THE REAL AMY
Mostly about Real Estate.
Or me. Or what I'm into.
But entirely real.
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Real OPTIONS | Loan Modification
Reading the latest on the the foreclosure levels in Southern California—particularly Riverside and San Bernardino counties—is distressing for a lot of people. Understandably. The picture looks “bleak” and there are lots of statistics and expert quotes to support that idea. Lots of people are stressed—their dream of home ownership shaken by the reality that their home is underwater. And for many, loss of job, hours, their health or a partner has exacerbated that stress. It can be very overwhelming.
If you’re a homeowner, and like many, you are unable to make your payments—the worst thing you can do is to do nothing. It’s critical to be proactive and look at your options. Some folks are able to work with their lender or through the Home Affordable Modification Program (HAMP) to renegotiate their payment terms. If you would like to know if you qualify for such a modification, please contact your lender or take a look at “Explore Eligibility” section of MakingHomeAffordable.gov.
Loan modifications aren’t the solution for everyone, but they can be if you qualify and if you’d like to stay in your home for the long term. For those who don’t qualify for a loan modification, I’d recommend taking a look at the Home Affordable Foreclosure Alternatives (HAFA) program.
And if the idea of determining your options is also overwhelming, please contact me. I will do what I can to help you understand your options, or refer you to the right place.
Real NEWS | Mortgage Interest Deduction Debate
At first blush—this seemed like a no-brainer to me. Of course Congress should extend the mortgage interest tax deduction (H.Res.25)—isn’t that one of the great tax benefits of home ownership? Then I read Donny Shaw’s take on it, which presents some interesting points. If anything, it made me want to take a closer look.
More on the debate:
“There is no dispute that the deduction benefits higher-income earners more than lower- and middle-income Americans. If you’re in the 35% tax bracket, you get $35 of savings for every $100 of mortgage interest you pay, but if you’re in the 15% tax bracket, you only get $15. So it’s hard to claim that the deduction is targeted at people who are on the fence on the question of buying a home vs. renting.” – Charles Wallace, Daily Finance
“True, everyone from the International Monetary Fund to the Tax Policy Center to the White House fiscal commission have called for the U.S. to cap, redesign or simply get rid of the deduction. The IMF called the mortgage tax break “expensive and regressive.” But this comes up every few years or so, before everyone realizes it’s impossible to hack away at a cherished part of the tax code.” – Shira Ovide, WSJ Deal Journal
Real NEWS | Bright Spots in Foreclosures
OK, so the news is that there are 2.2 million foreclosures in the U.S. But what’s more interesting to me is what’s also being reported:
- sales of foreclosures are increasing
- delinquencies are decreasing (meaning fewer homes will be foreclosed)
- 30-day and 60-day delinquent inventories are approaching pre-crisis levels
Could that suggest some light at the end of the tunnel? Let’s hope so. Regardless, it’s still a great time to buy—before interest rates go up.
Real NEWS | Debate Continues Over Foreclosure Bill SB 729
The sheer number of foreclosures are a massive challenge that is particularly relevant to the Southern California market; legislators continue to go back and forth as to what viable solutions look like (SB 729), but as reported today, Senator Alex Padilla is trying to craft a bill that would help struggling home owners to work towards loan modification by restricting lenders and loan servicers from furthering the foreclosure process without giving the homeowner notification of their decision.
Real NEWS | Proposed Bill to Shorten Short Sales
UPDATED | Latest on this bill is that it has been “referred to the Subcommittee on Financial Institutions and Consumer Credit” as of 5/2/11.
Original Post | My first short sale experience was as a buyer; sure, I had heard the horror stories. But my point of view was that I was looking for the right house—regardless of what type of sale it was. Of course I ended up falling in love with house that was a short sale. 6 months. That’s how long it took for the bank to accept my offer. A lot can happen in 6 months. Or not happen. So, any legislation that would help move along these decisions—I find interesting. Because the “short” in short sale certainly does not refer to how long they take to close.
The proposed bill, H.R.1498: Prompt Decision for Qualification of Short Sale Act of 2011, aims “to require the lender or servicer of a home mortgage, upon a request by the homeowner for a short sale, to make a prompt decision whether to allow the sale.” Wouldn’t it be nice. We’ll see how it shakes out.
For me, Barbara Corcoran is sort of like the Suze Orman of real estate—she calls it like she sees it and doesn’t mince words. Here’s what she describes as the four biggest mistakes sellers make when selling their home: [ 1 ] Don’t overprice [ 2 ] Lighten up your home [ 3 ] Don’t negotiate the sale yourself [ 4 ] Take the first bid seriously.
Real ADVICE | Mistakes for Sellers to Avoid
Real INFO | Short Sale Tips
According to the California Association of Realtors (C.A.R.), less than 3 out of 5 short sale transactions close. By no means are short sales simple, but they are certainly doable if the criteria are met and they are handled the right way. C.A.R. very recently created a site just for short sale information that includes helpful tips for consumers—both buyers and sellers.
New short sale website from California Association of Realtors (C.A.R.)
Real NEWS | HUD Grant for Inland Valley
The governments efforts to stabilize the real estate market are certainly controversial—though whether you agree with them or not—they persist. One of the latest for the Inland Valley is a $1 million grant from the U.S. Department of Housing and Urban Development (HUD); the grant will go towards buying and renovating foreclosed properties in the Inland Empire for resale. Work begins as early as June.
For those who are upside down in their home and do not qualify for loan modifications (through programs like Making Home Affordable) you may qualify for assistance through Home Affordable Foreclosure Alternatives (HAFA). To avoid foreclosure, a short sale or deed in lieu may make sense. It’s important to do your research to find what’s right for you.
Real OPTIONS | HAFA
If you’re currently a homeowner, but can no longer afford to make your payments, you’re not alone. With so many facing this challenge, the Obama administration has created a variety of programs called Making Home Affordable. If your home has drastically fallen in value, you need to restructure your mortgage payments (find out if you’re eligible to do so) or you are facing foreclosure because of unemployment—it’s worth looking into.