Yonas Woldu Greater Las Vegas Real Estate

Buying a foreclosed or bank-owned home can give you the chance to buy more house than you ever imagined for your money. The downside is that these homes often require repairs far more extensive than a little TLC. For many buyers, the economics do not add up if they lack the finances to make the repairs.

This scenario can be changed if the buyer takes out a 203k loan, which can roll the cost of the mortgage and needed repairs over $5,000 into one payment. An FHA product, the loans can be used to purchase a home needing rehab, as well as to pay off existing house debt and renovate the property or even to move a home to another location. The program, in its streamlined form, covers repairs up to $35,000, while the full program is available for more extensive repairs.

The most common types of updates covered by a 203k loan include:

• Remodeling bathrooms or a kitchen, including new built-in appliances
• Replacing a roof, gutters, and downspouts
• Adding a family room, bedrooms, or bathrooms
• Replacing flooring, tiling, or carpeting
• Completing a basement or attic conversion or adding a second story
• Expanding or building a garage or carport
• Renovating a deteriorating property, such as repairing a chimney, termite damage, or structural problems
• Upgrading plumbing, heating, air conditioning, or electrical wiring
• Eliminating health and safety hazards, such as removing lead-based paint
• Making the home accessible to the disabled
• Installing a well or a septic system
• Adding a porch, deck, or patio
• Adding or repairing siding or repainting
• Installing energy efficient windows or doors
• Repairing an existing swimming pool

Not all lenders offer 203k loans; those that do must comply with FHA rules. A smart buyer will hook up with a knowledgeable Realtor® to guide the process. The amount of the total loan for the property and the repairs must fall within the amount the buyer has been approved for, so a good realtor should direct the buyer to get a pre-approval letter and then help the buyer find affordable properties within the limits. Once the buyer makes the offer and has it accepted, he will get a home inspection and be assigned a 203K consultant to oversee repairs and administer draws.

Many home repair projects that people undertake drag on forever and are completed with poor workmanship. The goal of the loan is to assure habitable property within six months. In most cases, contractors are required to perform the repairs, unless the potential buyer is skilled and licensed. For loans over $35,000 architectural drawings are required.

At this point, the property is appraised and the loan is processed and closed. The repairs are then begun. As is true with construction loans on new homes, payments for repairs are submitted by contractors and reimbursed. If the buyer cannot live in the home until repair are completed, he can finance up to six months of mortgage payments. When the repairs are complete, the home is inspected again.

A 203k loan could make your dream of homeownership a reality. Ask Yonas Woldu or Nebi Adhanom from Prudential Americana Realty about this today.

N & Y Team

Nebi Adhanom Direct: (702) 277-9922

Yonas Woldu Direct: (702) 236-8997

Fax: 702-898-9738

www.VegasRealProperty.com

Click here to get a market snapshot of your home value!

P.S. We value and appreciate your referrals. As always, we promise to deliver such outstanding service that your family and friends will thank YOU for referring them to us. Give us a call if you know someone who needs a dedicated real estate consultant for life!

When it premiered in October, 2008, Hope for Homeowners was supposed to help 400,000 refinance into 30- or 40- year mortgages based on a current appraisal. Lenders would agree to write off the difference between the loan and the current appraised value, while homeowners would agree to share part of the equity when the owner sold or refinanced the property. The program was hard to qualify for and even harder to get lenders to agree to. So far, the hope for 400,000 has literally been hope for one, as a single homeowner has come through the program. Fifty one more are in the process.

A recent Senate bill passed on May 6 breathed new life (and additional funding) into Hope for Homeowners by making the terms more palatable for all parties. Using $2 billion in Wall Street bailout funds, the program offers a 30 year mortgage backed by FHA, with the government absorbing much of the loss formerly pushed on to the lenders. Language in the original bill barred borrowers who had previously defaulted on mortgage loans or other debts and allowed only mortgages on primary residences. The new bill will broaden eligibility. At this point, a compromise between House and Senate versions of the bill will be worked out to allow banks to get troubled loans off their books by writing down the principle while giving some homeowners a fresh start.

The Hope for Homeowners revamp was part of larger Housing Rescue Bill advanced by the Senate. Another important measure addressed the problem of second mortgages and home equity homes overlooked by the original Making Home Affordable package, which aims to straighten out first mortgages. Investors who hold second mortgages objected that their rights were violated if the first mortgage was modified.

The revised plan calls for modification of both loans and offers incentives to lenders to modify the loan and borrowers to retire the second mortgage. So far, many or the 12 mortgage servicers who hold 75% of the mortgages have agreed to participate in the second lien program. The plan also protects mortgage holders from investor lawsuits if loan terms are modified.

Will the latest reforms provide another piece of housing stability puzzle? Stay tuned!

For the best in Las Vegas housing and the news on short sale and bank owned home opportunities, contact:

N & Y Team

Nebi Adhanom Direct: (702) 277-9922 * Yonas Woldu Direct: (702) 236-8997 * Fax: 702-898-9738

www.VegasRealProperty.com * Click here to get a market snapshot of your home value!

P.S. We value and appreciate your referrals. As always, we promise to deliver such outstanding service that your family and friends will thank YOU for referring them to us. Give us a call if you know someone who needs a dedicated real estate consultant for life!

It's a miracle! Just the other day, right in this blog, we said that maybe some of the new housing affordability plans would really help more homeowners IF ONLY homeowners who were underwater by more than 105% could get help. Lo and behold, on May 6, the Wall Street Journal quoted Federal Housing Finance Agency director James Lockhart as saying the government is looking into higher limits. Should this occur, more homeowners could qualify for both the refinancing and the loan modification part of the program.

At the moment, there is quite a bit of debate about how many people have negative equity. Recent figures from Zillow.com indicated that over 21.9% are in this status nationwide, with Las Vegas reporting 67.2% and Reno 48.5%. Zillow apparently figures in the amount of initial mortgage debt before payments made are figured in and assumes that owners of home equity lines of credit have used their entire limit. Calculations by Moody's Economy.com tabulate underwater mortgagees at 19%. In either case, the numbers have increased because prices have fallen in markets where they previously stable, such as Dallas, TX, which has forced a new group of homeowners into a negative equity position.

Raising the 105% figure by 5% or even 10% might offer concrete help to more homeowners and stabilize housing in less tangible but still real ways. One way that some underwater homeowners deal with their negative equity is by walking away from the property. This is not a great option for many reasons, but it's a hot topic in areas like Las Vegas where there is a high negative equity ratio. According to a study by independent housing economist and former Fannie Me vice president, Thomas Lawler, those who owe more than 30% of their home's value are more likely to consider this tactic that those who owe 5 or 10% more. The last group has more faith that prices will rebound, but those more deeply in debt do not.

The administration is in the thinking stage about changing the limits of who the Making Home Affordable program can help. What's significant is that we see willingness to expand the plan first announced February, 2009. As we have said here before, this plan was the beginning of a plan to "fix housing first," not a static "one size fits all approach."

Looking for a creative way to sell your greater Las Vegas home? The N&Y Team will help you find an alternative to foreclosure. We'll also help you find a great deal on a short sale or bank owned home today. Call Yonas Woldu at (702) 236-8997 or Nebi Adhanom at (702) 277-9922 for details.

Loan modification was seen as a possible remedy for many homeowners with mortgage problems long before President Obama got in the game. Lenders did not enthusiastically embrace the concept, but in the face of growing foreclosures came to see it as preferable to foreclosure in many cases. New evidence shows it helps many borrowers get back on track.

Because loan modification involves changing a contract, it is a serious concession on the part of lenders. Does it work? Some statistics indicate that half the "worked out" loans end up in trouble it in six months. Now, new figures released by Comptroller of the Currency show that the amount the payment was lowered makes a difference. When the payments stay the same, half default. When they drop by at least 10%, only 23% are seriously delinquent in six months. This indicates that loan modification is a more effective strategy than repayment for most people. Sometimes lenders lack the ability to be flexible when modifying loans if they service them for someone else. Because most loans are sold to investors, there are more restrictions on altering the terms.

Since 2007, Hope Now, a private mortgage lender and servicer alliance given life during the Bush administration began working with homeowners in danger of losing their homes, in hopes of persuading their lenders to agree to change the terms of their contracts. The loan modification business has been brisk so far this year; Hope Now members modified 391,155 in the first quarter of 2009 and are on track to do 1.5 million modifications this year. They also expect to set in motion another 1.4 million loan repayment plans for homeowners who have missed payments. In contrast to the loan modification plans which would lower payments, the repayment plans would add what was missed onto the end of the loan.

Obama's new Making Home Affordable program has standardized the terms of loan modification among lenders and offered incentives to lenders to participate. The program should facilitate the process for qualified participants.

In our current economy, new foreclosures are filed every day and could approach 3.5 million in 2009. Some of those new cases could be candidates for loan workouts - unless, of course, the reason for the foreclosure is unemployment. With Obama's program as well as other programs offered by private lenders, the ability to make the new payment is key to having the bank accept the deal.

In Nevada, with many people being underwater, there is still help available to avoid foreclosure in Las Vegas. For a creative solution to your real estate problems, contact Yonas Woldu or Nebi Adhanom at Prudential Americana Group. We can help you find alternatives. If you are looking to purchase a short sale or bank owned home, visit our Vegas Real Property website.

Every once in a while, agents in Las Vegas who deal daily with a lot of short sales, underwater mortgages, and other casualties of the last few years are pleased to hear words like "Sales are soaring!" "Housing starts are up!" "Affordable homes are available for $135,000." It makes an agent dream of a time when real estate can once again be more about uniting happy buyers and sellers and less about repairing the past.

What is the basis for this momentary joy?

1. Las Vegas pricing is back to 2001 levels of $134,900, based in March, 2009 Real Trac numbers.

2. Sales were up 85.6%, as 3,626 homes were closed in March.

3. Closings on new homes were up slightly from the first months of the year, still good news given the large stock of available existing housing in Las Vegas.

The story behind these simple facts are that most of the homes sold (66%) were foreclosures with a median price of $127,000; the rest were regular transactions with a median price of $149,900. Banks sold more homes than they acquired for the first time since January, 2007. Las Vegas is one of the 10 cities saturated with foreclosures where sales are up! Since the state and city city are ususally frontrunners on the Top 10 list for foreclosures, it's great to be on a list with a positive twist.

Predictions from representatives of a variety of sources including Home Builders Research, the Mortgage Bankers Association, and Windermere Real Estate, combine to paint a cautiously optimistic future. Foreclosures and short sales will be the major component of increasing home sales, but sales of new homes will climb as well.

"We won't know we're at the bottom" of the current housing market "unless we're on the other side, but it feels like we're there," commented Robyn Yates, vice president of Windermere Real Estate. "Buyers are coming out of the woodwork. Banks are getting multiple offers on any REO (real estate owned) home under $300,000."

About 25% of the purchases for homes have been in cash, a sign that real estate investors are feeling confidence that the bottom of the market is near.

For agents like myself, engaged in the often frustrating but necessary work of helping people make it through pre-foreclosures and short sales, I am happy to take a break to tell prospective buyers in Green Valley and other parts of Greater Las Vegas that this is a great time to buy a home. At Prudential Americana, Yonas Woldu and Nebi Adhanom can show you affordable properties in Henderson and the Greater Las Vegas area. Check out our Vegasrealproperty website for a good look at some of our featured properties.