Karen Cooper-Mtg Banker|Broker Ashland|Medford

Karen Cooper - OR/CA Mortgage Consultant - www.Quality4Loans.com
Providing high Quality, Professional, Ethical service to Oregon and California home buyers and owners since 1983. Whether you are taking out your first home loan or your fiftieth, for your home, your second home or for investment, put my knowledge and expertise to work for you.

Karen Cooper - OR/CA Mortgage Consultant - www.Quality4Loans.com
Providing high Quality, Professional, Ethical service to Oregon and California home buyers and owners since 1983. Whether you are taking out your first home loan or your fiftieth, for your home, your second home or for investment, put my knowledge and expertise to work for you.

It's that time again, time for the outdoor thermostat to creep up over the 90 degree mark, time for the roses, daisies and lavender to give their prolific displays, and time for the Children's Festival in Jacksonville Oregon on the grounds of the Britt Festival.

Children's Festival, July 12-14, 2009, Jacksonville, Oregon Britt Festival Grounds, $2.00 entry fee per person.

Sunday July 12th - Session #1: 5:30-8:30pm
Monday July 13th - Session #2: 9am until noon
Session #3: 6:00-8:30pm
Tuesday July 14th - Session #4: 9am until noon

See you out there!

Karen Cooper - OR/CA Mortgage Consultant - www.Quality4Loans.com

I have heard from several Oregon Bond borrowers now who are struggling due to financial hardships, and running in to difficulties due to the owner occupancy requirement and the potential recapture tax provision a homeowner may face on an Oregon Bond loan when they sell their home and their income has increased enough to trigger this provision. Some of these homeowners were trying to get the Home Affordable Refinance or Home Affordable Modification programs to help reduce their monthly payments, but the Oregon Bond Loans are not eligible for these programs that were approved through the federal stimulus packages.

I asked the State of Oregon if they have any suggestions for folks who are experiencing financial hardship and have Oregon Bond loans. Here is the response:

"Karen,

Due to the economic downturn, it is possible for a Oregon Bond borrower to rent out their home for a short period of time, if they have continuously occupied the home for at least the first year of ownership. In recent months we have instructed our loan servicers not to monitor the properties for owner occupancy after the first year. Many of our borrowers are in the same situation of having to relocate to obtain employment. If this is going to be a permanent relocation, then they should refinance or sell the home financed by the Bond program. The Recapture Provision is only triggered upon sale of the home, and sale within the first 9 years of ownership. In most cases the borrowers will not owe a tax because their income has not increased significantly from the time of purchase.

For borrowers that are remaining in the home and struggling, we do not have any program to defer or reduce payments. We have had some borrowers with an improving employment outlook, but who have fallen one or more months behind on their payments, and the servicer has been able to modify the loan by capitalizing delinquent interest and bringing the loan current. This may be an option on a case by case basis for delinquent borrowers, but the borrower still has to be able to handle a full monthly payment going forward."

If you have been told by your existing lender/servicer something other than the information above, relay this info to them and ask your lender to verify it is okay for you to temporarily rent your home out as you find it necessary to temporarily relocate for your job.

Should your home sell AND your income exceeds those maximum income limits (follow this link for current income limits, but you should have received an initial disclosure that referenced limits at the time you took out your loan, plus annual increases) - that means BOTH the sale and exceeding income limits take place - you could potentially face a recapture tax. This hasn't happened to very many people.

So, it sounds to me like maybe getting a short term tenant in who gets below market rent rates because you are selling the home due to the economic downturn that necessitated a move in order to find a job might be a viable alternative for some folks who have an Oregon Bond loan get through these difficult times. Certainly a better alternative than loosing a home to foreclosure.

See you out there!

Karen Cooper - OR/CA Mortgage Consultant - www.Quality4Loans.com

Here in Southern Oregon, in the traditional peak buying season we're seeing quite a bit of activity in the lower price ranges of the real estate market. Even Ashland, where prices are at the higher end of the scale for the Rogue Valley, sales are picking up. In Medford, White City, Central Point, Eagle Point the under $200,000 price ranges are seeing a flurry of activity, especially heavy in the lower price ranges where both first time home buyers looking to take advantage of the $8000 tax credit before it sunsets December 1, 2009 AND investors who are seeing price ranges that will cash flow and meet their investment goals are competing against each other. The inventory of available homes is shrinking consistently now, with the Mar-May 2009 number of homes on the market 27% less than the same period in 2008. Foreclosure sales are still representing a large percentage of these sales, and this market segment is likely to pick up a bit more when the State once again releases the funding for the Neighborhood Stabilization Program, probably sometime toward mid to end of July.

So, how does the "average buyer" buy a foreclosure home? Typically, you won't find the average buyer on the courthouse steps trying to pick up a bargain through the Trustee's Sale. This is where you will find the sophisticated, experienced investors who know the risks associated with purchasing foreclosed homes in this manner. The average buyer is working with their savvy, experienced Realtor, who has explained the many risks associated with these "as is" purchases where the bank who owns the property has no idea of how the property was treated by previous occupants. Their Realtor is advising their buyers how to limit risk and protect themselves through home inspections and other more specific types of inspections specific to a property, such as septic system and well/ water flow/quality inspections and certifications. And, their Realtor is watching for these properties to come on the market - knowing even before they are on the Multiple Listing Service that they are coming down the pipe, letting their buyers position themselves to pounce as they come on the market.

Sound intimidating? With the right professionals on your team, it doesn't need to be. Southern Oregon Buyers are finding amazing deals this way. They are choosing their own Realtor to look out for their best interests vs. the bank's representatives who are looking out for the banks'. Here are some financing tools that may help you if you choose to buy a foreclosure/bank-owned home:

Home Path - Fannie Mae's specific program for buyers purchasing a home that Fannie Mae owns. A "standard program", or a "renovation program" for homes in need of some work. Fannie Mae works with local Realtors and Lenders on the sale of their homes so you may work with your chosen professionals. Here are the general highlights:

• Low down payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only)
  
• You may qualify even if your credit is less than perfect
  
• Available to both owner occupiers and investors
  
• Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer. This is a great fit for the Neighborhood Stabilization Program (see below)
  
• No mortgage insurance
  
• No appraisal fees
  
• HomePath Renovation Mortgage Financing to fund both your purchase and light renovation

HUD Homes - These homes went back to HUD after an FHA loan was foreclosed upon. This foreclosure process is a slow one, so we haven't seen many Hud Homes on the market in our area, but we do see a handful of them in our area. With only $100 down payment required, plus other buyer incentives, buyers may find they are paying as much as they are paying for rent, but own their own home.

Neighborhood Stabilization Program - This federal program that was devised as part of the stimulus packages approved in late 2008 has had a slow start getting to market so buyers may use it. Eligible Buyers purchasing foreclosed homes in the eligible areas that have seen a high concentration of foreclosures may get up to $50,000 to be used for matching down payment, closing costs, prepaid expenses, eligible repairs and mortgage reduction. A recent change in June has led to further investigations by the State of Oregon who administers the program. This process will hopefully be complete and the Neighborhood Stabilization program re-released for eligible buyers purchasing foreclosure homes

USDA Guaranteed Rural Housing - This program is not specific to foreclosure properties as are those programs listed above, but it does have a unique feature that allows for a "holdback" of up to $10,000 for repairs to be made after close of escrow that may be financed. Buyers meeting the income/property eligibility requirements of this program end up with a great government loan with no down payment and no mortgage insurance required.

Some of these programs have income limits; some have population/area limits, so feel free to check with me to see what is available to you based on your individual circumstances.

See you at the closing table!

Karen Cooper - OR/CA Mortgage Consultant - www.Quality4Loans.com