If you are like many home buyers who are trying to break into the real estate market in Tampa Bay, you know there are some amazing deals out there. Homes that sold in 2005 for over $200,000 are now selling for $100,000 or less in some areas! This makes buying a home a lot of fun today, you would think!

Many buyers are frustrated, 70% of the homes sales in recent months in the Tampa Bay area are distressed properties, short sales and pre-foreclosures. Getting these homes closed it just too much for some buyers. Often by the time it takes to get a short sale or pre-foreclosures approved by the seller’s lender, 50% of the buyers have walked before getting lender approval.

Most short sale deals take at least four months or more to get approval from the seller’s bank and if they have a PMI or MI insurance, a second mortgage or HELOC you could be looking six to twelve months or not getting approved at all! After the seller gets the lenders approval, the seller than has to agree to the lenders terms of the short sale. Which could include them signing a note for the balance or bring cash to the closing table. If the seller isn’t willing or able to accept these terms the deal could be dead! The buyer is then out 4-6 months of waiting.

Adding to this, homes under $100,000 are now starting to see bidding wars. Buyers used have been able to think about a home overnight but these days you need to move quickly to snatch up a good deal!

Home sales in the Tampa, St. Petersburg, and Clearwater areas rose 28 percent in the fourth quarter of 2009, and the median sales price hit $138,800. That’s down 42 percent since prices peaked at $239,600 in June 2006.

Time is also running on federal tax credit for 1st time and move up home buyers, putting a short sale under contract at this point and getting it closed in time to meet the dead lines may not be possible. Buyer’s must be under contract by 4-30-10 and close no later than 6-30-10 to get the tax credit. There are other stipulations to the credit, you can get the info at www.irs.gov

I’m telling my buyers at this point they need to make a decision, if the tax credit is the big reason they want to buy a home this year they many need to focus on REO (bank owned properties) or look for homes where the seller has equity so they can close in time. For a list of REO properties check out this link Bank Owned Homes List Click Here

If you don’t care about the tax credit, and you are focused on just getting the right home for you and your family as the market is returning from the bottom then short sales and pre-foreclosures should be on your list.

If you are looking for a newer community, taking the trip across the Skyway Bridge could get you more than you could dream of. I’ve been showing property in Manatee County over the past few weeks, where newer homes that were selling in the $500,000 range that can be purchased at a 50% discount. I’ve shown property built in 2005 with 4 beds 2.5 baths 2 car garage and 2,500 sqft selling for only $180k. Pulte Homes will build you a new 3,000 sqft home for just $212,000 WOW!

Let me know if I can help you with your home search!

Here is the updated list from Fannie Mae on PERS approved condos as of March 1st. There are a few additions to the list since December. If you remember, Fannie Mae has a task force dedicated to examining projects across the State to get them appoved. Once approved it allows us to do 80% financing on a conventional basis, for not only owner occupied buyers but 2nd home and investor buyers as well.

Click on this link “Fannie Mae Condo Approval 3-01-10″

Let me know if you have any questions.

John Fenech
Sunbelt Lending Services
Regional Loan Manager
Ph: 800-858-5674 or 727-827-1818
Fax: 856-917-2610

Signs of a recovery in the real estate market indicate this may not be the “Winter of your Discount Tent.” Home sales, value and mortgage applications have risen slightly as mortgage rates stand at a historic low.

This slight glimmer of positive news is offset by estimates that about 48 percent of all U.S. mortgages will be underwater by 2011. Foreclosures and short sales continue to plague the market, keeping a lid on home prices. As a result, 2010 will continue to be a buyer’s market.

That doesn’t mean, however, that all hope is lost of selling your home this year. Here are nine tips to sell your home in 2010.

1. Don’t wait for a recovery

Home values aren’t likely to rebound to previous highs for several years, perhaps even a decade. While you may face a loss by selling now, that negative figure may only be a paper loss, particularly if you’ve owned your home for some time.

2. Make improvements

If you have access to credit, invest in improving and repairing your home before placing it on the market, rather than trying to go for a quick as-is sale. Rehabs are more affordable now, thanks to the availability of low financing, reduced construction materials costs and lower contractor charges. Focus on upgrades to kitchens and bathrooms, especially counters and cabinets, as these yield the highest returns. Get three different estimates from contractors and add another 10 percent for unexpected costs.

4. Hire professionals

You need professionals, not friends or relatives, to repair, upgrade and sell the biggest investment you’ll likely own. Ask for credentials, references and a history of recent performance. Your appraiser should have at least five years experience with an appropriate license or certification. The same applies to hiring a home inspector. Talk to at least two or three appraisers and inspectors before selecting one.

5. Get downpayment assistance

Federal and local governments offer several downpayment assistance programs for first-time home buyers. Look for other city, county and state programs that will piggyback on federal programs for assistance. Search for “downpayment assistance programs” with the name of your region.

6. Take Uncle Sam’s help

The $8,000 first-time homebuyer tax credit program that helped jump-start the real estate market in 2009 has been extended into 2010 and expanded. First-time homebuyers qualify if they sign a binding contract to buy a home by April 30 and close by June 30. The program’s maximum income limits have jumped from $75,000 to $125,000 for individuals and from $150,000 to $225,000 for couples.

A separate $6,500 tax credit has been added for those who have owned their homes for at least five years and want to upgrade. Homeowners drowning in their present real estate loans are eligible for a loan-modification program with their current mortgage company or loan service through the Making Home Affordable Program (http://makinghomeaffordable.gov/).

7. Price accordingly

Listings move when a property is appropriately priced. Others gather dust because the owners haven’t adjusted their expectations to the present market. This doesn’t mean, however, you should severely drop your price on a well-maintained home to avoid extended problems. Research your market and price accordingly.

8. Energy tax credits

Through Dec. 31, homeowners who buy and install specific energy-efficient windows, insulation, roofs, doors and heating and air-conditioning equipment can apply for a 30-percent tax credit of up to $1,500 of their costs on each product.

Go one step further and earn a 30-percent tax credit through 2016 (without a spending limit) when you purchase such energy-saving products as solar energy systems, geothermal heat pumps, small wind systems, residential fuel cells and micro-turbine systems. Visit EnergyStar’s Federal Tax Credits for Energy Efficiency (http://www.energystar.gov/index.cfm?ctax-credits.tx-index) for a complete summary.

9. It’s not personal

Buyers want to imagine themselves in your house for years to come. Excess decor and knick-knacks distract from this vision. Ask your Realtor’s advice or hire a home stager to bring your house back to zero before beginning to show it. A general rule of thumb is to eliminate or store at least half the items in every room.

Don’t get defensive about colors, design patterns or flooring you installed. Just grit your teeth and think of the closing check while your agent serves as a buffer. Remember the customer is always right, unless, of course, they’re low-balling you.

www.freeshipping.org. Distributed by McClatchy-Tribune Information Services.

Florida expected to start adding residents again after population decline.

March 3, 2010 – It’s a small bounce, but Florida’s population should rebound this year from its first loss in more than half a century in a hopeful sign for the struggling state economy, new estimates from the University of Florida (UF) show.

The Sunshine State is expected to add about 23,000 residents between April 1, 2009, and April 1, 2010, following a loss of almost 57,000 residents the previous year, according to population projections released yesterday by UF’s Bureau of Economic and Business Research.

“Based on changes in electric customer data, we believe Florida’s population has increased slightly over the past year,” says bureau Director Stan Smith who led the research. “This may be an indication the state’s economy is no longer declining at the rate it had been before.”

Although the state’s unemployment rate remains very high, there are signs that the housing market is starting to pick up in a number of places. “It appears the state’s population loss was a one-year occurrence,” he says. “Even so, Florida’s growth will be very slow during the early years of the new decade.”

Not until 2014 or 2015 will the state return to annual population gains that are close to 300,000, the average annual increase over the past 30 to 40 years, Smith said. Population grew by more than 400,000 residents a year during the housing boom between 2003 and 2006.

The economy has such a big impact on Florida’s population growth because it drives migration, Smith says. People in their 20s, 30s and 40s who move to the state for jobs are the largest group of newcomers, followed by retirees and foreign immigrants.

“Even retirees are affected by economic conditions because of the housing market,” he says. “If it’s difficult for them to sell their homes, they may have to delay a retirement move to Florida even if that is what they had been planning to do.”

Due to the bursting of the housing bubble and the severe national recession, Florida lost more than 800,000 jobs between the fall of 2007 and the fall of 2009, and the state unemployment rate rose from about 4 to 11 percent. The declining economy led to a huge slowdown in population growth between 2007 and 2008 and a population loss between 2008 and 2009. The loss was the first since military personnel left the state at the end of World War II.

The bureau estimates the total number of state residents will grow from 18,750,000 to 18,773,000 between April 2009 and April 2010. According to long-term projections, state population is expected to reach approximately 21,247,000 in 2020, 22,574,000 in 2025, 23,821,000 in 2030, and 24,971,000 in 2035.

The biggest numerical increases forecast between 2010 and 2035 are in large counties. Orange County is projected to add the most new residents, 512,200; followed by Hillsborough, 471,800; and Miami-Dade, 457,200.

“Population growth has a lot of momentum in the sense that places that have been growing rapidly in one time period tend to grow rapidly in the following time period as well,” Smith says. “Large markets attract businesses and have more opportunities to draw job seekers. Also, migrants are often attracted by social and family connections with people who moved to an area previously.”

In terms of percentage increases, the biggest leaders over the next quarter century are projected to be Sumter and Flagler counties, growing by 111 percent and 109 percent, respectively.

“The main driving force to Sumter County’s growth is The Villages, a huge retirement community that has been adding a large numbers of residents,” Smith says. “Flagler County also has added a lot of retirees but has a rapidly growing working-age population as well.”

Monroe is the only county projected to lose population over the next 25 years, declining by about 4 percent. The county has little vacant land that can be developed and the area has a high cost of living. Some counties are expected to grow quite slowly, such as Pinellas, with an expected quarter century population increase of less than 2 percent. As the state’s most densely populated county, it has little available space.

The foreclosure process can be very stressful for homeowners; some home homeowners get so depressed, that they do nothing, some 57% of homes get foreclosed on and the owner never called their lender to work out a loan mod or ask for help!. While others who are proactive sometimes end up being given the wrong advice or make decisions that are not well informed. If you are a homeowner dealing with this situation, you will have to make a decision on whether to get your property sold as a Short Sale usually at the discount approved by your lender, or give the property back to them as a Deed-In-Lieu of Foreclosure or just let them complete the Foreclosure. You need to decide which of these three options is the best for you both in the short and long term? Deciding which option to take might be tough especially if you do not know how each will affect your credit and ability to buy a home in the future.

Short Sale VS Foreclosure VS Deed-In-Lieu of Foreclosure
A short sale transaction occurs when a lender agrees to a discounted payoff on the loan balance, due to the financial hardship experienced by the homeowner and/or a decrease in the resale value of the property. A short sale is the best option if you are facing foreclosure because it is a lesser financial loss. You get to avoid foreclosure, reduce the adverse effects on your credit and increase your chances of getting a loan to buy a home within a shorter period of time.

Foreclosure occurs when a lender sells or gets back a parcel of real property, after the owner failed to conform to their mortgage or deed of trust agreements. The estate becomes the absolute property of the lender. The foreclosure process generally starts with a formal demand for payment in the form of a letter called Notice of Default (NOD) issued from the lender. It varies from state to state but in most cases the lender usually issues this notice when the homeowner has been 3 months irregular on their mortgage payments. The notice is typically a warning that they will sell your property if you do not make your payments current.

Deed in Lieu of Foreclosure is the alternative to a foreclosure. This is a settlement, which is voluntarily made, and in good faith in which the borrower surrenders their house to the lender and moves on with nothing owed. The main advantage for the borrower is that it immediately releases them from the debt associated with the defaulted loan. The borrower also avoids a painful and time consuming foreclosure. The main advantage for the lender is a reduction in the time and cost of repossessing the property. In most cases a lender will only accept a deed in lieu if there are no other liens attached to the property or these liens can be significantly reduced. The reason is because they do not want to be responsible for the other liens that are attached to the property; this is why most lenders will push for a foreclosure instead because it removes all junior liens.

How does each of the three options affect your credit and the length of time it will take to buy another home?

Short Sale: This the best option for a homeowner facing foreclosure due to its reduced adverse effects on their credit and their ability to get a loan to buy another home in a shorter period of time.
Short sale credit reporting options are:
• Paid Settlement – In which, credit score will drop 50-150 points or more depending on the number of missed payments.
• Paid, As Agreed – in which, won’t hurt the score at all as long as the borrower is paying regularly.
• Unrated – In which, may drop a few points.

Fannie Mae & Freddie Mac guidelines states that the waiting period before you can buy a new home is 2 years from the date the proceeding is completed. And there is no exception for extenuating circumstances.

Foreclosure: This is the least advantageous of all of the three options; it will remain in the credit report for 7 years from completion date and the credit score will drop from 50-250 points. Another disadvantage is that when Deficiency Judgment or Tax Lien is filed the credit score may drop an additional 100 points.
Fannie Mae & Freddie Mac current guidelines state that the waiting period is 5 years from the date of foreclosure completion proceedings.
Below are requirements in addition to the 5 years up to 7 years after completion date:
• Purchase of a primary or principal residence is permitted, 10% minimum down payment and the minimum credit score is 680.
• Purchase of a second home or property investment is not permitted.
• No cash-out refinance is permitted.

Extenuating circumstances are acceptable such as loss of employment and severe medical crisis and if approved the waiting period is 3 years from the date of foreclosure completion proceeding. The same additional requirements are applied as above except the minimum credit score of 680 is not required.
FHA Guidelines state that the waiting period for a foreclosure is 3 years from the foreclosure completion proceedings. However if foreclosure is a result of extenuating circumstances such as serious illness or death the lender may grant an exception.

Deed in Lieu of Foreclosure: Credit scores will carry the same serious effects as Foreclosure because most lenders report a deed in lieu of foreclosure as foreclosure. However the reality is that what is reported can actually be negotiate with the lender. It will remain on the credit report for 7 years from settlement completion.
Deed in Lieu credit reporting options:
• Paid Settlement – In which credit scores can drop up to 150 points
• Paid as Agreed- Credit scores show a dropped over 100 points due to default in payment but with this option borrower could purchase a home in a short period of time.
Fannie Mae & Freddie Mac guideline state that the waiting period for a Deed in Lieu of Foreclosure is 4 years from the date of completion proceedings.
Additional requirements after 4 years up to 7 years from completion date:
• Greater than 10% minimum down payment required for the transaction or purchase of investment property, principal residence or a second home by a borrower.
• There is a limited-cash-out and cash-out refinance are permitted if eligible and meet the requirements.
• Extenuating circumstances, physical condition such as medical crisis or other factors such as loss of employment that caused a borrower to choose the option Deed In Lieu of Foreclosure, the waiting period is 2 years from the completion proceedings.

In summary, the guidelines stated above clearly show the advantages for you to choose to short sale your property compared to allowing it to go into foreclosure or deed in lieu because the adverse effects to your credit is reduced and also, you will just have to wait 2 years to get a loan to buy another home instead of 4 years with the deed in lieu option or 5 years with the foreclosure.

If you have additional questions please feel free to email or call me.

http://www.DavidPriceRealtor.com. What are the banks thinking today? Banks are more conservative than ever and are forcing property values down in stable neighborhoods.

I understand banks trying keep their equity position high and prevent further losses, but allowing appraiser to use “Short Sales” as comps in a an arms length transaction is crazy.

Buyer’s who buy short sale homes are looking for a deal and they often get one, discounts as much as 10-30% or more in some cases, I’ve seen banks sell homes to investors who then flip the home and make a profit so I know what is going on. Freddie Mac has a policy that they will accept an offer on a short sale if it’s within 77% of the BPO or appraisal value, which is great for the buyer who has waited 4-9 months to get an answer from the seller’s bank.

Where this breaks down is the poor homeowner next door, who has been paying his mortgage on time for years, and now, his property value just got flushed because appraisers are told to uses these short sales and not make adjustments.

Banks are missing the big picture, right now homeowners who maybe upside down with their property values, but are making payments are thinking and being advised to stop making payments, take a hit on their credit and get out why so many others are doing the something!

Appraisers need to not use short sale or make an adjustment anywhere from 10-30% so they don’t bring down values of non short sale homes anymore!

The Story below is something that isn’t just an isolated case, I’ve heard of people’s financial advisors advising clients it makes more sense to walk away and take the hit on their credit than wait 10-15 years to get their home value back to their mortgage amount. Something needs to be done to help more underwater homeowners from feeling this is the only way out.. But before you walk away you need to have all the answers. See below.

WEST PALM BEACH, Fla. – Feb. 24, 2010 – After more than six months of wrangling with her bank to get a reduced mortgage payment through a federal loan modification program, Debra Jacobs has had enough.

The West Palm Beach resident is walking away from her home of 14 years.

“I’m just going to wait here until they put a padlock on the door,” said Jacobs, 58. “I’m so over it, I have to let it go. It’s too painful.”

As homeowners grow increasingly frustrated by the nation’s struggling foreclosure prevention programs, more may consider walking away as a viable alternative.

But there’s more to it than just stopping your mortgage payments and handing over the keys.

Boca Raton real estate attorney Marlyn Wiener says there’s no “right way” to walk away from a home.

Knowing the consequences, however, will at least help the borrower make an informed decision, she said.

“There is an analysis that each homeowner should do to find the best way for them to proceed,” Wiener said. “There isn’t a speed lane.”

The biggest gamble in walking away is whether a lender will try to seize a borrower’s assets to pay for its losses, Wiener said. Lenders have up to 20 years in Florida to collect a deficiency judgment.

But banks are more likely to go after borrowers who strategically default – a term meaning the homeowner can afford the mortgage but decides to stop paying because the home is no longer a good investment.

Moral dilemmas aside, Wiener said it can make financial sense in some situations to “pull the plug and regroup” if the mortgage is underwater.

Scott Haft, who oversees the mortgage modification and foreclosure defense division at the law firm LaBovick & LaBovick, said some lenders are willing to forgive a mortgage debt if a borrower voluntarily turns over the home without going through a lengthy court foreclosure.

“We say, ‘We’ll give you the keys on Monday, but you have to waive your right to pursue my client in the future for deficiencies,’ “ said Haft, whose company has offices in West Palm Beach, Boynton Beach and Palm Beach Gardens. “Many times, the lender is only interested in regaining the property.”

Another concern is whether the homeowner will have to claim forgiveness of debt on tax returns for the amount of money owed the lender.

The Mortgage Debt Relief Act of 2007 temporarily exempts people who lose their primary residence from having to claim the canceled debt, but the act is scheduled to sunset Dec. 31, 2012, and can’t be applied to investment properties.

“Everybody’s relationship with their properties and their loans is different,” Wiener said. “People need to take a look at where they are in life before they decide to walk away.”

One thing Wiener asks clients is whether they will need good credit in the near future to secure a car or student loan. A foreclosure can knock up to 300 points off a credit score – damage that can take years to repair and will stay on your report for seven years.

Lenders have recently stepped up efforts to ease the foreclosure process and avoid the complications when a homeowner walks away.

Citigroup launched a program this month that allows some borrowers to stay in their homes for six months without paying. In return, the homeowner turns in the keys at the end of the time period and keeps the home in good shape.

The federal Home Affordable Foreclosure Alternatives Program, announced in November, gives lenders incentives for offering deed-in-lieu of foreclosure and for approving short sales.

But for Jacobs, the alternatives are “too little too late.”

“Not only do I not know the options, I don’t care anymore,” she said. “It’s really sad it’s come to this.”

FHA 203k streamline loan helps buyers of single family homes renovate and wrap up the renovation costs in to the loan. This is a great program for people buying distressed homes or dated property.

I recently completed my first 203k FHA loan with a young couple purchasing a home in Historic Kenwood, the deal wasn’t as simple as the story below. Our deal was a “short sale” and the buyers didn’t know about this program until after the home inspection revealed several problems that would have prevented our purchase with a normal FHA loan. This home needed electrical updates and plumbing issues as well as pealing paint on the out side of the home.

FHA sends out an inspector, if the home isn’t in good shape they will not fund the loan. In our case the seller wasn’t able to make the repairs so the 203k was our best option.

It did take several months to close due because we needed to renegotiate with the sellers lender on the sales price because of the updates and repairs needed. The FHA 203k loan was the only way they would have been able to buy this home so in the end it all worked out. (Just a FYI the 203k loan does take 90 days + & the cost of the loan is higher.)

If you’re finding all the homes in your price range need of updates (no structural work) the FHA 203k loan maybe a great option.

RisMedia story on a 203K loan

From John Fenech Sunbelt Lending

Some of you have asked me about the potential for rising rates. Here is something I read this week that reinforced my thoughts on the government’s continued help in this area:

Ask The Expert

Last year was a very challenging year. Many of my prospects, including previous customers who are homeowners, could not qualify for a new loan. Now I am hearing that rates will be going up after the Fed stops purchasing loans. I am actually scared that I will not make it. I need some advice but also encouragement. John from California

John, here is the good news. The industry, though rapidly changing, will be around for a long time. If anything this deep recession taught us is how important the real estate industry is to this country. At the beginning of the “sub-prime” crisis we had our government telling us that the economy was strong enough to withstand the issue. They were wrong. Real estate led us into this recession and it must lead us out. I expect the government to do whatever it can, from tax credit to foreclosure help, to right the ship. However, that does not mean that there will not be pain. There has been a lot of pain and there will be a lot more. We are on our way to recovery though.

John Fenech
Sunbelt Lending Services
Regional Loan Manager
Ph: 800-858-5674 or 727-827-1818
Fax: 856-917-2610

About 116,000 homeowners have had their loans modified to reduce their monthly payments, the Treasury Department said Wednesday. Only about $15 million in incentive money has been paid to more than 100 participating mortgage companies. That’s 0.02 percent of the $75 billion available.

Unemployment soared to 10 percent, and home prices continued to fall, especially in some states. 16 million homeowners nationwide now owe more to the bank than their properties are worth, according to Moody’s Economy.com.

Low interest rates and tax incentives have boosted home sales, but are ending soon. The $1.25 trillion program created by the Federal Reserve that has helped keep rates low is scheduled to end next month. The tax credits run out on April 30.

Obama’s plan had two main strategies: The government would channel $75 billion to banks to prod them into modifying the terms of mortgages for up to 4 million borrowers by the end of 2012. It would also relax rules to let up to 5 million homeowners refinance at lower interest rates.

Under the modification plan, borrowers can get their mortgage rates reduced to as low as 2 percent for five years and have the term of their loan extended to as long as 40 years. Borrowers must make three payments on time before the modification becomes permanent. Monthly payments for borrowers in the program have fallen to a median of about $835, down by about $520 a month.

Since the program started in March:

• 1 million people have entered the modification program, and almost 12 percent, or 116,000, have completed the process.

• A third of homeowners who made the three monthly trial payments on time have now fallen behind.

• More than 61,000 homeowners have dropped out, and hundreds of thousands more are expected to do so in the coming months.

• About 220,000 homeowners whose homes have plummeted in value have refinanced.

The process has been time-consuming, bureaucratic and fraught with communication mistakes. Borrowers often feel lost in a maze. When denied by their bank, they often don’t get a clear explanation of why.

To qualify, borrowers need to provide two pay stubs and a letter describing the reason for their hardship. They must give the Internal Revenue Service permission to give out their tax returns to their mortgage company.

Faced with poor results last summer, the Obama administration pressured mortgage companies. Treasury officials summoned key executives from lenders, including Bank of America, Wells Fargo and JP Morgan Chase, to Washington. The industry was given strict orders: Sign up at least 500,000 borrowers by Nov. 1.

To meet that goal, most companies allowed homeowners to enroll in the program without proof of income. That was the same low standard that lenders used when they made some of the riskiest loans that fueled the housing frenzy.

Getting the documents in advance would have been a better idea, Heid said. That’s because lenders have struggled to get homeowners to complete all the required documentation. Many don’t comply, despite repeated phone calls, mailings and even in-person visits by notaries.

It’s a problem that has perplexed and frustrated industry executives. “Borrowers didn’t understand that if they didn’t send the documents in, they would fail to qualify,” said Sanjiv Das, Citigroup’s top mortgage executive.

Last month, the Obama administration made key changes. It reduced the paperwork requirements and announcing that homeowners will be required to provide proof of their incomes upfront starting June 1.