Welcome to the "Z" Team!

Here is our  update information to share with you! Are you now starting to ask: When can we buy again? Were you foreclosed on or did a short sale due to circumstances like a job loss or illness? The wait may not be as long as they were once told! 

Many banks have guidelines that prevent them from issuing loans to people with a foreclosure or short sale in their credit history in some cases for as much as seven years. That also doesn’t factor in the damage foreclosures and short sales can do to a person’s credit score, and the work former home owners’ will need to do to repair it so they’ll have a better chance at qualifying for financing again in the future. Please contact a local lender that knows the new regulations and is recommended by your Realtor!  

The wait-time varies among lenders and government entities. For example, the Federal Housing Administration says former home owners with a foreclosure must wait three years before they can qualify, while Fannie Mae and Freddie Mac require a seven-year wait following a foreclosure. So clearify this with those helping you.  

As for short sales, sometimes these waits can be waived or drastically cut, depending on the borrower’s situation. FHA requires a three-year wait following a short sale, but it may waive that wait if the short sale was due to a job loss. 

Also, for borrowers who can come up with a higher down payment on their next home purchase, they may also not have as long to wait. For example, Fannie Mae will reduce the wait from seven years to two years for borrowers who come with a down payment of 20 percent or more. 

Source: “Lost Home to Foreclosure but Ready to Buy Again? Prepare to Wait in Lender ‘Penalty Box,’” Associated Press (Feb. 22, 2012)

Improving access to affordable mortgage financing for qualified home buyers and investors and committing additional resources to loan modifications and short sales will help reduce current and future inventories of real estate owned (REO) properties held by government agencies, according to the National Association of REALTORS®.

In a letter sent today to the U.S. Department of Housing and Urban Development, the Federal Housing Finance Agency, and the U.S. Department of the Treasury, NAR responded to the agencies’ recent request for input and offered its recommendations for selling REO properties held by Fannie Mae, Freddie Mac and the Federal Housing Administration.

In its letter, NAR urged the agencies to create an advisory board as they explore new options for selling foreclosed properties to ensure that efficiently disposing of agency REO properties will minimize taxpayer losses and reduce the negative effects that distressed properties have on local real estate markets.

“As the leading advocate for housing issues, REALTORS®know that foreclosures affect families, communities, the housing market and our nation’s economy,” said NAR President Ron Phipps. “We believe the government has an opportunity to minimize the impact of distressed properties on local markets by expanding financing opportunities, bolstering loan modifications and short sales efforts, and enhancing the efficient disposition of REO properties. This will help stabilize home prices and neighborhoods and help support the broader economic recovery.”

With the growth of green building the last decade, green lending has emerged to help finance those often costly “green” upgrades. 

Dave Porter, with PorterWorks in Stanton, Wash., who provides continuing education courses on green lending to those in the real estate industry, says there are several basic types of green mortgages, which most of the public still isn’t very aware about. For example, energy-efficient mortgages (EEMs) are “used to finance the construction of a home that would meet green standards or to buy one that’s newly built.” An energy improvement mortgage (EIM), on the other hand, is used to buy and fix up a house that needs green improvements, like insulation or new windows. 

The loans are available through mortgage programs by Fannie Mae, the Federal Housing Administration, Veterans Affairs, and the Department of Agriculture. More information for the Placerville, El Dorado County, California regions at: zteam4u@gmail.com

“They have slight differences in requirements, but basically they allow you to finance the home, plus the energy-conserving improvements, without having to qualify for the additional cost of the improvements,” Porter told the Chicago Tribune.

Source: “Market Ripe for Green Loans,” Chicago Tribune (Sept. 9, 2011)

The Department of Housing and Urban Development has once again extended its deadline for a program that provides up to $50,000 in interest-free loans to unemployed or medically ill home owners who are struggling to make their mortgage payments. 

The new deadline is now Sept. 15. HUD resumed taking applications for the program on Monday.The $1 billion Emergency Homeowners Loan Program, which launched in June, was originally slated to end on July 22, but HUD first extended the deadline to July 27 to give home owners more time to apply. Good news for the Sacramento and Placerville, California regions. 

Home owners eligible for the program will be able to qualify for up to $50,000 in interest-free loans for up to two years. Home owners who have had a drop in income of at least 15 percent from involuntary unemployment or underemployment due to economic conditions or a medical emergency are eligible for the program. Home owners must still be able to contribute $150 per month toward their mortgage. (Learn more about eligibility requirements and the participating states at http://findehlp.com.)

 Source: “HUD Extends Deadline for Unemployed Mortgage Assistance,” HousingWire (Aug. 29, 2011)

In June, the Department of Housing and Urban Development launched a new grant program to help home owners who have fallen behind on their mortgage payments due to unemployment or unexpected medical bills.

The program offers eligible home owners $50,000 in interest-free loans for up to two years.

HUD has until the end of the government’s fiscal year, Sept. 30, to spend all of its $1 billion for the Emergency Homeowners’ Loan Program (or EHLP), which will provide 27 states with aid for the program. Home owners in eligible states have until July 22 to complete their applications.

HUD hopes that 30,000 home owners can be helped through the program.

However, while some are seeing the program as a last chance to help unemployed home owners stay in their homes, others aren’t as convinced the program will do much good in ultimately lessening foreclosures in the country.  The Senate has yet to take up the bill.

For a full list of states and eligibility requirements for EHLP, visit the HUD Web site.

Source: “HUD to Give Away $1 Billion to Struggling Home Owners,” The Washington Post 7/4/11 

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

More than 30,000 California families will face higher down payments, higher mortgage rates, and stricter loan qualification requirements if conforming loan limits on mortgages backed by the Federal Housing Administration (FHA), Fannie Mae, and Freddie Mac are reduced beginning October 1, 2011, according to analysis by C.A.R.

Barring congressional action, the maximum FHA, Fannie Mae, and Freddie Mac conforming loan limit will decline to $625,500 beginning Oct. 1, 2011, from the current $729,750 limit, though the majority of counties will fall far below the $625,500 maximum.  The conforming loan limit determines the maximum size of a mortgage that FHA, Fannie Mae, and Freddie Mac government-sponsored enterprises (GSEs) can buy or guarantee.  Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan and require a higher down payment, increasing the monthly payment and negatively impacting housing affordability for California home buyers.

C.A.R. and NAR have long advocated making higher conforming loan limits permanent.  As a result of C.A.R.’s and NAR’s efforts, in 2008, Congress temporarily raised the conforming loan limits from $417,000 to $729,750 and has extended them annually through fiscal year 2011.

To view charts showing how the changes would impact various areas throughout California, visit: http://www.car.org/newsstand/newsreleases/2011newsreleases/loanlimits/ 

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

A sluggish housing market has caused millions of home owners to lose their home to foreclosure, short sale, or deed in lieu of foreclosure. But once these former home owners get a better handle on their credit, how long do they have to sit on the sidelines until they can secure future financing to buy a home again?

Fannie Mae and Freddie Mac have a three-year waiting period following a foreclosure, and a two-year wait following a short sale, deed in lieu, or discharge or dismissal of bankruptcy. However, if borrowers can justify that the circumstance for the foreclosure or bankruptcy occurred because of an illness or job loss — or other “extenuating circumstance” — that may help reduce their wait. But with no such extenuating circumstances, these former home owners may have to wait longer, even up to seven years following a foreclosure or four years after bankruptcy, the article notes.

For loans insured by the Federal Housing Administration, borrowers with perfect credit afterwards also will, in general, have to wait three years after a foreclosure and two years after a bankruptcy is discharged, The New York Times notes.

Following a short sale, borrowers will have to wait three years to secure another FHA loan — however, there are plenty of exceptions. Borrowers will have to wait three years if they were in default at the time of the short sale and had no extenuating circumstances. However, if the borrowers were on time with all their payments a year prior to the short sale, they may have no wait at all and might even qualify for an FHA loan immediately.

Source: “The Post-Foreclosure Wait,” The New York Times (June 23, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at:www.sierraproperties.com

Federal regulators are accusing Bank of America Corp. of being slow to provide documents and other information in an investigation into the banking giant’s foreclosure practices, according to a court filing.

BofA “significantly hindered” the review, said departmental auditor William Nixon in a document that was filed in a lawsuit by the State of Arizona against the bank.

“When interviews were permitted, the presence or involvement of the bank’s attorneys limited the effectiveness of those interviews,” Nixon said in the court filing.

Federal regulators and state attorneys have been investigating banks’ procedures for foreclosures after reports surfaced last year of banks using “robo-signers” to sign hundreds of unread foreclosure documents daily without proper reviews.

Full article at source: “Bank of America Hindered Foreclosure Review-Filing,” Reuters News (June 13, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

Currently, home owners who take out FHA-backed loans are required to have a minimum down payment of 3.5 percent; the GOP bill seeks to raise that to 5 percent. The GOP says it wants to protect home owners against default and improve FHA’s finances.

The draft legislation also calls for lowering FHA loan limits in several areas.

As of now, the maximum size of FHA-backed loans in expensive areas of the country is set to drop to $625,500 from $729,750 as of Oct. 1. In less expensive areas, the limit may drop to $271,050. The GOP draft bill wants to drop the limits even more to 125 percent of a county’s median home price, Dow Jones reports.

“While we support reforms to strengthen the program, changes should not be made at consumers’ expense by drastically impacting the affordability and availability of mortgage capital,” Ron Phipps, the National Association of REALTORS®’ president, said in a statement.

Source: “House Republicans Aim to Raise Money Down for FHA Loans,” Dow Jones International News (May 23, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

The federal bailout of the U.S. financial system, which was originally forecast to cost as much as $700 billion, is expected to cost far less than expected, according to a newly released congressional report.

The federal bailout, known as the Troubled Asset Relief Program (TARP), was launched by the Bush administration in response to the 2008 financial crisis and was to include aid to struggling home owners. But TARP is expected to now cost taxpayers about $25 billion because it did not accomplish all that envisioned to help home owners avoid foreclosure, a congressional panel said.

The Treasury Department allocated $45.6 billion for three major housing programs to help home owners, including the Home Affordable Modification Program (or HAMP), a refinancing program run by the Federal Housing Administration to aid underwater home owners, and a program designed to help hard-hit areas. But the Treasury Department only spent about $1 billion in TARP money for the foreclosure prevention effort, the panel noted.

Source: “TARP’s Lower Cost Reflects Troubles of Foreclosure Effort,” Dow Jones Business News (March 16, 2011) and “U.S. Senate Panel to Step TARP Oversight-Chairman,” Reuters News (March 17, 2011) 

Unfortunately this, along with restrictions from the Fed’s regarding loans in the Sacramento and Placerville, California regions continue to restrict economic recovery. Other related articles at: www.sierraproperties.com