Ashlie Ducros

Daily Real Estate News | January 5, 2011 |

Sellers aren't entitled to a short sale just because they've lost equity in their home. Lenders look for other hardships when approving short sale transactions. Lisa Udy, a real estate professional with Logan Real Estate in Utah, notes in a recent article the following hardships often qualify:

• Job loss
• Illness
• Divorce
• Death of spouse
• Natural disasters
• Bankruptcy

However, besides a hardship, lenders also consider whether the home's value has dropped, the mortgage is near or in default (you don't have to default to qualify but you must prove that if something isn't done soon, you will default, Udy notes), and the seller has no other assets.

What doesn't qualify as a hardship? Udy says:

• Bad purchase decision or over-bought on the home
• Unhappy with location
• Purchased another home
• Pregnancy
• Walk away
• Home value declined

If you have any questions regarding short sale, please contact our office at: 714-743-9778

Source: "Short Sale Hardships -- Qualifying for a Short Sale," Tempe Real Estate Agent (Jan. 4, 2011)

I wanted to let you know that HUD has recently announced changes to their FHA loan guaranty program...these changes, if implemented, will surely affect many first-time buyers with limited resources. Let me know if you think this is good for bad for buyers....

Announced FHA Policy Changes:

Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending

• The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.
• If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
• This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing
• The initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring.

Update the combination of FICO scores and down payments for new borrowers.

• New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
• This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
• This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.

Reduce allowable seller concessions from 6% to 3%

• The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.
• This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.

For more information, please contact me at 714-743-9778, or write your comment on www.AshlieDuCros.com/Blog

Brea Homes for sale: Short Sales vs. Retail Sales in Olinda Ranch? Which ones dominated the market?

In looking at Olinda Ranch community in Brea today, you will find total of 6 homes Active in today's market. They are combined types of sales with 2 short sales and 4 Retail sales. For the month of December, there were total of 10 homes went into escrow which 5 were short sales, and 5 retails. The closed ration seems to be almost 50%. There were total of 5 closings in this month. Two of the homes were short sales which is good news for people looking to short sale their homes. It seems like banks are being more cooperative in getting these deals approved. There were also total of 3 Retail sales. So depending on your time frame to buy, both short sales and retail sales exist in this community. If your a homeowner, right now will be good time with low inventory in your neighborhood. It seems that both short sales and retail sales are in demand.

To find out what your home is worth, click on "Whats my property worth?" on www.AshlieDuCros.com For more information of this community, please contact us. The link below will show you the list of homes.

Line Item Report (Market Report December 2009)

December 2009:Market report for Kerrigan Ranch, Manor homes, and San Antonio homes in Yorba Linda

Is it good time to sell in your neighborhood?

As of January 2010, the active homes on the market have decreased quite a bit since last year. There are only total of 4 homes on the market right now, 5 are in escrow, and one home closed in the month of December. There were mixture of both short sales and retail sales in this neighborhood. I do see that buyers are starting make purchases for both retail and short sale priced homes indicating a demand for this neighborhood. Please click on the link to see the market snap shot. To find out what your home is worth, simply login to www.YorbaLindahomevalue.com, or click on search local listings to find your dream home!

Line Item Report (Click here for report)