Once again our government fails to act in a timely fashion. Recently, there were a couple of days when getting a loan and closing a transaction were hindered by a lapse in the National Flood Insurance Program. And the 'fix' is only good to March 28.
Read the details from this Florida Realtor information:
National Flood Insurance Program extended one month WASHINGTON – March 4, 2010 – Late Tuesday, President Obama signed H.R. 4691 into law, extending the National Flood Insurance Program (NFIP) for one month – until March 28, 2010. NFIP’s expiration date was Feb. 28. Without Congressional extension, the program officially lapsed for almost two days, impacting the issuance of new flood insurance policies until late in the day on March 2.“Real estate closings can get delayed when mortgage holders require flood insurance, putting the financial security of millions of Americans at risk,” says Mike Becker, director of federal affairs for the National Association of Professional Insurance Agents. “This is only a short reprieve,” he adds.The one-month extension gives Congress time to consider a broader initiative that would extend NFIP until the end of the year. In a Government Affairs Update, the National Association of Realtors® says it will continue to push for a longer extension to avoid compounding market uncertainty and give Congress sufficient time to enact meaningful long-term reform.Most observers expect an NFIP extension to be in place by the March 28 deadline, but Matt Brady, a spokesman for the National Association of Mutual Insurance Companies, notes that this is the second time NFIP has been allowed to expire for reasons that have nothing to do with the program itself.© 2010 Florida Realtors®
An analysis of sales trends for January, 2010 on Anna Maria Island is now available at
www.calltheislanders.com/salesinfo
which reveals that the average price per square foot for single family residences is down 16 percent, condos is down 15 percent and multi-family sales are virtually non-existent at this time.
Call me to discuss how to sell a property in this kind of market. And call me to find out how to get a property you like at a great price.
John van Zandt Cell 941-685-8822
There is a new government program announced in November that may help owners of 'underwater' properties on Anna Maria Island out of trouble. Of course, that will work for mainland property owners as well. Here's the full article received today.
By Jeff Lischer Print Article
RISMEDIA, February 15, 2010—On November 30, 2009, the Treasury Department released guidelines and forms for its new Home Affordable Foreclosure Alternatives Program (HAFA), which will help homeowners who are unable to retain their home under the Home Affordable Modification Program (HAMP). Under HAFA, a borrower (the current owner) may be able to avoid foreclosure by completing a short sale or a deed-in-lieu of foreclosure (DIL).
HAFA is designed to simplify and streamline the use of short sales and deeds-in-lieu of foreclosure by improving the process. Specifically, HAFA will:
• Complement HAMP by providing a viable alternative for borrowers (the current homeowners) who are HAMP eligible but nevertheless unable to keep their home.• Use borrower financial and hardship information already collected in connection with consideration of a loan modification under HAMP.• Allow borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).• Prohibit the servicers from requiring a reduction in the real estate commission agreed upon in the listing agreement (up to 6%).• Require borrowers to be fully released from future liability for the first mortgage debt and if the subordinate lien holder receives an incentive under HAFA, that debt as well (no cash contribution, promissory note, or deficiency judgment is allowed).• Use standard processes, documents, and timeframes/deadlines.• Provide financial incentives: $1,500 for borrower relocation assistance; $1,000 for servicers to cover administrative and processing costs; and up to $1,000 match for investors for allowing a total of up to $3,000 in short sale proceeds to be distributed to subordinate lien holders (on a one-for-three matching basis; up to 3% of the unpaid principal balance of each subordinate loan).
HAFA is a complex program with 43 pages of guidelines and forms. To help everyone better understand the process, below are some frequently asked questions that address the basics. For more details on HAFA, visit www.realtor.org/shortsales for links to the guidance, many additional FAQs, and much more information about short sales.
What is HAFA?Initially announced on May 14, 2009, with guidance and standard forms issued on November 30, 2009, the program will help owners (referred to below as borrowers) who are unable to retain their home under the Home Affordable Modification Program (HAMP). A borrower (the current owner) may be able to avoid a foreclosure by completing a short sale or a deed-in-lieu of foreclosure (DIL) under HAFA. The guidance and forms released on November 30 do not apply to loans owned or guaranteed by Fannie Mae or Freddie Mac. Those enterprises will issue their own HAFA guidance and forms.
Who is eligible for HAFA?The borrower must meet the basic eligibility criteria for HAMP:• Principal residence.• First lien originated before 2009.• Mortgage delinquent or default is reasonably foreseeable.• Unpaid principal balance no more than $729,750 (higher limits for 2 to 4 unit dwellings).• Borrower’s total monthly payment exceeds 31% of gross income.
How is the program being implemented?Supplemental Directive 09-09 (November 30, 2009) gives servicers guidance for carrying out the program. All servicers participating in HAMP must also implement HAFA in accordance with their own written policy, consistent with investor guidelines. The policy may include such factors as the severity of the loss involved, local market conditions, the timing of pending foreclosure actions, and borrower motivation and cooperation.
A short sale agreement (SSA) will be sent by the servicer to the borrower after determining the borrower is interested in a short sale and the property qualifies. It informs the borrower how the program works and the conditions that apply. After the borrower contracts to sell the property, the borrower submits a “request for approval of short sale” (RASS) to the servicer within 3 business days for approval. If the borrower already has an executed sales contract and asks the servicer to approve it before an SSA is executed, the Alternative RASS is used instead. The Servicer must still consider the borrower for a loan modification.
What are the steps for evaluating a loan to see if it is a candidate for HAFA?1. Borrower solicitation and response.2. Assess expected recovery through foreclosure and disposition compared to a HAFA short sale or DIF.3. Use of borrower financial information from HAMP. (May require updates or documentation.)4. Property valuation.5. Review of title.6. Borrower notice if short sale or DIL not available (to borrowers that have expressed interest in HAFA).
What are the HAFA rules regarding real estate commissions?The guidance states that a servicer may not require a reduction in the real estate commission below the amount stated in the SSA. The SSA states that the servicer will pay the commission as stated in the listing agreement, up to 6%. If the servicer has retained a vendor to assist the listing broker, the vendor must be paid a specified amount from the commission. Neither buyers not sellers may earn a commission in connection with the short sale, even if they are licensed real estate brokers or agents. They may not have any side deals to receive commission indirectly.
What else should I know?• The deal must be “arms length.” Borrowers can’t list the property or sell it to a relative or anyone else with whom they have a close personal or business relationship.• The amount of debt forgiven might be treated as income for tax purposes. Under a law expiring at the end of 2012, however, the tax may not apply. Forgiven debt will not be taxed if the amount of forgiven debt does not exceed the debt that was used to acquire, construct, or rehabilitate a principal residence. Check with a tax advisor.• The servicer will report to the credit reporting agencies that the mortgage was settled for less than full payment. There will be a negative effect on credit scores.• Buyers may not reconvey the property within 90 days after closing.
When does the program end?Short Sale Agreements must be executed and returned to the servicer no later than December 31, 2012
Jeff Lischer is the Managing Director for Regulatory Policy, NAR. For more information, please visit www.realtor.org/shortsales.
Once again, a client has liked a property enough to speak about wanting to make an offer, but has been resistant to actually writing an offer.
And once again, that client has been disappointed in that failure, since the place they liked went under contract before they put an offer in writing.
That's why it is so important to be ready to move quickly in this market: if you like a property, others will, too. And with pricing at about half of what it was at the top of the market here on Anna Maria Island, the properties with the best pricing to value ratio are being snapped up quickly.
So, to avoid disappointment, here's a hint. Write the offer subject to your personal satisfaction with whatever questions are in your mind about the home or condo. That satisfaction should be given within -- say -- five business days. Or even 10 days. And it could be an inspection-related question about the roof, the seawall, or land lines. It could be about the suitability as a rental property. It could be related to a spouse's seeing the home (amazing how many times one spouse makes the offer and the other is not even here!). Whatever the concern, WRITE THE OFFER.
We can work out the details later.
John
I've just received an interesting update on the perils of purchasing REO or bank-owned properties from trusted law firm, Barnes Walker, of Bradenton.
There are many advantages to purchasing such properties, mostly the low price. But there are some real problems. Below, please find a summary. For more information, or the complete article, contact me, or Barnes Walker, at 941-741-8224.
T
As part of our ongoing efforts to assist Realtors®, Barnes Walker is pleased to bring you the attached new article:
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You, as well as your buyers, know that lender-owned (REO) properties often sell for much lower prices than properties owned by sellers without financial difficulties and close much sooner than similarly priced short sale properties, but do your buyers know the risks involved? If not, have you advised your buyers that the contracts to sell REO properties are not only “As Is” contracts, but, for example:
•
The following article describes the most common of the dangers, traps, and issues to look for in an REO property contract and discusses what the buyer should accept, may accept, and should not accept.
If you have any questions, please do not hesitate to call or e-mail us....
Garret T. Barnes Adron H. Walker
© 2010. Barnes Walker & Goethe, Chartered. All rights reserved.
Fresh from Fannie Mae, news about helping clear foreclosures.
Fannie to offer closing cost aid on foreclosures WASHINGTON – Feb. 1, 2010 – Fannie Mae, the largest provider of residential home funding in the United States, announced on Friday that it would start to pay closing costs for buyers of foreclosed homes in its inventory. Buyers of qualified properties will get up to 3.5 percent in closing costs or an equivalent amount for the purchase of new appliances.Fannie wants to clear out the nearly 50,000 properties it has in inventory – listed on HomePath.com, the Web site created by Fannie Mae last year to sell the growing number of foreclosed homes. The offer is available to any owner-occupant who closes on the purchase of a property listed on HomePath.com before May 1, 2010. Applicable properties can be found on HomePath.com, along with property descriptions, photographs, community and school information, and more. In addition, some Fannie Mae-owned properties are eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing, which offers qualified homebuyers the ability to purchase with as little as 3 percent down.“Attracting qualified buyers to the market and reducing inventory of vacant homes is critical to stabilizing neighborhoods and helping the market recover,” Terry Edwards, executive vice president for credit portfolio management, said in a statement.© 2010 Florida Realtors®
This week, property owners who qualified for a homestead exemption on state and local taxes received their postcard from Charles E. Hackney, the Manatee County Property Appraiser.
The renewal is automatic if one is still entitled to the exemption; filing is the responsibility of the homeowner. Applications are taken year round, but they must be completed by March 1 of the year in which the exemption is to be effective. AND you have to be a permanent resident of Florida before January 1 of the year in which you apply.
If you buy a home during any calendar year, and the property owner qualified for exemption, that exemption will be continued until the end of that year. So, you must come in and file before March 1 of this year to continue an exemption if you bought property and made it your permanent residence in 2009, for example.
Other information may be necessary if you sold one exempted property and then bought another. A portion of the exemption may be 'portable' under certain circumstances.
Go to www.manateepao.com for more information.
A company called C&M Dredgemonster is now providing services to residents of Holmes Beach canal homes to perform maintenance dredging, according to the information left on the front door of our canal home.
In part, here's what the flyer says:
"The City of Holmes Beach holds authorizations for MAINTENANCE DREDGING of canals within the City of Holmes Beach... which allows for private property docks, boat lifts, seawalls, etc to be maintenance dredged.... The private dock and boatlift work must be contracted separately and paid for by the private property owner without any liability or exposure to the city.... It is advisable for residents in the same neighborhood to seek (common) interest from neighbors and other nearby home owners along these canals (to)... lessen the cost of mobilization in each area."
For more information, call Paul DeMariano at 941-751-6999, or email him at pauldemariano@aol.com.
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