Jerry LaRose, PA., ABR,GRI,e-PRO, CLHMS Seminole Florida Real Estate

As of October 1, 2008 there is a new Foreclosure Fraud rescue Law. F.S. 501.1377 Anyone working with short sales in Florida expecially in Pinellas county need to be aware of this new Law. The intent obviously is to protect the homeowners. To read this 7 page Law click below.

http://laws.flrules.org/files/Ch_2008-079.pdf

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Jerry LaRose is a Pinellas county Area Residential Real Estate Expert, who can assist you with the purchase and/or sale of Real Estate in pinellas county Florida or any place in the country. Jerry has created a team of professionals throughout Clearwater, seminole and the country to ensure that you enjoy a smooth transition to your new area. Please visit www.JerrySellsOrlando.com for your real estate needs. Please give me a call if you have questions about the Central Florida real estate market.

P.S. If you are listing your home as a short sale in Pinellas County Florida make sure you hire an agent who knows how to do short sales and has the experience to get the job done. We are doing successful short sale packages. Call us at 407-580-7011 to find out more about Pinellas County Short Sales and Clearwater Area Short Sales.

One way first-time homebuyers can keep housing costs down is to get a great deal on a foreclosure. Right? Wrong, says author, real estate attorney and investor James Randel.

"First time homebuyers have their own issues," says Randel. "To put foreclosure risks on top of that is imprudent."

"Buying foreclosures isn't as easy as it looks," says Randel, "There are a number of risks associated with it."

People think foreclosures are a goldmine, low-hanging fruit, but the only ones who tend to do well are experienced buyers and professionals who treat buying foreclosures as a business.

According to Randel, here are the top five reasons why foreclosures carry too much risk for first-time homebuyers.

•1. Damaged goods. When people get in trouble, they tend not to care for the property. And because of anger and frustration, they may damage the property deliberately.

•2. As is, where is. In a normal transaction, there are seller's disclosures. Sellers are liable for fraud if they lie, but that due diligence doesn't exist in foreclosures because there is no contract with the seller.

•3. No Title, No Recourse. You get a title search in a normal transaction after your offer is accepted. In foreclosures, you do the title search before your bid is accepted. "If you don't do the title search, you may prevail at the auction but be subject to superior liens like tax liens," warns Randel. "People say, 'I may not get the deal so I don't want to spend the money for a title search - that's backwards thinking."

•4. Evictions. You have to determine the homeowner is out of the property. The homeowner may still have personal property or still live on the premises, and it could take time and money to get rid of them.

•5. Bidding Fever. Auctions are designed to get yo excited. Some people don't go mentally prepared to an auction in the right way. The auction could take place on the courthouse steps or in a courtroom, but the tempo matters. If it's fast-paced, don't get caught up in the excitement and energy or you're likely to overbid.

"The best way to buy a foreclosure is to let the bank take title and try to buy directly from the bank -- before it goes on the auction block. Those properties are called REOs, real estate-owned, explains Randel. "If that's not possible, prepare for an auction. There are websites that notify the public when a lis pendens (pending action) has been filed. That's a notice of foreclosure.

"I recommend to investor clients to get to know bankers in your geographic area, and they'll tell you this property has problems."

The best short cut to buying a foreclosure is to work with a Realtor who knows the market and can help you pick the right property for your needs.

For years, the Veterans Administration has allowed "Jumbo" VA loans; it's just that hardly anyone knew about them. The current VA loan limit with zero down, is $417,000, matching the conforming loan limits set by Fannie Mae and Freddie Mac. But the VA does make allowances for VA loans above that amount ... way above. Say around $700,000.

Current Jumbo fixed rates are anywhere from 1.00 percent to 1.50 percent higher than conforming rates. That's a lot, and has many Jumbo buyers in a quandary. A 30 year fixed conforming rate might be 6.00 percent while a similar Jumbo rate could be 7.50 percent. That spread used to not be so vast. Prior to the current mortgage mess, Jumbo rates were typically about .25 to .5 percent higher than a conforming loan. But not so with a VA Jumbo loan.

VA Jumbo rates are near conforming rates, about .25 percent higher. And loans can be as high as $700,000. So how does this work?

First, if you're a qualified Veteran or Reservist, there simply is no better home loan out there with no money down. Period. Even when every lender on the planet was shouting "No Money Down!" for their home loans it couldn't hold a candle to a VA loan when comparing rates and closing costs. As long as the VA loan didn't exceed $417,000 ($625,000 for Alaska and Hawaii).

But a little "quirk" in VA lending allows for VA loans above that $417,000 as long as the veteran comes up with some down payment -- as with any Jumbo mortgage.

To figure out how much down payment a veteran will need, simply multiply the amount of the sales price over $417,000 and take 25 percent of that. For instance, a home sells for $650,000. Now subtract the maximum "zero down" VA loan amount of $417,000 and you get $233,000. 25 percent of $233,000 is $58,250. That's the down payment needed from the veteran.

That works out to about 9 percent down payment on a $650,000 home! As on all VA loans, there is a Funding Fee of about 2.2 percent of the loan amount but that can be rolled into the loan and not paid out-of-pocket. In this example, the final loan amount would be about $604,750.

With a conventional Jumbo loan, you'd need 20 percent down and pay a higher rate, say 7.50 percent compared to 6.25 percent.

Not all lenders will offer this program, so you'll need to do a little homework and even those that do may have their own VA Jumbo limits. But if you're in the Jumbo market and are VA eligible...give this program a hard look.

Fannie Mae is scrapping a "declining markets" policy that required loan underwriters to boost minimum down-payment requirements by 5 percent in areas where home prices are falling or difficult to determine.

Beginning in June, Fannie Mae will instead require 3 percent down payments for conventional, conforming mortgages processed through its Desktop Underwriter automated underwriting system, and 5 percent minimum down payments for loans processed manually. Larger down payments may be required depending on occupancy, property and transaction types.

The new single national down-payment policy will retire a controversial declining-market policy announced in December. The policy, implemented Jan. 15, boosted the minimum down payment required by 5 percent when Desktop Underwriter flagged a property as being located in an area of declining home prices or where it was difficult to assess home values. The policy also applied if an appraiser determined a property was in a declining market.

In an April 11 letter, the National Association of Realtors complained to Fannie Mae that "entire metropolitan statistical areas (MSAs) have been tagged as declining markets regardless of the actual values in the local neighborhoods, which further discourages potential buyers from entering the market."

The policy kept some would-be home buyers from taking action because they could not come up with the funds to make the increased down payment. Others avoided buying because they were afraid to do so if prices were still declining.

"In either case, the impact of the policy becomes a self-fulfilling prophecy that creates declining markets that did not exist before and intensifies the decline for markets that are declining and delays their recovery," NAR President Richard Gaylord said in a letter to Fannie Mae Chief Executive Officer Daniel Mudd.

Fannie Mae says it's able to move away from the declining markets policy because the latest version of Desktop Underwriter -- Version 7.0 -- will limit risk layering and assess each loan more precisely.

"At the same time, we believe that equity matters, especially in this market," Marianne Sullivan, Fannie Mae's senior vice president of single-family credit policy and risk management, said in a statement. "Down payments are a critical success factor in home ownership -- and responsible lending is good business."

Private mortgage insurers who insure most loans purchased by Fannie Mae and Freddie Mac in cases where borrowers put down less than 20 percent have their own requirements, including 3 percent minimums and stricter standards in declining markets (see story).

Fannie Mae's new national down-payment policy is part of the company's "Keys to Recovery" initiative announced May 6, which also includes improved pricing for jumbo-conforming mortgages to help borrowers in high-cost areas.

Through the end of the year, Fannie Mae announced this month that it will buy the new jumbo-conforming loans -- up to $729,750 in high-cost areas -- at the same price as loans that meet the conventional conforming loan limit of $417,000.

Congress gave the government-sponsored enterprises the ability to purchase mortgages larger than the conventional conforming loan limit of $417,000 in the hopes of bringing down interest rates on jumbo loans.

But until recently, the "spread" between conventional conforming loans and jumbo loans had remained pronounced -- about 1 percent -- and lawmakers have expressed disappointment about the pricing of jumbo conforming loans.

Although rates on jumbo conforming loans have come down, the House Financial Services Committee will hold a hearing on May 22 to examine the steps taken to implement the new loans and the impact on home buyers and the housing market.

Get Your Home Ready To Sell

In preparing your house to sell, ask yourself over and over if your house looks like someone else's dream house. Houses in move-in condition tend to be inviting to buyers; houses that are like new typically sell the fastest and procure the best price.

With that in mind, here are a few things to consider when getting ready to sell:

Exterior
Remember the 60-second rule: that's all the time you have to create a good first impression! Mow the lawn, rake leaves, trim trees and shrubs that keep light out of the house and remove dead plants. Pick up tools, garbage cans, hoses, toys, and building materials and store them neatly in a storage area. Replace broken or missing roof shingles and straighten and clean the gutters and downspouts. Clean all windows and mend torn screens. Painting your house helps improve curb appeal more than any other fix-up! If you decide against painting the entire house, consider painting the front door, window frames and shutters. Seal or resurface the driveway and repair broken steps and walkways. Paint or replace your mailbox and post. Dress up the front yard with some simple landscaping.

Clean, Clean, Clean
Step back for a moment and look at your home as if you were seeing it for the first time. Every room should be spotlessly clean, dusted and uncluttered. Steam clean the carpets and wax the floors. Wash the walls, windows and light fixtures. Tighten loose stair railings and clean all woodwork. In the event that you feel a project of this magnitude is better left to a professional, ask your real estate agent to recommend a cleaning service.

Entryway
Use bright light bulbs in the foyer and throughout the house. Fill the house with a pleasant aroma, such as berries in the summer or cinnamon in the winter.

Living Room
Replace the carpet if it's worn. It costs money, but you may find that you will more than recoup that cost when the home sells. Patch cracks and nail holes in the walls, and repaint walls in neutral colors, such as white or ivory. Nail down creaking boards and stair treads. Lubricate any sticking or squeaking doors. Open all curtains, and replace them if they are getting old. Add lamps and lighting if the house is dark. Set out fresh flowers.

Furniture
Rearrange or remove furniture to make your rooms look more spacious. Too much furniture and too many knick-knacks make rooms look cluttered and small. One or two decorative items per surface are plenty, so pack the rest away.

Kitchen and Baths
These rooms should sparkle! Clear off counters, and clean all appliances and fixtures. Scrub the floors and walls. Re-caulk tubs and showers. Clean these rooms thoroughly, and be sure they smell fresh.

Closets
Take those things to Goodwill that you'll have to discard anyway when you move. Organize shelves and straighten shoes. Be sure that sliding doors operate smoothly and knobs on drawers are secure.

Utility Room
Dust and wash the washer, dryer and water heater.

Light and Bright
Do everything you can to brighten the interior. Replace wallpaper with white or off-white paint, and repaint shabby or dark walls. Open the blinds, and replace broken windows and window seals. Always maintain a comfortable temperature inside the house, even if you are away for an extended period of time.