Single Family Home for Rent in Hollister

Strategic Default - Time to talk about this again

We read an article on Reuters.com about strategic default this morning, and it resonated with us because we are representing a homeowner in this situation right now. The homeowner thought about a strategic default for over two years before taking the first step. It's a very difficult choice!

The article has some valuable information, and a list issues to consider.

If you are underwater on your mortgage please read this article. If you think that strategic default is the answer for you, please contact us right away, at the very beginning, for advice and help along the way.

A reprieve for unemployed borrowers

Fannie Mae and Freddie Mac recently extended their foreclosure forbearance programs to give short-term aid to unemployed homeowners, but housing counselors warn that these borrowers will need to look at longer-term solutions.

Details:

• In a forbearance program, a lender agrees not to foreclose on a property and gives the borrower several months’ grace from or reduction in monthly mortgage payments.  The programs work best for temporary setbacks, like job loss, health problems, or natural disasters.
• There are drawbacks to the forbearances though. The most-significant drawback is a larger total debt from the smaller payments.  The unpaid balance continues to increase during this time.
• The new temporary mortgage payment is often set to 31 percent of the household income; in some cases lenders agree to accept no payments.  Fannie Mae’s extended unemployment program, first offered in the fall of 2010, limits any nonpayment or other forbearance plans to one year, with the second six months requiring approval by both Fannie Mae and the lender.
• However, even with the program in place, the lender could still report a mortgage as delinquent, which could adversely affect the borrower’s credit score.
• Because some agreements add onerous term and conditions, homeowners should also consult with a housing counselor certified by the Dept. of Housing and Urban Development.

The New York Times has a full article on this subject (we've just covered the bullets).

Need Directions? Ask a Realtor

By Gino Blefari
President & CEO
Intero Real Estate Services, Inc.

I'm always amazed at the amount of local community knowledge a typical Realtor has. If you need to know about the local preschool situation, where to get the best cup of coffee within earshot of a specific address, where to get free Internet while you enjoy a hot beverage or quick lunch, and where the best morning bun in town is served, ask a Realtor. Seriously.

Read the rest of the story...

Lowest Interest Rates in History – Do You Qualify?

Interest rates are the lowest in history, enticing many renters to look at buying a home, and many homeowners to look at refinancing. There are amazingly low interest rates being talked about, but beware – not everyone qualifies for those lowest of the low rates.

Mortgage lenders adjust their rates based on perceptions of risk, so unless the borrower can show they’re a low-risk it is unlikely that they will qualify for a rate that matches those seen in recent advertisements and headlines.

Here are some specifics:

• The rates quoted are averages drawn from a variety of financial institutions, and lenders use varied approaches to set them. Consumers who want to try for the lowest rates available need to consider basic factors, such as credit score, points, property type, down payment, and length of the loan.
• Credit score: The ideal borrower has a FICO score of 740 or higher, which puts the individual in the best place for pricing.
• Points: The lowest rates usually are decreased by paying a fee called a point, or 1 percent of the loan amount. Borrowers may buy points in order to get the best rates at many banks. Points might make sense depending on the borrower’s financial situation and how long they expect to stay in the home.
• Property type: Borrowers planning to buy a duplex or a four-unit build likely will have a higher interest rate. Condominiums also may have a rate premium rate, especially if they are newer or the down payment is less than 25 percent. Lenders also may charge more if the borrower is not planning to live in the home.
• Down payment: Borrowers who put down at least 25 percent are more likely to obtain the best interest rates. Lenders offer different breaks on rates if equity in the property is higher, so borrowers should ask what is available.
• Length of loan: Borrowers who are likely to move in a few years may want to look into an adjustable-rate loan with a low interest rate fixed for a few years, and adjusted afterword.

Independent Foreclosure Review process

Team Patereau received this information from C.A.R. (California Association of Realtors):

Homeowners who had a mortgage loan on a primary residence and who believe were financially harmed during the mortgage foreclosure process by GMAC Mortgage, HSBC Finance Corporation, SunTrust Mortgage, or EMC Mortgage in 2009 or 2010 can request an independent review and potentially receive compensation.

The review is intended to determine if borrowers suffered financial harm directly resulting from errors, misrepresentations, or other deficiencies that may have occurred during the foreclosure process. The servicers are required to compensate borrowers for financial injury resulting from deficiencies in their foreclosure processes.

A number of servicers supervised by the Office of the Comptroller of the Currency (OCC) are also required to conduct independent reviews.

Borrowers are eligible for an independent foreclosure review if 

• the property securing the loan was the borrower's primary residence;
• the mortgage was in the foreclosure process (initiated, pending, or completed) at any time between January 1, 2009, and December 31, 2010; and  
• the mortgage was serviced by one of the mortgage servicers listed here.

There are no costs associated with being included in the review; the review is a free program. Borrowers should beware of anyone who wants payment to assist with the independent foreclosure review or any other foreclosure assistance program.

Requests for review by the servicers’ independent consultants must be received by April 30, 2012.  Borrowers are encouraged to carefully consider the information about the review program to determine if they are eligible to participate.  

Appraisal Problems Don't Mean the Deal's Off

Today we're facing a problem appraisal. We're telling our Buyers that this is not the end of their dream to own this home. We'll persevere, we'll ask for a re-appraisal, we'll talk to the lender and the seller's agent and we'll see what happens. We've been through this before and most transactions have closed. Not all of them but a lot of them. Stick with it!

Open House TODAY!

Housing Action this week at Federal Level

The Wall Street Journal is reporting today that Congress is being encouraged to do things differently with regard to the Housing Market in order to stimulate recovery. Here's the WSJ video report:

Know risks when forgoing inspection contingency

Team Patereau is working with a Buyer who watches every penny and would like to forego the cost of home inspections.  This person is knowledgable about the property and familiar with the neighborhood, and has met the current homeowners. We are cautioning that there are hidden conditions that need to be tested by a professional, but in the end it is optional. Today we saw this article from Inman News about home inspections and we are sharing it with our Buyer, and you.

Know risks when forgoing inspection contingency - Surprise defects can compromise a homebuyer's deposit

By Dian Hymer, Monday, January 2, 2012.Inman News®

Think again if you're considering buying a home without having it inspected. This particularly applies to first-time buyers who have little, if any, experience with home defects and repairs. Even professionals can make mistakes when buying homes without having them thoroughly inspected.

In one example, an experienced contractor bought a home to fix up and resell. The contractor looked over the property carefully before he bought it, but he did not have it inspected by an impartial home inspector.

After the contractor took possession of the property, he discovered that the furnace was shot and required replacement. The cost of a new furnace was not included in his renovation budget.

Here's the full article