Short Sale Guidelines Revised

Guidelines for short sales to help homeowners who need to sell their houses but cannot secure contracts at a high enough price to pay off their mortgages have been revised by the Treasury Department.

The plan was created to aid homeowners whose income or debt is too low to qualify them for a loan modification under the Making Home Affordable program. The plan establishes timetables, a standard process and documents, and cash incentives for participation.

The new guidelines require the following:

• Property be the homeowner's primary residence.
• Homeowner be delinquent on the mortgage or likely to default.
• Loan was made before Jan.1 this year and is less than $729,750.
• Borrowers' total monthly mortgage payment exceeds 31 percent of their before-tax income.

The guidelines are expected to reduce paperwork by requiring mortgage companies to use the financial and hardship documents submitted by borrowers seeking a loan modification. To speed up the approval process, mortgage companies will have to approve short-sale terms, including the minimum listing price, before the house is put on the market. Mortgage companies will be required to offer the program as of April 5, 2010. – Corpus Christi Association of Realtors and acQuire Investments – 361 Realty

12 tips to prevent home foreclosure

1. Protect your credit score.
2. Beware of offers that sound too good to be true – they probably are.
3. Become an educated consumer. Talk to your Texas REALTOR® about predatory lending practices – what they mean and how to keep from being a victim.
4. Don’t buy more house than you can afford right now.
5. Think twice about non-traditional loans, such as interest-only and adjustable-rate mortgages (ARMs). Fixed-rate mortgages are just that – fixed.
6. When purchasing a new home, look beyond the monthly mortgage. Other costs to consider include property taxes, homeowner’s insurance, utilities, maintenance, and, depending on the neighborhood, homeowners’ association fees.
7. Don’t sign a blank document or anything you don’t understand.
8. Know and understand the terms of your mortgage.
9. Don’t let anyone persuade you to “pad” your income to qualify for a loan.
10. If you’re having trouble making your monthly mortgage payment, don’t hide from your lender. Work with your mortgage lender to find out what your options are.
11. Work with your Texas REALTOR® to find a reputable lender and a loan product that works for you.
12. Call the foreclosure prevention hotline (888)995-HOPE (4673) or visit www.995HOPE.org. Sponsored by the non-profit Homeownership Preservation Foundation, these consumer services are free.

Texas Association of REALTORS® and acQuire Investments – 361 Realty

Texas homeowners get a break with home equity loans

Nationwide, predatory lending is a real problem, not only in first mortgages, but also home equity loans. When homeowners obtain home equity loans with bad terms, it can put their homesteads in jeopardy. Consumers see national TV ads stating they can get loans of up to 125 percent of their home’s equity.

These loans strip equity from the property and can make it difficult for homeowners to ever resell. Thankfully, in Texas things are different. In 1997, during the 75th session of the Texas Legislature, the Texas Association of REALTORS® fought hard to pass legislation with more consumer protections than any other home equity lending law in the country. These homeowner protections include:

• 80 percent loan-to-value, preserving at least 20 percent of your equity at all times
• 3 percent cap on lender’s fees, protecting you from loan “flipping”
• Judicial foreclosure, ensuring homeowners have a venue to appeal a foreclosure

The protections in Texas’ home-equity lending law are constitutional, meaning any changes require a two-thirds vote of the legislature and statewide approval by Texas voters. During each legislative session, Texas REALTORS® oppose efforts by some in the lending community who want to repeal these important consumer protections.

Source: Texas Association of REALTORS® and acQuire Investments – 361 Realty

Forget the forecast; look out the window

By MARTY KRAMER, Consumer columnist

The weather forecast I saw last Sunday morning showed clouds giving way to a sunny afternoon in the low 50s. Five hours later, while shivering on the sidelines at a flag football game under overcast skies, I wondered how the meteorologists could have been wrong by 20 degrees. And it made me think of real estate.

You frequently hear economists and financial experts predict with some measure of confidence what will happen to mortgage rates, housing prices, and home sales. They often hit the mark. Sometimes, though, like with the weather, unpredictable factors render a forecast as helpful as a good old stab in the dark.

However, you can remove the guesswork regarding weather or real estate conditions when you observe what’s actually happening now. So, let’s take a look.

Interest rates are about as low as they’ve ever been. That translates into a larger loan for the same monthly payment compared to times with higher rates.

In addition to favorable mortgage rates, the federal government will pay you thousands of dollars to buy a home. Most first-time buyers and many current homeowners qualify for a significant tax credit. To take advantage of the credit, you must have a signed contract by April 30 and close on the transaction by June 30. There’s a real incentive for meeting these deadlines. The tax credit is worth up to $8,000 for first timers and $6,500 for existing homeowners.

You may be wondering whether the tax-credit will be extended. After all, the deadline has been pushed later once already. You may also want to know if interest rates could go down a little more. I can tell you what most experts I’ve heard say to these questions: probably not. But as I pointed out, the forecasters aren’t always right. Rather than focus on predictions, I recommend you take a peak outside right now. Conditions for purchasing a home before the tax credit expires look positively sunny.

Source: Texas Association of REALTORS® and acQuire Investments – 361 Realty