to detail, your move can be relatively stress-free.

Here are a few Simple and Helpful tips:
Hire a reputable mover: A reputable mover can give you peace of mind. Don’t just hire the first mover you see—or the cheapest. An unqualified mover can end up costing more in the end if items are lost or broken. Check references carefully, and contact your local Better Business Bureau to see if complaints are on file.

Make a schedule: Start at least two months before your move (if possible!), and create a checklist. The more organized you are, the fewer things you will forget, and the less stress you will have—particularly as the move gets closer and time is at a premium.
Label boxes properly. To save time—and help make sure boxes end up in the right rooms when you arrive—label them with the contents and the room they go in.

Eliminate excess possessions before the move: If you won’t need an item in your new home, get rid of it before you move. You’ll save time packing, eliminate clutter and, if you hold a garage sale, you’ll make some extra cash too.

Stock up on supplies: Nothing creates stress like running out of boxes or packing tape at the last minute. Have plenty of supplies on hand.

Change your address early: By completing a change-of-address form before you move, you can save yourself the headaches of overdue bills, service disconnects and even identity theft. Don’t forget to schedule cut-off dates for utilities—and make sure these same services are turned on at your new home. Many firms now allow you to make these changes online.

Whew! With theses tips, Moving will be so simple and will save You time and money!

Planning to buy a house?

It’s one of the smartest decisions you can make—and not just because you’ll be creating a wonderful home in the location of your choice. It’s because homeownership has many tax benefits as well.

Homeowners may receive benefits from Uncle Sam when they purchase or sell a home, and tax advantages may even accrue during the period you own a home. That's why many people consider homeownership to be the ultimate tax shelter.

Here are just three of the possible tax-saving opportunities for homeowners*:

1. Mortgage interest deductions. Interest paid on a mortgage on a first—or even second—home is deductible for those who itemize. That reduces the cost of ownership. For example, someone who pays $10,000 in mortgage interest and who falls in the 25% tax bracket could save up to $2,500 in taxes each year. Generally, all the interest paid on a mortgage is deductible, unless the loan is more than $1 million.
2. Real estate tax deductions. Property taxes based on the assessed value of your home and paid to a state or local government can be deducted—whether you pay directly or through an escrow account. Your bank will provide you with a statement of the actual amount it paid. Also, remember to look at your settlement statement if you recently purchased a home. Any prepaid taxes for which you reimbursed the seller are deductible as well.
3. Capital gain exclusion for the sale of a home. Under current law, if you are selling your principal residence, you can exclude from taxation any profits up to $500,000 for married taxpayers or $250,000 for single taxpayers.

Call Charlene "Char" McPherson at 813-841-2382 today so I get you on the path to the home of your dreams.

* Consult a tax professional for details.

New Appraiser Code of Conduct

The new HVCC, Home Valuation Code of Conduct, rules became effective in May. The intent of the new rule is to keep appraisers from altering property values to please lenders. The code was initiated after New York Attorney General Andrew Cuomo prosecuted the giant home-mortgage lender Washington Mutual in 2007 for working in collusion with a large appraisal firm.

The new rules Summarized:

• Anyone associated with producing a mortgage cannot select the appraiser judging the property


• To comply with the new regulations, which cover all Fannie Mae- and Freddie Mac-backed loans, lenders have turned to “appraisal management” companies, which typically select appraisers from a pool.

How these changes affect YOU:

• The National Association of Mortgage Brokers estimates that the new code has added an average of $711 to the cost of getting a mortgage because of added fees for second appraisals and extended loan locks.


• Appraisers will now determine values for homes in areas in which they are unfamiliar i.e. an appraiser may work in one county but may be asked to go to another county to determine the value of a home.


• Under the new system, appraisal requests now go through the management companies, which retain as much as 40 percent of the appraisal fee. The appraisers that take these assignments via the appraisal management companies, accept nominal fees and may not take the time to adequately research a market

The National Association of Realtors has asked ranking members of Congress, and the conservator overseeing the government-supported mortgage backers Fannie Mae and Freddie Mac, for an 18-month moratorium on the new system.

New Programs Target Low-Income Buyers

Under the federal Neighborhood Stabilization Program, many new state and local initiatives are expected to roll out in the next few weeks that will help middle- and low-income families Buy foreclosed homes in hard-hit neighborhoods.

In all, about $5 billion is available, including $50 million in technical assistance to get the programs up and running. Some of the Regulations include:

• Participation is limited to households earning no more than 120 percent of the median income
• 25 percent of the money will go to families earning less than half the median.
• The funds must be used for primary residences in communities with the highest incidences of foreclosures and subprime loans.
• There also will be a lease-to-own program.

The Neighborhood Stabilization Program was authorized last summer, but it has been rolling out slowly because the volume of paperwork.

Source: CNNMoney.com

HOME SALES

Florida's existing home sales rose 20 percent in February - the sixth consecutive month that sales activity showed increases in the year-to-year comparison, according to FAR. Statewide sales of existing condos increased 15 percent last month compared to the previous year; and February's statewide sales also were higher than January's figures in both the existing home and existing condo markets.

Florida’s median sales price for existing homes last month was $141,900; a year ago, it was $199,300 for a 29 percent decrease.

Interest rates for a 30-year fixed-rate mortgage averaged 5.13 percent last month, down significantly from the average rate of 5.92 percent in February 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

visit: http://www.floridarealtors.org/NewsAndEvents/n1-032309.cfm

 Char McPherson, 

Your First Choice in Real Estate

a member of the Century 21 LIST with Beggins Team 

Before deciding which company to choose when buying or selling your home, consider these facts:

Century 21 is the franchisor of the world's largest residential real estate sales organization helping families and communities around the globe.

• More than 8,400 offices worldwide
  
• More than 4,000 offices in the U.S.

With so many offices, any home for sale, gets greater Exposure.  With more exposure comes increased sales opportunities.  Isn't that what You want?

List your property with the company that will get it SOLD!   Call Char today for YOUR free consultation. 

Char McPherson, YOUR Realtor

Century 21 LIST with Beggins

813-841-2382

First Time Home Buyer Credit

As you may have heard, significant improvements in the temporary First-Time Homebuyer Tax Credit were signed into law on Feb. 17 as part of the American Recovery and Reinvestment Act of 2009 to provide a housing stimulus for first-time home purchases that occur between Jan. 1 and Dec. 1, 2009. This is even better news for first-time homebuyers than the tax credit announced in April 2008 because not only has the tax credit maximum increased from $7,500 to $8,000 – but more significantly – it does not need to be repaid unless the individual re-sells the home within three years. There are several notable points about this federal income tax credit They are:

•Credit maximum was increased from $7,500 to $8,000. The credit is calculated as 10% of the purchase price. Example: If the purchase price is $70,000, the credit is $7,000.

•Removed the repayment requirement, provided the homebuyer does not resell the home for three years.

•Eligibility remains for first-time homebuyers only. In this case, a first-time homebuyer is defined as an individual who has not owned a primary home at any time during the three years prior to purchase, but who may have done so prior to that time. Although certain income limits do apply, the amount of the credit is the same for all taxpayers, married or single.

•To be eligible for the full tax credit, the homebuyer can have an annual adjusted gross income of no more than $75,000 ($150,000 on a joint return). A homebuyer with an annual adjusted gross income above that level and up to $95,000 ($170,000 on a joint return) is eligible for a reduced tax credit.

•The tax credit can be claimed on one’s individual or joint tax return for the purchase of any single-family home between Jan. 1, 2009 and Dec. 1, 2009. It can be claimed on a 2008 tax return (to be filed by April 15, 2009), an amended 2008 tax return, or a 2009 tax return. Individuals should consult a professional tax advisor for exact tax calculations and timing.
Be sure to note that you are not a tax or legal professional, and of course encourage homebuyers to use their own advisors.

Keep in mind that this tax credit is retroactive.

Contact Char with questions 813.841.2382