Your First Steps To Avoid Foreclosure

In today’s market, 1 in 7 homeowners is having trouble paying the mortgage. More than 70% of these homeowners proceed without seeking assistance or getting the facts. Many do not even realize that foreclosure is a process, and that there is time to make decisions that may result in a better outcome.

As a homeowner in the Virginia Beach area, you are not alone. Millions of other homeowners nationwide are in the same circumstances. To assist you, I’ve prepared a free report outlining the first steps a homeowner should take when facing a foreclosure.

Please use the link below to obtain your free report. Don’t hesitate. Get back on track today!

http://www.virginiabeachshortsale.com/Your-First-Steps-To-Avoid-Foreclosure.aspx

Income limits have been raised for Virginia Beach area homebuyers, and now some existing homeowners can also claim a credit if they buy a new home too.

The basics:

• To claim any credit, buyers must have a contract by April 30, 2010 and close by July 1, 2010.
• The income limit has been raised to $225,000 for couples.
• First-time buyers can claim an $8,000 credit, as before.
• Buyers who already own the home they are selling (or have sold), and have lived there for five of the past eight years can claim up to a $6,500 tax credit (on homes worth $800,000 or less).
• Both credits apply only to primary residences.

FHA-approved lenders received the go-ahead to develop bridge-loan products that enable first-time buyers to use the benefits of the federal tax credit upfront, according to eagerly awaited guidance from the U.S. Department of Housing and Urban Development on so-called home buyer tax credit loans that was released today.

Under the guidance, FHA-approved lenders can develop bridge loans that home buyers can use to help cover their closing costs, buy down their interest rate, or put down more than the minimum 3.5 percent.

The loans can't be used to cover the minimum 3.5 percent, senior HUD officials told reporters on a conference call Friday morning.

Thus, buyers applying for FHA-backed financing with an FHA-approved lender that offers a bridge-loan program can get a bridge loan to bring down the upfront costs of buying a home significantly but would still have to come up with the minimum 3.5 percent downpayment.

There remain many sources of assistance for buyers needing help with the 3.5 percent downpayment, including many state and local government instrumentalities and nonprofit lenders.

In addition, some state housing finance agencies have developed their own tax credit bridge loan programs, so buyers in states whose HFAs offer such programs can monetize the tax credit upfront to cover all or part of their downpayment. These programs are separate from what HUD announced today.

The first-time homebuyer tax credit was enacted last year and improved upon earlier this year--to help encourage households to enter the housing market while interest rates are low and affordability is high. The credit is worth up to $8,000 and is available to households that haven't owned a home in at least three years. The credit does not have to be repaid, and is fully reimbursable, so households can get their credit returned to them in the form of a payment.

Learn more about the credit, including how to apply for it this year even if you've already filed your taxes.

Source: Robert Freedman, REALTOR® Magazine Online

Freddie Mac put together a new video on their website to help Virginia Beach area homeowners understand the new “Making Home Affordable” program.  In this video, Ingrid Beckles, Senior Vice President, Freddie Mac, explains how borrowers can determine their eligibility for “Making Home Affordable” and use the plan to refinance their current mortgage, or if they’re already behind on their loan or facing a financial hardship, get a modification that makes their mortgage more affordable.  Click here to access the video.

Frankly, my opinion on paying good money to subscribe to a foreclosure website is it is basically a waste of money and I can provide a buyer with a list of foreclosure and short sale homes that are actually for sale for free.  I will explain this furhter, but let's discuss the issues with foreclosure websites first.

The problem with foreclosure websites is they draw their info from public notices, city records and the like for free.  Then they repackage the information to sell to the public on the internet. This is perfectly legal, but not always very helpful to buyers. A buyer would have to do all the legwork trying figure out what is good and what is not. For most buyers, they do not have the time or know how to do this. To make matters worse, not all homes on these sites even make it to foreclosure to begin with.

The real drawback to paying money to subscribe to a foreclosure website is the information is not always accurate either.  I will share with you a great example of this.  A friend of my mine owns several investment properties.  Her mortgage company recently sold her loans to another mortgage company, and the new company has messed up the payment processing for her accounts.  She has actually paid the mortgages on time, but her rental properties are showing up on these sites as going into foreclosure for non-payment.  Now some prospective buyers are writing her tenants letters and knocking on their doors to get into the houses to find out how to buy them.  

My advice to buyers is to just focus on all homes that are actually listed for sale.  You also need to understand that just because it is a foreclosure does not make it a great deal either. Please remember foreclosure homes have probably been neglected for a long time, since the owner could not pay their mortgage it is unlikely they kept up with preventive maintenance or other repairs either.  Many will have undisclosed problems and most will require some investment and sweat equity to bring them up to par. For some buyers, it may just be a better idea to buy a non-foreclosure home without having to deal with the unknown factors.  

Most of legitimate properties for sale that are foreclosures and short sales are listed in the MLS.  I have a program that can provide buyers with automatic daily e-mail of listings of the homes in the Virginia Beach area and other Hampton Roads cities are listed as bank repos, short sales, and Government owned VA and HUD homes and I can do this for you for FREE. The best part is you would know about these homes before most agents and other buyers even realize these homes are for sale. All you need to do is let me know what you are looking for and I can set it up for you today!

If you would like to discuss the issue further or you would like to receive foreclosure listings by e-mail, please drop me a line at Jorge@House4U.com.

The $8,000 Tax Credit can be earned by purchasing any home in Virginia Beach and Hampton Roads area, whether it be new construction or any residential home on the market.  If you are intertersted in finding out more about the $8,000 First-Time Home Buyer Tax Credit Program, please let me know.

Video Source: NAHB

Congress has included language in the economic stimulus package to compensate service members who sell their home at a loss or have been foreclosed upon because they were forced to move after a base closure, reassignment or a combat wound required them to be relocated near a health facility. The program also covers surviving spouses of those killed in combat.  Under the new provision, the government will cover 95 percent of a loss if a service member is forced to sell. The government can also choose to acquire the title of a home by paying off the balance of a service member's mortgage or paying the owner up to 90 percent of the home's previous value. No dollar ceiling has been set.  Click here to read more in a recent Virginian-Pilot article.

Source: Center For Real Estate Newsletter

Here’s a warning for potential borrowers: Nervous lenders have tough new rules and are paperwork crazy.

"Borrowers are going to have to prove they are the borrower they say they are," says Keith Gumbinger, vice president of HSH Associates, a mortgage-industry publisher in Pompton Plains, N.J.

Gumbinger says homebuyers should consider these things before they apply for a loan.

1. Down payments are critical. Borrowers should expect to put down at least 10 percent for a “conforming loan” – a mortgage that Fannie Mae and Freddie Mac will purchase.

2. Credit scores count. A 720 on the 850-point FICO rating scale will get a borrower access to the best rates. Rich Bira, branch manager of FCM Direct Lender in Chicago, says: "A score between 720 and 739 gets 0.125 percent added to the rate, a score between 700 and 719 gets 0.375 percent added to the rate, and a score between 680 and 699 gets 0.5 percent added to the rate.”

3. Consider VA and FHA Mortgages. Borrowers without down payments or with less than stellar credit scores should consider these government-insured loans offered through the Federal Housing Administration of the Veterans Administration.

4. Unearth the records. Before applying, borrowers should organize tax, banking and other records that prove income, savings and debts. They should also expect to be patient about what may seem to be endless requests for information.

5. Get rid of debts. Limiting debts, including what borrowers expect to pay for the mortgage, to less than 43 percent of gross income is important.

Source: NAR

If your resolution for 2009 is to live a little greener, an easy place to start is in the bathroom. In a typical home, the bathroom is where we use the most water. So how do you make your bathroom green? Start conserving water by following these simple steps:

1. Check your toilets for leaks.  Put a few drops of food coloring in the toilet tank. If, without flushing, the coloring begins to appear in the bowl, you have a leak that may be wasting 100 gallons of water a day.

2. Install water-saving showerheads or flow restrictors. 

3. Take shorter showers.  Try to keep them under 5 minutes. You can also save water by turning off the water while soaping down.

4. Turn off the water while brushing your teeth and shaving.  Turning off the water can save 4 gallons per minute.

5. Stop using the toilet as a wastebasket.

6. Install inexpensive faucet aerators. By mixing air with the water, aerators reduce the amount of water that comes out of the faucet without reducing the pressure.

7. Install high-efficiency/ultra low-flow toilets.  Look for the WaterSense label.  If you live in Virginia Beach, take advantage of the Toilet Rebate Program and get $75 for each older toilet you switch out with an ultra low-flow model using no more than 1.6 gallons per flush.  For more info, call the Office of Permits & Inspections at 757-385-4211 or visit their website at VBgov.com/dpu and click on the link for "Water Conservation." 

While it may seem a bit overwhelming at first, don't get discouraged.  Start with one or two water saving practices at a time. As those become second nature, begin adding other techniques into your daily routine. By making a few small changes and breaking some bad habits, you can start saving the planet with every drop you save.  Find more water-saving tips at www.hrwet.org.

Source: Pipeline

A recent NAR survey stated that most Americans are unaware of the $7,500 home buyer tax credit. Some details from the National Association of Home Builders:

§ The tax credit is available for first-time home buyers only. See FAQ link below for the definition of first-time home buyers, as it is not what it seems.

§ The maximum credit amount is $7,500.

§ The credit is available for homes purchased on or after April 9, 2008 and before
July 1, 2009.

§ Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

§ The tax credit works like an interest-free loan and must be repaid over a 15-year period.

The National Association of Home Builders has a great FAQ site here.  This tax credit is available in the Virginia Beach, Chesapeake, and Hampton Roads area.