Insigniaresidential - FSBO

By having your client sit with a mortgage planner during the formation stages of the settlement strategy you can get an accurate picture of what your client will be able to afford, be it for refinancing the current residence or to purchase a new one. This will have a big impact on the direction of your settlement strategy.

Unfortunately many attorneys do not get involved with the mortgage process because they see it as a matter of course and it is what it is. However, if the divorce attorney takes an active roll in their client’s mortgage and takes the time to understand how it impacts their client’s cash flow and overall net worth they can and will do a better job negotiating a property settlement agreement for their client.

For instance, what if they negotiate a settlement wherein their client retains the house and then they discover that their client can’t afford to keep the house. Selling it changes the dichotomy of the finances which may have tax implications and the settlement that took so long to reach may have to be re-opened? This wastes time and money.

Many times a mortgage planner will discover that the client cannot afford to remain in the current residence and that of course will impact your approach to settlement discussions. A mortgage planner will analyze the income and assets (as you think they might be post divorce) and come up with what your client can afford. Once you know the answer to this you will be in a better position to negotiate for keeping the home or selling it.

There are two other big benefits in starting with a mortgage planner months in advance of the settlement discussions. One benefit is that you can use the information on affordability as a red herring to get something else during the negotiations. The important thing is to “know” the financial impact to your client before you begin settlement discussions. Of course there also may be a big emotional tie to this issue so the sooner you ferret out this issue the better for you and your client.

Another big benefit is to begin with a credit review. The majority of people going through a divorce have their credit destroyed either out of spite or ignorance. By having a mortgage planner run a tri-merged report they will be able to find out if there are any issues with your client’s credit which could dramatically impact the ability to get a new mortgage and of course it will also have an affect on the monthly payments. In addition, by running a credit report you can see if the other spouse has run up any of the credit cards unbeknownst to your client. You will not be able to see if they opened any new cards in their name but any cards with your name attached to them will show up on your report.

As you can see there is a lot to gain in having your client consult with a mortgage planner at the onset of your discussions with your new client. Additional benefits are having an ally to help deliver bad news to your client when they can’t afford to stay in the house that they want to keep for emotional reasons. In summary, form a relationship with a quality mortgage planner you know and trust and use their services to do a better job for your client and make your life easier.

About the Author:  Dave Muti, JD, RMA is the author of Mortgages: What You Need to Know and a Senior Mortgage Planner with Millenium Home Mortgage, LLC located in Parsippany, New Jersey.  Dave can be reached at info@mortgageswhatyouneedtoknow.com.

Considering all the backlash about affordable housing and gentrification in Harlem, this PSA is quite....interesting. I'll let you fill in the blanks with the missing adjectives in the comments section.

via: HarlemWorld

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In an earlier post, Short Sale v Foreclosure, we saw the difference between a short sale and a foreclosure, but there is another option for a distressed  homeowner. This is the Short Payoff. This option makes sense only under special circumstances.

What’s the difference between Short Sale v Short Payoff?

Victorian houses 3

In our current real estate environment, short sales are becoming more common. A short sale occurs when  the lender or investor agrees to accept an amount less than actually owed on the property. The lender sells the property "short." In this case, it's up to the homeowner, usually using a real estate agent, to market and sell the property. The new buyer usually gets a bargain. The previous homeowner gets out from under an unmanageable mortgage by giving up the house.

In order to qualify for a short sale, generally speaking, the homeowner must demonstrate a verifiable long-term hardship rendering him unable to pay the mortgage. These days,  many homeowners, especially those who bought within the last several years or those who refinanced and took big chunks of equity out of their properties, becoming "upside down" in their home loans or owing more than the home is worth. Now, more and more often, these homeowners are also doing short sales.

So far, this doesn't sound like such a bad deal. The house I bought loses value, so I sell it at current market rates and the lender takes the loss. Well, true, but the homeowner no longer has a home. And, the former homeowner will probably be a renter for several years to come as his credit report's FICO score will immediately drop by about 300 points. The newest loan guidelines from Fannie Mae and Freddie Mac specify that after a short sale, a prospective borrower must wait for 2 years to qualify for any  FHA- or government-backed loan.

So, what's the alternative that will NOT damage credit to such a degree?

That option is called a Short Payoff. It also carries some tough restrictions. If the homeowner is upside down by a smallish amount, say $10,000 to $50,000, depending on his  financial perspective, he might try to negotiate a short payoff with his lender.  In this scenario, the lender agrees to release the lien, his interest in the property, allowing it to be  “conveyed” or sold to a new owner.  The lender agrees to accept less than the amount owed on the property to release the lien, thus "short payoff,"   However,  in return, the former homeowner signs a promissory note for the difference or some of the difference agreeing to "pay off " this unsecured line of credit according to the terms of the note.

To do a Short Payoff, the mortgage must be  current, the borrower must have  great credit, and must demonstrate the ability to pay off the debt.  The upside of this situation? The former homeowner keeps his great credit and can purchase another home or anything else he desires.

When is a  Short Payoff appropriate? A homeowner might  request a short payoff when the home has lost value dramatically or even just enough to make it impossible to sell, and he does  not have the ability to pay the large amount to get completely out of the property.

Not all lenders will allow for a Short Payoff; however,  you will never know if you never ask.
Of course, the advantages of short Pay-offs are the borrower are able to move out of the property and get on with his life, there SHOULD receive no negative feedback on the former homeowner's  credit.

If for some  reason down the line, the borrower's  ability to pay changes and cannot pay on the note, the credit ramifications are significantly smaller.

For further clarification of the entire short sale, foreclosure and short payoff differences, I have just posted an E-Book, Should I Short Sale My Home or How To Survive the Worst Real Estate Market in History, available as a free download, on my website. Plus, it appears in Links to the right of this post.

Earlier this week, Turtle Bay Exploration Park in Redding, CA announced that last year the Park brought over $9 million dollars into the Redding economy. Althought the formula was complex, the reality is dollars did flow into Redding as a result of the Turtle Bay Park and ifs fine exhibitions, museum, and Paul Bunyan Camp for children, young and old.

Maybe Tourism should become the #1 industry in Redding, is now the talk. With a nice variety of both economy and upscale hotels, plenty of restaurants, and being so close to both the major lakes in the north state, Whiskeytown Lake and Shasta Lake...why not?

Stay tuned.

Ron Largent, the Largent Team at Keller Williams Realty

www.ronlargent.com     ronlargent@kw.com

Today I am grateful for:

1. The fact that we saw a house today that got my pulse running again. Hooray for renewed possibilities!
2. The fact that my husband is a tradesman, so that when we see a house that needs this and that doing to it, he usually has the skills necessary to do it himself.
3. The fact that when I get a little too comfortable with that and start getting carried away -- "Ooh, we could pull this wall down and put a bathroom here and, oooh, French doors there and..." -- he just lets me rattle on, and doesn't hit me over the head for being such a starry-eyed numpty! Love is patient.

This thursday, President Bush will be visiting Redding, CA to check out the fire situation in the Trinity Mountains to the west, just a few miles west of Redding City Limits. The C-17 arrived yesterday with the 3 Presidential Helicopters and some equipment, as well as the Presidential Advance Team.

The President is scheduled to call on the Fire Center Command post in Anderson and then get a look at the water plane, the Martin Mars Water Bomber which is temporarily stationed at Lake Shasta.

All of Redding will be out at the Airport to welcome the President, in that this is the first time that President Bush has visited Redding.

Thanks,

Ron Largent, Keller Williams Realty  Redding, CA

www.ronlargent.com    ronlargent@kw.com

The process of the Los Angeles real estate rengentrification in downtown is one of the most ambitious endeavors in Los Angeles since the failed underground.

We are talking about trying to bring Los Angelites back to the idea of a "centralized city". Unfortunately, it won't work.

Los Angeles is actually multiple cities, that have grown together. Each city has its own personality, its own professional centers and its own economy. To try to supplant this is near impossible, and foolish.

It would require breaking the thought processes of the millions of citizens who inhabit the grand suburb of Los Angeles, who see it as just that. Good luck. If you want to see what is going on, visit my Los Angeles commercial real estate site.

Ok, so the news doesn’t look so good for the housing market right now what with IndyMac being seized by the government and mortgage lenders Freddie Mac and Fannie Mae’s stock plummeting. But take heart, because real estate always seems to rebound, and in fact, there are areas of the nation that are beginning to see a brighter future.

First you have to keep in mind that just because the housing market in one area is bad, that doesn’t mean it is bad all over. That’s because real estate is a local game. In fact median prices for existing single-family homes in a third of the country's metro areas are actually higher than they were a year ago, according to the National Association of Realtors. Of course you’ll have to do your research, especially when looking for reputable mortgage lenders and real estate appraisers. Be very careful though, because one of the shady practices of some mortgage lenders is coercing real estate appraisers to turn in a report that shows a higher value for a home than the market in those areas really reflects.

You also want to keep in mind that even when the housing market was beginning its bubble, different areas of the nation were booming sooner than others. For example; real estate in Las Vegas and San Diego were two of the first markets to shoot up. That being said, different cities in the country will start rebounding faster than others as well. The point I’m trying to make is this, don’t lose hope just because the housing market in your area still stinks. Again, it may be even more important than ever to find an honest mortgage lender even before you begin looking for your home. Try asking around; word of mouth is the best referral source you’ll find.

With prices of homes starting to fall, you may be thinking this is a good time to get into the housing market. But before you do, ask yourself a few key questions, in order to gage whether or not real estate is rebounding in your area.

First of all, is there a reduction in the supply of homes combined with a spike in sales in your area? If so, this is a good sign that your location is on the way back up the real estate ladder. Try and research the amount of mortgage loan applications mortgage lenders in your area are getting. Again, if it is a lot, or if the number is rising, that’s a good sign. You may want to enlist the aid of an experienced real estate agent for that one, because often times, it can be difficult information to get unless you work in the housing market industry.

Even though falling home prices are a good thing for buyers, knowing when the fall begins to slow down is even better. For information on the sale prices of homes in the housing market in your area you can find quarterly price data for about 150 major metro areas at the Web site of the National Association of Realtors. For monthly figures, ask your agent or local real estate association. Some agents will even provide stats for homes in particular price ranges and zip codes. Another good option is to hire a real estate appraiser. They do research on the sale of real estate in your area, and can tell you what the going rate is. Keep in mind that you’ll want to track these numbers for at least three months in order to feel confident that the housing market is really shifting.

Finally ask yourself this question; is the real estate in the housing market you’re looking in really more affordable? Unless a significant percentage of households in a market can afford to buy homes there, sales won't rise. It's as simple as that. So check your region's affordability level. But don’t price yourself out of the housing market by waiting too long, because experts say that by the time foreclosures peak and start falling, the market will have already bottomed out and turned around. In other words, buyers will have missed the sweet spot.

If you are looking into buying a house right now, do your research, hire a thorough and honest real estate appraiser and real estate agent and ensure you are dealing with a reputable mortgage lender. If you are careful about your purchase and you time it right, you may just get yourself into your dream home.

If you are looking to buy a home, sell a home, refinance a home or find out what your current home is worth, please contact us at Mahler & Associates for all your appraisal needs.

1031 Exchanges are a very secret art in real estate investing, but is among the most valuable reasons to invest in real estate.

It is a legal way to defer capital gains taxes on your real estate investment, and instead roll it over into a new property. There are time limits, but otherwise, it is an incredible way to retain wealth and quickly convert your real estate gains into larger and better properties.

There are also a lot of misconceptions on 1031 exchanges. For one, that you have to transer into "like property", or into the same number or properties, or that you cannot refinance that money out later on. These are all myths, as any accommodator can explain to you.

For more information on 1031 exchanges, please visit our Los Angeles commercial real estate site, and cotact us directly.

Where is the bottom?

Is it just around the corner? Is real estate in a never-ending freefall from which it will never recover? More importantly, how can I tell when we do hit bottom?

These are the multi-billion dollar questions -- how low will real estate go?

Historically, median houses cost 3x the median household incomes of a given area. By that logic, places all over Southern California have another 50% or more to drop.

This isn't completely logical, because of the simple availability of loans. Prices are inflated heavily based on the assumption that as good Americans, you will borrow to buy your home.

It is impossible to tell what is ultimately going to fix everything, but fortunately, we have an easy indicator.

Real estate has historically had "sticky prices" in its downturns. What it means is that at prices drop, and increasing number of people stay put, and do not sell until the real estate market recoups. What this causes is, instead of a natural sine curve that dips down, is an protracted period of relatively flat prices. How long? Well, the crisis of the late 80's had a price plateau for 10 years. And this boom was even larger.

So when are we at bottom? When the market has been flat for at least 6 months -- that is when we will again have stability. But don't be in a major hurry to buy for appreciation: because your hold-out, along with everyone else, will be quite long.

For Los Angeles commercial real estate agents, visit our website.