Short sale rules are changing all the time. Here are some new tidbits that may be of interest to you:
1) Effective June 2012, lenders must provide a response within 30 days of receiving a short sale offer if the loan is backed by Freddie Mac or Fannie Mae, or is subject to the Home Affordable Foreclosure Alternatives Act (HAFA). Also, those lenders must make a final decision within 60 days.
2) HAFA is no longer limited to owner-occupied homes. Certain investment properties may qualify under HAFA as well.
3) Homeowners who are in the military, and need to move quickly as a result of receiving new orders, can qualify for short sale assistance automatically if their loans are backed by Fannie Mae or Freddie Mac, and if they owe more than their home is worth.
Friday, November 30, 2012
Wednesday, November 28, 2012
Can I buy another house if I have been foreclosed?
Can you buy another home if you have gone through the foreclosure or short sale process? Well, it's not going to be easy, especially if you need financing. But the Federal Housing Administration has some programs that could help you out. You could qualify for an FHA loan if you meet various criteria. For example:
1) It has been at least three years since you have owned any real estate that was foreclosed (including regular foreclosures and deed-in-lieu transactions).
2) You did a short sale, but you were current in your mortgage payments for the 12 months leading up to your short sale.
3) You did a short sale, and you were current on all installment payments (i.e. credit cards, etc.) for the 12 months leading up to your short sale.
On the other hand, you would be ineligible for an FHA loan if you fall in one of the following categories:
A) You did a short sale only to take advantage of the real estate market, and/or bought property nearby at a reduced price.
B) It has not been three years since you have had real estate that went through the foreclosure or deed-in-lieu of foreclosure process, unless you have significantly improved your credit since the foreclosure and the foreclosure was caused by certain circumstances beyond your control, such as the death or illness of one of the primary wage-earners involved. Failure to sell the real estate, divorce, and relocation, however, are not enough to get you an FHA loan.
C) You were not current on your mortgage payments for at least 12 months before you did a short sale, unless that was due to the death or illness of one of the primary wage-earners involved.
So all is not lost. Conventional financing, much of which is backed by Fannie Mae and Freddie Mac, may not be an option for you. You would have to wait 7 years after your foreclosure to qualify. But an FHA loan may be available to you in just 3 years. If you have been through, or are going through, the short sale or foreclosure process, be optimistic! You could be a homeowner again soon!
1) It has been at least three years since you have owned any real estate that was foreclosed (including regular foreclosures and deed-in-lieu transactions).
2) You did a short sale, but you were current in your mortgage payments for the 12 months leading up to your short sale.
3) You did a short sale, and you were current on all installment payments (i.e. credit cards, etc.) for the 12 months leading up to your short sale.
On the other hand, you would be ineligible for an FHA loan if you fall in one of the following categories:
A) You did a short sale only to take advantage of the real estate market, and/or bought property nearby at a reduced price.
B) It has not been three years since you have had real estate that went through the foreclosure or deed-in-lieu of foreclosure process, unless you have significantly improved your credit since the foreclosure and the foreclosure was caused by certain circumstances beyond your control, such as the death or illness of one of the primary wage-earners involved. Failure to sell the real estate, divorce, and relocation, however, are not enough to get you an FHA loan.
C) You were not current on your mortgage payments for at least 12 months before you did a short sale, unless that was due to the death or illness of one of the primary wage-earners involved.
So all is not lost. Conventional financing, much of which is backed by Fannie Mae and Freddie Mac, may not be an option for you. You would have to wait 7 years after your foreclosure to qualify. But an FHA loan may be available to you in just 3 years. If you have been through, or are going through, the short sale or foreclosure process, be optimistic! You could be a homeowner again soon!
Saturday, November 17, 2012
The Benefits of Having a Survey
Usually, when I represent someone purchasing commercial property, an apartment building, or a single-family home, I don't have to worry about ordering a survey. That's the seller's job. But with more and more of my clients purchasing real estate that has been foreclosed directly from the bank, I find myself advising my clients to obtain surveys before closing. Why? Many bank-owners of foreclosed property don't provide surveys as part of their agreement with the buyer. As a result, something that the buyer did not anticipate having to pay for becomes an additional expense. Surveys range in price from a few hundred dollars for residential property to thousands of dollars for large parcels of commercial property.
But really, you should get that survey. Why? Here are a few reasons:
1) You may not be able to purchase the property without a survey even if you are willing to. Many lenders require a survey as a condition of financing.
2) Having a survey gets you extended coverage on title. This is a little bit more comprehensive and stronger form of title coverage than you would get otherwise.
3) There may be an encroachment or other serious issue with the layout or location of fixed structures on the property. It's better to know now than find out later.
4) You may find the property lines are entirely different from what you thought they were. That apple tree you thought was yours? Surprise, it belong to your neighbor, and so does that whole hedge. Again, it's better to know now than to find out later.
5) Sometimes surveys are needed when you apply for a tax appeal, especially if you believe you are being assessed for property that is not yours.
6) If you intend to subdivide the real estate you are purchasing, you will need a survey to submit as part of the subdivision process.
But really, you should get that survey. Why? Here are a few reasons:
1) You may not be able to purchase the property without a survey even if you are willing to. Many lenders require a survey as a condition of financing.
2) Having a survey gets you extended coverage on title. This is a little bit more comprehensive and stronger form of title coverage than you would get otherwise.
3) There may be an encroachment or other serious issue with the layout or location of fixed structures on the property. It's better to know now than find out later.
4) You may find the property lines are entirely different from what you thought they were. That apple tree you thought was yours? Surprise, it belong to your neighbor, and so does that whole hedge. Again, it's better to know now than to find out later.
5) Sometimes surveys are needed when you apply for a tax appeal, especially if you believe you are being assessed for property that is not yours.
6) If you intend to subdivide the real estate you are purchasing, you will need a survey to submit as part of the subdivision process.
Saturday, November 10, 2012
Revised FHA Condominium Rules
It's become harder and harder to find a condo that is eligible for FHA financing. Just when everything seems okay, the buyer finds out the association doesn't have enough reserves. Or perhaps, the association has too many commercial units, like a shopping center on the first floor. Or maybe, too may homeowners in the association have been hit hard and are no longer making assessment payments. When these things happen, the unit becomes ineligible for FHA financing, sometimes dashing the buyer's -- and the seller's -- dreams of a purchase or sale.
The good news is, the FHA finally revised its rules for condominium financing, making it a little bit easier to get approved for an FHA loan. For example:
1) If you are buying a residential unit in a condominium building where up to 50% of the space is allocated for commercial use, you can still qualify. Previously, the cutoff was 25%.
2) A single investor can now own up to 50% of the units in the condominium building, and other units will still be eligible for FHA financing. Previously, if any one investor owned more than 10% of the units in a building, the other units could not qualify for FHA financing.
3) You can still be eligible for an FHA loan if up to 15% of the units in the building are no more than 60 days delinquent on assessment payments. This is an increase from 30 days.
So if there was previously a condominium you had your heart set on, but it didn't qualify for FHA financing, you may want to go back and see if you can get that loan now!
The good news is, the FHA finally revised its rules for condominium financing, making it a little bit easier to get approved for an FHA loan. For example:
1) If you are buying a residential unit in a condominium building where up to 50% of the space is allocated for commercial use, you can still qualify. Previously, the cutoff was 25%.
2) A single investor can now own up to 50% of the units in the condominium building, and other units will still be eligible for FHA financing. Previously, if any one investor owned more than 10% of the units in a building, the other units could not qualify for FHA financing.
3) You can still be eligible for an FHA loan if up to 15% of the units in the building are no more than 60 days delinquent on assessment payments. This is an increase from 30 days.
So if there was previously a condominium you had your heart set on, but it didn't qualify for FHA financing, you may want to go back and see if you can get that loan now!
Subscribe to:
Posts (Atom)
