Stellar Realty Northwest

Fannie Mae owns thousands of home at all price levels across the country. When foreclosures occur on mortgages in which Fannie Mae is the investor, they sell the properties "as is", and the condition can run anywhere from broom clean, recently remodeled, to needing a complete overhaul. It is recommended that you get an inspection, which is really the case for any property you purchase whether it's a bank owned property or one that is purchased directly from a seller. Fannie Mae has condos, town homes and single family detached for sale, and one question that comes up is "Do I have to use a Realtor or can I buy direct from Fannie Mae?". The answer is: YES, you must use an agent. Fannie Mae requires that customers be represented by Realtors. This is because even though some GREAT values can be had, there are specific conditions that Realtors are helpful with; for example Fannie Mae will not accept offers that are contingent on the sale of your current home. Other contingencies will be considered on a case by case basis. This is why first time home buyers are great candidates for Fannie Mae listings. You also need to be pre-qualified, even though the lender you ultimately use doesn't have to be the one who prepared your pre-qual letter. If you are interested in finding some Fannie Mae properties for consideration, contact us at the Mannila Besaw Group and we'll be happy to assist!

The question is being asked a LOT lately about whether the banks will be reporting the shortfall on the loan (the difference between what the house sells for vs. what is left owing on the 1^st and/or 2^nd mortgages) as income to the IRS, resulting in a tax bill that could be substantial depending on how much was "shorted" in a short sale with the bank. The "Mortgage Forgiveness Debt Relief Act of 2007" relieves the homeowner of any potential liability in regards to the shortfall if the property is a the owner occupied. In the event that a cash out refi was taken out on a primary residence then you will probably be issued a 1099.

All is not lost on the investment property or second home if the borrower can prove insolvency. The threshold for proving insolvency is much lower than qualifying for bankruptcy. Ask your CPA about IRS form 982.. As a homeowner if you can prove with receipts, etc, that all the cash was only used for the house (updates, repairs, etc) then you may not be liable. Another thing to know is that you cannot be issued a 1099 AND a Deficiency Judgment.

If you are struggling with making your mortgage payments or are already in default, you may be considering a short sale, which is where your lender/lenders may be forgiving a portion of your outstanding loan balance in order to execute a short sale as opposed to letting it go into foreclosure. Let's say your loan balance with your first lienholder is $300,000, and current market value of your home is $240,000. With closing costs and commissions, if the lender approves a short sale they'll be forgiving MORE THAN $60,000. A deficiency judgment is where the lender attempts to come after you for the balance of the forgiven amount at a later date. Generally, lenders will not seek a judgment if it's the primary residence, or if it's been refinanced and there has been no "cash out" on a 2^nd mortgage or line of credit. Even if they do seek a judgment, it may not be a legitimate lien, depending on your circumstances. Our team recommends you seek advice from a CPA or attorney who is short sale savvy. If you are considering a short sale, be sure to ask the agent you're interviewing how many they have successfully negotiated. It is in your best interest to work with an agent who knows the ropes and has some solid experience under their belt.

5 or 10 years from now, when the financial crisis is over and home prices are up smartly once again, many will use hindsight and realize that they missed a golden age for first time home buyers. Anyone who sat on their "down payment savings account" for too long will kick themselves, realizing that while they waited for "the bottom", that they missed it. Just as with the stock market, this time will arrive just when everyone is at their MOST pessimistic.

With rates at somewhere around 5%, anyone who follows financing will realize that this is a truly incredible time to lock in for a 30 year mortgage at a rate that may not been seen again for another "cycle" of real estate. Remember, as a first time home buyer, you have the advantage of not having to sell your old home before buying a new one. While creative financing like lease options will continue to grow in popularity for credit challenged folks, the BASICS are important to remember; like spending no more than 28% of your pre-tax income on mortgage payments, taxes and insurance. Even if a lender doesn't hold you to this, hold YOURSELF to this. You will also want to be mindful of credit score improvements now, as it may take several months to get it above the 720 level that qualifies for many of the best mortgage rate plans.

If we look at November compared October of this year, closed sales are down 28.9%, which sounds HUGE, but if you look at the actual numbers, it's less dramatic: 1,108 closed sales in 2008 vs 1,268 in 2007. It's encouraging to know that homes ARE still selling, the key question for consumers is what is the price point that will actually motivate a buyer to make an offer in this climate where the attitude is "I'm waiting for the BOTTOM before I buy". Taking a look at the sales PRICES we can see that the average sale price in 2007 was $334,500 compared to this November's average sale price of 308,300. It would be easy to look at that and say "Wow, check out the depreciation" but that's not necessarily so. Yes we all know that's occurring at some level, but based on our economy it also means that people are buying less expensive homes due to higher unemployment and a general sense of insecurity about our lending situation and more difficulty in qualifying for loans. We are now sitting at 15 months of inventory for the Portland Metro area, which means that if sales continue at their current pace, it would take 15 months to sell it all. Clark County is sitting at almost 17 months, with many of those being short sales. The Days on Market is 135 days average. This is a GOOD number, which means that homes priced according to what the market will bear will sell quickly. Creative financing with lease options will continue to give buyers options to get into a good home in the event that they can't qualify for conventional or FHA loans due to being self employed or lower credit scores.