Tired of looking for your dream house with no success? Don't give up! Turn to Kim Drusch Realtor of Century 21 Award. Your San Diego REO, Foreclosure, Short Sale & Investment Specialist!
Showing posts with label Kim Drusch. Show all posts
Showing posts with label Kim Drusch. Show all posts
Friday, September 10, 2010
Sunday, June 6, 2010
Seller concession rules for FHA mortgages to be changed
Seller concession rules for FHA mortgages to be changed
By Kenneth R. Harney
May 30, 2010
Reporting from Washington — — One of the key attractions of FHA home mortgage financing is going, going, but not quite gone. Sellers and buyers who move fast can still make the most of it.
Sometime this summer, the Federal Housing Administration plans to slash maximum "seller concessions" from 6% of the home price to 3%. Seller concession rules allow buyers to look to the property seller to pay for a variety of services and taxes connected with the transaction — loan origination and local transfer fees, appraisals, inspections, closing and escrow costs among others — though not the down payment.
Sometime this summer, the Federal Housing Administration plans to slash maximum "seller concessions" from 6% of the home price to 3%. Seller concession rules allow buyers to look to the property seller to pay for a variety of services and taxes connected with the transaction — loan origination and local transfer fees, appraisals, inspections, closing and escrow costs among others — though not the down payment.
Say you're buying a $200,000 house. If you are using FHA financing under current rules, you can structure the contract so that the seller agrees to pay all closing costs and even some repairs the house needs at closing, up to 6% of the price or $12,000. On a $400,000 house, allowable concessions go to $24,000. That's huge, especially if you have to struggle to come up with a 3.5% down payment and you're not sure where you'll find the closing and repair money.
Contrast that with using Fannie Mae or Freddie Mac conventional financing, where seller concessions generally are limited to 3%. For many buyers, the extra negotiating flexibility built into the FHA program makes the choice between programs a no-brainer.
When FHA officials announced the policy change this year, they said the long-standing 6% maximum "exposes the FHA to excess risk by creating incentives to inflate appraised value." That would occur when sellers agree to pay buyers' closing and other expenses but merely tack those costs onto the final sale price of the house. Rather than agreeing to a $200,000 price as in the example above, with $12,000 worth of concessions, the final contract price of the house would instead be $212,000.
If an appraiser did not detect and report the price boost, the FHA would effectively be insuring a mortgage on a house worth less than the sales price. In fact, since the rules allowed a 6% seller concession and the down payment was just 3.5%, the FHA would be insuring an underwater loan from the start.
To limit further possible losses, FHA decided to cut the concessions limit in half. In its announcement, the agency said the change would occur in "early summer" after publication of a Federal Register notice and a public comment period. But Lemar C. Wooley, an FHA spokesman, confirmed May 19 that there had been no Federal Register announcement.
Since public comment periods frequently run for 60 days, followed by a review period, it appears that any start date for the concessions change has slipped to late summer at the earliest. Wooley said in an e-mail that "early summer may be stretching it, but I'm told that we do still expect it this summer."
Why does the timing matter? Whatever you might think of the FHA's existing seller concession rules, the fact remains: Concessions of 6% are still allowed, and will be until the FHA announces that they're not. Buyers and sellers who have a legitimate need to build concessions into their contracts can still do so, but they need to know that the clock is ticking.
Smart real estate agents and mortgage loan officers already are putting out the word: If a home sale deal needs the 6% FHA feature, get the contract put together as fast as possible. Abbie Higashi, national designated broker for ZipRealty Inc. of Emeryville, Calif., said she fully understood and supported the FHA move, but agents should "do the deals now" if more than 3% concessions would help the sale go through.
Paul Skeens, president of Colonial Mortgage Group in Waldorf, Md., said he was advising loan applicants to request a good-faith estimate upfront that provides for the seller to pay 100% of closing costs and prepaid fees "so that in cases where the buyer doesn't have much more than the down payment, that's the only cash they'll need to close" on an FHA loan before the policy change.
Skeens said he'd prefer that the FHA adopt a "sliding scale" approach to concessions, with higher concessions allowed on lower-priced homes, and the lowest concessions allowed on high-priced properties. Since closing and loan expenses generally represent a larger percentage of the total transaction on lower-priced houses, he believes that the new 3% rule across the board "will have a much heavier impact on the people FHA traditionally has served," who are buying modestly priced houses and have limited cash resources.
kenharney@)earthlink.net
Distributed by Washington Post Writers Group.
Copyright © 2010, The Los Angeles Times
By Kenneth R. Harney
May 30, 2010
Reporting from Washington — — One of the key attractions of FHA home mortgage financing is going, going, but not quite gone. Sellers and buyers who move fast can still make the most of it.
Sometime this summer, the Federal Housing Administration plans to slash maximum "seller concessions" from 6% of the home price to 3%. Seller concession rules allow buyers to look to the property seller to pay for a variety of services and taxes connected with the transaction — loan origination and local transfer fees, appraisals, inspections, closing and escrow costs among others — though not the down payment.
Sometime this summer, the Federal Housing Administration plans to slash maximum "seller concessions" from 6% of the home price to 3%. Seller concession rules allow buyers to look to the property seller to pay for a variety of services and taxes connected with the transaction — loan origination and local transfer fees, appraisals, inspections, closing and escrow costs among others — though not the down payment.
Say you're buying a $200,000 house. If you are using FHA financing under current rules, you can structure the contract so that the seller agrees to pay all closing costs and even some repairs the house needs at closing, up to 6% of the price or $12,000. On a $400,000 house, allowable concessions go to $24,000. That's huge, especially if you have to struggle to come up with a 3.5% down payment and you're not sure where you'll find the closing and repair money.
Contrast that with using Fannie Mae or Freddie Mac conventional financing, where seller concessions generally are limited to 3%. For many buyers, the extra negotiating flexibility built into the FHA program makes the choice between programs a no-brainer.
When FHA officials announced the policy change this year, they said the long-standing 6% maximum "exposes the FHA to excess risk by creating incentives to inflate appraised value." That would occur when sellers agree to pay buyers' closing and other expenses but merely tack those costs onto the final sale price of the house. Rather than agreeing to a $200,000 price as in the example above, with $12,000 worth of concessions, the final contract price of the house would instead be $212,000.
If an appraiser did not detect and report the price boost, the FHA would effectively be insuring a mortgage on a house worth less than the sales price. In fact, since the rules allowed a 6% seller concession and the down payment was just 3.5%, the FHA would be insuring an underwater loan from the start.
To limit further possible losses, FHA decided to cut the concessions limit in half. In its announcement, the agency said the change would occur in "early summer" after publication of a Federal Register notice and a public comment period. But Lemar C. Wooley, an FHA spokesman, confirmed May 19 that there had been no Federal Register announcement.
Since public comment periods frequently run for 60 days, followed by a review period, it appears that any start date for the concessions change has slipped to late summer at the earliest. Wooley said in an e-mail that "early summer may be stretching it, but I'm told that we do still expect it this summer."
Why does the timing matter? Whatever you might think of the FHA's existing seller concession rules, the fact remains: Concessions of 6% are still allowed, and will be until the FHA announces that they're not. Buyers and sellers who have a legitimate need to build concessions into their contracts can still do so, but they need to know that the clock is ticking.
Smart real estate agents and mortgage loan officers already are putting out the word: If a home sale deal needs the 6% FHA feature, get the contract put together as fast as possible. Abbie Higashi, national designated broker for ZipRealty Inc. of Emeryville, Calif., said she fully understood and supported the FHA move, but agents should "do the deals now" if more than 3% concessions would help the sale go through.
Paul Skeens, president of Colonial Mortgage Group in Waldorf, Md., said he was advising loan applicants to request a good-faith estimate upfront that provides for the seller to pay 100% of closing costs and prepaid fees "so that in cases where the buyer doesn't have much more than the down payment, that's the only cash they'll need to close" on an FHA loan before the policy change.
Skeens said he'd prefer that the FHA adopt a "sliding scale" approach to concessions, with higher concessions allowed on lower-priced homes, and the lowest concessions allowed on high-priced properties. Since closing and loan expenses generally represent a larger percentage of the total transaction on lower-priced houses, he believes that the new 3% rule across the board "will have a much heavier impact on the people FHA traditionally has served," who are buying modestly priced houses and have limited cash resources.
kenharney@)earthlink.net
Distributed by Washington Post Writers Group.
Copyright © 2010, The Los Angeles Times
Friday, March 26, 2010
Prom Dresses Needed for Foster Teens - Can You Help?
I am so excited by the wonderful souls who have so far dropped off 22 prom dresses for San Diego foster teens. We still need 50 more gently used, dry cleaned, prom dresses and fancy party dresses. All sizes & styles (short or long) are needed. There is a special need for plus size dresses as well. If you have accessories, jewelry, or wraps that would be wonderful! I am collecting them at my office by April 15. I am located at 700 La Terraza Blvd. #100 in Escondido. Call me at 760-580-9195 with any questions.
Could you please move this video around? What a great feeling to be a "Fairy God-Dresser" for a very deserving lovely young teen! Thank you with all my heart.
Could you please move this video around? What a great feeling to be a "Fairy God-Dresser" for a very deserving lovely young teen! Thank you with all my heart.
Friday, March 19, 2010
Interest Rates Likely to Rise Shortly
WEEKEND INVESTOR
MARCH 13, 2010.Nabbing a Bargain-Basement Mortgage Before Rates Rise .ArticleComments (13)more in Personal Finance ».EmailPrintSave This ↓ More.
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close Yahoo! BuzzMySpacedel.icio.usRedditLinkedInFarkViadeoOrkut Text .By JAMES R. HAGERTY
Is it time to rush out and buy a house before mortgage rates go up?
As the Federal Reserve winds down its intervention in the mortgage market, rates on home loans are generally expected to rise at least modestly during the rest of this year from today's unusually low levels. Some analysts believe mortgage rates will jump to around 6% by year end from 5% in recent weeks, while others see only a slight increase.
.Meanwhile, federal tax credits available for some home buyers are due to expire at the end of April, adding to the sense of urgency many shoppers feel.
"I'd hate to miss out on really low [mortgage] rates" or the tax credit, says Jennifer Hale, a veterinarian who is looking for a new home near Minneapolis with her fiance, Lawrence Nystrom.
If rates do go up sharply, that will have a big effect on home buyers. Richard Redmond, a mortgage adviser at All California Mortgage in Larkspur, Calif., offers the example of a couple with combined pretax income of $100,000 a year and debt obligations (excluding mortgage) of $500 a month. At a 5% mortgage rate, he figures, the couple could qualify for a loan big enough to buy a $590,000 house, assuming a 20% down payment. At 6%, that would fall to $540,000.
Since late 2008, 30-year fixed-rate mortgages have been available for people with strong credit records at around 5%, near the lowest levels since the 1950s, thanks to the Federal Reserve's heavy purchases of mortgage securities. At the end of March, the Fed is due to stop buying the securities. Most mortgage analysts think the immediate effect of the Fed's withdrawal will be modest.
More Weekend Investor
Where to Find the Money
Intelligent Investor: Why You Should Get a Bigger Slice of Earnings
Tax Report: File Away, but Pick the Right Status
Coupon Clipping: Playing a Calmer Corporate-Bond Market
Getting Going: The Home-Credit Derby Has Its Price
.Laurie Goodman, a senior managing director at mortgage-bond trader Amherst Securities Group LP in New York, estimates that the Fed move will add a maximum of about 0.25 percentage point to mortgage rates. "There is a lot of private money on the sidelines," waiting to buy mortgage securities once the Fed stops gobbling most of them up, Ms. Goodman says. She points to banks, money managers and foreign investors.
What happens to interest rates over the rest of this year depends on many factors that are hard to predict, including the strength of the economy, Fed policies and foreign investors' willingness to buy U.S. debt.
Projections vary widely. At the lower end of the scale, analysts at Credit Suisse and FTN Financial Capital Markets forecast that mortgage rates will be in a range of roughly 5% to 5.25% at the end of 2010. Moody's Economy.com projects about 5.7%, and Barclays Capital 6%. Barclays cites a general rise in interest rates propelled by heavy government borrowing and a strengthening economy as the main factors.
John W. Anderson, a broker at Twin Oaks Realty of Crystal, Minn., who is helping Ms. Hale and Mr. Nystrom search for a house, says the tax credit and fear of higher interest rates are motivating buyers "to move a little faster." But he cautions against moving too fast because of the risk of overpaying or ending up with a home you don't really like. "Getting the right home is the No. 1 thing," he says.
MARCH 13, 2010.Nabbing a Bargain-Basement Mortgage Before Rates Rise .ArticleComments (13)more in Personal Finance ».EmailPrintSave This ↓ More.
.Save to ↓ More.
Save This ↓ More.
Saved ↓ More.
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Please log in or register for free to use Save This.
Log InRegister What is Save This?Save to+ New CollectionGo to Save & Share »Name your new Collection and click save.
SaveCancel Go to Save & Share »Go to Save & Share »facebook
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+ More
close Yahoo! BuzzMySpacedel.icio.usRedditLinkedInFarkViadeoOrkut Text .By JAMES R. HAGERTY
Is it time to rush out and buy a house before mortgage rates go up?
As the Federal Reserve winds down its intervention in the mortgage market, rates on home loans are generally expected to rise at least modestly during the rest of this year from today's unusually low levels. Some analysts believe mortgage rates will jump to around 6% by year end from 5% in recent weeks, while others see only a slight increase.
.Meanwhile, federal tax credits available for some home buyers are due to expire at the end of April, adding to the sense of urgency many shoppers feel.
"I'd hate to miss out on really low [mortgage] rates" or the tax credit, says Jennifer Hale, a veterinarian who is looking for a new home near Minneapolis with her fiance, Lawrence Nystrom.
If rates do go up sharply, that will have a big effect on home buyers. Richard Redmond, a mortgage adviser at All California Mortgage in Larkspur, Calif., offers the example of a couple with combined pretax income of $100,000 a year and debt obligations (excluding mortgage) of $500 a month. At a 5% mortgage rate, he figures, the couple could qualify for a loan big enough to buy a $590,000 house, assuming a 20% down payment. At 6%, that would fall to $540,000.
Since late 2008, 30-year fixed-rate mortgages have been available for people with strong credit records at around 5%, near the lowest levels since the 1950s, thanks to the Federal Reserve's heavy purchases of mortgage securities. At the end of March, the Fed is due to stop buying the securities. Most mortgage analysts think the immediate effect of the Fed's withdrawal will be modest.
More Weekend Investor
Where to Find the Money
Intelligent Investor: Why You Should Get a Bigger Slice of Earnings
Tax Report: File Away, but Pick the Right Status
Coupon Clipping: Playing a Calmer Corporate-Bond Market
Getting Going: The Home-Credit Derby Has Its Price
.Laurie Goodman, a senior managing director at mortgage-bond trader Amherst Securities Group LP in New York, estimates that the Fed move will add a maximum of about 0.25 percentage point to mortgage rates. "There is a lot of private money on the sidelines," waiting to buy mortgage securities once the Fed stops gobbling most of them up, Ms. Goodman says. She points to banks, money managers and foreign investors.
What happens to interest rates over the rest of this year depends on many factors that are hard to predict, including the strength of the economy, Fed policies and foreign investors' willingness to buy U.S. debt.
Projections vary widely. At the lower end of the scale, analysts at Credit Suisse and FTN Financial Capital Markets forecast that mortgage rates will be in a range of roughly 5% to 5.25% at the end of 2010. Moody's Economy.com projects about 5.7%, and Barclays Capital 6%. Barclays cites a general rise in interest rates propelled by heavy government borrowing and a strengthening economy as the main factors.
John W. Anderson, a broker at Twin Oaks Realty of Crystal, Minn., who is helping Ms. Hale and Mr. Nystrom search for a house, says the tax credit and fear of higher interest rates are motivating buyers "to move a little faster." But he cautions against moving too fast because of the risk of overpaying or ending up with a home you don't really like. "Getting the right home is the No. 1 thing," he says.
Sunday, February 28, 2010
Are You in the "Inner Circle" of a Top Foreclosure Specialist?
oreIf you're constantly running "a day late & a dollar short" with bank owned properties, you need to change your strategy. Instead of long nights on inaccurate websites that are just "fishing" for your business, you really need to bite the bullet and realize you DON'T know all there is to know about buying a foreclosed property and you need a guide. A map. A specialist. An REO agent who has an "Inner Circle" that may be a little tougher to get into, but ultimately, you get a great house at an unbelievably great price for a fraction of the effort.
Why would an agent with REAL information about great deals give it away to the dozens of investors who call each week. Well, they don't. They have a special group of investors and home buyers who are loyal to them...and the agent is loyal right back. Most hot deal hunters are afraid of missing out on any foreclosure or insider info, so they don't commit to an agent. These are typically the same people who will end up at a cocktail party in 5 years saying, "Wow, the deals I could have had in 2010." Wouldn't you rather be the one at the party talking about the deals you did get?
I hope I don't offend anyone too much with the following statements, but the truth really needs to come out. You don't go to your doctor, pick his/her brain about how to do a surgery, and then try to do it yourself to save money. Change the scenario and insert lawyer, CPA, etc. Top professionals in any industry deserve respect and loyalty. Contrary to popular belief, there are, in fact, top professionals in the real estate industry even in light of the black eye the industry has received in the last few years. Your job? Find one. Get referrals. Check them out online. Ask for references.
But don't call me, ask for my hottest deals, and then tell me you don't want to commit. I am loyal to my clients. I have an "Inner Circle". Those are the buyers that get inside my foreclosed properties BEFORE they are listed. Those same buyers know market trends before they become the "buzz" and then old news. I network with other foreclosure agents as well looking for specific properties for my buyers. I save my buyers time, huge money, and they always end up with a property in a fraction of the time they spent searching endlessly on the internet. I bring the deals to them. That's what you should expect from your agent. But commit to your agent. Find a full time professional with up to the minute market expertise and an exhaustive knowledge of social media.
My 'Inner Circle" clients are prepared to discuss their financial needs, get preapproved from a respected lender who performs, are motivated, understand the market or want to learn, don't "low ball" deals and they are a joy to work with. If this fits your buying personality, and you are excited about this real estate market, call me. Let's see if we're a match.
After all, don't you really want to BUY a foreclosed home and not just look for them??????
One more thing, if you get my voicemail, send me a text. Do whatever it takes to get my attention. You've wasted enough time running in circles. Let's get your home today!
Why would an agent with REAL information about great deals give it away to the dozens of investors who call each week. Well, they don't. They have a special group of investors and home buyers who are loyal to them...and the agent is loyal right back. Most hot deal hunters are afraid of missing out on any foreclosure or insider info, so they don't commit to an agent. These are typically the same people who will end up at a cocktail party in 5 years saying, "Wow, the deals I could have had in 2010." Wouldn't you rather be the one at the party talking about the deals you did get?
I hope I don't offend anyone too much with the following statements, but the truth really needs to come out. You don't go to your doctor, pick his/her brain about how to do a surgery, and then try to do it yourself to save money. Change the scenario and insert lawyer, CPA, etc. Top professionals in any industry deserve respect and loyalty. Contrary to popular belief, there are, in fact, top professionals in the real estate industry even in light of the black eye the industry has received in the last few years. Your job? Find one. Get referrals. Check them out online. Ask for references.
But don't call me, ask for my hottest deals, and then tell me you don't want to commit. I am loyal to my clients. I have an "Inner Circle". Those are the buyers that get inside my foreclosed properties BEFORE they are listed. Those same buyers know market trends before they become the "buzz" and then old news. I network with other foreclosure agents as well looking for specific properties for my buyers. I save my buyers time, huge money, and they always end up with a property in a fraction of the time they spent searching endlessly on the internet. I bring the deals to them. That's what you should expect from your agent. But commit to your agent. Find a full time professional with up to the minute market expertise and an exhaustive knowledge of social media.
My 'Inner Circle" clients are prepared to discuss their financial needs, get preapproved from a respected lender who performs, are motivated, understand the market or want to learn, don't "low ball" deals and they are a joy to work with. If this fits your buying personality, and you are excited about this real estate market, call me. Let's see if we're a match.
After all, don't you really want to BUY a foreclosed home and not just look for them??????
One more thing, if you get my voicemail, send me a text. Do whatever it takes to get my attention. You've wasted enough time running in circles. Let's get your home today!
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