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Short Sales: A Viable Alternative to Foreclosure

Short Sales: A Viable Alternative to ForeclosureShort Sales

By John Voket

One of the things we hope to see less of in 2012 is short sales.

This brings me to a blog by Bion Grady, (bionsellshomes.com) who specializes in loan modification assistance and short sales in Paulding County, Ga. Grady says if the only alternative for distressed homeowners is to walk away from their property, a short sale may still be a viable alternative for a number of reasons .

Grady advises homeowners to remember these four things:

1. Debt Eraser. The upside down debt is erased in most cases. If you are selling because of a financial hardship, then the upside down debt will be automatically erased in most cases. If your loan is owned or insured by Fannie Mae, Freddie Mac, FHA, and/or VA, and you are short selling because of a financial hardship, their policies state that your debt will be erased.

2. Faster Rebound. You are eligible to buy another home much sooner compared to a foreclosure. The most common loan program, Fannie Mae, stipulates that you can buy another home under their program in two years. FHA, a popular low down payment loan program stipulates that you can qualify for an FHA loan within three years.

3. No Cost to You. According to Grady, all of the expenses are paid for by your lender. That includes the title insurance, any county taxes or fees on the sale, attorney fees, and the real estate agent. If the lender foreclosed on the house and then tried to sell it, they would have to pay all the costs.

4. Less Credit Damage. Upon completion of the short sale, Grady says your credit score will drop between 50 and 100 points. However, it will rebound fairly quickly, and you will have a lower debt to income ratio, which will boost your credit. In addition, anything and everything bad on your credit can be fixed through the dispute process.

I hope this information is useful to you. Please contact me for all your South Florida real estate needs at (305) 329-4929 or solovay.m@ewm.com.

Written by Michael Solovay | Discussion: No Comments »

Survey Shows Consumer Attitudes More Positive

Survey Shows Consumer Attitudes More Positiveconsumer confidence

A new survey shows that Americans’ concerns about key economic and housing issues are beginning to subside.

Fannie Mae’s February 2012 National Housing Survey shows that consumer attitudes have stabilized across most indicators—including personal finances, housing, and employment—compared to late summer and fall of 2011. The survey polls 1,003 Americans via telephone interview to assess their attitudes toward owning and renting a home, mortgage rates, homeownership distress, the economy, household finances, and overall consumer confidence. Homeowners and renters are asked more than 100 questions used to track attitudinal shifts.

The survey shows that the most dramatic change revolves around the economy—35 percent of Americans now feel that the economy is on the right track, up 19 percentage points since November, and 57 percent think the economy is on the wrong track, down 18 percentage points since November.

Americans’ confidence about personal financial situations, household income, and household expenses, as well as attitudes about homeownership and renting is holding at steady levels. Also important to note, Americans’ concerns about losing their job in the next 12 months has stabilized since the late fall, with 76 percent of Americans saying they are not concerned in February 2012, compared to 70 percent in November 2011. Fannie Mae believes that the recent pick-up in the pace of hiring over the past few months is directly responsible for alleviating consumer concerns about unemployment.

Here are some additional highlights from this important survey:

  • Only 12 percent of respondents believe that their personal financial situation will worsen in the next 12 months, a 3 percentage point drop from January and the lowest value in over a year.
  • 33 percent say their expenses have increased significantly over the past 12 months, a 3 percentage point decrease from last month and the lowest level in the past 12 months.
  • 28 percent of respondents expect home prices to increase over the next 12 months (consistent with last month), while 15 percent say they expect home prices to decline (down 1 percentage point since last month).
  • 10 percent of Americans say that mortgage rates will go down in the next 12 months, a 2 percentage point increase from last month.
  • The percentage of respondents who say it is a good time to sell rose by 3 percentage points to 13 percent, the highest level in over a year.
  • 45 percent of respondents think that home rental prices will go up, a 2 percentage point increase from last month.

Let me assist you with all your South Florida real estate needs.  Contact me at (305) 329-4929 or solovay.m@ewm.com.

Written by Michael Solovay | Discussion: No Comments »

Will Mortgage Rates Go Down?

Federal Reserve Makes An Annoucement:  Mortgage Rates fall below 5%

Federal ReserveThe Fed just announced that they will buy another$300 billion in long-term government bonds and $750 billion in mortgage backed securities guaranteed by Fannie Mae and Freddie Mac.

Will this cause a big drop in mortgage rates?  Not necessarily, although analysts expect rates will decrease 0.25 to 0.5 percentage points.  The Fed’s actions create a demand for mortgage backed securities which should most likely keep home loan rates from increasing for the foreseeable future.  This is good news for home buyers who realize that now is the time to buy and want to take advantage of the bargain prices that are out there.  However, based on what the Fed has been buying when they started their purchasing program at the beginning of this year, their actions may keep a lid on rates, but may not push them much lower.

By the close of business on March 19, the 30-year conforming FRM fell to 4.94%, according to HSH Associates.  With rates this low and so many bargains out there, what is keeping you from buying?  Don’t wait until prices start to rise.  Take advantage of today’s low interest rates.

Contact me if you have any questions at solovay.m@ewm.com

Written by Michael Solovay | Discussion: No Comments »

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