Tax Credit Closing Date Extended
Federal Tax Credit Closing Date - $8000 Credit:
Congress has passed an extension of the Homebuyer Tax Credit closing deadline, the Homebuyer Assistance and Improvement Act (H.R. 5623). The extension applies only to transactions that have ratified contracts in place as of April 30, 2010 that have not yet closed. The legislation is designed to create a seamless extension the new closing deadline for eligible transactions is now September 30, 2010. There is will be no gap between June 30 and the date the President signs the bill into law.
This will help many buyers in the Twin Cities and also nationwide who had an executed contract before April 30, 2010 that could not close by June 30, 2010. Many reasons could cause delay but most noted and probably the cause of most delays, are the short sales.
How Do Sellers Find A Realtor?
Sellers Are Finding Realtors In The Digital Age:
It was recently reported that nearly 25% of people in the market to sell a home find their agent on the Internet. This statistic is published by the St. Paul Association of Realtors. If you are reading this blog, you most likely found us at our Twin Cities Short Sale Realtor website. Many buyers also come here for news and resources on the Short Sale industry in the Twin Cities. We'd enjoy the opportunity to work with you and answer any questions that you have. Please contact us today!
25% of Sellers find their Realtor Online
Fannie Mae Cracks Down On Strategic Defaults
Strategic Defaults - To Walk Away Or Not:
Fannie Mae recently announced that it is attempting to end a strategic default from the homeowner. A strategic default would be the homeowner has the ability to pay for their mortgage, but chooses to walk away because they are upside-down, or have too much negative equity. Fannie Mae is stating that homeowners who strategically default and did not make a "good faith effort" to advert foreclosure will not be eligible for a Fannie Mae backed mortgage for 7 years. Fannie Mae also left the door open to pursue deficiency judgments in an attempt to recoup any outstanding debt.
Why is Fannie Mae considering these actions? It was reported that nearly 1/3 of defaults in March of 2010 were purposeful, or strategic. Fannie Mae is a government backed entity, they don't like to lose money - heck, the government has given too much away to be satisfied that they're losing more.
You might think: "Who cares if I cannot get a Fannie Mae backed loan for 7 years? I'll get a mortgage backed by someone else." Although this is certainly a possibility, almost 75% of the mortgages in the US are backed by Fannie Mae or Freddie Mac. This number is probably poised to go even higher as time goes on.
My question as I found out the news is what does a "good faith effort" mean? I believe it means that homeowners need to work with the lender to either do a loan modification, a short sale, or a deed in lieu of foreclosure.....Basically anything that you can do to work with the lender to avoid the "strategic default" or "walk-away" is a very good idea.
What should you do if you have negative equity or cannot afford your home because of your personal financial situations? Feel free to contact us and learn more about the options you have available to you.
Low Home Sales Reported
MSNBC Confirms June 17th Blog Post:
As I wrote on June 17, 2010, I believe home sales are headed even lower than they already are. As I watched the nightly news on NBC with Brian Williams, it was reported that new home sales in May hit a record low. In fact, new homes sales in May 2010 were down 33%. This can be attributed to the lack of potential buyers possibly due to the end of the government tax credit. It could also be due to the fact that the ecomony is poor right now. We have high unemployment and on the flup side, slow job growth.
As the inventory of homes in the Twin Cities remains relatively stable, the demand for homes is down. This will most certainly cause the prices to plumet even more. As more and more people find themselves in a predeicament with mortgage payments and either reductions in pay or job loss all together, short sales and eventually REO/Foreclosure homes will lead the charge of what sales there are.
If you'd like to discuss your options, please don't hesitate to contact us at the Twin Cities Short Sale Realtor.
Short Sale Vs. Foreclosure
Should You Choose A Short Sale Vs. A Foreclosure?
There are many considerations to take into account when considering selling your home on a short sale vs. letting your lender foreclose on your home. Although it might be easy to just let the lender foreclose, that may not be the best decision for you.
Benefits of a Short Sale:
- You get to sell the home and leave on your terms. This is probably the biggest peace of mind for most people when considering the short sale. Although you can predict when exactly you're expected to leave during a foreclosure, you will need to find alternative housing when it is actually time to leave. If you cannot find something in time while waiting to the last minute, you may end up in a bind.
- One of the purposes of the short sale is to get your lender to agree that the money they receive from closing satisfies your mortgage. IE: you don't want them to come after you for the balance. In Minnesota, a lender can either foreclose on you, or they can try to obtain a judgment against you for the deficiency balance, but not both. The main goal of the short sale is to get them to agree that they will not obtain a judgment against you. Of course if they do, they can legally pursue remedies to seize any assets that you have.
- You may feel better about knowing who is buying your home. After all, you made the house your home and you'd probably like to know that the next person is going to take care of it like you did.
- You're likely to see a shorter time frame until you can buy again. The short sale has a negative effect on your credit, the foreclosure will have a greater negative effect. You'll want to consult a lender for specific time frames and these rules and regulations are continuing to change.
- You're likely to see a smaller dent in your credit and that dent will most likely repair itself much quicker than if you allow the lender to foreclose.
- You will not have to say "yes" to any future mortgage application questions that ask if you've had a "foreclosure or deed-in-lieu in the past 7 years".
- You may be eligible for up to $3000 in moving expenses as part of HAFA.
Benefits To A Foreclosure:
- You may be able to live in the home for a longer period of time without paying the mortgage. During the short sale process, you will need to move out when the home sells, similar to a standard sale. In Minnesota, when you allow your lender to foreclose, you will have 6 months from the date of the sheriff's sale until you have to leave. If you don't move out by then, you can expect the sheriff to come knocking on your door, forcing you to leave.
- There may be a cash for keys offer extended to you by your lender to move out. In our experiences, a cash for keys offer may be as low as a couple hundred dollars, or as much as $2500. Lenders will typically offer cash for keys so they don't have to go through the expense and aggravation to evict you.
- You won't have to deal with any showings for prospective buyers during the foreclosure process.
As you can see, the benefits to a short sale almost always outweigh the benefits to a foreclosure. You'll want to weigh each option available to you so you make the correct decision that is right for your personal situation. Feel free to contact the Twin Cities Short Sale Realtor with any questions that you may have.
Twin Cities Short Sale Realtor Website Launched
TwinCitiesShortSaleRealtor.com was created to be your one stop resource if you're interested in short sales, or you would like to sell your home on a short sale. Throughout this website, you will find answers to your common real estate questions, external real estate resources available to you, and expert short sale knowledge that you expect and deserve.
One of the common misinterpretations of a real estate short sale is that if you list your home and get an offer, the lender will automatically take it. That couldn't be further from the truth. There are many steps required to request a short sale from your lender. To simply put it, we're the expert real estate agents that specialize in short sales and we can help you navigate the tricky waters of requesting a short sale from your lender.
We work in all areas of the Twin Cites of Minneapolis and St. Paul. If you're looking for answers to your short sale questions, or are looking to sell your home in any of the following areas, feel free to contact us today!