Ohio FHA HUD Buyers Have a Great New Deal For Home Buying

December 11th, 2007 Bank-Owned/Short Sale Homes, Columbus Buyer Info, The Good 1 Comment

Looking for a great deal on a home?  Now Ohio homeowners can buy a HUD home using an FHA loan with only a $100 down payment.

A HUD home is a property that was financed through a bank with an FHA loan, and is now bank owned.  The Federal Housing Administration oversees the process of selling the home.  To purchase a HUD home, a Realtor must submit a contract for a buyer through the FHA online website.

The FHA-financed home buyer can also get a $2500 sales allowance that can be used for closing costs, or to make repairs.  (If you’re NOT using FHA financing, you can still qualify for a $1000 sales allowance to be used only for closing costs.)

This special incentive is good until September 30, 2008.

The $100 down payment is only for FHA insured sales to owner occupants– meaning you’ve got to live there (investors need not apply).  Mandatory down payments in the past were $500–$1000.

Interested?  Contact Sondra for more details.  HUD homes (as well as standard bank owned homes) vary widely in their condition; there are hideous ones and good ones.  All properties are sold ‘as-is.’  You can have inspections to determine issues, but it’s difficult to get any repairs done.  In some cases, there has been a pre-determined amount mandated by FHA of needed repairs that must be done by the buyer in order for the home to sell.  These repairs can be done after closing; but funds are placed by the buyer into a ‘repair escrow account’ and must be used in a certain period of time.

Columbus Ohio Job Growth Will Offset Foreclosures’ Impact

November 30th, 2007 Bank-Owned/Short Sale Homes, Columbus Buyer Info, Columbus Seller Info, The Good No Comments

The Columbus Gross Domestic Product, or GDP (which is a measure of the value of goods and services) is projected to grow 2.5% this next year.  The national GDP is projected to grow 1.9%.  This will offset the impact of upcoming foreclosures in the real estate home market, and adds to Forbes Magazine (Columbus is listed as the 3rd most stable real estate market in the nation) and other media sources reaffirming the Columbus economy and housing market as stable.

Other Ohio cities are struggling…. Lima Ohio is projected to see a 1% loss in GDP, and both Cincinnati and Springfield are looking at a 1/2% loss in GDP for 2008.

For more details on the report specifics from Global Insight, click here.

The ‘Subprime - Short Sale - Bank-Owned’ Primer

November 4th, 2007 Bank-Owned/Short Sale Homes, Columbus Buyer Info, Columbus Seller Info, The Bad 1 Comment

Here’s a short and sweet summary of links and info to fill you in on the many issues the title words conjure up:

First off, if you’re caught in an adjustable subprime loan that is strangling you with upward spiraling house payments, check into FHA’s recent option to refinance called FHA Secure.  If a subprime borrower has a good payment history and at least 3% home equity, you can get a safe FHA loan with fixed payments. Even if you’re in default on your loan now, but were making payments before your adjustable loan reset to a higher interest rate, you can qualify. Special note: this is a temporary program (for now) with an application deadline date of 12/31/08– so let all those you know in this fix to move on this option.  There is also an option in Ohio sponsored by OHFA– the Ohio Housing Financing Agency.

If you’re a buyer that can’t find financing since the lenders have tightened their loan approval guidelines, click here.  There are new programs available (not all banks offer them) that can get you the money you need.

If you think that it’s the ‘end of the world as we know it’ and the real estate industry is imploding into oblivion, click here.  The media mavens who report all the real estate hoopla are talking about less than 1% of the total market.  Yes, it’s an issue, but let’s get a little perspective!  If you’re a numbers person, here’s statistics on the foreclosure numbers in the Columbus and central Ohio area as of September 2007…..

Trying to avoid foreclosure? Don’t ignore it– do something about it. Visit the HUD website to find a counseling agency near you. There are a number of agencies in Columbus Ohio; The Ohio Housing Finance Agency is one of them.  Another great resource is the Homeownership Preservation Foundation– they offer FREE advice and support.

Are you a victim of predatory lending? Call the Office of Attorney General Marc Dann at 800–282–0515… they want to know about it. The Ohio Division of Financial Institutions also registers complaints; call 866–278–0003.

Think you want to buy a bank-owned home?  You may want to think again… it’s a long and winding road.  Click here and here to see the experiences of others……

Need a little humor on the subject?  Click here to read about people who tried to get a loan and shouldn’t…….

The ‘short sale’ home situation is a unique animal…. which can kick the owner hard long after the sale.  Click here for more details. (A lender told me about a brand new surprise for owners. A couple had given their FHA deed-in-lieu-of-foreclosure to the bank and a year later wanted to get a new home loan.  However, the lender had filed a CAIVERS report on the couple months after the fact… which meant they could not get an FHA or VA loan for a period of 3 years! Please, talk to a knowledgeable lender or realtor early in the process….)

Curious about how and why the foreclosure crisis has developed?  Read earlier posts dated in March and August that gives some background…..

The Subprime - Short Sale - Bank-Owned Primer

November 4th, 2007 Bank-Owned/Short Sale Homes, Columbus Buyer Info, Columbus Seller Info, The Bad No Comments

Heres a short and sweet summary of links and info to fill you in on the many issues the title words conjure up:

First off, if youre caught in an adjustable subprime loan that is strangling you with upward spiraling house payments, check into FHAs recent option to refinance called FHA Secure. If a subprime borrower has a good payment history and at least 3% home equity, you can get a safe FHA loan with fixed payments. Even if youre in default on your loan now, but were making payments before your adjustable loan reset to a higher interest rate, you can qualify. Special note: this is a temporary program (for now) with an application deadline date of 12/31/08 so let all those you know in this fix to move on this option. There is also an option in Ohio sponsored by OHFA the Ohio Housing Financing Agency.

If youre a buyer that cant find financing since the lenders have tightened their loan approval guidelines, click here. There are new programs available (not all banks offer them) that can get you the money you need.

If you think that its the end of the world as we know it and the real estate industry is imploding into oblivion, click here. The media mavens who report all the real estate hoopla are talking about less than 1% of the total market. Yes, its an issue, but lets get a little perspective! If youre a numbers person, heres statistics on the foreclosure numbers in the Columbus and central Ohio area as of September 2007..

Trying to avoid foreclosure? Dont ignore it do something about it. Visit the HUD website to find a counseling agency near you. There are a number of agencies in Columbus Ohio; The Ohio Housing Finance Agency is one of them. Another great resource is the Homeownership Preservation Foundation they offer FREE advice and support.

Are you a victim of predatory lending? Call the Office of Attorney General Marc Dann at 8002820515 they want to know about it. The Ohio Division of Financial Institutions also registers complaints; call 8662780003.

Think you want to buy a bank-owned home? You may want to think again its a long and winding road. Click here and here to see the experiences of others

Need a little humor on the subject? Click here to read about people who tried to get a loan and shouldnt.

The short sale home situation is a unique animal. which can kick the owner hard long after the sale. Click here for more details. (A lender told me about a brand new surprise for owners. A couple had given their FHA deed-in-lieu-of-foreclosure to the bank and a year later wanted to get a new home loan. However, the lender had filed a CAIVERS report on the couple months after the fact which meant they could not get an FHA or VA loan for a period of 3 years! Please, talk to a knowledgeable lender or realtor early in the process.)

Curious about how and why the foreclosure crisis has developed? Read earlier posts dated in March and August that gives some background..

99.2% of Mortgages Are NOT In Foreclosure

October 8th, 2007 Bank-Owned/Short Sale Homes, Columbus Buyer Info, Columbus Seller Info, The Good 4 Comments

That’s a line from a report issued by Gary Watts, a real estate economist and forecaster for the real estate industry in California. There’s been a lot of buzz in the real estate blog world over his report he presented August 2007 in Monterey, CA at a Coldwell Banker retreat titled, “The Real State of Real Estate.”

In addition to the startling fact titled above (due to the fact that real estate drama has been a favorite topic of big media), here’s a couple other pertinent facts that will help put the Big Picture into proper perspective:

1. Sub-Prime loans make up only 5% of all the loans in the US.

2. Media reports of ‘massive delinquencies and huge foreclosures in the sub-prime market’ are not accurate– they are lumping three categories of a delinquent payment, a notice of default, and a foreclosure together.

3. Only 3.23% of all sub-prime loans (that’s 3.23% of 5% of the market– see #1 above) have gone from the ‘notice of default’ into the foreclosure process.  Only 1.28% of all prime loans have entered the foreclosure process.

4. As of July 2007, there was 1 foreclosure filing for every 693 homes in America.

5. For the 3.23% of sub-prime loans going bad in #3 above, 68% of these people are able to prevent the foreclosure by refinancing or selling their home.

6. In 2006, the US had a combined foreclosure (sub-prime and prime loans) of only 1.09%.

7. For the fore-closures that happened, the top 4 reasons they occurred were: 1. Fraud  2. Unethical lending  3. Loss of job  4. Medical crisis.

Why Big Media LOVES Bad Real Estate News

October 5th, 2007 Bank-Owned/Short Sale Homes, Columbus Buyer Info, Columbus Seller Info, From Professional to Personal 3 Comments

There’s a great article written by Dillon Devereaux of the Triangle News in North Carolina regarding this topic.  It’s one I’ve often wondered about…. I mean, when was the last time you heard Big Media showin’ a little love when it comes to real estate? When real estate is rolling, there’s a lot of muttering or silence. But get a few negative numbers in there, and we are slammed non-stop with stats and bad press.

In a nutshell, Mr. Devereaux believes there are 3 reasons why network television chortles with glee and negativity:

1. Real estate advertising is local.  There are little advertising dollars in the national coffers supporting television’s monthly bills.

2. All major media networks are owned by publicly traded companies. They cover Wall Street and are involved in Wall Street.  There is an interest to point investors towards the stock market… and if the stock market is having a downturn, it’s better to focus on downturns in other areas… like real estate.

3. There’s a lot of misinformation and partial information being presented.  “Consider a report that discusses a 25% decline in home sales…when the news caster fails to disclose that the drop was from an all time record high in sales, it skews the picture of real estate.” Viewers need to work at reading between the lines of what is being presented.

To get a REAL picture of what your local market is doing, talk to a local realtor who is working/living/breathing real estate 24/7… one who will present a true picture, and not give you a ‘song and dance’ from the other end of the pendulum.  (Living in the Columbus, Ohio area?  Call Sondra….) As my grandmother always said… “listen with a grain of salt– and then get the real answers you need”….

Homebuyer Help- Ten Tips to Assure Your Home Loan Approval

October 1st, 2007 Bank-Owned/Short Sale Homes, Columbus Buyer Info, Columbus Seller Info, The Good 1 Comment

Barb Collier of Metrocities Mortgage graciously allowed me to share these important credit tips for all buyers who want to have their loan close:

1. Do NOT apply for new credit– your credit score can lose points each time a creditor or lender pulls your credit report.

2. Do NOT pay off collections or ‘charge offs’– you can pay off old accounts at closing.  Doing so sooner could drop your credit score…

3. Do NOT close credit accounts– it’s possible that your debt ratio will look like it has gone up.  This can also affect other factors in your credit score.

4. Do NOT max out or over charge your credit cards– Try to keep your credit balances below 30% of your credit limit during the loan process.

5. Do NOT consolidate your debt– you can be penalized for this.

6. Do NOT do things that can raise a ‘red flag’ by the credit scoring system– this would include adding new accounts, co-signing on a loan, changing your name or address with the credit bureaus, buying new major purchases (furniture, cars, etc.).

7. DO join a credit watch program– you can monitor your own credit report (you will not get dinged for a ‘hard’ inquiry).

8. DO stay current on existing accounts– one 30–day late notice can cost you.

9. DO continue to use your credit as normal– if it appears that you are changing your pattern, it could raise a red flag.

10. DO call your loan officer– ask your loan officer before doing anything that impacts your finances… a little caution could save your loan.

For more tips and good information on how credit scores are created, go to Credit Score Basics in Real Estate.

Foreclosure Statistics in Columbus Ohio Area

September 18th, 2007 Bank-Owned/Short Sale Homes, Columbus Buyer Info, Columbus Seller Info, Columbus and Central Ohio Home Sales Stats, The Bad 2 Comments

We’ve heard the doom and gloom of foreclosed homes in this country. Here’s some real numbers and stats of what’s happening in Columbus and central Ohio, courtesy of the Columbus Dispatch:

For Franklin county and all the surrounding counties, there were 6000 foreclosed homes in 2005, 10,000 in 2006, and 8,485 for the first 6 months of 2007.

Percentage-wise, the biggest jump in foreclosures is Union County (197 through June 2007 compared to 80 for 2006).

The Top 10 Most Affected zip codes all have a portion of area in Columbus.  Seven of the Top 10 are south of downtown, running from the Hilltop/Franklinton area, down to Grove City, east through the Greman Villlage area and over to Reynoldsburg.

The hardest hit area south of downtown is 43207, which includes the Obetz area.  Obetz owners are hopeful that the bustling business growth in and surrounding the nearby Rickenbacker Airport will stimulate home buying and increase home values.

Within the city limits, the Linden area is struggling, with the zip code 43211 portion of the Linden area winning the number 1 spot in the Top 10 list.

Now…. some of these homes are in terrible condition; I have personal experience showing them. But… there are many of them that just need a little TLC to become fine, loving homes for families to grow up in.  And all have prices that are opportunities for buyers!

It’s a great time to buy a home. Period. Jump in the marketplace and see how the water feels….. get a search set up via email that allows you to test the waters and see what is out there for you….. you won’t regret it. (What is gloom to some people is opportunity for others…)

August Mortgage Loan Panic in Full Bloom

August 17th, 2007 Bank-Owned/Short Sale Homes, Columbus Buyer Info, Columbus Seller Info, The Bad 6 Comments

Well, it’s just past the halfway mark in a hot, dry August, and Life in the home financing industry is suffering through a drought of its own.  American Home Mortgage, the 9th largest mortgage lender in the USA, suddenly closed their doors at the start of the month, leaving thousands of buyers sitting at the closing table with no money to buy. 

While these buyers have (and are) scrambling to find new banks to fund, many prime lenders have cancelled products like stated-income loans, second mortgages, and loans for those with non-perfect credit.

Nervous watchers include international banks like BNP Paribas, who have suspended investor withdrawals in response to the sub-prime market implosion. This and other actions have led to an evaporation of cash flow, which ALL businesses need to survive (it’s like us not having air to breath, folks). Countrywide and Washington Mutual have both stated they are having unprecedented disruptions from their sources for mortgages.

This week, Merrill Lynch advised about a possible Countrywide bankruptcy that could happen soon if they can’t solve their liquidity problems.  The stock market has been a giant see-saw, with wild swings going back and forth. 

Today (August 17), First Magnus Financial Corp. suddenly shut their doors.  This Arizona firm was one of the nation’s largest privately held mortgage companies.

In response, the Fed has dumped a couple of large cash infusions into the economy and just cut the Discount Rate a full half point from 6.25% to 5.75%.

SOOOOOO…… what does this all mean?  Well, we’re in the middle of a big story, and nobody knows the ending yet.  Speculation and borderline hysteria are rampant.  DOES this mean that nobody can get a loan again? No.  Does this mean that some folks won’t be able to get a loan? Yes.

If you’re in the market to finance a home, continue to watch the news and be alert. Keep your cool and look for the facts, NOT the ‘what-ifs’. Talk to your loan officer and get their take on things. Find a loan officer who’s competent, who knows their stuff, and who can flex with any change in direction.

Yip pee-ki-yiy-yay….. this bucking bronc isn’t ready to tame itself just yet…. Hold on to your hats!

You Know You’re A Subprime Loan Candidate When…

July 31st, 2007 Bank-Owned/Short Sale Homes, Cartoons, Columbus Buyer Info, The Bad No Comments

Remember Jeff Foxworthy’s famous line “you know when you’re a Redneck when…?” 

Well, kudos to Broker Outpost for a compendium of real-life statements of people who really shouldn’t be buying a home. (These guys are part of the problem of the ongoing implosion of subprime lenders…)  Here’s a few goodies:

• The borrower calls in and has a f i c o ( all spelled out) of Four.
• When the Borrower doesnt know their loan amount, interest rate or mortgage payments.  
• You think your medical collections are Credit references.
• When you make your car payment but not your house payment.
• When your best trade line is Fingerhut (a mail order company that sends out magazine catalog and EVERYONE gets $300 of credit. The only place I know of where you can buy a $10 toaster for $35 then make $70 in payments…)
• You have 25 tradelines and they are all collection accounts.
• You spend your closing costs money on a motorcycle 2 days before closing.
• You are cashing out your equity to go on vacation. Again.
• Your fico score and total assets are the same number.
• When the lender used for your purchase is now out of business and now you can’t get out of your 80/20 that is about to adjust to 12%.
• When you take the competition’s 7.375 loan paying 2 discount points instead of the local loan locked at 6.875 paying nothing, even after being shown the numbers . . .because you “like your privacy, and the lender you called on the phone way out in california doesn’t know where you live” ?????
• When you get the same call off of the same advertisement from a homeowner who just used you to refi two months earlier.
• When you have 5 applicants for the same loan and the highest middle score is 530 and they all want to go stated.
• When the borrower tells you if they pay for the appraisal the loan has to go through and fund because they will definately be late next month.
• When you don’t own your house (99+ ltv), have no equity, can’t afford current payment, expect there to be no closing costs and want to go stated income.
• When you give a handwritten note that reads “The chargeoff accounts are not mine.” for verification of supposed fraudulent accounts.
• When you refuse to payoff your (4) American General or Citifinancial high rate revolving loans because ” they’ve been good to you.”
• When your borrower has a 591 credit score and you tell her she doesn’t have A paper credit for the A paper rates she is looking for. She gets insulted and tells you that 591 is a great credit score and she had no problems getting her 2/28 loan 2 years ago with a start rate of 8.5 that’s due to adjust to 10.5.
• When your appraiser takes photos of the subject with the ‘for sale’ sign in clear and plain view.
• When you ask your borrower for his last 2 tax returns he gives you 2001 and 2004 (because he ain’t filed the rest yet).
• When your borrower calls and asks you to bail him from his foreclosure, but when you pull public records, the house was titled to the bank 6 weeks ago.
• And last of all…. You know you are subprime when: the borrower asks if they still have to pay their mortgage and bills since they are going to be paid off.