Janice Petteway

This spring could be the time everyone gets something they want. Orlando buyers get the home of their dreams at an affordable price with decent interest rates. Sellers move that property that's been on the market for awhile and then are able to take advantage of a good deal on their next home. Banks reduce their inventories of foreclosed home. Neighborhoods rebound, as families fix up and move into homes formerly owned by people who may not have been able to keep them up.

One thing that is facilitating this happy picture is the first time homebuyer's credit. Available until December 1, 2009, the credit of 10% of home value up to $8,000 is out there for anyone who has not owned a home for the past three years. As the money does not have to be paid back, the $8,000 is a big help in getting a downpayment together. Technically, the tax credit is not available to buyers until they file their taxes, but new FHA regulations authorize some creative ways for buyers to gain access to the funds for their downpayments.

On a $150,000 home, the required 3.5% FHA downpayment is $5,250 and closing costs average $5,000. FHA still wants you to put some of your money down so the credit will not wipe out that requirement. However, you can temporarily borrow the money from family or friends, take out a loan on your car, or tap into your 401k. If you then filed an amended tax return for your 2008 taxes that requested the credit, you could repay your debt with the $8,000 and have less than $2,500 in out of pocket expenses.

With the new ruling, certain FHA-approved lenders and non-profits can offer bridge loans for $8,000 that can be used toward the down payment and closing costs. Though there has been a lot of confusing and contradictory information in the media about this, the buyer has to come up with 3.5% to have the credit "monetized" and applied to the downpayment. The $8,000 can go toward closing costs and additional downpayment. The buyer won't get any cash back at the closing, so if he has borrowed the 3.5%, he won't be able to repay the loan from tax credit funds.

Technicalities aside, there is a tax credit out there for you if you are a first time home buyer. Janice Petteway and her Exit Real Estate Results team will show you the best in affordable central Florida homes.

While home sales are going great guns in central Florida, the Orlando area is still high on the foreclosure list, ranking number 10 of the country's largest metropolitan areas. Florida itself trails only Nevada among the states with the highest foreclosure rates, as one of every 135 Floridians received a foreclosure filing in April.

For people at risk of foreclosure, the hot topic still remains:

Where can I get help?

What follows is an alphabetical list of sources of help. No one on the list will charge you a fee. Keep two things in mind. First, time is of the essence! Call today! Second, no one on the list can guarantee the exact outcome, but they want to help you come to a dignified solution short of foreclosure.

So, here's the list:

Association of Community Organizations for Reform Now (ACORN): (866) 67-ACORN. This long-time crusader against subprime loans and for foreclosure moratoriums offers free counseling that can help you work out a solution.

Bank of America/Countrywide Homeownership Retention Program: (800) 669-6607. Holders of Countrywide loans originated before December, 2007 may qualify for loan modification that includes interest rate reduction, principle reduction, refinancing into a conventional loan, waiving of late fees and penalties during modification, and no foreclosure during the evaluation process.

FHA Secure: Call your lender regarding eligibility. Homeowners with non-FHA adjustable or other loans who are upside down or delinquent can refinance to regular mortgage at market rates. In some cases, you may need a second mortgage if your needs exceeds the FHA limit for your area or you are short on equity.

FLASH (Florida Attorneys Saving Homes). (866) 607-2187. Attorneys will help negotiate loan modification for troubled homeowners.

HOPE for Homeowners: Call your lender regarding eligibility. This recently revamped program helps troubled homeowners refinance into 30 or 40 year mortgages for up to 96.5% of the home's value. In return for incentives, the lenders write off older inflated appraisals.

HOPE Now: (888) 995-HOPE. This alliance of lenders and community groups is committed to working with homeowners and their lenders to avoid foreclosure and offers HUD-approved counseling.

Making Home Affordable. www.makinghomeaffordable. The Obama housing rescue package aims to help homeowners who qualify refinance their home, modify their loan, arrange a short sale or deed in lieu of foreclosure. Check the website - you may can an idea if you qualify (but don't stop there if it seem like you don't qualify!)

National Association of Consumer Bankruptcy Attorneys. www.nacba.org. If your financial situation is deepening and you fear foreclosure, this group will offer you information about bankruptcy and direct you to a nearby attorney for a free consultation to determine if bankruptcy can help you save your home.

National Foundation for Credit Counseling. (866) 845-2227or www.housinghelp.now. This group will show your options to avoid foreclosure and alert you to the latest foreclosure scams.

Janice Petteway and the Exit Real Estate Team would like to part of your solution. We do short sales in Central Florida.

It's hot in Orlando, nearly 90 degrees. For the first time in a long time, the housing market is hot too. According to the Orlando board of Realtors, home sales in Orlando for the past two months exceeded sales in March, 2008 by 47.59% and in April, 2008 by 42%. About half the sales for each of the two months this year were distressed or bank-owned.

It's a great thing that the distressed and bank owned homes are moving. This has made Realtors® like us who specialize in placing people in homes like this crazy busy, while showing our customers affordability they haven't seen in a while. In April, 2009, for example, when 1,741 homes closed in Orlando, 865 were bank owner or distressed. The median price for the bank-owned properties were $89,000 vs. $146,000 for the distressed homes vs. $161,245 for the conventional ones.

Though the median reflects an average price, in this case the number is pretty chose to the price homes actually sold for. According to Orlando Regional Realtors Association, 7% of homes went for less than $200,000. Only 10% sold for over $300,000.

The affordability index in the area was 194.01 - which means that area buyers, who enjoy a median income of $52,307, are more than qualified to buy homes valued up to $257,840! The figures are slightly different for first time buyers, where the expectation for median income is $35,569 and the maximum price is $155,850. The April affordability figure was 137.96.

When the affordability index is 100, buyers who earn the median income for the state can buy median-priced home. An index figure below 100 means the buyers lack income; a figure above means buyers have more than enough income. Since many distressed homes require repairs, it is likely that prudent buyers will qualify for 203k loans or have access to cash or other funding sources to get the home in shape.

First time homebuyers in Orlando, like most Florida cities, are not dominating the market. While the first time homebuyers tax credit may an incentive to some people, many actual buyers do not appear to be first timers. Many buyers are investors, often foreign and often paying in cash. The net effect of the buying activity is that inventory of homes on the market has been deflated to a nearly "normal" seven month inventory of homes.

Help heat up Orlando! Contact Janice Petteway and the Exit Real Estate Team to buy a home today. We can help you find the perfect bank-owned or conventional home in Central Florida.

These days, whenever you read about the great values available for foreclosed and bank owned homes, there is always the disclaimer "as is." This could mean anything from "it needs minor cleaning" to "the place has been stripped of its water lines and needs other major repairs." Depending on whether you are the type of person who can see potential in a distressed property and are willing to endure the pain and suffering of a rehab project, you may be a good candidate for buying a home like this. The next question is, how will you pay for the repairs?

FHA now has a program to designed to make it easier to finance needed repairs either before you move in or later on down the line when you want to refinance your property. The 203k loan program will allow you to include the cost of repairs over $5,000 in your mortgage. The repairs must start immediately and be completed within six months of closing. There is no ceiling on the amount the program will cover, but the total for the mortgage and the repairs must fall within the amount you are pre-approved for. The program is designed to rehab single family housing, but owners of multi-family dwellings like condos can apply for a rehab allowance for each suite. Other funding sources, like the $8,000 new homeowners tax credit and applicable city, state, and funds can be used to pay for some repairs as well.

What's great about the program is that is covers a variety of renovations - even ones that will upgrade the property to make it more energy efficient or spacious. While it won't cover adding a pool or other luxury features, it will cover renovating existing ones.

To qualify, an interested buyer should first hook up with an experienced Realtor who will assemble a team that includes a lender who offers 203k financing and a contractor will oversee the work. Later on down the line, the other team member will be a 203k consultant who will make sure all the ducks remain in the row throughout the rehab. For projects over $35,000, an architect will need to be in the mix to render drawings.

• Buying a property with a 203(k) loan includes the following steps:Working with a Realtor, you find the fixer-upper home you want and after your Realtor does a feasibility analysis, you agree to purchase it. You sales contract will indicate you are seeking a 203k loan and indicates the purchase is contingent on loan approval that includes repair costs.
• You then find an FHA-approved 203(k) lender and present a detailed proposal that shows the scope of work to be done and a detailed cost estimate on each repair or improvement of the project.
• The lender has the property appraised to show current and estimated value after renovation.
• Once the loan is approved, it will close for an amount that includes the purchase price, the remodeling costs, and a 10-20% contingency to cover cost overruns and any extra work not included in the original proposal
• When the property closes, the seller receives the purchase price, while the balance is put in a contingency fund that will be tapped by the contactor in a series of draws throughout construction. To make sure that no liens will be placed on the property, the draws are paid to the contractor less 10%, obtainable at the end of the project.
• The contingency fund can also include up to six months of mortgage payments if the new owner will not be occupying the property during construction.

Six months or so after closing, your once-distressed property will be a market-value home. Janice Petteway and the team at Exit Real Estate Results can make this happen for you. We are listing an interesting mix of Central Florida homes. One of them could be yours.

Let's clear up a misperception. As we encourage troubled homeowners to "avoid foreclosure," we are not assuming that everyone will be able to keep their home. Some people got in far too deep and bought homes far beyond what a person in their income bracket could really afford. When ARMs adjusted or property values plummeted, these people and many others whose homes were more modest find themselves in need of a solution far bigger than anything out there to keep them in their homes. Some borrowers lost their jobs or second income, got divorced, got sick, or ran into other problems.

Frankly, some people have had enough. Big, pricey homes usually come with big, pricey utility and maintenance costs that will not change even if the mortgage is refinanced or the mortgage loan modified. (Even moderate homes can be a burden if family circumstances have changed.) Moving out of the home may be the best option for a family.

When put in proper perspective a house is a material possession that provides shelter. Many of the intangible things tied up in the concept of "home" are transferable so long as the family stays together. Yet, foreclosure can be a devastating event for many people which leaves them feeling powerless and trashes their credit.

So, what does "avoid foreclosure" mean? It means putting people in a position where they have some control over their lives. This might be accomplished in one of several ways:

Loan Modification - for people who want to keep their home and have enough income to do, changing the loan terms to lower the payment might do the trick.

Refinancing - for those who want to keep their home but get a better interest rate and better terms, refinancing might lower the payment over the long run.

Short Sale - when keeping the home is not an option, making the choice to sell for a price in line with the market but less than the amount of the loan is an appealing prospect. This may negatively affect your credit but not as much as a foreclosure will.

Deed-in-lieu of foreclosure - giving the house back to the bank.

The recently-passed Making Home Affordable program enabled loan modification and refinancing for many who qualify but did not address many homeowners who are underwater or who have insufficient income. New provisions announced last week expanded the program to offer lenders incentives to be more amenable to short sales and deed-in-lieu.

In all of these cases, lenders accept these alternatives because it is more cost effective for them to do so - not due to any altruistic motives. But homeowners still benefit, even if part of the solution requires they give up the home and move on to the next phase of their lives.

Homeowners in trouble: Foreclosure does not have to be the end of the story. There are alternatives best explored with a HUD-approved housing counselor. Call Hope Now at (999) 995-HOPE to start planning.

Janice Petteway and the Exit Real Estate Team would like to part of your solution. We do short sales in Central Florida.