According to an August 6 Mortgagee Letter released by HUD (click here to download the entire letter), the program will allow “borrowers who are current on their mortgage to qualify for an FHA refinance loan provided that the lender or investor writes off the unpaid principal balance of the original first lien mortgage by at least 10 percent.”

While lender consent is required and program participation voluntary, the FHA has stated the program could modify between 500,000 and 1.5 million upside-down mortgages.

Following are a few of the eligibility requirements detailed in the Mortgagee Letter:

1. Homeowner must have negative equity, be current on the existing mortgage, and have a FICO score greater than or equal to 500

2. It must be for the homeowner’s primary residence

3. Existing loan can’t be FHA-insured

4. First lien holder must write off at least 10 percent of the unpaid principal balance

5. Refinanced mortgage must have a loan-to-value ratio (LTV) no greater than 97.75 percent

6. Second liens must be re-subordinated so the new loan does not exceed a combined LTV of 115 percent

Because of this last requirement, this program may have difficulty when confronted with situations involving second lien holders.

Here is a resource that agents can use to find help for troubled short sale cases:
HelpWithMyBank.gov is administered by the U.S. Department of the Treasury Office of the Comptroller of the Currency (my hands cramped just writing that!) … even if you can’t remember the name of who’s administering the service, the website is provided to file legitimate complaints against national banks.
However, we haven’t heard a lot of news or stories about using this site. If you have experiences, please share! Your story might be able to help another agent find a way to help clients in need.

In seeking home loan through a traditional lender, borrowers should have a perfect credit score with great history of paying debts on time and also a firm work history. Even though it is a troublesome to other to have a less perfect credit score there are diverse options while buying a property.

Seller carry back financing is a frequent practice known in the market. This method assists seller carry all or a piece of the sale price. When a buyer enters into a contract with the seller, the contract will last for two to five years. This is the time for the buyer to create a good credit history by clearing up negative credits. The good news is that the borrower can apply for a traditional home mortgage loan at the end of the contract. One thing to consider is the rent-to-own agreement which is contract that permits the buyers to live in the home renting property and after the rental period, part of the rent are contributed to the purchase price. This agreement takes effect for two to three years that may be an instrument to have a solid payment record. Make sure to contact a real estate lawyer before engaging to both carry back mortgages and rent-to-own agreements before signing.

Through the aid of private lenders, Home Mortgage Loans can be achieved. If you do not qualify for a traditional loan , various real estate investors and investment companies render hard money loans. Hard money mortgages are not cheap. Interest rate will go up to 15-20%. And 30-50% down payment is required by most real estate investors. With regards to private lender mortgage loans the period is usually 2 to 3 years. This time allows the borrowers to strengthen their credit and refinance into a typical loan. Those borrowers who are not capable meeting the typical home mortgage loans measure, Federal Housing Administration (FHA) offers loans. On the other hand, borrowers should supply necessary documents such as proof of income, source for down payment and appraised value of property so the bank knows its resale value to ensure a FHA loan.

It is essential to do appropriate research and converse with a specialist regarding carry back mortgage and the rent-to-own.

In this case, it could be advantageous to people who purchased the home through auction sales. Undeniably, one’s defeat can be one’s benefit. One advantage that you can get out of buying these homes is that it is bargain basement priced than the rest. For some reason it is affordable since it has been used by the previous owners and the investors are much attracted in recovering its funds. Thus, putting it up as a sale would give a remarkable discount to the buyers, so it is perfect timing to purchase such property.

An ample number of owners dealt with investors, that cannot pay their debts are one of the main causes of fiscal crisis. This can lead to predicaments where in the investors runs out of money. To get out of this shortage, investors sell these properties in order to obtain finances.

In search for these houses that are for sale, it can be found in home listings via on-line hunting. Key in the words linked to these listings and it will appear instantly. The listings provides you the information needed such as the details of the property (lot size, house size, number of bedrooms and bathrooms) and of course, details on how to purchase the estate.

It is better than legal land proceedings. The discounted money is being collected after the house has been sold to clear the outstanding amount. One of the utmost advantages of the discounted selling of houses is that they do not leave bad credits on your financial history. It will give you the opportunity to apply for another loan in the future. Now and again, it does not pass to produce such amount to pay the total amount of your debts. So being litigated is marking up due to the deficit in payment.

Therefore, how does one borrower forestall these possible litigations? After all, this legal proceeding is a deadly defense of investors against the debtors to make some payment. To prevent from having such embarrassing possibilities, you need to consider these few key points. First is to check if there is a promissory note existed or not. It is important to identify if such is present. If in case you have signed with the agreement that you will pay, then the investors will fully exercise his right to claim the collateral and put it up for sale just to compensate for your debts. If your signature does appeared on the promissory note, then seek for legal advice at once to plan appropriate counter attacks to avoid these legal actions.

Second is understanding the bylaws applied to deficiency judgment. Some counties do permit the investors to file lawsuit against the debtors. But there are some states that put limitation on the amount disputed and others do not completely permit the investors to file any lawsuit against the debtors at all. Scrutinize this law carefully, after all you will find means to trail off the anxiety of being prosecuted. Lastly is to shop around a potential expert in negotiation. A third party moderator can plead your case to the investors to give such an incredible price cut to your total balance. Then again, the investors will capitulate on the remaining discrepancy. With all the cleverness in negotiating, without difficulty, you can deal with these problems and alleviate the stress it has caused you.

Grasping the full interest of these realtors could be more promising if you walk in to your business meeting carrying tons of new-fangled lists of potentials. Discussing these leads with the realtors is one way of establishing pleasant working relationship between the investors and realtors.

Short sale business should accompanied by these steps before putting it up. First is to create leads straight right from the broker. Second, take these to the agents and last is to work with them with these leads that are not on the list.

Every hour, there are nearly thousands of individuals who are browsing on-line for assistance and seeking facts about real estate problems. Giving them information as well as receiving contact details from interested brokers by means of a system. This system can be done by following the procedure. Of course, having a website is quite important and it should be in a PDF file mode that is capable of sending “free report”. Next, it should have an auto responder in sending a message. Third, to attract your guests on your website, the “free report” has a content of useful particulars and this would serve as your selling product to encourage the guests in giving their contact details. Fourth, is giving bits of facts about real estate problems. This would acquire guests’ interests and might end up as a potential target. Fifth, endorse this report. And last, usage of engine like search engines will be more likely helpful to endorse your report as well as your new webpage.

This is very useful but quite pricey that you have to pay a thousand dollars or more to create your own webpage. On the brighter side, there are also ways to manage your expenses in this kind of industry and one of the sites that could help is NOPsites.com. This website is alternatively providing services to the investors of real estate.

The rental fee you are getting should cover the payment for mortgages. Not everyone has this kind of asset, but people have their own talent. Even without properties, savings and all, they can also become fiscally free. When a person is shoddier, it is much easier because his expenses are lesser.

One of the many ways to become free from finances is to learn how to produce money. A property that is possible of getting a worthy transaction through finding a financier who has more money than time and who wants people to carry transactions with him. agreement of an equal share by explaining that you produced the transaction, he’s got the money for the deposit, he can get a loan to finance the purchase of real estate, and people give fees for finding good assets deals. To purchase your first rental property and haven’t got any savings, find at least dozens of good deals and bring them to the land property financier, they would give you at least 1.5% of the purchasing cost as finder’s fee.

Another way of creating money out of the property is to know how can you purchase an asset by means of lease or rent-to-own. It is fundamentally purchasing a property in the future at a cost you agree today. So if one owner bought the property at a specific price and he couldn’t afford to pay the mortgages anymore. The owner would want to move and no one will purchase the house not unless he barters the price. So it is a good time to approach the owner and offer a deal to buy his property on its original price. Tell the owner a payment scheme that would take until 5 years and also, you are the one who will cover the mortgage fee.

So the owner will move out, rent it out and let the rental does the cover of all the mortgages. In half a decade, you owned the property, and its appreciated value will increase up to 50% of the original cost. You also have a tenant, whose rental fee covers the mortgage payments.

The deficiency is like any other unsecured debt and as such is legally the same to credit card debit, medical debt, or a payday loan. The law authorizes an action for a deficiency judgment for the balance due upon an obligation for the payment of which a deed of trust or mortgage with power of sale upon real property or any interest therein was given as security, as specified. The law also forbids a deficiency judgment in any case in which the real property or an estate for years therein has been sold by the mortgagee or trustee under power of sale contained in the mortgage or deed of trust.

California Price Shows Year-To-Year Gain for First Time in Two Years

The median price of a home in California experienced its first year-to-year gain in over two years during the month of November, as the California housing market continued recent trends in terms of prices, supply, and sales. The monthly median price crossed the $300,000 threshold in November with a median of $304,520, up 2.4 percent from the October median price of $297,500 and up 5.8 percent from $287,880 a year earlier. The situation has improved greatly from a year ago during the worst of the financial crisis, when the median price had registered 41.3 percent year-to-year decline.

After a 59 percent peak-to-trough decline, the California median price has increased 24.1 percent from a trough of $245,170 that occurred in February 2009.  The increase in price has been sustained by a combination of lean supply and high demand, the latter triggered by historically high affordability (See November article). By comparison, the NAR national median price for existing single family homes, which experienced a 29 percent peak-to-trough decline, has increased by 4.7 percent from its trough of $164,200 in January 2009 to $171,900 in November 2009.

Nine consecutive month-to-month increases in the California median price have been the result of the lean inventory conditions throughout the year. The MLS-based unsold inventory index for California has averaged 4.8 months since the start of the year, well below the 7 month long run average. (See the October article for an analysis of the relationship between MLS-based unsold inventory, defaults, and foreclosures). By comparison, the national unsold inventory index for single family homes has averaged 8.4 months over the year. Inventory levels in both California and the US have trended down for most of the year.

As for sales, California returned to pre-peak levels of sales in late 2008 and sustained them throughout 2009. With sales of 536,720 homes in November, the market was 4.6 percent lower than the October sales figure of 562,400, but 4.7 percent above the November 2008 figure of 512,840. Sales throughout the year have averaged 545,600, compared with the pre-peak monthly average over the 2000-2002 period of 537,300 homes. Over the 2000-2002 period, US sales of existing homes averaged 4.8 million homes, compared with the low- to mid-4 million range of sales that the national market experienced from late 2007 until late this year when sales finally exceed the 5 million threshold.

The year-to-year increase in the California median price is the latest sign of turnaround from the dire circumstances facing the statewide housing market a year ago. Its foreclosure problems notwithstanding, California’s housing market appears to be ahead of the national market, both in terms of hitting bottom and in demonstrating important signs of market stability and improvement.

By: Robert A. Kleinhenz , Ph.D., Deputy Chief Economist

Here is the overview of the median Home Price for California.  With the banks holding on to such large percent of foreclosed homes I wonder how this will look in a year from now.  My prediction is we haven’t seen the end of this yet.  The Sacramento’s Short Sales continue to grow.

Angel