Keep reading to get Free access to Bucks County School Report Cards. If you are looking to buy a Home in Bucks County or the surrounding area, it is important to know what and where the best ranked schools are. The Philadelphia Inquirer has released a special report card on local schools for the last 13 years. In my opinion, it is the most comprehensive look at how well schools in the Bucks County and surrounding region are doing. Sure, websites like http://envirian.greatschools.org/ can be helpful but this particular report provides unique information gathered from a survey designed and distributed by The Philadelphia Inquirer to every one of the 166 school districts and more than 300 high schools in the eight county area, including charters, private, diocesan and technical high schools. The report includes profiles of virtually every school district in the region and includes their websites. On top of all the information, it is also easy to navigate the site. If you are thinking of moving and school district quality and location are important to you, I think you will agree this is a wonderful and helpful resource. Get your special report card on local Bucks County Schools here. Enjoy!
The HAFA (Home Affordable Foreclosure Alternatives)Program is coming and will take effect on April 5, 2010. It is essential that you know why it is not a good program and why, if you are a seller, you should throw that agreement in the trash! (this is the PG version of what I really feel you should do with it!!)
Before I go on, you need to know I have spent many hours in webinars and seminars which were ran by Wells Fargo, Bank of America, Freddie Mac and a few nationally recognized attorneys who specialize in short sales on top of plenty of time reading the guidelines and contract myself.
Most of what I will include below is my professional opinion based on the information given to me by the above parties. I feel it is important to share the information I learned to help you make a more informed decision. Ultimately, you need to take the guidelines and contracts (they call it the Supplemental Directive 09-09), which I've included below, to your own attorney (not just any attorney but one who specializes in short sales) and make an informed decision. Click here for a free list of questions you'll want to ask to be sure any professional you are seeking advice from actually has significant short sale experience.
Supplemental Directive 09-09 - First of all before I begin it is first important to point out how you know if you are even eligible for the program. You will need to meet the following criteria:
1. Your loan must be a non GSE loan - Loans that are not owned or guaranteed by Fannie Mae or Freddie Mac (click on either of the previous links to find out if your loan is a Fannie or Freddie loan)
2. The servicer of your loan (who you make your payments to) must have executed a servicer participation agreement and related documents (SPA) withFannie Mae in its capacity as financial agent for the United States (as designated by Treasury) to participate in HAMP on or before December 31, 2009
3. A loan must be HAMP eligible and meet the other requirements to be eligible for incentive compensation under HAFA
4. Servicers must evaluate a borrower for a HAMP modification prior to any consideration being given to HAFA options
5. Borrowers that meet the eligibility criteria for HAMP but who are not offered a Trial Period Plan, do not successfully complete a Trial Period Plan, or default on a HAMP modification should first be considered for other loan modification or retention programs offered by the servicer prior to being evaluated for HAFA
6. The property is the borrower’s principal residence - no second homes or investment properties
7. The mortgage loan is a first lien mortgage originated on or before January 1, 2009 - if you have a second or third mortgage or any other lien, they are not eligible. You will be responsible for getting any additional liens released on your own.
8. The mortgage is delinquent or default is reasonably foreseeable
9. The current unpaid principal balance is equal to or less than $729,750 - no jumbo loans
10. The borrower’s total monthly mortgage payment (as defined in Supplemental Directive 09-01) exceeds 31 percent of the borrower’s gross income
Now on to the Highlights, der, uh, I mean Lowlights:
1. Servicers, in accordance with investor guidelines, determine if a short sale or DIL (deed in lieu of foreclosure) is in the best interest of the investor, guarantor and/or mortgage insurer. It matters not what is in your sellers best interest but what is in the best interest of the investor/lender/insurance companies!
2. By signing the SSA, you are agreeing not only to a short sale but also to a deed‐in‐lieu of foreclosure if a short sale is not successful - This is a huge gotcha and the biggest reason why I would not sign or enter into a HAFA agreement!
3. A fixed termination date of not less than 120 days, after which, the servicer may or may not agree to extend it for up to a year. - On the surface this does not seem all that bad unitl you read #4 below.
4. When the seller signs the SSA (HAFA short sale agreement) they are agreeing up front to a DIL (see #2 above). The investor is obligated to accept a DIL in accordance with the terms of the SSA if the term of the SSA expires without resulting in a sale of the property - This means come day 120 the lender can exercise and enforce a DIL because the seller already agreed to it in writing. For those of you who don't know, a DIL is nothing more than a volunteered foreclosure. It will show on your credit as a foreclosure. This is not a benefit to you but it is to the lender because they get the property back in their possession faster thereby saving them money compared to making them go through a judicial foreclosure process.
5. Servicers may amend the terms of the SSA in accordance with investor requirements. - Talk about a sentence that opens the flood gates for lenders to do what they please!
6. Sellers will have to continue to pay a portion of their mortgage payment. They will be required to pay, during the term of the SSA, an amount that must not exceed 31% of the borrower’s gross monthly income. - Sellers who miss payments will be in default of the agreement and a DIL can be immediately pursued and enforced!
7. The offer price will be dictated by the lender using the 90 day "as-is" BPO value. - The servicer does not have to agree to additional valuation methods. - Sellers better pray they get an experienced BPO agent because if they over value your property and it does not sell within 120 days because it is overpriced, you just gave your property to the bank (see DIL #2 and #4 above)
Don't fret though as there is ONE good thing about HAFA. You can opt out of this program at any time! If the borrower fails to contact the servicer within the timeframe or at any time indicates that he or she is not interested in these options, the servicer has no further obligation to extend a HAFA offer. This means you can elect to perform what is now being referred to as a "proprietary" or "classic" short sale (or a non HAFA short sale).
If you have help from a qualified experienced short sale professional, they will know all you have to do is put in your short sale package cover letter the words, "THIS IS TO BE A NON HAFA SHORT SALE." They will also have many ways to help you avoid having a foreclosure on your record, avoid agreeing to a DIL, avoid agreeing to deficiency judgements and avoid signing promissory notes.
Bottom line, HAFA is great for the lender/servicers but not so much for you, the homeowner/seller. I predict HAFA will be another massive failure just as HAMP has been. This program will be a good fit for very few homeowners, if any at all.
The sooner you realize lenders control our politicians and they both falsely act as if their programs will work better for consumers while in reality they have figured out, in advance, how they will ultimately improve their own position and bottom line, the better off you will be! KNOW YOUR RIGHTS!
Disclaimer: While attempts have been made to verify information provided therein, the author does not assume any responsibility for errors, omissions, or contradictory information contained in this document. This document is not intended as legal, investment or accounting advice. The reader of this blog assumes all responsibility for the use of these materials and information.
There is a big difference between a short sale specialist and a short sale wanna be. Even in the affluent areas of the country including, Bucks County , short sales are effecting the market in a huge way. This is part two in a series of articles I will be writing to help you navigate the murky waters of a short sale. Click on Part One for a refresher.
If you live in the Bucks County, PA or the Philadelphia area, and you are a home owner in distress and looking for help but don't know where to turn and don't know who to trust, PAY ATTENTION, THIS IS FOR YOU!
Who should I call for help first?
In Bucks County,Pennsylvania your lender is required to send you an Act 91 letter. This letter is the first formal notice provided by your lender that you are at risk of foreclosure. Included in the letter is a list of state approved credit counselors who will help you and answer your questions, free of charge. Companies such as American Financial Counseling Services, Inc. (AFCS) which is a PA State Affiliated Non-Profit Agency are very respectable and knowledgeable. They have been through many training courses specifically related to dealing with distressed sellers. They not only have the ability to refer you to an experienced real estate agent but also will be able to help you rebuild your credit and answer any possible Bankruptcy questions you may have. These state certified companies usually have attorneys on staff who can also help you if needed. Be sure to meet with them and ask for their help! They very well may provide you with options that allow you to stay in your home and your initial consultation is free so you have nothing to lose.
Why, as a licensed real estate agent and realtor(r), would I suggest contacting an investment company or an REI club regarding your short sale situation?
It's simple really, it's safe to say the president of a well known REI (real estate investment) club will have contacts and knowledge in buying and selling all kinds of distressed properties. It is quite possible he/she will know more about the subject than your average local real estate agent who may never have completed any type of distressed real estate sale, let alone, a short sale transaction. He/She may even know someone who may want to buy your home for cash. That is what investors do!
Shouldn't I be wary of investors who "Bottom Feed" and take advantage of unsuspecting and uneducated (in Real Estate) Sellers?
Well, yes and no. Yes, you should be wary of anyone you are entrusting with your short sale, including investors. But, every town has investors who operate with high morals and ethics and they very well may have a real estate license themselves they just don't operate and use it like a "traditional agent". Investments are their game and they stick to what they know. Plus, large national companies like 1-800-SELL-NOW do not affiliate themselves with just any investor, they make sure their brand is represented by professionals who have integrity and knowledge of distressed real estate. They even provide specific training which is usually better than what is offered by the NAR (National Association of Realtors).
Warning: If you are going to call a local and unknown "We Buy Houses" investment company who use those cheap looking home made signs, be very careful and tread lightly as there are a lot of crooks out there. Think about it, if they do not care enough or do not have enough money to, at least, have a professional looking sign, how professional do you think they will be with everything else they do? Larger National Companies have much more at stake and will more than likely be a safer bet.
Problem is even those who you "think" would have your best interest in mind may not be able to be trusted these days.
Recently even attorney's, real estate agents and mortgage companies have been accused of committing fraud. A short sale is a very tricky transaction and should only be handled by experienced professionals who can answer your questions and provide you with resources and testimonials.
Investigations and arrests both locally and nationally are popping up all over. Just do a quick goggle news search on foreclosure fraud and you will quickly get a sense of the murky waters you are in. You need to be sure you are not knowingly or unknowingly committing or about to be a victim of fraud.
You'll want to be sure you interview more than one professional and ask the following questions before moving forward:
1. How Many short sale transactions have you closed?
2. What is your short sale closing ratio?
3. What is your average time from listing to closing?
4. What is the average commission you'll accept from the bank?
5. How many short sale files are you currently working on?
6. Do you negotiate the short sales yourself or do you outsource the negotiations to a third party?
7. Do you have testimonials and a list of past clients I can call to ask them about your services?
8. Can you provide me with a list of experienced short sale attorneys who you feel comfortable referring me to?
9. Can you provide me with a list of experienced Bankruptcy attorneys so I can weigh my Bankruptcy rights and options?
10. How will a short sale affect my credit compared to a bankruptcy, foreclosure or a deed-in-lieu-of foreclosure?
11. Will I be able to stay in my home by renting it back from the buyer?
12. Will I receive any proceeds derived from the sale of my home?
13. Will I have to pay taxes on the difference between what I owe and what the house sells for?
14. Will I have any future financial obligations to the lender after the short sale transaction closes?
15. How long will it take for you to find a buyer?
16. Do I have to pay any money or commissions in order to sell my home in a short sale situation?
17. Can you provide me with a list of experienced CPA's that specialize in cancellation of debt and the tax consequences of short sales?
18. Will I have to sign a promissory note or worry about the bank going after me for a deficiency judgement?
If you are thinking of buying or selling some Real Estate in Bucks County, or anywhere in the U.S., and you want to get a great deal of help from Uncle Sam and the FHA (Federal Housing Administration) then you are going to want to keep reading. Big changes are coming and you do not want to "miss the boat" for the opportunities that are TEMPORARILY available.
The "Perfect Storm" that caused home prices in many markets, including the Bucks County Real Estate market, to drop considerably has resulted in an opportunity you should take advantage of before it is gone. Especially, when combining it with what the government has done to stem the decline in values.
Considering the fact that Homes in Bucks County have stopped their rapid declines, the numbers suggest we may have hit bottom, this generally means now is a good time to buy.
Combine that with the fact that interest rates remain near their lowest level, on historic terms, and this makes financing a purchase "cheap" and locks that advantage in for 30 years.
Most of you probably already know as part of it's plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:
The legislation requires buyers to be "under contract" by April 30th, 2010 and close by June 30, 2010. This reduces taxes owed on a dollar for dollar basis, which is much better than as a deduction or write-off.
The government has also increased it's appetite for certain loans, known as FHA loans, by increasing the loan limit for such loans to $420,000 in Bucks County and it's surrounding counties. The same program allows the seller to give up to 6% of the purchase price back to the buyer at settlement so they can buy the home with less money out of their pocket. Plus, you only need a nominal 3.5% down payment which can be supplied by a family member, public housing state/county/township grant program as a "gift".
The above loan program and tax incentive attributes basically gives anyone, with a job and the desire, to become a home owner for literally "no money down". In fact, if you combine a grant program, 6% seller assistance and the tax incentive, one could make the case the government is going to PAY YOU and REWARD YOU WITH CASH for buying a home right now!
Are you beginning to understand the opportunity that is available to you yet? That is great news, right? Well, there's a catch!
These programs will be expiring and going away for a very long time and perhaps for good.
Consider the fact the tax incentive program is set to expire on April 30th, 2010 for both exisiting owners and first time home buyers. Folks, April is right around the corner and word on on the "street" is this program will not be extended. Think about it, where is the money going to continue to come from? These tax incentives will not and can not last forever. Dramatic changes are taking place and to think or expect this program to keep on getting approved is short sighted, at best. It wasn't exactly an overwhelming vote for yes the last time it was extended back in October of 2009.
Now consider the fact there was a pretty important election last night and it was won by a Republican. The political tides just may be changing a bit in the senate which may make it even tougher to get an extension approved moving forward.
Add to this the announcement today that FHA will be tightening their guidelines sometime in/around the summer of 2010 and you will quickly realize the window of opportunity for first time home buyers in bucks county, and the whole country for that matter, to get into a home with little or no money down will be closed for a long, long time!
As reported in The New York Times and Wall Street Journal yesterday, today the FHA is expected to announce that beginning in the summer of 2010 the allowable assistance is going to be cut in half from 6% to 3%.
And that's not all that is going to change with regards to FHA loans. Borrowers who get an FHA insured loan will also have to pay a higher initial mortgage insurance premium, known throughout the industry as the MIP. The new premium will be raised from 1.75% of the loan amount to 2.25%. That's a $500 increase per every $100,000 in loan value! Thankfully, the proposal that would not allow this premium to be financed into the loan was rejected. This means, as is the current status quo, that you can "roll" the premium into the loan rather than paying it up front in cash. So, while this particular change will not cost you additional up front costs it will increase your monthly payment amounts.
Borrowers who have a credit score below 580 will now need to put down at least 10%.
Other changes will try to hold lenders who participate in the FHA program more accountable by publicly reporting their performance rankings. The new measures are aimed at shoring up the agency's finances while also screening out unprepared borrowers.
IMHO, the change with the most impact will be the reduction in the allowable seller assistance.
I know some of you are probably saying to yourself, this is great information, but what is it going to mean to me?
So, let me break down the numbers for you and show you what the cost difference is going to mean to you if you buy before April 30th, 2010 compared to if you wait and miss the chance to take advantage of the current opportunities.
The median price for homes sold in Bucks County in 2009 was $278,833. The median for first time home buyer areas in Bucks County is probably closer to $175,000 and the average taxes around $3,500 per year, insurance, let's say $1,000 per year add a conservative interest rate of 5.25%......and that is what I'll use.
If you buy a home using the current tax incentives and FHA guidelines by April 30, 2010 it would cost you, approximately, $6,200 in up front cash (after a 6% seller assist) with monthly payments of $1,401.24. Combine your first time buyer tax incentive of $8,000 and that means the government pays you $1,875 for buying this house. Add in a gift or grant program to cover the required 3.5% down payment and you are walking away with all $8,000 from Uncle Sam to do what ever you choose come tax time!!!
Let's compare this to what will very likely occur if you wait to buy the same house come July 1st, 2010. Your out of pocket cost will shoot up to $10,445 (after the revised 3% max seller assist) with a monthly payment of $1405.91 (MIP increase). Your Uncle Sam will no longer be answering your calls for $8,000. At best if you can get a gift or grant program (which is not easy to get and does not happen often for numerous reasons) you will still need $4,320.
Folks, that is a potential $12,000 difference!!!
So, I'll ask you one more time. Do you understand why it is important for you to take advantage of the current situation at hand?
Do you understand if you wait it is very likely you will have cost yourself $12,000 for buying the same exact house at the same exact purchase price only two months later?
What would you do with an extra $12,000? Do you think the people in Haiti could use $12,000? If you don't take advantage of this you might as well just take your paychecks and flush them down the toilet.
Please, don't be "that guy/gal". Find yourself a trusted realtor, mortgage consultant and tax advisor and get moving already because the train has all but left the station!!
I know, I know your thinking,"whatever Kevin, you're a real estate agent. When do you agents ever say it is not a good time to buy."
Well, those of you who have known me, know I have been and usually am at the forefront of what is going on in the real estate world. I was buying investment properties before it was a cool thing to do. I was buying short sales 11 years ago when most of the general public did not even know what they were. Then I stopped investing in 2004, before most speculators, because I clearly saw the signs that the pendulum had swung in the other direction. I was the first agent in Bucks County to start an internet based brokerage company five years ago before "internet leads, websites and virtual offices" were popular. I am once again at the forefront of the pre-foreclosure market and I am telling you, mark my words.......
If you want to be a home owner, have steady income and can afford the payments and you don't buy a home before April 30, 2010, you will have blown an opportunity to take advantage of a once in a lifetime opportunity and you will cost yourself thousands and thousands of dollars.
Disclaimer: While attempts have been made to verify information provided therein, the author does not assume any responsibility for errors, omissions, or contradictory information contained in this document. This document is not intended as legal, investment or accounting advice. The reader of this blog assumes all responsibility for the use of these materials and information.
This just in: FHA announces they will waive the 90 day anti flip rule for short sale and reo back to back transactions!
Last week I wrote a blog about the legalities of these transactions, are back to backs legal, and informed you all of the legitimacy of them. FOr all you flippers and rehabbers out there the news could not be any better!
Finally, the powers that be are actually doing something to help us churn through all this distressed inventory. I predict many more lenders and organizations will fall in line like dominoes by the end of 2010.
Just make sure you follow the guidelines please as we don't need a few rotten apples to spoil the bunch.
Happy Home Hunting!!
Disclaimer: While attempts have been made to verify information provided therein, the author does not assume any responsibility for errors, omissions, or contradictory information contained in this document. This document is not intended as legal, investment or accounting advice. The reader of this blog assumes all responsibility for the use of these materials and information.
BEWARE......make sure you interview your agent before you hire them. For a free list of questions you should ask, e-mail me.
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