Shea adds 55-plus community to Encanterra

Trilogy by Shea Homes has added a 55-and-over community to Encanterra, the San Tan Valley area development that sports a 60,000-square-foot clubhouse. Shea said in a release that Trilogy at Encanterra is the "first age-qualified community to open in several years in the Southeast Valley."

TWO COMMUNITIES
The addition means Encanterra now has two communities, one for all ages and the other for people over 55. Hal Looney, Arizona area president of Shea Homes Active Lifestyle Communities, said the company made the move to "accommodate requests for an age-qualified neighborhood, and provide affordable luxury for consumers who have certainly spent a lifetime earning it." The community has 50 homes so far with seven floor plans, priced from the mid-$140s.

CLUB A BIG DRAW
Looney said a big draw for prospective homebuyers in both Encanterra communities has been membership privileges in the private La Casa, which includes four restaurants and bars, a wine-tasting venue, a full-service spa, the Mallorca Event Center, and an athletic club with a women-only gym, three pools, lighted championship tennis courts, and an outdoor amphitheater.

Free help for struggling homeowners

A group of housing-assistance organizations is hosting an all-day event Thursday in downtown Phoenix for Arizona homeowners who are behind on their mortgages or may be at risk of foreclosure.

The Free Help for Homeowners Community Event is scheduled for 11 a.m. to 7:30 p.m. at the Phoenix Convention Center, 100 N. Third St.

It is a joint effort by the Obama Administration's Making Home Affordable Program, lending-industry consortium Hope Now, and non-profit community development organization NeighborWorks America.

Organizers said the event will provide a chance for homeowners to meet face to face with their mortgage company and a HUD-approved counseling agency to work on a solution to help them stay in their homes.

5 Mortgage and Foreclosure Myths

In a mortgage market that changes as quickly as this one, today’s fact is tomorrow’s fiction.  For buyers, misinformation can be the difference between qualifying for a home loan or not. Sellers and owners, knowledge is foreclosure-preventing, smart decision-making power! Without further ado, let’s correct some common mortgage misconceptions.

1.       Myth: Buyers with bad credit can’t qualify for home loans. Obviously, mortgage guidelines have tightened up, big time, since the housing bubble burst, and they seem likely to tighten even further over the long-term. But just this moment, they have relaxed a bit.  In the last couple of weeks, two of the nation’s largest lenders of FHA loans announced that they’ve dropped the minimum FICO score guideline from 620 (which allows for some credit imperfections) to 580, which is actually a fairly low score. 

At a FICO score of 620, buyers can qualify for FHA loans at many lenders with only 3.5 percent down. With a score of 580, the lenders are looking for more like 5 to 10 percent down – they want to see you put more of your own skin in the game, and the higher down payment lowers the risk that you’ll default.  However, if your credit has taken a recessionary hit, like that of so many Americans, this might create a glimmer of hope that you’ll be able to take advantage of low prices and interest rates without needing years of credit repair.

2.     Myth: The Mortgage Interest Deduction isn’t long for this world.  Homeowners saved over $85 billion in 2008 by deducting their mortgage interest on their income tax returns. A few months ago, the National Commission on Fiscal Responsibility and Reform caused a massive wave of fear to ripple throughout the world of real estate consumers and professionals when they recommended Mortgage Interest Deduction (MID) reform, which would dramatically reduce the size of the deduction.

Fact is, the Commission made a sweeping set of deficit-busting recommendations to Congress, a few of which are likely to be adopted.  Fortunately for buyers and sellers, MID reform is not one of them.  Very powerful industry groups and economists have been working with Congress to plead the case that MID reform any time in the near future would only handicap the housing recovery.  Congress-folk aren’t interested in stopping the stabilization of the real estate market.  As such, the MID is nearly universally thought of as safe – even by those who disagree that it should be.

3.       Myth:  It’s just a matter of time before loan guidelines loosen up.  The US Treasury Department recently recommended the elimination of mortgage industry giants Fannie Mae and Freddie Mac. I won’t get into the eye-glazing details of it here, but the long and the short is that (a) this is highly likely to happen, and (b) it will make mortgage loans much harder and costlier to get, for both buyers and homeowners.   It’s possible that loans are as easy to get as they’re going to get.  So don’t expect that if you hold out, zero-down mortgages will come back into vogue anytime soon. Fortunately, Fannie and Freddie aren't likely to disappear for another 5-7 years, so you have a little time to pull your down payment and credit together. If you want to get into the market, the time to get yourself ready is now!

4.       Myth: If you don’t have equity, you can’t refi. Much ado is being made about how stuck so many people are in their bad loans, because they don’t have the equity to refinance their way out of them.  If you’re severely upside down (meaning you own much, much more than your home is worth), stuck may be the situation. But there are actually a couple of ways homeowners can refi their underwater home loans.  If your loan is held by Fannie or Freddie (which you can find out, here), they will actually refinance it up to 125% of its current value, assuming you otherwise qualify for the loan.  That means, if your home is worth $100,000, you could refinance a loan up to $125,000, despite the fact that your home can’t secure the full amount of the loan.

If your loan is not owned by Fannie or Freddie, you might be a candidate for the FHA “Short Refi” program. While most mortgage workout plans are only available to people who are behind on their loans, the Short Refi program is only available to homeowners who are current on their mortgages and need to refinance up to 115 percent of their homes’ value.  So, if you owe $250,000 on your home, you can refinance via an FHA Short Refi even if your home’s value is as low as $217,000. If you think you’re a good candidate for a short refi, contact your mortgage broker, stat – there are some in Congress who think that this program is so underutilized (only 245 applications have been submitted since it rolled out in September – no typo!) that its funding should be diverted to other needy programs.

5.       Myth:  If you’ve lost your job and can’t make your mortgage payment, you might as well mail your keys in.  Until recently, this was essentially true – virtually every loan modification and refinancing opportunity required that your economic hardship be over before you could qualify. And documenting income has always been high on the requirements checklist. But there are some new funds available in the states with the hardest hit housing and job markets, which have been designated specifically for out-of-work homeowners.

The US Treasury Department’s Hardest Hit Fund allocated $7.6 billion to the states listed below – all of which are now using some portion of these funds to offer up to $3,000 per month for up to 36 months in mortgage payment assistance to help unemployed homeowners avoid foreclosure.  Contact the state agency listed below if you need this sort of help:

• Alabama: http://www.hardesthitalabama.com/
• Arizona: https://www.savemyhomeaz.gov/
• California: https://www.keepyourhomecalifornia.org/
• Florida: https://www.flhardesthithelp.org/
• Georgia: http://www.dca.state.ga.us/housing/homeownership/programs/hardesthitfund.asp
• Illinois:http://www.ihda.org/
• Indiana: http://www.877gethope.org/
• Kentucky: http://www.kyhousing.org/
• Michigan: http://www.michigan.gov/mshda/buyers/save_the_dream/helping+hardest+hit+homeowners+-+contact+your+mortgage+servicer+for+assistance
• Mississippi: http://www.mshomecorp.com/firstpage.htm
• Nevada: http://www.nahac.org/
• New Jersey: http://www.state.nj.us/dca/hmfa/home/foreclosure/homekeepers.html
• North Carolina: http://www.ncforeclosureprevention.gov/
• Ohio: http://www.savethedream.ohio.gov/
• Oregon: http://www.oregonhomeownerhelp.org/
• Rhode Island: http://www.hhfri.org/
• South Carolina: http://www.scmortgagehelp.com/
• Tennessee: http://www.thda.org/
• Washington D.C.: http://www.dchfa.org/

Short Sales and Mortgage Insurance

In my previous two articles, I discussed the role of mortgage insurers (MIs) in relation to short sales and answered some of the key questions my company, Radian Guaranty, receives about this type of sale.

In addition to answering a few other frequently asked questions, in this third installment of my three-part series on short sales, I provide the answer to the question we’re probably asked most: Is there anything I can do to help ensure my short sale goes through?

As every real estate agent knows, you can never guarantee any type of sale, but you can increase the likelihood of short sale success with knowledge of what’s involved.

Short Sale FAQs

-How does Radian determine if the purchase amount is reasonable? Radian relies on the mortgage servicer’s property value, but may obtain its own value if there are questions.

-What seller costs does Radian consider reasonable? Radian would like to see seller costs not exceed 8.5% of the purchase amount. Past due taxes, condo dues, local assessments, approved payment to a junior lien holder, etc. would all be valid exceptions.

-How should the seller’s expectations be set before a short sale listing agreement is executed?

1. The sale is subject to written approval by the mortgage servicer, as well as the seller and mortgage lender’s approval.

2. Approximately how “short” the sale will be based on the estimated total mortgage debt through the sale closing (include anticipated past due amounts), minus the estimated sale proceeds.

3. A short sale is a workout, and the seller owes the entire short amount.

4. They may be required to participate financially in exchange for an approval of the short sale.

5. They must demonstrate that a financial hardship exists.

6. They have the right to negotiate or decline participation if the servicer’s approval terms are not acceptable.

7. A person’s credit rating is a powerful measurement in today’s society, and a short sale is a better outcome than a foreclosure from a credit perspective.

-What can an agent do to increase the likelihood of a successful short sale after a purchase offer has been made?

1. The servicer must comply with various third-party requirements, so it’s important to follow the servicer’s instructions carefully for submitting documentation, and do so in a timely manner.

2. Follow up with the servicer often, but keep in mind they are dealing with unprecedented volumes of requests.

3. Keep a log of all activities related to submitting and finalizing the sale, including dates, results of communications, and names, titles and contact information for everyone you deal with.

4. Retain copies of all documents submitted and received.

5. Upon receiving the servicer’s written approval, review all terms and conditions promptly to ensure they were as negotiated and can be met. Some key terms to review are:

a) The authorized net proceeds figure, since the sale will likely be rejected if the servicer does not receive this amount.

b) If the seller is required to contribute cash at closing.

c) The specified settlement date.

d) If the seller is to net zero, since this means no funds can go to the seller.

e) If a promissory note is involved, to be sure it’s executed and delivered as needed and remains unaltered.

f) If the formal, written approval letter matches any pre-negotiated sale terms. If it does not, promptly outline to the servicer why the terms are not appropriate and provide supporting documentation.

6) Communicate the servicer’s approval terms to participants, but only share necessary information relative to the sale.

I trust this series has provided you with useful insight on short sales, offering knowledge from a unique insider perspective to help you overcome obstacles and create a winning situation for everyone involved.

February Housing Scorecard Shows Increase in Existing Home Sales as Home Affordability Remains High

The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury released the February 2011 edition of the Obama Administration’s Housing Scorecard. The latest housing figures show increased existing home sales as home affordability remains high, but officials caution that the market remains fragile, as prices are unsettled.

“In the face of the deepest economic recession and housing crisis in decades, the Obama Administration has taken unprecedented action to promote stability in the market—keeping millions of families in their homes and helping millions more to save money by refinancing. But the data clearly show that the market remains extremely fragile,” said HUD Assistant Secretary Raphael Bostic. “While we cannot stop every foreclosure, we know that many responsible homeowners are still fighting to make ends meet. Through the broad range of programs this Administration has put in place, we can put help in reach to those homeowners as early as possible.”

“Our housing market remains fragile. We know this from the data, but homeowners across the country can feel it too. That’s why this Administration remains committed to helping eligible homeowners avoid foreclosure where it makes economic sense to do so,” said acting Assistant Secretary for Financial Stability Tim Massad. “Every month, HAMP continues to help tens of thousands of additional families in a cost-effective manner. And by setting affordability standards and developing a framework for how mortgage servicers provide assistance to struggling families, HAMP has established critical protections for homeowners and has catalyzed improvements in modifications industry-wide.”

The February Housing Scorecard features key data on the health of the housing market including:

-The housing market remains fragile as data through January 2011 paint a mixed picture of recovery. Existing home sales ticked upward in January, but remained below levels seen in the first half of 2010. Mortgage delinquencies continued a downward trend compared to early 2010 and foreclosure starts and completions remain below peak. However, as lenders review internal procedures related to foreclosure processing, many foreclosure actions have been delayed. The decline is likely to be temporary as lenders eventually revise and resubmit foreclosure paperwork in the coming months.

-Administration efforts have been effective in blunting the effects of the deepest economic crisis since the Great Depression. Since April 2009, record low mortgage rates have helped more than 9.5 million homeowners to refinance, resulting in $18.1 billion in total borrower savings. However, home prices remain unsettled at this fragile stage of the recovery. More than 4.2 million modification arrangements were started between April 2009 and the end of January 2011—including nearly 1.5 million HAMP trial modification starts, more than 730,000 FHA loss mitigation and early delinquency interventions and more than two million proprietary modifications under HOPE Now. While some homeowners may have received help from more than one program, the number of agreements offered was more than double the number of foreclosure completions for the same period (1.8 million).

Given the current fragility and recognizing that recovery will take place over time, the Administration remains committed to its efforts to prevent avoidable foreclosures and stabilize the housing market.