Real Estate Information

There have been proposals for some changes to the FHA loan guidelines that could greatly impact your qualifying for a loan, especially those who are qualifying marginally.

The following changes have been proposed:

First, that down payment of 3.5% be raised to 5%.

Secondly, that interest rates be raised.  Interest rates have been very low due to the efforts of the government to boost the housing market.  According to the California Association of Realtors, a mortgage analyst predicts that by the end of 2010, interest rates could rise to 5.75% to 6%.  

This graph will show you the difference in payment of a $250,000 loan with a 5% interest rate when interest rates increase.*

Some buyers are sitting on the fence waiting for further decline in prices.  It may not be the best thing to do since interest rates have as much effect on the purchase of a home.  As a rule of thumb, a 1% increase in interest rate is equal to approximately 10% change in price.

Note:*This is not intended to be an offer of credit but is an estimate of a possible mortgage based on the lender’s underwriting guidelines.

If you need additional information, do not hesitate to contact me at (909) 376-8615.  I would be happy to answer your questions, discuss and analyze what is best for you.  As a Residential Financial Consultant, I help people understand the tax advantage, financing alternatives and investment aspects of home ownership and what makes now an incredible time to buy.

Elizabeth M. Eugenio, (909) 376-8615

Certified Residential Specialist, Certified Distressed Property Expert,  Residential Finance Consultant, Graduate Realtor Institute

Elizbeth@HomesByLiz.com, www.HomesByLiz.com

Century 21 Superstars

Most homeowners in financial distress are so confused over what is happeninng to them.  Embarrasment about their situation prevents them from getting proper help. Statistics say that 7 out of 10 homeowners who go into foreclosure without any intervention from their lender or from a real estate agent. They fall prey to scammers who take advantage of their situation.

The most common scam we see are the loan modification programs.  Homeowners are asked to pay $3,000 sometimes up to $5,000 upfront fees and nothing happens.  After the money is given, the person disappears or tells the homeowners that they are still waiting to hear back from the bank.  Most end up in foreclosure unless they get the right help.  The best advise we can give you is to contact your lender and explain your hardship.  They are willing to keep you out of foreclosure.  Yes the process takes time and it is not easy but there is nobody better than you to help yourself.  If you feel you need help, contact a HUD approved Counseling Agency.  They do not charge any fees.

Sometimes, a homeowner is approached by so called investors who will pay for their deficiency to help them get out of foreclosure and are asked to sign documents.  DO NOT DEED YOUR PROPERTY to someone nor sign any papers you do not understand. Read it thoroughly and have a knowledgeable party read and explain it to you.  If you have any questions, verify with your lender.

Another type of scam is when the homeowner is asked to sign papers to authorize them to modify the terms of their loan.  Only your lender can modify your loan.  Do not authorize anybody you do not know and have done due diligence in checking the credibility of the person you are giving your authorization to. 

A homeowner is not allowed to short sale their home to their relative who "buys" the home at a much lower price so you can keep the house and make lower payments.  The guise is to continue living in the home and "rent".  This is fraud and punishable by law.

Delinquency rate in America is 8.8%, inspite of loan modification efforts of the government.  Not only are the sub prime loans affected but there have been an increase in delinquency in prime loans due mainly from job losses, medical bills and other factors.  Homeowners need to realize that their situation is not unique and it is nothing to get embarrased about. The sooner they get proper assistance, the better of they are. 

In light of this, let's all join hands in helping those in financial distress get the right help.  We all have a responsibility to offer our assistance in preventing another foreclosure that is so damaging to all of us.  Every foreclosure affects everybody.

Elizabeth M. Eugenio

(909) 376-8615, Century 21 Superstars

Certified Distressed Property Experty, Certified Residential Specialist, Graduate Realtor Institute

DRE# 01126934

The $8.000 tax credit ends midnight of November 30, 2009.  Buyers who have not owned a home for at least 3 years are eligible for the tax credit, subject to income limitation.  However, there is not that much time left.  Considering that finding the right home can take some time, buyers need to take into consideration also that it is now taking two weeks longer than last year to go through with the lending process.

Primary residences are eligible for the federal tax credit and vacation homes do not qualifiy.  Additionally, it has to be an arms-length transaction, meaning, the seller cannot be the buyer's grandparents, parents, child, grandchild or spouse.

The government allows buyers who purchase their home through a federally insured loan to use the credit towards their closing cost or as an additional down payment, instead of waiting for the refund when they file their 2009 taxes.

There is now a demand for homes below $500,000.  We are seeing multiple offers and buyer making offers higher than the listed price.  You will have to resign yourself to the fact that you may have to make several offers before your offer finally gets accepted.  So, act now and get serious with your house hunting. 

Elizabeth M. Eugenio

(909) 376-8615, Email: Elizabeth@HomesByLiz.com

Certified Residential Specialist, Certified Distressed Property Expert, Graduate Realtor Institute

Century 21 Superstars

DRE# 01126934

A number of homeowners decide to let their homes go to foreclosure because they are not familiar with how short sale works.  These are some of the most common misconceptions I hear:

1.  I don’t have money to pay for the commission to sell my home. 

2.  I can’t afford to make the necessary repairs to my home.

3.  I was told that I have to pay taxes and the lender for the deficiency resulting from the sale.

Here are the facts:

1. On a short sale, the lender who holds the loan pay for the deficiency, the commission and all the cost of selling.  Because of this, the sale is subject to the approval of the lender.  The owners do not spend anything on the sale of the home.  All they need to do is to cooperate with the sale and make the house available for showing and to keep he house in good showing condition as much as possible.
2. Sellers do not have to make repairs they cannot afford.  The house is sold in it’s present condition.  They do have a duty to disclose any material facts about the house.  It is highly recommended that they keep the house as neat and clean as possible to get the best price possible to minimize the deficiency.
3. It is strongly advised that sellers seek counsel with their tax accountant regarding tax consequences.  They may also check the IRS website and read the publications regarding the Mortgage Debt Relief Act and Cancellation of Debt at www.IRS.gov or call the IRS tax assistance line for tax questions at (800) 829-1040 in order to fully understand the matter.
   

The consequences of foreclosure is more damaging than a short sale.  Before making the decision to walk away from your home, talk to a qualified real estate professional who has the know how.  Not all agents are knowledgeable when it comes to short sales.  Choose one who has received the proper training in order to get the correct information.

Elizabeth M. Eugenio

(909) 376-8615

Certified Distressed Property Expert, Certified Residential Specialist, Graduate Realtor Institute

Century 21 Superstars

DRE# 01126934

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The IRS has announced increased tax savings for homeowners who take advantage of making energy efficient improvements or installing alternative energy equipment. IRS Commissioner Doug Shulmansaid “People can improve their homes and save money over the long run.”

The recently enacted American Recovery and Reinvestment (ARRA) of 2009 contained several new or expanded tax benefits on expenditures to reduce energy use or create new energy sources.  More information can be found on the Special Recovery section of IRS.gov. For a larger listing of ARRA’s energy-related tax benefits, see Fact Sheet 2009-10.

The hot summer months will soon be here and by making improvements such as adding insulation, energy-efficient exterior windows, and energy-efficient heating and air conditioning systems, ARRA will give a uniform credit of 30 percent of the cost of qualifying improvements up to $1,500.  

For more information, check the IRS webiste or check with your tax accountant for the various credits and incentives provided to homeowners.

Elizabeth M. Eugenio, (909) 376-8615

Certified Residential Specialist, Certified Distressed Property Expert, Graduate Realtor Institute

In 1978, a constitutional ammendment was passed that allows  a temporary reduction in the assessed value of a property when there is a decline in value.  This is called Proposition 8.

Take advantage of this now that property values have declined.  Forms can be downloaded from the county tax assessor.  There is no fee to apply for this.  You will need some information from your tax bill and your opinion of value for  our property.

I will be happy to give you the latest market value of your home if you do not have this information. 

Here are the links for the different counties to download the form:

San Bernardino County: www.sbcounty.gov/assessor/decline.asp

Riverside County: http://riverside.asrclkrec.com/acr/forms/755P-AS3RS0%20Owners%20Request%20for%20Review.pdf

LA. County:

http://assessor.lacounty.gov/extranet/guides/prop8.aspx

There are companies out there sending letter to homeowners and charging a fee from $99 to $179.  There is no advantage to pay somebody to send the application for you.  It is a very simple process and the assessor's office also indicate that you can do this yourself.

If you need any assistance, feel free to contact me.

 Elizabeth M. Eugenio

(909) 376-8615/ Elizabeth@HomesByLiz.com

Certified Distressed Property Expert, Certified Residential Specialist, Graduate Realtor Institute

The economy has caused unbearable stress and financial burden to an increasing number of homeowners.  The numbers continue to grow affecting not only those who took adjustable rate mortgages but also those who have prime mortgages.  The shocking truth, according to Alex Charfen of the Distressed Property Institute. is that 7 out of every 10 homeowner who loose their home have not contacted their lender to get any assistance nor did they try to sell their home.

What is going in the mortgage market today has just begun.  There is a wave of mortgage resets we have not started to see yet.  According to RealtyTrac, a company that sells default data, foreclosure filings rose in February to nearly 300,000, up 6% from the month before.  There is a tsunami of foreclosures that is coming and President Obama’s hotly debated $275 billion housing-relief package alone will not reverse the trend.

Every foreclosure in a neighborhood depreciates the value in the neighborhood by at least 9%.  The bank carries an additional loss of approximately $60,000 for every property that goes into foreclosure against a short sale.  If we want to see better times, we have to join hands with the government to prevent foreclosure to hasten our economic recovery. Reaching out to our friends, neighbors and family who are going through hardship and letting them know that there are options available to avoid foreclosure could prevent another foreclosure.   A lot of times, they feel overwhelmed once they get over the initial denial stage.

If you have a friend in a distress situation, we would be happy to send them a copy of our report on "Options and Solutions for Homeowners in Foreclosure". Educating them about their options lead to better decisions and we will all be helping each other prevent more foreclosure.  

Elizabeth M. Eugenio

Certified Distressed Property Expert

(909) 376-8615

www.StopForeclosureRemedies.com

The Obama administration has created a strategy to get back the economy on track.  In summary, the stability plan has 3 parts:

1.  Create low cost refinancing plan for homeowners who are current on their payments and are suffering from falling home prices.  Historically, in order to refinance, there has to be an 80% value on the house.  The admministration is announcing a new program to help responsible homewoners with conforming loans guaranteed by Fannie Mae or Freddie Mac refinance their loan even if they owe more than 80%.

2. $75 Billion Stability program to help homewoners at risk of foreclosure to help them stay in their home.  The program is not for flippers and speculators.

3.  Increase funding commitment to Freddie Mac and Fannie Mae to maintain more affordable rates. 

Loan modification is now the new buzz word.  While it may not work for everybody, there are other options to avoid foreclosure.  Ask me about the different options. 

Elizabeth M. Eugenio, (909) 376-8615

Elizabeth@HomesByLiz.com

Certified Distressed Property Expert, Certified Residential Specialist, Graduate Realtor Institute, Certified Foreclosure Specialist

When buying a home, the first step is to get yourself pre-approved for a loan.  This should be done before even going out to look at homes.  Why? Because when you get pre-approved for a loan, you will know what price range you qualify for and most important, what monthly payments you will be making.  We find a majority of buyers even if they are qualified for a higher price, put a cap on the monthly payments they want to make so that they have extra money left over for vacations, going out to dinner or doing fun stuff with the family. Besides, when you find your dream home you have a stronger offer when your pre-approval letter is included with your offer, together with the proof of your funds sufficient to close escrow.

Nowadays, we find that the FHA loans are the best loans compared to the conventional loans, for various reasons.  First of all, FHA loans only need a 3.5% downpayment which can come from family members, something that is not allowed in conventional loans.  It is also easier to qualify for FHA loans because FHA insures the loan so lenders are more willing to give loans with lower qualifying requirements, even if you have credit problems such as banckruptcy.  In times of hardship, they have more options to keep you in your home to avoid foreclosure.  

FHA also offers more protection for the buyers.  They make sure that the property appraises for the right value by requiring that their own appraisers be used before approving the loan. They also make sure the condition of the house passes FHA approval.  Make sure you find an approved FHA lender.  If you need help finding a lender, just let me know.  You want to make sure you have a pleasant home buying experience.

Elizabeth M. Eugenio, (909) 376-8615

Certified Distress Property Expert (CDPE), Certified Residential Specialist (CRS), Graduate Realtor Institute (GRI), Certified Foreclosure Specialist (CFS)

Most homewoners in financial distress want to keep their home and are more vulnerable to con artists at a time when they are desperate. The first step in getting help is to contact their lender.  Prior to calling the lender, they should have the following information ready:

• Loan number
• Income information and documentation
• Latest mortgage statement
• Bank statements
• Letter stating the reason for their financial harship

If they wish to hire the help of a professional, extreme caution should be exercised in choosing the person/company, especially if you are asked to pay in advance.  Many homewoners have become victims of companies/individuals who claim to be "foreclosure/mortgage consultants" or "foreclosure rescue agency" and have given money upfront and did not receive the help they need. 

Theee are various government programs that are available without them havng to pay a fee. One of them is the Hope for Homeowners.  Some lenders like Countrywide, CitiMortgage, JP Morgan Chase and IndyMac provide assistance to homeowners whose loan they are holding. 

The Department of Real Estate has issued guidelines on how a Realtor can assist their clients.  If a Notice of Defualt has been recorded on their property, a real estate licensee or company cannot collect an advance fee.  They can get paid after their work is completed. The  Department of Real Estate has listed on their website the real estate brokers who may charge an advaced fee.  The address to go to is http://www.DRE.Ca.gov/mlb_adv_fees_list.html. 

Homeowners who were not able to modify their loan through the free govenment programs find that they were helped by going to other companies and paying a fee.  Exercise due diligence in choosing the right person/company.  They can protect themselves from scams by:

• Know and undestand every document before signing.
• Get promises in writing instead of oral promises
• Pay mortgages directly to your lender
• Never sign over your deed without the advise of your lawyer or financial advisor
• Report suspicious activity to the FTC or your local consumer protection agency.

We hope that this has been good information for you.  If you have further questions, please feel free to email me at: Elizabeth@HomesByLiz.com

Elizabeth M. Eugenio, (909) 376-8615

Certified Distress Property Expert (CDPE), Certified Residential Specialist (CRS), Graduate Realtor Institute (GRI), Certified Foreclosure Specialist (CFS).