Where do you think Real Estate will be in 2-3 years??

The most common question I get from homeowners is,"Where will Real Estate values be in 2-3 years?" I wish I had a crystal ball. For now, I will just have to make an educated guess.
Seeing that the volume of foreclosures is barely slowing in Maricopa County, I think that, in 2-3 years, we will be in approximately the same market as we are in now...a market fueled by distressed properties. I believe the small slowdown we have seen in the number of foreclosures is due to the increase in the number of short sales and the fact that some lenders have been postponing auctions. I believe the general public is now better informed as to the benefits of short sales and is now more inclined to pursue one.
I think that those homeowners who are underwater and are "on the fence" about short saling or strategically defaulting will take the plunge and attempt a short sale. The more distressed homeowners are talking to each other regarding their financial difficulties, the less the negative stigma of a short sale or foreclosure. The higher the number of homeowners defaulting, the more those "on the fence" will see a short sale as a viable solution and a wise market opportunity.
I believe that in the future we will see another wave in the West Valley...an onslot of bankruptcies. Just as we begin to see a slight tapering in the number of short sales and foreclosures in the years ahead, the swell of bankruptcies will begin. Consequently, we will have a market with a steady supply of distressed properties for at least the next 2-3 years. And, with a wealth of inventory, comes low, affordable prices.
If you have any questions about the value of your home and/or know of anyone who is considering capitalizing on this market, give us a call at 623-694-0354 or visit our website. www.MaryDrefs.com. We are here to help.

BANKS CRY FOUL! LET'S ALL CRY.........

Yesterday, the Arizona Republic ran a story about Real Estate "Flopping" in Arizona. Basically, the story relayed that "flopping" is when a buyer purchases a foreclosed or short sale property and then immediately lines up another buyer to purchase the property at a higher price. Apparently, it is big news because banks are crying "Foul!" Banks are saying that if they knew that another buyer would pay a higher price, they would have sold directly to that party...or would they?
Banks call this flopping. I call it capitalism. Show me a business that does not have a middleman that gets paid for his knowledge and service. If the buyer of the foreclosed home is cunning enough to line up another buyer who is willing to pay more, so what? Personally, I would never go to the court house steps to purchase a foreclosed property because I don't know all of the intricacies of purchasing a foreclosed property. I am too afraid that I would purchase a house with a huge tax lien or structural or environmental defects. Would I purchase a house from an experienced court house step buyer? Yes. And I realize I would have to pay more for the house for utilizing his expertise.
Some buyers right now want to purchase properties but cannot get financing using traditional lending companies because of increased loan requirements. Are these buyers willing to pay more for a home that offers seller financing? Absolutely. Should those sellers who are carrying the note and the financial risk receive more for these homes? Yes!

The lenders are crying Foul. But is the average Joe feeling sorry for the lenders? Please note that if a house forecloses or is short saled and has a loan that is government insured, the lender is handsomely financially rewarded after the transaction closes. This is where the billions of dollars to solve the housing crisis is going. It is not going directly into the hands of any homeowners. Ultimately, we will all contribute to these billions by paying taxes. So, in the end, the banks win again...and again...and again.

PHOENIX AREA REAL ESTATE MARKET FORECAST

It has now been two and a half years since we started to see a marked increase in foreclosures in Maricopa County. Since April 2008, there have been 232,456 Notices of Trustee's Sale filed in Maricopa County. 115,214 of those homes have actually ended with a recorded trustee's deed indicating foreclosure. The other homeowners have either gotten current on their loan, successfully sold the house as a short sale or are attempting loan modification. Since January 1, 2010, the number of notices filed in Maricopa County stands at 87,747. However, while fewer properties are entering into the foreclosure process, the banks have picked up the pace at which they are foreclosing.

It has now been two and a half years since we started to see a marked increase in foreclosures in Maricopa County. Since April 2008, there have been 232,456 Notices of Trustee's Sale filed in Maricopa County. 115,214 of those homes have actually ended with a recorded trustee's deed indicating foreclosure. The other homeowners have either gotten current on their loan, successfully sold the house as a short sale or are attempting loan modification. Since January 1, 2010, the number of notices filed in Maricopa County stands at 87,747. However, while fewer properties are entering into the foreclosure process, the banks have picked up the pace at which they are foreclosing.

In October, due to legal pressure, several of the big lenders placed moratoriums on their foreclosures. Bank of America, GMAC, and Wells Fargo were several lenders who stopped foreclosures. Now, Wells Fargo has quickly ended their moratorium and is back to foreclosing. The court system did have testimony from several bank employees who stated that they had given their approval on directives to foreclose without actually reviewing the files. This was due to the overwhelming number of files the employees were assigned. Fearing more lawsuits, the lenders ordered the moratoriums.

Currently, the bank owned inventory of homes for sale is rising. Of the approximate 4,800 homes auctioned at the trustee sales, approximately only 1,000 are being purchased by investors. This means approx. 3,800 are returned to the banks for them to sell. Of these returned homes, approx. 2,600 are actually being purchased thru the MLS. This means the REO or lender owned properties inventory for sale is increasing by approx. 1,200 homes per month. Excess inventory means lower prices. All of this inventory needs to be absorbed, or purchased, for us to see prices rise again.

At this time, experts are predicting the next big wave of foreclosures to hit just after the first of the year. In the meantime, mortgage interest rates are remaining low and lenders are reporting that refinanced loans are up.

Need to sell or looking to purchase?? Give us a call. We can help you make sense out of the current market and choose the path that is best for you.

MORTGAGE PAYMENTS TODAY CAN BE CHEAPER THAN RENT

Mortgage Interest rates are so low that renters should definitely be considering purchasing a home. For example, for a $150,000 house at 20% down and an interest rate of 4.25% on a 30 year fixed rate mortgage, the payment including tax and insurance is only $746 per month. Cheaper than most 4 bedroom rentals.
In addition, homeownership brings great tax write offs.
If you would like to see a list of homes for sale for $150,000, give us a call at 623-694-0354.

A Moratorium on Foreclosures....What Does It Mean?

This past weekend, Bank of America announced that it is placing a temporary moratorium on foreclosures. What does this mean? It means that those homeowners who have received their Notice of Trustee Sale from Bank of America due to non-payment of their mortgage, may not have their homes auctioned any time soon. This does not mean that all Bank of America customers can stop making their mortgage payments without consequences. It simply means that those homeowners who have imminent auction/foreclosure dates have received a postponement of the inevitable.

Other lenders such as JP Morgan Chase and GMAC Mortgage, have announced a moratorium on foreclosures in 23 states. Arizona is currently not included on this list. Why the moratoriums? It has come to light in a court of law that lenders are not paying close attention to the homeowner's documents and that many bank officials are overwhelmed by their workloads. Consequently, they are not diligently investigating before approving foreclosures.

These moratoriums do currently not affect short sales. Short sales are proceeding as usual.

If you have any questions regarding alternatives to foreclosure, give us a call at 623-694-0354. We are here to help you through a difficult time with grace and dignity.

FORECLOSURES ON HOLD? COULD THIS BE TRUE??

In the past several weeks, JP Morgan Chase, GMAC Mortgage and Bank of America have placed foreclosure filings on HOLD in 23 states. Currently, AZ is NOT one of these states.
In a February deposition in Mass., a Bank of America Executive said she signed as many as 8,000 foreclosure documents in a month without reviewing them. The statement was taken by lawyers for homeowners contesting the seizure of their homes.
Why not in AZ? The 23 states where the foreclosure holds are taking place require a court order before a home can be seized. This requires more extensive documentation before they can foreclose. AZ does not have the same foreclosure procedure.
HOWEVER,with the upcoming elections, this has become a hot issue for politicians. Perhaps they may mandate Federal Guidelines to ease the foreclosure crisis. Stay tuned.................

Forced to Relocate......

Lately we have been getting quite a few calls from homeowners who have been notified by their employers that they are scaling back or shutting down their Phoenix operations. This leaves homeowners with equity in a quandry. Should they sell at the current market price and barely break even, or in some cases, bring money to the table at closing OR should they hang on to their house and rent it out?
Obviously, circumstances vary from homeowner to homeowner. Being an out of state landlord can supply a nice flow of cash...if the rent adequately covers the mortgage payment and HOA dues, etc. But, if you are waiting for prices to return to the '05 prices, you will need to rent your property for a very long time. (i.e. at least 10-15 years)
It is best to look at the real estate market you are moving to and see how prices are there. If you sell your AZ property at a slight loss, but are able to pick up a great bargain in your new locale, then it may be worth bringing a few dollars to the closing.
Also some owners do not have the temperament to be a landlord. If you are the type that is bothered by a scuff on the wall or a few leaves in the yard, then you will probably be an agitated landlord. And, some things are just not worth the aggravation.
We are finding that the majority of those relocating are moving to Washington State and Oregon. In this case, the grass is greener where it actually takes minimal effort to grow.

Arizona Real Estate Update- Avoid Arizona Foreclosure: Fannie Mae Backed Mortgage Loans

Arizona Real Estate Update- Avoid Arizona Foreclosure: Fannie Mae Backed Mortgage Loans: "In the past month, Fannie Mae has become stingy in granting extensions on auction dates even when the seller is in contract with a ready, wi..."

Fannie Mae Backed Mortgage Loans

In the past month, Fannie Mae has become stingy in granting extensions on auction dates even when the seller is in contract with a ready, willing, able buyer who is paying fair market value for a short sale property. This makes no sense to me because Fannie Mae is a government backed loan.
In almost every case, Fannie Mae would receive more money from the completion of the short sale. But, no, Fannie Mae refuses to extend the auction date so the short sale can be completed. Instead, they force the homeowner to go into foreclosure. When the house forecloses, the lender needs to take the house back and care for it. Now the lender needs to pay for the utilities,the lawyers, the pool service, the landscape service, and the commissions for the realtors involved in the new sale. Typically, the house comes back on the market for a lower price than what the short sale buyer was willing to pay. So, in the foreclosure, Fannie Mae receives less in the foreclosure sale than they would have received if they had waited a few weeks and completed the short sale. And,the foreclosure closes typically 3-4 months later than the original short sale closing date.
When Fannie Mae agrees to take this greater loss, who is the big loser. WE ALL ARE. The Fannie Mae loan is government backed. That means that loss increases our US deficit. Ultimately, you and I will pay for this loss thru our taxes.
We can only fight this process by contacting our US representatives and by voting for those politicians who are willing to fight for us and stop increasing the national debt.

Yea for Luke AFB !!!

Kuddos to the government for selecting Luke AFB as the number one site for the new F35's. It looks like Luke AFB will continue to bolster our local economy. We are very thankful for our local service personnel and think of freedom every time we hear a jet pass over.
Also, soon Luke AFB will have the largest solar plant on government grounds in the US. APS will be building this solar operation and upon completion it is expected to service over 3750 homes. Finally, we are using our most plentiful, free resource in Arizona...the sun!
Go Luke AFB! You Rock!!

DO FORECLOSURES HURT HOME VALUES???

A recent study by a MIT economist and 2 Harvard researchers concluded that a foreclosure reduces that home's value by an average of 27%. " In the study, “Forced Sales and House Prices,” which will be published in the American Economic Review, Pathak, Campbell and Giglio examined 1.8 million home sales in Massachusetts from 1987 to 2009. By looking in granular detail at real-estate prices, the researchers have concluded that a foreclosure reduces the value of a house by 27 percent, on average."

So, if my neighbor's house is foreclosing, will this affect the value of my house?
YES, The study concluded that a foreclosure reduces the surrounding home's values by an average of 9%. A bankruptcy in a neighborhood reduces the surrounding home's value by an average of 3%.
Short sales, a transaction in which the property can avoid becoming vacant, is increasingly sought after as a solution not only for homeowners facing foreclosure, but lenders looking to recoup more of their investment.
Interested in a Short Sale? Call me at 623-694-0354.

Canadians Are Here!!

Many people are assuming that because our economy is so bad in AZ, that real estate sales must be slow and few. On the contrary, many current buyers who always dreamed of owning real estate in the sunshine are flocking in from othe US States AND Canada. The beauty of the Canadian buyer is that most are paying cash. Canadians fully realize the values that are currently available in Arizona and are buying it up. Some have the intention of owning a second home now and some are wishing to rent out the property for several years and then use that house as their second home in the future.
Most of the best values available are in the West Valley of Phoenix. Coupled with the growing entertainment and shopping opportunities, www.Westgate.com, www.ArizonaCardinals.com, www.PhoenixCoyotes.com, , the West Valley is the place for all the "smart & savvy" real estate buyers.

New Standards Due Nothing to Reel Fannie Mae and Freddie Mac In

Today's words of wisdom come from Diane Gerdes of The Mortgage Advantage. Thanks to Diane for clarifying what is happening on the national economic scene every week. This week our government is patting itself on the back for passing the Dodd-Frank Financial Reform Bill. However, they missed two major economic components that seem soon to derail any economic progress. Enjoy!


The Economic Cupcake by Diane Gerdes
"The Dodd-Frank Financial Reform bill signed on Wednesday was touted as the most sweeping financial bill since the Glass Steagal Act of 1933. (You remember that law, don't you? It's the one that the banks had repealed in 1999 and was ground zero for the global financial catastrophe). The hefty 2300 page bill signed into law by President Obama is structured to prevent future economic meltdowns. It allegedly gives tools to regulators so they can reel in the banks if they don't behave, but not enough to hurt their profits. The bill did manage to call for nearly 70 study groups, according to CNN Money, to analyze subjects such as fiduciary standards for brokers and analyzing reverse mortgages. It may be years before we feel the full effect of the law.

Two of the most terrifying man-made Frankenstein's living in Uncle Sam's house are Fannie Mae and Freddie Mac, with trillions of dollars in outstanding mortgages that they either own or have backed. The Dodd-Frank Bill did nothing to address their situation: they have cost the taxpayers more than the bail-out banks and auto companies combined.


Both Fannie and Freddie were quasi government entities given quotas for selling mortgages. It was a concoction that bred fraud. For instance, Countrywide Financial Corporation gave loan discounts to employees of Fannie Mae. Fannie and Freddie were both accused of fraudulent accounting practices resulting in huge bonuses for executives of both companies. They funneled campaign contributions to choice government representatives.


The Dodd-Frank Bill was designed to keep Main Street (us) safe from Wall Street (them). But somehow it overlooked the two-headed monster in the cellar... Fannie Mae and Freddie Mac."

Why Would I Want a HAFA Short Sale?

In theory, HAFA Short Sales should receive a quicker approval from the seller's lender than regular Short Sales. I say in theory because realtors are saying this is not always the case. Some Lenders, like Wachovia, are known for approving Short Sales in record time. Of course, all approval times are dependent on the investor's policies.
Word on the street is that currently only 10% of the HAFA Short Sale applications are being accepted as a HAFA sale. Most of the applicants are being rejected due to the income requirements.
Need to do a Short Sale? Give me a call at 623-694-0354

HAFA -- Fannie Mae and Freddie Mac Soon To Be Paticipating in HAFA

Beginning August 10th, 2010, Fannie Mae and Freddie Mac will be participating in the goverment's new HAFA program. Those who wish to apply for a HAFA short sale with these programs will need to first apply for the loan modification and then fill out the Short Sale Application. These forms should be submitted by your real estate agent to your lender. Applicants will still need to meet the program's requirements. See MakingHomeAffordable.gov for a list of the requirements. Better yet, contact a Short Sale Specialist. You can contact me at 623-694-0354.

Arizona Short Sales Booming

Suddenly our Short Sales business is booming! Our number of Avondale Short Sales has really picked up. I think it because sellers are becoming more familiar with the term short sale and now understand how the short sale can be beneficial. We have helped many families get out from under their mortgage debt. This area of my work is the most fulfilling. Many homeowners I meet would feel devestated if their house foreclosed. Most of the clients I meet are barely making ends meet. They are worn down and tired from all the financial stress.
This week we learned that Fannie Mae is no longer allowing auction dates to be postponed. This could have a huge impact on the number of foreclosures. With Fannie Mae short sales, we have to close before the first auction date posted on the Notice of Trustee Sale and on taxes. No longer do we get an extension because we have a contract on the house. Fannie Mae would rather foreclose than sell that house as a short sale when the auction date is looming. That does not sound like good business sense to me....but then again neither does a lot of government policy.

Happy Father's Day!!!!!!!!!!!!

Happy Father's Day to all you lucky fathers out there. My father is 85 and still vibrant (and funny) and I realize how lucky we are to have him. Can't wait to see him in 2 weeks as we welcome another new baby into our family. I am glad he is able to see the family growing.

I say "lucky" father's because just this month my brother in law became a father for the first time. He is 47 years old and he and his wife tried to conceive for years. Finally, after all this time and heartache, they decided they were ready to adopt and now are parents to an adorable 4 month old. All fathers are "lucky" indeed.

Have a great Father's Day!

It's The Bottom Line That Counts

Recently I realized that lenders in a Short Sale don't place as much importance on the reason for a short sale as I thought. They don't seem to care as much about the reason for a hardship as they do the current numbers on the financial pages. Banks deal in hard numbers and as long as the bank is financially pleased, they will approve a short sale. If the numbers do not make financial sense for the investor, the lender will turn down a short sale.
The most important piece of paper submitted to the lender in a short sale is the financial page which outlines the monthly budget. Be sure to be precise and accurate when filling out this page. It is the most important of all those submitted.

No Income Tax Owed on the Deficiency

After a Short Sale you will not owe income tax on the deficiency... the amount forgiven. Click on the youtube link to learn the facts from Suzy Orman. http://www.youtube.com/watch?v=OboT-c0QNtA

STRATEGIC DEFAULT-- FREDDIE MAC- ARE YOU FOR REAL??

Strategic Default with a home mortgage is when the owner makes a business decision to not continue to pay on spiraling mortgage and instead decides to cut loose from the mortgage with a short sale or a foreclosure. The owner makes a conscious decision to "cut their losses" and stop paying the mortgage and apply for a short sale or worse, let's the house foreclose.

In Arizona, where many homeowners owe more than double of what their home is now worth, strategic default may be necessary for future economic survival. What is the point on continuing to pay on a 30 year loan for a product that may only appreciate in value to the amount owed (break even point) in 20+ years? Many people in Arizona purchased homes two years ago for $300,000 only to find that today that same house is worth $150,000 and experts are predicting that it may take up to 20+ years to recover and get the value back to $300,000.

Donald Bisenius, a VP of Freddie Mac's Single Family Credit Business, stated today in the Wall Street Journal that he felt that strategic default for a single family homeowner is bad for the neighborhood because it drives down all of our values. His definition of strategic default is when a homeowner has the financial means to make the monthly payments, but chooses to purposely default on his loan. Obviously the man has never been to AZ lately. He goes on to say that the homeowner's strategic default is bad social policy.

Homeowners are not sipping margaritas by the resort pool's while deciding that it is better to cut their losses on their biggest investment....their family home. They are choosing between buying another bag of Top Ramen at Fry's or making the the mortgage payment. Most families I see choosing to short sale are really struggling. Many have lost their jobs or have a significant cut in pay. Many are relocating to other states so that they can maintain their income....but then are faced with making the mortgage payment on the AZ house and trying to pay rent in the new city. Coupled with medical issues and divorce, etc., these people are going under and no one is throwing them a lifeline.

Freddie Mac's officials are trying to fog the mirror by placing all the blame for the neighborhood economic downfall on the little people....the homeowners. What about the strategic default of Morgan Stanley 2 months ago when they defaulted on hundreds of millions of dollars in loans in just one swoop? How about the banks that are going bankrupt? Does their single action cause a lot more devastation to our economy than one tiny homeowner defaulting because they are choosing the survival of their family?

How about if Freddie Mac looks back in the foggy mirror and suggests that more lenders and investors should begin to REALLY modify loans....with modifications that would actually benefit the homeowners...not just tacking on mortgage payments to drag out the life of the loan. How about suggesting modifications that would help the multitudes in AZ that are 50% under water?

Let's face it. America is out of money. Greece is out of money. The world's financial picture is bleak. Why continue to pay on an inflated product? Good business is good business. Strategic default makes excellent sense for many homeowners and can be a very wise financial decision.

Your HOA and Short Sales

When the monthly budget gets tight, it is tempting to not pay your HOA bill because you may feel you will still receive the benefits of the HOA even if you don't pay your bill. The HOA will still cut the community grass and maintain the parks, etc. even if you don't personally pay your bill.
In a short sale, however, it is VERY important to keep up on your HOA payments. Why? Because many lenders refuse to pay the HOA liens on a house. Therefore, if the dues go unpaid, you may be accumulating late fees and legal fees which can add up to thousands of dollars. When a short sale is officially sold to a new buyer, there can be no liens on the property. This includes HOA liens. So, it is wise to keep up on the monthly, quarterly or semi-annual HOA dues so that you do not accrue additional fines. Because "You can pay me now, or you can pay me more later."

Want to know who is the current property management for your HOA?? Visit http://www.aznb.com and click on your community's name for the latest news.

AZ Getting a Bad Rap

For all you who have been reading the papers and watching the news, Arizonans are sorry that we have had to go to such extreme measures to finally get the Federal Government's attention regarding our borders. Az has more illegal immigrants than any other state and consequently, we have taken on most of the nation's financial burden. As a result, soon we will be voting on a 1 cent increase in our sales tax.
As we stand today, our neighborhoods have a glut of foreclosures and short sales. How did this happen? Because of our temperatures and our open borders more and more people moved to AZ, so we built more and more houses. Anyone with a pulse could get a job as a construction worker. Many were immigrants who sent a portion of their wages to their remaining family members in Mexico. Eventually, many of them purchased homes and managed to get their family members to also cross the border. Typically, these people do not participate in paying income tax. Many were given housing loans with payments 50-75% of their monthly income. Now they are abandoning their homes and abandoning the housing debt they helped create.

As result of this swell in population, our schools are bursting at the seams. School districts had to hire additional teachers and have additional resources such as English as a SEcond Language Classes in every school. Many times, multiple, extended families lived in one dwelling which meant multiple students and yet only one property tax was paid. Our school districts can no longer balance the budgets. In our own high school district, it was announced last week, that 176 high school workers, i.e. teachers, assist. principals,janitors etc., would not have their contracts renewed and four sport programs and various clubs would be completely eliminated due to budget constraints. Our elementary school is now serving free breakfast and lunch to more than 65% of the school's students and we thought we were living in an mid to upper level middle class subdivision. In addition, our elementary district serves a free meal all summer long to families who claim they otherwise would not have a daily meal.

Our hospital emergency rooms are overrun with non emergencies because all recognize that if they seek emergency medical treatment, one does not need to have medical insurance to be treated. To balance out the deficits, hospitals and doctors are raising their prices and passing the costs on to those who have insurance.

Az's violent crime statistics are up and we are number 2 in the world for kidnappings. Why? Because illegal immigrants pay smugglers thousands of dollars to get them across the border. They house up to 100 immigrants in a house in AZ and then hold the immigrants ransom until their family members pay extra for their release. Consequently, Home invasions are up. What about those immigrants who dont' have the money? They agree to strap 50 lb bundles of marijuana on their backs in exchange for a guided trip thru the desert to AZ. Drug related violent crimes are up. Our prisons are so crowded we house criminals in tents. Soon those criminals with less than 1 year left on their sentences will be sent to county jails because our state cannot afford to keep them...and the counties cannot afford it either.

Az has had it. Our neighborhoods have 1 of 7 homes in foreclosure. Our state coffers are empty. We thought our previous governor, who is now the head of Homeland Security would help us when she got to Washington, but no. So, sometimes you have to aim high to hit the target. Is the law a bit extreme? Yes. But did it hit the target of gaining the Feds attention. Yes, it did.

I think that all the people marching at all the cities across the country could greatly help AZ by passing the hat for our state at these events. If each state's citizen gave just $1, then we could begin to recover from the burden that we have been carrying for the entire nation. Did we aim too high? Perhaps. But, from where I am sitting, AZ is now right on target.

NEW CERTIFIED DISTRESS PROPERTY EXPERT !!!!!

Mary Drefs has recently been designated a CERTIFIED DISTRESS PROPERTY EXPERT ! What does this mean? Mary has spent considerable time and resources learning the ins and outs of the distress property market and has earned the CDPE designation. This means she can provide you with all the alternatives to foreclosure and has mastered the art of the short sale.
Having difficulty keeping up with your mortgage payments? Mary can help you decide which path is best for you. Give her a call at 623-694-0354 and she will get you on the path to recovery soon.
Check back for lots more information on foreclosures and short sales!
--
Mary Drefs , CRS, GRI, CDPE
Mike Drefs
Keller Wms Realty Professional Partners
623-694-0354 marydrefs@cox.net
Agent of the Year 2001,2002,2003 & 2004
Top Team 2005, 2006, 2007 & 2008 !!!

WHY IS IT SO HARD TO BUY A CONDO?

Many of our out of state clients are wanting to purchase condos. Condos are becoming one of the most difficult real estate purchases in our market. This is because of the high foreclosure rate and the vacancies. Many condo owners are not paying their HOA dues, placing the Homeowner's associations in jeopardy. See the question below.
Question: My perfect client is putting 50 percent down on a condo. The lender says they need to approve the entire complex. What's up with that?

Answer: Because of the number of condominium foreclosures across the country, most conventional lenders are requesting a complete legal review of the complex. In the ancient days or last year, the lender would request a simple condo certification form to be filled out and signed by any representative of the home owners association.

Now Fannie Mae and Freddie Mac want a full-blown packet with all of the recorded HOA legal documents, as well as their budgets to be scrutinized either by an underwriter or a condo review specialist.

What are they looking for? These are the highlights:

1. Delinquent HOA dues. If the complex has over 15% of the condo owners past due, it may not qualify (Yikes! This one really hurts)

2. The budget must be reflect money in reserves for unexpected repairs

3. Any lawsuits that pertain to the building or structure

Believe it or not, Fannie Mae does not have a guideline of primary residence to investor. But that is the holy grail of most banks. If the mix is more investor than primary, it could be a deal breaker.

FHA and VA are a little simpler, at least for today. As long as the condominium complex is listed on the HUD website as approved, you are good to go. Well, almost. The lender will still need to validate a 51% plus owner occupancy.

--
Mary & Mike Drefs
Keller Wms Realty Professional Partners
623-694-0354 marydrefs@cox.net
Agent of the Year 2001,2002,2003 & 2004
Top Team 2005, 2006, 2007 & 2008 !!!

HAFA for Short Sales

The government has announced a new HAFA plan and a good description of the plan is on the address below.
http://www.youtube.com/watch?v=8TXx8rKy-Ow

To participate in HAFA you must meet the following criteria:
1) The house must be your principal residence
2) You must be delinquent or soon to be delinquent on your mortgage payments
3) Your unpaid mortgage balance must be less than $729,750
4) Your mortgage payment must exceed 31% of your gross monthly income
5) Your loan cannot be owned or guaranteed by Fannie Mae or Freddie Mac.

Currently the only mortgage insurer participating in HAFA is MGIC. I will update you as more come on board.

--
Mary & Mike Drefs
Keller Wms Realty Professional Partners
623-694-0354 marydrefs@cox.net
Agent of the Year 2001,2002,2003 & 2004
Top Team 2005, 2006, 2007 & 2008 !!!

Upcoming Short Sales

Very shortly I will listing another short sale in Garden Lakes & in Sarival Village. Both are excellent homes!
--
Mary & Mike Drefs
Keller Wms Realty Professional Partners
623-694-0354 marydrefs@cox.net
Agent of the Year 2001,2002,2003 & 2004
Top Team 2005, 2006, 2007 & 2008 !!!

And Away We Go.............

Most homeowners I meet are not aware of the basic requirements for a short sale. They are: 1) The monthly mortgage payment(s) must be more than 31% of the monthly household income. 2) The homeowner must prove a financial hardship.
I have a list of the hardships accepted by the lenders. Just contact me if you would like a copy.
If you are considering a short sale call me at 623-694-0354 and I will help you determine if you are a good candidate.