I'm in the process of negotiating a short sale with CitiMortgage. The property is my client's only rental property. The tenants just had an independent appraisal completed that came out to $184k (they had an offer in but bailed after the appraisal came back). My highest and best offer is for $210k with no seller concessions!! Citi came back to us with an "acceptance" but one with strings.....reduced commissions (of course) AND they are asking the sellers/owners to pay back $8400 over an 84 month period with payments at $100 per month. My clients are unsure what to do.....$100 per month is a lot for them right now, they are in FINANCIAL HARDSHIP and are struggling to keep their payments current on their primary residence....of which Citi holds the note on. Arizona is a non-deficiency state. Has anyone else had experience with this? Are they bluffing...or simply playing hardball and seeing just how much they can get out of my clients?? Has anyone had success negotiating their clients out of having to pay this monthly payment agreement?
It is estimated that 1 in 10 homeowners with mortgages are upside down in their homes, as of March, 2008. There are now an estimated 9 million US homeowners in that predicament, according to Moody's Economy.com.
As alarming as that is, the projection is that as home values continue to plummet, 1 in 3 home owners will be upside down by the end of this year, 2008. "Upside Down" simply means that you owe more than your home is worth. Another term for this situation is "screwed" :-)
Now before anyone goes too far off the deep end, being upside down is less of a problem if you don't need to sell or refinance. You just keep making the payments and everything is fine. It may be possible that real estate won't eventually return to the pattern of appreciation we've come to expect these last hundred odd years, but that's not the way the smart money is betting. I think that we're going to stabilize relatively soon and may even start seeing small amounts of appreciation. For those people who have sustainable loans, being upside-down is a non-event.
Where it becomes a serious problem is when you've got a non-sustainable loan. Whether it's negative amortization, or a 2/28 or something short term interest only, you're looking at a time when refinancing is going to be pretty much mandatory. If you could have afforded the payment it's going to adjust to, you could have had a sustainable loan. But people have a tendency to stretch too far and buy more of a property than they can really afford.
I ran across this website that advertised "short refinance" assistance (http://www.mortgagehelphotline.com/) and it got me thinking.....are lenders "doing it"? This is unchartered territory for me, so I would love to learn more about it. Is a short refinance a viable alternative to foreclosure, in line with a loan modificiation or short sale?
What is your experience with short re-fi's? Thoughts?
Typically, FHA will NOT insure more than one mortgage to any Borrower. An individual or couple owning a home that is already covered by an FHA mortgage CANNOT purchase another property that will be financed through FHA except under the following conditions:
1) Increase in family size. If the number of dependents has increased to the point where the present home no longer meets the family's needs, the Borrower may be able to finance another home through FHA. Borrower must provide satisfactory evidence of the increase in family size and show how the home no longer is large enough for the family. The Borrower MUST ALSO PAYDOWN THE 1st FHA Mortgage so that the LTV on that loan DOES NOT EXCEED 75% OF THE CURRENT APPRAISED VALUE OF THE PROPERTY. (NOTE: A full appraisal will be required to establish the value of the home).
2) Relocation: For Borrowers who are relocating to a new area that is NOT within a "reasonable commute" from their FHA-insured primary residence, the Borrower may keep the FHA-insured property as a rental property. The mortgage payment on the home must be documented and a lease of a 1-year duration (or longer) is required to show the rental income supports the payment for the mortgage.
3) Vacating a Jointly owned property: If the Borrower is vacating a residence that will remain occupied by a Co-Mortgagor, the individual vacating the property is permitted to obtain another FHA-insured loan. Acceptable situations would include those following a divorce or where one of the Co-Mortgagors will vacate the existing property to marry another.
a) For divorce situations, a copy of the divorce decree and the quitclaim deed would be required to show that the Borrower has relinquished the first FHA-insured property as part of the property settlement. It is also necessary to provide copies of canceled mortgage payment checks to show the ex-spouse has been paying the mortgage payment (with no lates) for at least the past 12 months.
4) A Non-Occupant Co-Borrower: A Borrower may be a Non-Occupying Borrower on the purchase of a 1-unit home for a family member to assist that person in qualifying the mortgage. The Borrower MAY STILL OBTAIN MAXIMUM FHA FINANCING ON HIS OWN PERSONAL MORTGAGE FOR HIS PERSONAL RESIDENCE.
 |
|
|
We are a husband and wife team specializing in selling Short Sales, pre-foreclosures, & foreclosures/bank owned homes. We service buyers and sellers all over the metro Phoenix Valley.
ActiveRain Corp. is not responsible for the accuracy of the site's content (which is written by members of the ActiveRain Real Estate Network) and does not endorse the views of the real estate agents, mortgage brokers, and others listed here.
Powered by the ActiveRain Real Estate Network
© 2009 ActiveRain Corp. All Rights Reserved
