FORECLOSURE ACTIVITY REMAINS AT RECORD LEVELS IN APRIL

“Total foreclosure activity in April ended up slightly above the previous month, once again hitting a record-high level,” said James J. Saccacio, chief executive officer of RealtyTrac. “Much of this activity is at the initial stages of foreclosure – the default and auction stages – while bank repossessions, or REOs, were down on a monthly and annual basis to their lowest level since March 2008. This suggests that many lenders and servicers are beginning foreclosure proceedings on delinquent loans that had been delayed by legislative and industry moratoria. It’s likely that we’ll see a corresponding spike in REOs as these loans move through the foreclosure process over the next few months.”

 

 

Nevada, Florida, California post top state foreclosure rates
Despite an 18 percent decrease in foreclosure activity from the previous month, Nevada continued to post the nation’s highest state foreclosure rate in April, with one in every 68 housing units receiving a foreclosure filing — more than five times the national average. The decrease in Nevada was driven largely by a 44 percent drop in bank repossessions from the previous month, although default notices also decreased from the previous month. Total foreclosure activity in Nevada was up 111 percent from April 2008.

A 37 percent month-over-month increase in foreclosure activity boosted Florida’s foreclosure rate to second highest among the states in April. One in every 135 Florida housing units received a foreclosure filing during the month, more than 2.7 times the national average. The monthly increase in Florida was driven by a spike in default notices and auction notices, but bank repossessions were down 7 percent from the previous month. Total foreclosure activity in Florida was up 75 percent from April 2008.

Foreclosure activity in California decreased 10 percent from the previous month, but the state still posted the nation’s third highest state foreclosure rate in April, with one in every 138 housing units receiving a foreclosure filing during the month. Total foreclosure activity in California was up 42 percent from April 2008.

 

Arizona posted the fourth highest state foreclosure rate, with one in every 164 housing units receiving a foreclosure filing in April, and Idaho posted the fifth highest state foreclosure rate, with one in every 255 housing units receiving a foreclosure filing in April.

Other states with foreclosure rates ranking among the nation’s 10 highest were Utah, Georgia, Illinois, Colorado and Ohio — although the foreclosure rates in Illinois, Colorado and Ohio were below the national average.

Top 10 states account for more than 75 percent of total U.S. foreclosure activity
The 10 states with the most properties with foreclosure filings in April accounted for more than 75 percent of the national total. California documented the highest total (96,560), followed by Florida (64,588), Nevada (16,266) and Arizona (16,245).

 

Foreclosure filings were reported on 13,647 Illinois properties in April, the nation’s fifth highest state total. Illinois foreclosure activity decreased 11 percent from the previous month but was still up 54 percent from April 2008. With one in every 384 housing units receiving a foreclosure filing, the state’s foreclosure rate ranked eighth highest in the country but was still below the national average.

Other states with totals among the 10 highest in the country were Ohio (12,324), Georgia (11,521), Texas (11,314), Michigan (10,830) and Virginia (6,254).

 

Las Vegas continues to post top metro foreclosure rate
Foreclosure filings were reported on 14,073 Las Vegas properties in April, a 20 percent decrease from the previous month, but the city continued to post the highest foreclosure rate among metro areas with a population of at least 200,000. One in every 56 Las Vegas housing units received a foreclosure filing during the month — nearly seven times the national average.

 

The Cape Coral-Fort Myers, Fla., metro area documented the second highest foreclosure rate in April, with one in every 57 housing units receiving a foreclosure filing during the month. Foreclosure activity increased 31 percent from the previous month in Cape-Coral-Fort Myers. Two other Florida metro areas also documented foreclosure rates in the top 10: Miami at No. 9 and Orlando at No. 10

With one in every 65 housing units receiving a foreclosure filing, Merced, Calif., posted the nation’s third highest metro foreclosure rate. Five other California metro areas also documented foreclosure rates in the top 10: Modesto at No. 4, Riverside-San Bernardino at No. 5, Bakersfield at No. 6, Vallejo-Fairfield at No. 7, and Stockton at No. 8.

Renovation Loan: Ideal For Investors

From what I am seeing, much of the activity from buyers is coming from first time home buyers wanting to take advantage of the 8,000 tax credit or investors buying bank-owned properties.

For the investors, it seems many of them are paying cash – because until recently, there wasn’t very many programs available for investors and Fannie Mae has limited the number of properties that you could own to 4. Well, now two things have changed:

 

1. There is a new Fannie Mae program called the Fannie Mae HomeStyle loan program that can be used by investors who want to buy homes in need of a little repair work.

Highlights of the Fannie Mae HomeStyle Loan:

The HomeStyle Renovation mortgage program allows borrowers to combine the cost of the home with the costs for renovation or remodeling.

At closing, all funds for renovation will be escrowed in an interest-bearing account. After all renovation work is complete, any remaining funds in the escrow account will be used to pay down the principal balance of the mortgage.

Fannie Mae HomeStyle Renovation Loan Highlights:

• Up to 95% LTV (see LTV matrix below)
• Renovation funds escrowed in an interest bearing account
• Soft costs (architectural services, engineering, permit fees, etc.) may be financed
• Loans are underwritten to FNMA guidelines

HomeStyle Renovation Loan LTV Requirements:

• Primary Residence – Up to 95% LTV
• Second Home – Up to 90% LTV
• Investment Property – Up to 75% LTV

HomeStyle Renovation Mortgage: More Information

Borrowers can basically do any repairs / renovation to the home that they want as long as the appraisal supports the value, the improvements are common for the area (pools, for example), the repairs can be completed within six months, and the repairs do not exceed 50% of the after improved appraised value.

USDA RURAL DEVELOPMENT SINGLE FAMILY HOUSING FUNDS AVAILABLE- MARCH 20, 2009

$10 Billion ( yes, that’s a billion with B) The USDA has already used 25% for “purchase transactions” that have been on HOLD since 1/9/2009. When “dust” settles, money will be released for refis. Not every community qualifies-but if it does, it’s the best thing since sliced bread

Here’s a link to check counties http://eligibility.sc.egov.usd.gov .

Check with your lender and see if they offer this program-most of them do but never seem to mention it!

Buyer Qualifications Highlights

• No Down Payment
• 30 year fixed rate
• 102% LTV (100% plus 2% guarantee fee)
• Finance Closing Costs If Appraisal Is Higher Than Sales Contract
• No Mortgage Insurance
• No cash contribution required from borrower.
• Income Limits (by county)
• Unrestricted gifts, no need to document source.
• No Maximum Loan Amount
• No Cash Reserve Requirements

Property Qualification Highlights

 Existing Home
 New Construction
 New Manufactured Homes
 Modular Homes
 Condos & Town homes (Must be approved projects)

Prohibited Loan Purposes

• Co-signors not residing in the household
• In-ground swimming pools
• Construction draws
• Furniture and personal property
• Income producing property
• Non-essential buildings and land
• Previously occupied manufactured homes

Let me know if this was helpful information.

What You Need to Know About the $8,000 First Time Home Buyer Tax Credit

• Never owned a home
• Have not owned a home within the last 3 years–determined by HUD 1 date when previous home was sold
• Purchased a home to be a primary residence between January 1 and November 30, 2009
• Owned a rental property or vacation home which was not used as a primary residence over the last 3 years
• If married and one person owned a home within the last 3 years, the other did not, they do not qualify
• If unmarried and one person owned a home within last 3 years and other did not, they can “designate” the tax credit to the one who is considered the FTHB.
• If parents cosign on a mortgage (and own a home) and the child is a FTBH, they are eligible for the tax credit.
• Non-US Citizens may qualify if they meet resident-alien status (IRS Pub 519)
• Revenue or Housing Bond financing are eligible for tax credits.

Types of Properties

• Primary Residence – Single family, 2-4 units (must occupy one unit) town homes, condos, manufactured homes, mobile homes and houseboats.
• New Construction – “Purchase Date” is the date the owner occupies the home (between Jan 1 and Nov. 30, 2009) Note: They could have owned land and are in the process of building.

Income Limits

• $75,000 Single Person (Partial Credit up to $95,000)
• $150,000 Married Couple (Partial Credit up to $170,000)
• Based on Adjusted Gross Income (AGI) line on IRS Form 1040, 1040A or 1040EZ

Amount of Credit

• 10% of Sales price
• Up to Maximum of $8000
• Partial Tax Credit if income exceeds $75,000 or $150,000

Repayment Tax Credit

• If sold within 3 years, the entire tax credit needs to be repaid! After 3 years, no repayment is due.

Buyers should check with a tax advisor on how it will affect their individual tax returns

What is an Energy Efficient Mortgage?

 

Here’s a great program to help save home buyers in Today’s Real Estate Market…

 

An Energy Efficient Mortgage (EEM) is a mortgage that credits a home’s energy efficiency in the mortgage itself. EEMs give borrowers the opportunity to finance cost-effective, energy-saving measures as part of a single mortgage and stretch debt-to-income qualifying ratios on loans thereby allowing borrowers to qualify for a larger loan amount and a better, more energy-efficient home.

To get an EEM a borrower typically has to have a home energy rater conduct a home energy rating before financing is approved. This rating verifies for the lender that the home is energy-efficient.

EEMs are typically used to purchase a new home that is already energy efficient such as an ENERGY STAR qualified home. The term EEM is commonly used to refer to all types of energy mortgages including Energy Improvement Mortgages (EIMs), which are used to purchase existing homes that will have energy efficiency improvements made to them. EIMs allow borrowers to include the cost of energy-efficiency improvements to an existing home in the mortgage without increasing the down payment. EIMs allow the borrower to use the money saved in utility bills to finance energy improvements. Both EEMs and EIMs typically require a home energy rating to provide the lender with the estimated monthly energy savings and the value of the energy efficiency measures — known as the Energy Savings Value.

EEMs (and EIMs) are sponsored by federally insured mortgage programs (FHA and VA) and the conventional secondary mortgage market (Fannie Mae and Freddie Mac). Lenders can offer conventional EEMs, FHA EEMs, or VA EEMs.

First Time Homebuyer-Tax Credit

U.S. Senate passed the American Recovery and Reinvestment Act of 2009

***Up to a $8000 tax credit to First Time Homebuyers***

The provisions in the bill pertaining to the tax credit for first time home buyers are as follows:

* The $8000 tax credit is available only for first-time home buyers

(Definition of a “first-time home buyer” is a buyer who has not owned a

principal residence during the three-year period prior to the purchase)

* There is a $75,000 adjusted gross income limit for tax filers filing

separate and $150,000 limit for joint return filers.

* The $8000 tax credit is available only for primary residence purchases.

* The tax credit does not require a repayment for most cases.

* The tax credit does have a repayment provision if the homeowner

does not occupy the property for a minimum of 3 years from the

closing date.

* The home buyer must purchase a home between January 1, 2009 and

December 1, 2009.

* The $8000 tax credit is received when you file your tax return.

How does the credit affect the taxes you owe and the refund you get?

The credit reduces your tax liability, that is, the amount of taxes you are required to pay. Depending on your tax withholdings, you could get a bigger refund or owe less in taxes when you file.

 

How to buy a Historic Home with Renovation Financing

What is a Historic Home?  A historic home has some significant historic relevance as reflected in its architecture. 

Why Buy?  Historic homes appeal to people for a variety of reasons.  Many home buyers like the idea of a historic home because it had significant relevance in the past, while others may just like “the look” of architecture from years past.  A large contingency of buyers, while certainly admiring the property’s aesthetic qualities, will buy a historic home because of the benefits that come with restoring it. Historic homes are often eligible for special grant awards for preservation.

 

We’ve made major improvements in the way people finance their renovations! You’ll enjoy start to-finish convenience with our streamlined, simplified process:

 

 

1.      Consult with a renovation specialist such as myself to determine if the renovation program will meet your needs.

2.       Apply for your Purchase & Renovate loan or Refinance & Renovate loan. Upon credit approval, you receive a Priority Buyer preapproval letter and I will contact you to discuss approval conditions.

3.       For purchases only, select a property (if one has not already been chosen) and execute a purchase agreement, if not previously done, containing renovation verbiage.

4.       Do research on the home.  Once you are comfortable with any laws and regulations regarding purchasing a historic home, you should decide on a house. State websites on historic preservation may have helpful links to information on the property you are particularly interested in.  If the property is listed, the real estate agent should be able to provide you with interesting tidbits about the property’s history. 

5.       Schedule required inspections as applicable, There are inspectors who specialize in historic homes.  See the Historic Building Inspectors Association for more information.  These people might be more costly than a regular inspector, but they are trained to evaluate properties such as the one you are interested in. The roof is a huge inspection item.  A failing roof will cause leaks and will incur much money for repairs in the future.  The heating system in the building will likely be old.  Just because a system is old, however, does not mean it is bad.  Have your inspector evaluate the method of heating, and suggest ways to maintain/improve on it.  Remember, though, that certain methods may not be acceptable by the historic commission of your state (i.e. ripping it out and putting in a brand new system). I will assign a certified consultant to you to determine the scope of work.

6.       Select a contractor and provide a contractor’s packet. Review the contractor’s package and copy of renovation disclosures. Upon completion, the contractor returns the packet to us. 

7.       The scope of work is reviewed and accepted by all parties – you, your consultant, your contractor and Wells Fargo Home Mortgage.

8.       The approved scope of work is sent to an appraiser who inspects the property and determines its after improved value.

9.       Final loan approval is issued after the scope of work, appraisal and loan commitment conditions are reviewed and approved.

10.   You obtain the homeowner’s insurance, the title is received, final figures are established and the closing documents are signed.

11.   Renovation must begin within 30 days of closing, cannot stop for more than 30 days, and must be completed within the agreed-upon time frame (not longer than six months).

12.   As work is completed, inspections are made by a certified consultant, funds are requested and disbursed.

Now you enjoy your newly renovated home!

 

 

Will Addo

Renovation Specialist

Wells Fargo Home Mortgage

404-375-7819

willis.addo@wellsfargo.com