Bryan Crabtree

Mortgage Modification

If you're facing foreclosure and want to "modify" your mortgage to keep your home, you must meet the following criteria:

• Have secured your mortgage before Jan. 1, 2009
• Have a primary mortgage of less than $729,500
• You must live on the property
• Must fully document income with tax returns and pay stubs
• Sign a financial hardship statement
• Go for counseling if your total household debt totals more than 55 percent of income.

"Homeowners must be late on their payments to qualify," says Trish Summers, a private mortgage banker with Luxury Mortgage company in Stamford, Connecticut.

CNBC.com

If you meet all those qualifications, your lender will then determine how much to lower your monthly payment so it's about 31% of your gross monthly income. The interest rate could be as low as 2%.

Homeowners pay no fees for the modification. However, homeowners could face a balloon payment at the end if your lender reduced your monthly principal payment during the modification. So if your lender reduced your total payments $20,000, you could owe that amount when paid off your loan, refinanced or sold your house.

But there is some financial benfit for the homeowner in the plan. For every month a homeowner makes a payment on time, the Treasury will pay an incentive that reduces the principal balance on a loan. Over five years the total principal reduction could add up to $5,000.

There's also a trial period period for the modification.

"The loan servicer gets paid by Fannie (Mae) or Freddie (Mac) after three months," says Summers. "If the homeowner pays the mortgage on time, the servicer gets $1,000 from the government each year for the next three years. If the mortgage is not paid on time in those three months, the deal is over."

And the new loan rate can go up after 5 years. It's only a low in the beginning to help the homeowner dig themselves out.

The plan is in effect until the end of 2012 and can only be used once.

Sales in January were at a 10-plus year low of 372 total transactions in the Tri-County.
Sales in February were even lower at 317 total transactions in the Tri-County (this number should be slightly higher when the final number comes out - but likely still lower than January)
This, above, is very abnormal.

The interesting fact is that showings are up 74% in our MLS.

Here's what's selling:

$19,999 OR UNDER       0         0         0         0         0         0
 $20,000 -  $29,999     0         0         0         0         0         0
 $30,000 -  $39,999     1         2         1         0         1         5
 $40,000 -  $49,999     0         0         1         0         2         3
 $50,000 -  $59,999     1         8         1         0         1        11
 $60,000 -  $69,999     0         0         0         0         1         1
 $70,000 -  $79,999     0         1         0         0         2         3
 $80,000 -  $89,999     0         2         0         0         2         4
 $90,000 -  $99,999     1         5         0         0         1         7
$100,000 - $119,999     0        13         2         0         6        21
$120,000 - $139,999     3        14         4         0         9        30
$140,000 - $159,999     1        12         6         0         5        24
$160,000 - $179,999     0        20        11         0         9        40
$180,000 - $199,999     1        13        14         0         3        31
$200,000 - $249,999     1        16        16         0         8        41
$250,000 - $299,999     1         7        11         0         2        21
$300,000 - $399,999     0        11        15         0         2        28
$400,000 - $499,999     0         3         9         0         0        12
$500,000 - $749,999     0         1         7         0         2        10
$750,000 - $999,999     0         1         8         0         1        10
$1,000,000 OR OVER      1         1         6         0         3        11
Total Types:           11       130       112         0        60       313

AS YOU CAN SEE, MOST OF THE SALES ARE BETWEEN $100,000-$300,000.  

I believe this has a lot to do with the very difficult financing. The good news is that the $8000 tax credit will drive some interest into the market, our website traffic is up substantially (which is about a six-month leading indicator) and showings have been markedly higher than in the last quarter of 2008.

So what can we do as marketing agents and sellers working together to sell our homes? We are working on various ways to improve our presence through the use of Craigslist, more marketing, increased direct mail, and even more follow up with the prospects that are looking at homes.

Unfortunately, price is what sells right now. Some estimated 48% of transactions in our market are distressed sales or bank-owned. If you need to sell in the next three months, it's likely that discounting and hard negotiation is going to play heavy into the equation.

Homebuyer Provisions
FIRST-TIME HOMEBUYER TAX CREDIT
As Modified in the American Recovery and Reinvestment Act
PROVISIONS EFFECTIVE FOR PURCHASES ON OR AFTER JANUARY 1, 2009 AND BEFORE DECEMBER 1, 2009
AMOUNT OF CREDIT Maximum credit issued will be $8,000
ELIGIBLE PROPERTY Any single family residence (including condos,
co-ops and townhouses) that will be used as the principal residence.
REFUNDABLE Yes. Reduces (or, can eliminate) income tax liability for the year of the
purchase. Any unused amount of tax credit will be refunded to the
homebuyer.
INCOME LIMIT Yes. Full amount of credit available for individuals with adjusted gross
income of no more than $75,000 ($150,000 for a joint return).
FIRST TIME HOMEBUYER
ONLY?
Yes. Purchaser (and purchaser’s spouse) may not have owned a principal
residence in 3 years prior to purchase.
REVENUE BOND
FINANCING
Purchasers who utilize revenue bond financing can use credit.
REPAYMENT None, for purchases on after January 1, 2009 and before December 1,
2009.
RECAPTURE None, unless the home is sold within three years of the purchase. If the
home is sold within three years original purchase, the entire amount of
credit is recaptured upon sale.
TERMINATION December 1, 2009
EFFECTIVE DATE Effective as of January 1, 2009
Loan Limits (applies to Berkeley, Charleston, Dorchester Counties)
FHA loan limit: $335,000 Fannie Mae/Freddie Mac loan limit: $417,000

This is good news for all regions. Florida, who led the bust in Housing is reporting an increase in sales:

The real estate business is improving in Florida, a state that was among the hardest hit by foreclosures.

Sales of existing single-family homes in Florida rose 13 percent in the fourth quarter of 2008, compared to the fourth quarter of 2007, according to the Florida Association of REALTORS®.

This is the second consecutive quarter that Florida has reported higher existing home sales. Sales were up 5 percent in the third quarter compared to the previous year.

Twelve Florida metropolitan statistical areas (MSAs) reported increases, as well as a growing number of smaller markets.

Listen to our radio show each Saturday at 8am on WTMA, 1250am for more on these type of stories, or download our podcasts for free, click here.

Selling your home in the Charleston County or Tri-County area? Call Bryan Crabtree at 843-343-4141. He and his wife have sold 16 of their listings in the last 100 days making them Number One in Mount Pleasant and Number 10 for the entire market.*

*source CTARMLS 2/11/2009

Courtesy of Rismedia, Reuters and the Lowcountry Real Estate Show on 1250am, WTMA Saturdays at 8am. Click here for our podcast.

The House of Representatives Friday voted 246 to 183, almost entirely along party lines, to jolt the nation’s struggling economy with a $787.2 billion stimulus package designed to provide quick tax relief and create or save 3.5 million jobs.

Senate passage was expected later Friday, and President Barack Obama is likely to sign it early next week. Once he does, some of the money should start flowing quickly. The bill promises quick job creation by spending $27.5 billion to modernize roads and bridges, $16.4 billion for investments in high-speed rail and transit and $53.6 billion to help states pay education expenses.

And it includes up to 33 weeks of additional jobless benefits in high-unemployment states as well an extra $25 a week, funds to help the poor and those with disabilities with health care costs, and payments of $250 to retirees, Supplemental Security Income recipients and veterans who get pensions or disability payments.

The mood among supporters was a combination of relief, euphoria - and confusion. No Republicans voted for the bill - seven Democrats were opposed - and GOP critics were bitter, charging the bill was dotted with favors to special interests that had no business in emergency legislation and offered too few tax cuts.

The GOP was critical of one of the biggest, Obama’s signature “Making Work Pay” tax cut, which provides effective rebates of $400 per taxpayer to most taxpayers. The credit, estimated to cost $116.2 billion, should mean only $13 a week this year, assuming the plan begins in June, and $8 a week next year.

Republicans objected to how congressional negotiators worked largely behind closed doors to cobble the bill together quickly this week- despite Obama’s promises of transparency. And when copies of the 1,073 page, 8-inch-thick bill became available a few hours before the votes, they had inked notes scribbling changes in the margins.

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Selling your home - $500 Guarantee to sell it in 60 days; Call Bryan Crabtree for details at 843-343-4141 (Charleston Tri-County SC)