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Frank Harris

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Mortgage Modification Update

04-16-09
Frank Harris

Loan modification program starts

The Treasury Department announced that the first six participants to sign up for President Obama's loan modification program are JPMorgan Chase, which will get up to $3.6 billion in subsidy and incentive payments; Wells Fargo, $2.9 billion; and Citigroup, $2 billion. The others are GMAC Mortgage, $633 million; Saxon Mortgage Services, $407 million; and Select Portfolio Servicing, $376 million. A statement issued by Wells Fargo said, "We view this modification program as yet another incremental opportunity for thousands of homeowners to preserve and maintain the dream of homeownership." Left unsaid is the fact that now the second wave of foreclosures will begin, as banks decide which loans are worth trying to save and which are not. Watch for more to come. I will try to keep everyone in the loop.

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ABC's of Real Estate Foreclosures

02-21-09
Frank Harris

I have been getting bombarded with questions concerning foreclosures, so I decided to start a blog series of the subject. First I want to address some of the terms and move on from there to the deeper inner workings on the subject.

Default:

A contract goes into default, or a default is said to occur, when the borrower fails to make the scheduled payments to the lender, Frequently, missing two consecutive payments will be enough for the lender to declare the loan in default.

Foreclosure:

A foreclosure is said to occur when the lender, feeling that he has no other choice, takes away by legal means the right of the borrower to repay the debt or to make up the missed payments.

Contract:

A contract is the agreement between the borrower and the lender defining the terms of the loan and specifying what is to happen in the event that the terms of the contract are broken. In the U.S. there are two types of contracts commonly in use.

One is called a Mortgage Contract and the other, a Contract for Deed or Deed of Trust. Most states use one or the other although there are some states that use both.

While each type of contract may differ in detail, both are based on the borrower pledging the home as security for the amount of the loan.

If the borrower fails to repay the loan on schedule, the home ownership is transferred the the lender. The Mortgage Contract used in some states, consists of two parts- the Mortgage Contract and a Promissory Note, The Deed of Trust contract, more standardized and more commonly used, also consists of two parts- a Trust Deed and a Trust Note.

You will need to know which type of contract is used in the area where you wish to buy your bargain home.

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What does a Realtor Do ?

11-26-08
Frank Harris

I was recently asked this question and here is a list of duties that I came up with thus far.

Prepare A Comprehensive Market Analysis

Present Expect More - Full Service Home Marketing System

Saleable Enhancement Suggestions - "Dress Your Home For Success"

Make A List Of Home Features And Benefits

Ask Seller For Deed, Survey & Back Title

Verify Tax Information, Assessments, Lot Size

Explain Nationwide Referral Network

Home Protection Plan

Seller Fill Out Disclosure Statement

Relocation Assistance

Introduce Concierge Services - Seller & Buyer Benefits

Obtain School Information - Locations And District

Complete Filling Out Of All The Listing Forms

Write Ads and advertising in Newspaper & Internet

Make Copies Of Listing Forms - One To Seller

Put Home On Market

Enter New Listing Into MLS

Prepare General Information On The Neighborhood

Transcribe Information To MLS Data Sheet

Help stage the house or hire a staging expert

Take Photos Of Interior & Exterior Of The Home

Yard Sign Installation

Install Lock Box

Order Virtual Tour

Put Home On Web Sites With Photos & Virtual Tours

Use Photos For Brochures & e-brochures

Prepare Color Property Flyers

Mortgage suggestion for next purchase

Office Caravan to preview new listing

Notify Cendant Mobility of listing

Notify Referral Network of new listing

Up desk calls regarding new listing

Lock Box Printout

Schedule Office & Broker Tour

Target Mail "Just Listed"

Target Mail To Top Producers

Notify the offices of Keller Williams of new listing

Add to KWLS for 40,000 plus additional agents to view

Brokers Open House - MLS Notification

Sunday Public Open Houses twice p/month, invitation to MLS Offices & agents

Personal invitation to Real Estate Agents with Merrill Flyer & Listing

Qualify Buyers & Establish Potential Financing

Continually Present To or Call Seller With Marketing Activity Report

Present All Sales Contracts (Offers)

Discuss Possibilities Of Unacceptable Offers

Follow up with agents who have shown the home

Respond To Questions From Sellers & Buyers

Represent All Counter Offers

Review Substance Of All Sales Contracts

Make Sure All Parties Sign Accepted Documents

Check On Return Of Appraisal

Attend Home Inspection

Attend walk through

Notify All Parties Of Loan Approval

Communicate With Attorneys

Negotiate Acceptable Closing Date

Explain Addendums To Sales Contract

Respond To Seller On What Is Needed To Close

Assist with Homeowners Insurance

Discuss Closing Costs

Attend The Closing

Respond To Buyer/Seller Questions

Send Thank You Notes - Lender, Title Company, Agents

Phone Seller After Possession - Check On Moving

Phone Buyers After Possession

Arrange for transfer of utilities

Welcome To Your New Home!

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Your Credit

11-26-08
Frank Harris

Your financial health - your credit and home affordability.


Is now the right time financially for you to buy a home? Would you rate your financial picture as healthy? Is your credit good? While you can always find a lender to lend you money, solid lenders are more skeptical if your credit history is not good. Generally, a couple of blemishes on a credit report will make you a good credit risk and could qualify you for the lowest interest rates. If you have more than a couple of blemishes on your report, lenders like Quicken Loans may still provide you with a loan, but you may just have to pay a higher interest rate and fees.

Some say that you should refrain from borrowing as much as you qualify for because it is wiser not to stretch your financial boundaries. The other school of thought says you should stretch to buy as much home as you can afford, because with regular pay raises and increased earning potential, the big payment today will seem like less of a payment tomorrow. This is a decision only you can make. Are you in a position where you expect to make more money soon? Would you rather be conservative and fairly certain that you can make your payment without stretching financially? Make sure that whatever you do, it's within your comfort zone.

To determine how much home you can afford, talk to a lender or go online and use a "home affordability" calculator. Good calculators will give you a range of what you may qualify for. Then call a lender. While some may say that the "28/36" rule applies, in today's home mortgage market, lenders are making loans customized to a particular person's situation. The "28/36" rule means that your monthly housing costs can't exceed 28 percent of your income and your total debt load can't exceed 36 percent of your total monthly income. Depending on your assets, credit history, job potential and other factors, lenders can push the ratios up to 40-60% or higher. While we're not advocating you purchase a home utilizing the higher ratios, its important for you to know your options.

Contact me at Frank@kw.com For information on current home buying programs.

Happy home shopping!

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Thinking About Buying Your First Home?

11-26-08
Frank Harris

Thinking About Buying Your First Home?


Many renters are starting to think about purchasing a home of their own. Several factors should be considered when purchasing a home:

How long you plan to live in the home.
If you purchase a home and get a job transfer or decide to move after only a short time, you may end up paying money in order to sell it. The value of your home may not have appreciated enough to cover the costs that you paid to buy the home and the costs that it would take you to sell your home.

The length of time that it will take to cover those costs depends on various economic factors in the area of the home. Most parts of the country have an average of 5% appreciation per year. In this case, you should plan to stay in your home at least 3-4 years to cover buying and selling costs. If the area you buy your home in experiences an economic up turn, the length of the time to cover these costs could be shortened, and the opposite is also true.

How long the home will meet your needs.
What features do you require in a home to satisfy your lifestyle now? Five years from now? Depending on how long you plan to stay in your home, you'll need to ensure that the home has the amenities that you'll need. For example, a two-bedroom dwelling may be perfect for a young couple with no children. However, if they start a family, they could quickly outgrow the space. Therefore, they should consider a home with room to grow. Could the basement be turned into a den and extra bedrooms? Could the attic be turned into a master suite? Having an idea of what you'll need will help you find a home that will satisfy you for years to come.


Where the money for the transaction will come from.
Typically homebuyers will need some money for a down payment and closing costs. However, with today's broad range of loan options, having a lot of money saved for a down payment is not always necessary - if you can prove that you are a good financial risk to a lender. If your credit isn't stellar but you have managed to save 10-20% for a down payment, you will still appear to be a very good financial risk to a lender.

The ongoing costs of home ownership.
Maintenance, improvements, taxes and insurance are all costs that are added to a monthly house payment. If you buy a condominium, townhouse or in certain communities, a monthly homeowner's association fee might be required. If these additional costs are a concern, you can make choices to lower or avoid these fees. Be sure to make your realtor and your lender aware of your desire to limit these costs.

If you are still unsure if you should buy a home after making these considerations, you may want to consult with an accountant or financial planner to help you assess how a home purchase fits into your overall financial goals.
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