Attention Homeowners!

Free Special Report On How To Avoid Foreclosure! 

Any Condition – Any Price Range – Any Area!

Email or call me for more information about the “How to Avoid Foreclosure” informational packet.

Phone: 310-662-1784

Email: aaron@embracevision.com

I’m in the business of buying houses and I might want to buy your house or condo. If you want to sell your house easily, I’ve got the perfect solution.  Normally, selling a house is a costly, complicated and time consuming process.

But I have a much easier solution for you!

I represent a group of private investors who purchase several homes per month in multiple different areas and surrounding neighborhoods. We use private funding, which means there are no banks to wait on or hassle with and we can close quickly.  To be clear, I am not a real estate agent, I am looking TO BUY YOUR HOUSE WITH CASH.

I’m sure you’ll agree we’re in a buyer’s market and getting top dollar for your home is close to impossible. In fact, selling today is a very frustrating experience.  If you want a FAIR MARKET CASH OFFER and the ability to close quickly we can help. 

Your current situation or the condition of your homes doesn’t matter. If you need to move fast, if you are behind on payments, if you are facing foreclosure or bankruptcy, if you are going through a divorce or any other problems that involve your home, we can help right now.

I may be able to buy you house, or maybe not, a lot of it depends on you. However, I can make you a fair market offer.

If you’re looking to solve your problem quickly call me right away at 310-662-1784.

Take care,

Aaron Clendenning

Phone: 310-662-1784

Email: aaron@embracevision.com

Mortgage Market Update

From the desk of Joe Bailey

Keeping You Informed…

Planning To Use The $8,000 Tax Credit? It’s Time For A Re-Pre-Approval

 As the federal home buyer tax credit nears its April 30 end-date, there’s a lot of would-be home buyers in California and elsewhere working hard to get under contract.

What’s A Re-Pre-Approval?

If you’re among them, a piece of advice: If your pre-qualification and/or pre-approval letter is more than 8 weeks old, get yourself “re-pre-approved”. Mortgage guidelines have been in flux and your original lender letter may now be invalid.

As examples, over the past half-dozen months, the majority of lenders have reduced risk tolerance with respect to:

• Maximum debt-to-income ratios : Now capped at 45%
• Minimum allowable credit scores : Heavy penalties starting below 740
• Calculation of “assets in reserve” : Only 60% of some assets can “qualify”

For buyers of condominiums and certain townhomes, even the subject property itself comes under tougher scrutiny.

You Only Get One Chance To Claim The $8,000 Tax Credit

Today’s mortgage applicants need to be a complete package. It takes more than just good income and credit to get approved anymore and today’s buyers would be prudent to revisit their qualifications.

What passed underwriting in January may not pass in May.

Being pro-active brings other advantages, too. If a mortgage re-pre-approval does unearth an issue, addressing and correcting it up-front will be simpler than trying to clean it up once a home’s already under contract. If things fall apart after the April 30 deadline and you lose your claim on $8,000 — tough noogies.

With More Homes Going Under Contract, Home Prices Certain To Rise This Spring

As expected, the Pending Home Sales shot higher in February, boosted by the federal home buyer tax credit’s April 30 deadline.

Pending Home Sales Spike

Versus the month prior, February’s index rose 8 percent but remains well off the highs set last October.

For today’s home buyers and seller, the Pending Home Sales Index is an important measurement. This is because a “pending home” is a property that is under contract to sell, but not yet closed.

According to the National Association of Realtors®, 80% of homes under contract close within 60 days, historically. Therefore, a higher Pending Sales figure in February projects that April’s Existing Home Sales will be higher, too.

More Pending Home Sales Means Higher Home Prices

If you’re a California home buyer today, no doubt you’ve noticed the extra market activity.

On right-priced homes, multiple offer situations are more common; sales prices are settling closer to listing price; Days on market is falling. These are the signs of a buyer-heavy market.  It drives home supplies down and home prices up.

It’s a good time to be a seller, in other words.  Especially as buyer activity looks poised to peak.

Get Ahead Of The Surge To Get The Best “Deals”

When the home buyer credit faced its last expiration in November 2009, we saw a pattern of buyers rushing to beat the deadline.  There’s no reason to expect that won’t happen again. And as it does, Pending Home Sales should continue to climb. Average home sale prices should rise.

Home buyers may find it smart to go under contract sooner rather than later. Pending Home Sales is a warning shot.  Higher home sales figures are ahead.

“Play like a champion today!”

 Joe Bailey - Loan Officer
O.  (831) 689-8500
C.  (831) 251-5167

Joe.Bailey@BaileyMortgage.com

PICTURE: Stephanie and Bob Walker chronicled their home’s short sale in a popular blog called Love in the Time of Foreclosure. (Stephanie and Bob Walker / October 15, 2006)

Love in the Time of Foreclosure

Banks’ resistance to the tricky transactions is softening as the number of distressed properties increases.

February 17, 2010|By Alejandro Lazo – Article was found in the Los Angeles Times.

Nineteen months ago, the recession took Bob Walker’s job. Then, creditors lined up to take the three-bedroom hilltop home that the computer consultant shared with his wife, Stephanie, a playwright still looking for her first break.

Avoiding the stigma and financial fallout of foreclosure became an obsession for the Walkers. They talked to the banks, found multiple jobs, put their Silver Lake house on the market and tried to stitch together a plan to repay their debts. Finally, they turned to a short sale, chronicled in a popular blog: Love in the Time of Foreclosure.

“We really thought that, worst-case scenario, we will sell the house and break even,” Stephanie Walker said. “But it didn’t work. We went into great losses.”

In a short sale the lender lets a homeowner unload a house for less than what is owed on the mortgage. The transaction recognizes that the home isn’t worth what the owner paid for it after more than two years of falling real estate values.

Such deals are appealing to struggling homeowners because they escape weighty house debts — but they don’t get away unscathed. Their credit scores will be damaged, perhaps less severely than in foreclosure, but still badly enough to limit for years their ability to borrow money. There may be tax consequences. And any money invested through down payments and renovations will be lost.

Lenders, which can withhold approval of a short sale if they don’t like the price, have resisted such sales because they are difficult to execute, particularly when multiple creditors and other parties are involved. And short sales lock in losses that might be reduced if the sale is delayed until the market improves.

But that resistance is softening. With more Americans losing jobs and missing mortgage payments, banks and investors increasingly are agreeing to short sales as a less costly alternative to foreclosure.

Short sales approved by Fannie Mae and Freddie Mac, which own 57% of U.S. mortgages, nearly quadrupled in the first nine months of 2009 compared with the same period in 2008. At the nation’s largest mortgage servicers, short sales soared 165% to 74,513 in the first nine months of 2009 from the year-earlier period.

Short sales are still few compared with foreclosures, but policymakers are looking at such sales to shrink the number of bank-owned homes on the market.

Mortgage Market Update

From the desk of Joe Bailey

Keeping You Informed…

FHA Rulebook Changes: Higher Fees, Bigger Down Payments, And More Mortgage Insurance

Life as an FHA borrower just got tougher.

In an effort to shore up its flailing balance sheet and dwindling capital reserves, the Federal Housing Authority rolled out sweeping financial changes on Wednesday.  FHA borrowers must now look better on paper and have more cash at closing.

Mortgage insurance premiums are rising, too.

In its official announcement, the FHA said it’s trying to “better position the FHA to manage its risk while continuing to support the nation’s housing market”.

The changes are effective with case numbers assigned starting April 5, 2010.

One widely speculated change wasn’t made — the increase of the FHA minimum down payment.  Homebuyers in California and elsewhere can still buy with just 3.5 percent down.  However, the FHA did roll out a number of other changes, including:

• An increase in Upfront MIP from 1.75 percent to 2.25 percent
• A reduction in maximum seller contributions from 6 percent to 3 percent
• A Congressional request to increase monthly mortgage insurance premiums

Furthermore, the FHA’s new guidelines institute a minimum FICO requirement of 580 to make the minimum 3.5% down payment, requiring 10 percent for any applicant whose credit score falls below that level.

But, just because the FHA allows a 580 FICO, it doesn’t mean that banks will approve it.

The official term here is “investor overlay”. It’s when the banks use FHA guidelines as a starting point for their own set of underwriting rules which are often more strict; banks have a good reason for making investor overlays.

Last week, the FHA subpoenaed 15 lenders — including the well-respected 1st Advantage Mortgage in Lombard, Illinois — because of abnormally-high FHA default rates.  The act was a shot across the bow, it seems, because in Wednesday’s FHA statement, the group established an official benchmark for FHA loan performance.

If a bank’s defaults exceed the mean by a certain number of sigmas, the FHA terminates the bank. Period.

For this reason, FHA investor overlays will be a running theme of 2010.

The FHA changes go into effect this spring.

“Play like a champion today!”

 
Joe Bailey – Loan Officer
O.  (831) 689-8500
C.  (831) 251-5167

JBailey@JoeBailey.biz

Mortgage Market Update

From the desk of Joe Bailey

Keeping You Informed…

Foreclosure Distribution In The United States (2005-2009)

Foreclosures have always been an issue for banks, but since 2005, the percentage of foreclosure filings coming from the top 10 foreclosure-filing states has moved markedly higher.

• Q1 2005 : 64.3 percent
• Q4 2009 : 72.4 percent

The U.S. foreclosure problem is concentrating by geography.  And meanwhile, the 10 states included in the list — California, Florida, Illinois, Arizona, Michigan, Texas, Georgia, Nevada, Ohio and Nevada — account for just 45% of the nation’s population.  Distilled, 45 percent of states represent 72 percent of foreclosure filings.

Clearly, some states are more foreclosure-heavy than others. We must use caution when interpreting national housing statistics. A few states can distort the bigger picture.  For example, when RealtyTrac says annual foreclosures reached 2.8 million last year and that foreclosures are up by one-fifth, that’s a national story.  On a local level, however, the story’s much different.

10 states showed year-over-year improvement in 2009 — including Ohio and Indiana. Both states had been hard-hit by losses in manufacturing.  And even when we examine states like Florida and Arizona — two of the most foreclosure-heavy states in the nation — we can find areas in which foreclosure filings are down and the housing market is thriving.

Miami is a terrific example of this.

All real estate is local.  Period.  We can’t compare states any more than we can compare Bakersfield to Beverly Hills.  Big picture data is important, but it’s what happens on the streets that matters, pardon the pun.

Once you’ve found a home and need a prequalification letter to accompany your offer, send me an email and I’ll get you handled. 

“Play like a champion today!”

 
Joe Bailey - Loan Officer
O.  (831) 689-8500
C.  (831) 251-5167

JBailey@JoeBailey.biz

There has been a lot of talk recently about the New FHA Loan Seasoning Guidelines for 2010.  For all of those that don’t know what property seasoning is, let me explain.  If a 90 day seasoning period is required, it means that the property can’t be bought and sold within 90 days.  For example, if buyer #1 purchases a property on January 1^st they can’t sell it to buyer #2 until it has “seasoned” for 90 days or until April 1^st. 

FHA (Federal Housing Administration) loans had a 90 day property seasoning duration last year and it looked like that would continue into 2010 as well.  This made it difficult for Short Sale investors to perform A-B-C transactions.  The A-B-C transaction is typically used by investors because it makes negotiations with the lenders much easier and more efficient.  Let me explain an A-B-C transaction.  The “A” party would be the distressed home owner that is currently in pre-foreclosure, the “B” party would be the real estate investor and the “C” party would be the end buyer.  A real estate investor goes in and works with the distressed home owner’s lender to negotiate a payoff authorization.  The investor has more leverage with the lender by offering a cash purchase.  Subsequent to the payoff authorization the investor will start looking for an end buyer.  As you can see, the investor performed a valuable service to the distressed homeowner, the original lender and the end buyer.  Let’s take a look at how the short sale investor provides a valuable service.

1. Distressed Home Owner – They are behind on their payments, typically in pre-foreclosure.  They are in position to lose their home to foreclosure, destroy their credit and continue along a bad path in a difficult time in their life.  The short sale investor helps them out of their foreclosure problems with much less affect to their credit and pocket book.  Also, the investor will have access to additional resources and often times can help the distressed home owner find a new place to live.
2. Foreclosing Lender – The bank doesn’t want to take back the property because they are in the business to lend money, not own real estate.  If they go through with the foreclosure process there is a risk that the property will not be purchased at auction.  That means it will go back to the bank and become an REO property.  This means additional holding costs, selling costs, repair costs, lending restrictions due to the additional liability and not to mention headaches for the lender.  Once they finally get rid of the property, they are getting rid of it for a discount.  By accepting a discount with the investor during the short sale process they save a lot of additional costs and headache.
3. End Buyer – The end buyer will typically have a chance to purchase the property at a discount as well.  Investors are looking to sell the properties quickly and to do so, they offer discounts.  A new home owner will not only get a great property but they will also get instant equity in their new home.

Last year, Short Sale Investors had to find end buyers that could qualify outside of the FHA loan program due to enforcement of a 90 day seasoning period.  Starting February 1, 2010 the 90 day seasoning period for FHA Loans will be lifted until February of 2011.  To read more about the change check out the following HUD article.

HUD – New FHA Loan Seasoning Guidelines for 2010 

This was great news for the investors and end buyers alike!  Here are a few more articles about FHA Loans for you to check out…

FHA Loan Pros & Cons

FHA Official Website

Aaron Clendenning

aaron@embracevision.com

If you have decided to sell your house, how can you turn your house into the most valuable asset? Before selling real estate, it is important to read the ten keys to boosting profit. You should read these low cost tips and you will manage to enhance the overall income return when you sell your house.

How do we know? Everybody knows that most houses would sell more quickly and for a better value if the real estate agent had followed some reasonable, proved real estate tips. If a house is already a showcase, it simplifies the job of the buyer. When some buyer does not like your house for various reasons, an agent will bring other buyers back to the house. In a community of real estate agents everybody very quickly gets to know about a ready showcase house.

First Impressions – It is very important and should not be overlooked in any case. This tip that I am going to share with you is similar to that concept that is called Curb Appeal. It is the very first feeling that a buyer gets from your house. So, take into account, that the buyer’s first impression starts forming as he walks up to the front door and to the moment when the door first opens. So, make sure that you front door is tidy, as it is an entrance into your house. Make your front door sparkle. If the door needs repainting or refreshing, make sure that you have done that.

If you have a plate on your house with your family name, remove it. Even if it is just on the mailbox. You can always put it back once you move. You should make your house anonymous, so that the buyer should have an impression as if the house already belongs to him.

Check if the key fits properly and the lock works easily. When a home buyer visits your house, the agent uses the key from the lock box. Just imagine if there are some problems with your lock and everybody is standing and waiting, your prospective buyer will get negative impression.

The next thing to be considered is an entry way. Make sure there are no shoes or other clutter in the foyer, it also affects the first impression of your potential buyers.

Take into account that in any real estate market, especially in a buyer’s market there is a strong competition and your house should compete with many other houses in your neighbourhood. If your house is competitive your prospective buyer can be easily turned into a buyer.

But, bear in mind that first impression can be spoiled, if the rest of your house is not presentable. A lot of property buyers would like to know what trade-offs to make, how much money to allocate to get their home ready to list and sell. The main thing is that you should think like the buyer, stroll across the street from your house and walk up to the front door, fix all the things that you would like to see repaired or improved if you are planning to buy your own house.

Now Denver real estate search is easy and convenient as never before. Please visit this web site and you will get shortcut not only to Denver real estate quotes and listings, but also a nice looking online map with the best Denver real estate area propositions – zoom in and see.

I heard this little poem yesterday and really liked it.

When you want a thing bad enough to go out and fight for it,

To work day and night for it,

To give up your peace and your sleep and your time for it;

If only the desire of it makes your aim strong enough never to tire of it;

If life seems all empty and useless without it,

And all that you dream and you scheme is about it;

If gladly you’ll sweat for it, fret for it, plan for it,

Pray with all your strength for it;

If you’ll simply go after the thing that you want with all your capacity,

Strength and sagacity; faith, hope, and confidence, stern pertinacity;

If neither poverty nor cold nor famish nor gaunt,

Nor sickness or pain to body or brain can turn you away

From the aim that you want;

If dogged and grim, you besiege and beset it,

With the help of God, you WILL get it!

Author Unknown

Aaron Clendenning

aaron@embracevision.com

Find Out Information About when to refinance and Read Helpful Tips About should i refinance my mortgage and no cost refinance.

Cash back mortgage refinancing is a great way for homeowners to use their homes equity, and quickly obtain a large amount of money that can be used for anything. Different from a personal loan, cash out refinancing typically offers people much more money with much better interest rates, terms, and conditions. Here are some things people should know when considering a cash out refinancing.

There are many reasons for wanting to use your homes equity. Many people have medical bills or other financial hardships that need immediate attention. Other homeowners want to use their homes equity to complete home improvements or repairs, pay college tuition, or for other major life expenses. While a cash out refinance does potentially provide a homeowner with a big lump of money, always remember that it needs to be paid back.

This means that it is generally a good idea to have a productive plan for the money you are getting. Even if most of it is going to be used to prevent or help a financial problem, the rest should be used to improve your homes value, your financial future, or both. Some people come into problems down the road when they unwisely spend the money from a refinancing on things that are not going to benefit them now. However, the money has absolutely no restrictions on what it can be spent on and some homeowners use it for extravagant vacations, expensive cars, or for other big ticket items. The choice is yours, just make is wisely and with the long run in mind.

Here is a very simple example of how a typical cash out mortgage refinancing can work. Say you owe $50,000 over the next 5 years on your 30 year mortgage. With a cash out refinance, you can take out a new home loan for $100,000 due over 10 years, and pocket the $50,000 difference. This is the money you are able to use for anything you want. This money often comes at a much better interest rate than a typical personal loan would be at.

While this type of refinancing may not be beneficial for everyone, it is a great option for many people. Make sure you understand the long term effects, what you want to do with the money, and the benefits of cash out refinancing before you get yourself into anything. A lot of people actually get themselves into a really bad financial situation if they improperly prepare, understand, or get a cash back refinance. Do not be one of these people.

Once you know the difference you are aware of what each of these options mean so you can make educated choices for your loan modification needs. As you navigate through this complex process it is important to learn as much as you can so that you know what you are getting every step of the way and you can have more control of your process.
Gain handy tips about should i refinance my mortgage – study this publication.

Mortgage Market Update

From the desk of Joe Bailey

Keeping You Informed…

Why You Won’t Always Get The Lowest Advertised Mortgage Rates

 Mortgage rates are low but maybe not for you, specifically.

If you’ve ever wondered why loan officers can’t give you the best “advertised rate”, it’s not because of a bait-and-switch scheme or something worse.  Most likely, you’re being quoted higher mortgage rates because of a government mandate called Loan-Level Pricing Adjustments.

LLPAs are changes in loan costs based on your personal risk traits.

Fannie Mae and Freddie Mac first introduced loan-level pricing adjustments in April 2008 and they’ve been a constant cause of consternation among conforming borrowers since.

The problem is loan-level pricing adjustments aren’t exactly Prime Time news and so the first time most people hear about them is at the point of application. LLPAs can raise a person’s mortgage rate by a full percentage point or more.

To understand what LLPAs are and how they work, let’s talk about auto insurance.

For all of us, there is some base insurance rate for which we all qualify.  It’s based on our age, our credit and the ZIP code in which we park the car.  From there, however, adjustments are made — drive a riskier car, pay a higher premium.  Have a history of accidents, pay a higher premium. Things like that.

The same goes for mortgage loans, the more the risk, the higher the rate.  A few of the risk factors that can change a person’s mortgage rate include:

• Living in a condo with less than 25% equity in the home
• Having a credit score of less than 740
• Living in a 2-unit, 3-unit or 4-unit home
• Using a home as an investment property
• Doing a “cash out” refinance with less than 40% equity in the home
• Having a second mortgage to subordinate

Each of these traits — historically — increases the likelihood of your default.  Therefore, to hedge, Fannie Mae and Freddie Mac charge flat fees to offset potential future losses.

LLPAs are not discretionary fees; sources of profit or padding.  Nor are they junk fees.  LLPAs are mandatory costs triggered by specific loan characteristics.  There’s no flexibility, either.  If you trigger the guidelines, you pay the fees.

The Fannie Mae Loan-Level Pricing Adjustment chart is as thorough as it is punitive. At least borrowers get to choose how they pay them:

1. LLPAs can be paid as a traditional “closing cost”, due at closing.
2. LLPAs can be built into an interest rate. In general, interest rates increase 0.250% for each 1 percent of loan-level pricing adjustment.

It doesn’t take much to trigger the risk-based pricing of Fannie Mae and Freddie Mac; in fact, a lot of conforming mortgage applicants do trigger the LLPAs.

“Play like a champion today!”

 
Joe Bailey – Loan Officer
O.  (831) 689-8500
C.  (831) 251-5167 

JBailey@JoeBailey.biz