A Common Meridian, Nampa & Boise Loan Mod Mistake

Meridian, Nampa & Boise ID – The Stop Foreclosure Institute recently received a question from a person attempting a loan modification on their home. Here was their question.

“I have a first mortgage for $197,000. That was my original loan from when I bought my home. I borrowed $250,000 on a second mortgage for a remodel.

My house has dropped dramatically in value. It used to be worth over $500,000, but not the value is more like $250,000.

With the recent decrease in value, I would like to get a modification on my second mortgage. I would like to get that reduced to $250,000.”

Get my Free, Step By Step Loan Modification Guide by clicking here.

We talked to this fellow and found out some other information. He mentioned that he was having a hard time paying the second mortgage.

He did mention that he was saving up $7,000 to settle a $25,000 debt on a credit card. That was the shocker. Why would you pay $7,000 to a credit card rather than paying your mortgage?

That will cover his second mortgage payments for almost a year. He thought it was the best opportunity he would ever have to avoid repaying the $25,000.

This was when I told him about a client we helped with a short sale. This seller had been chased down by a credit card judgment for over 3 years. However, they couldn’t levy her bank account or garnish her wages. Why not?

She found a state law that forbids garnishments when a person is a head of household. This is good news for the guy who wants to pay $7,000 to the unsecured credit card.

How does that impact his loan modification? It doesn’t. He still has to go thru the excitement of negotiating that. But, it does free up his finances dramatically.

Here is the bottom line. You don’t always have to choose between keeping your house and getting your wages garnished. If you are considering a loan modification, then first look at what other debts you can stop paying. Thinking about a loan modification?

Our Meridian, Nampa & Boise loan modification guide will show you how to reduce your mortgage payment, keep your home, and get back on your feet. Send me an e-mail at kecia@homesid.com to request a Free Copy.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at 208-724-4661

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thanks for reading this, Kecia Mortenson.

Kecia is a Real Estate Agent at Keller Williams Realty Boise. Meridian, Nampa & Boise Short Sales Realtor:

Phone: 208-724-4661. kecia@homesid.com.

Solution Based Real Estate

View My homes for sale at ida-homes.com.

Mike Heckenlaible specializes in loan modification assistance and short sales in Meridian Idaho. Meridian Loan Modification Help, Meridian Short Sales. Meridian Short Sale Realtor. Nampa ID Loan Modification Help, Nampa ID Short Sales. Nampa ID Short Sale Realtor. Boise ID Loan Modification Help, Boise ID Short Sales. Boise ID Short Sale Realtor. Meridian, Nampa & Boise ID Short Sales. Meridian, Nampa & Boise Realtor.

Meridian, Nampa & Boise Loan Mod Help: How will a loan modification affect my credit score?

Meridian, Nampa & Boise ID – How do foreclosures, loan modifications or short sales affect a credit score? Your credit score will be affected by late mortgage payments and a short sale.

However, there are 2 things that are considered horrible on your credit report. Those 2 are items are foreclosure and bankruptcy.

Get my Free, Step By Step Loan Modification Guide by clicking here.

A foreclosure or bankruptcy will almost immediately lower a credit score by around 100 to 120 points. (The number is not hard and fast – it all depends upon what the score was before the foreclosure, and other factors that the credit bureaus don’t like to share.)

The way that they write the algorithm, a foreclosure will keep on pushing your score down for the next 2 years! A foreclosure can also stay on a credit report for 7 years.

Short sales are different from a foreclosure. Short sales and loan modifications by themselves do not hurt a credit score (depending on how they are reported.) It is the missed payments that ding your credit report.

How a short sale is coded/reported to the credit reporting bureau does make a difference in the affect it has on your score. It could be reported as a charge-off, a 120 day late payment, or a settled account.

Any of these are dings on the credit report, averaging 100 points. Here is the good news. The way they do the algorithm, it will damage your score for a shorter length of time than the 2 years a foreclosure does.

How a short sale is reported to the credit bureaus is something that can be negotiated as part of the process of the sales negotiations. Good negotiators can have a positive impact here.

But, in the end, the credit score should not be the first thing to consider when facing the decision to short sale a home.

You need to look at what is best for your family financially. The credit score is secondary to that.

Get advice from a trusted source, and then make an informed decision. Thinking about a loan modification?

Our Meridian, Nampa & Boise loan modification guide will show you how to reduce your mortgage payment, keep your home, and get back on your feet. Send me an e-mail at kecia@homesid.com to request a Free Copy.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at 208-724-4661

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thanks for reading this, Kecia Mortenson.

Kecia is a Real Estate Agent at Keller Williams Realty Boise. Meridian, Nampa & Boise Short Sales Realtor:

Phone: 208-724-4661. kecia@homesid.com.

Solution Based Real Estate

View My homes for sale at ida-homes.com.

Mike Heckenlaible specializes in loan modification assistance and short sales in Meridian Idaho. Meridian Loan Modification Help, Meridian Short Sales. Meridian Short Sale Realtor. Nampa ID Loan Modification Help, Nampa ID Short Sales. Nampa ID Short Sale Realtor. Boise ID Loan Modification Help, Boise ID Short Sales. Boise ID Short Sale Realtor. Meridian, Nampa & Boise ID Short Sales. Meridian, Nampa & Boise Realtor.

Pending Homes Sales Soar!

Pending home sales climbed thanks to first time home buyers for the sixth consecutive month in July, according to the National Association of Realtors. The groups “Pending Home Sales Index” jumped 3.2 percent in July to 97.6. The index is 12 percent higher than in July of 2008.

“The recovery is broad-based across many parts of the country,” says Lawrence Yun, chief economist for the association. “Housing affordability has been at record highs this year with the added stimulus of a first-time-buyer tax credit.”

The index was up in the South and West but slightly declined in the Midwest and Northeast. The NAR’s Housing Affordability Index for July was 158.5, up 36 points year over year. Yun says home sales will likely drop in next year’s first quarter is the first time home buyers tax credit deadline is not extended.

“However, the fundamentals of the housing market and the economy are trending up, and we expect home sales to generally pick up in the second quarter of 2010,” he says.

Existing home sales figures for August will be released September 24th and the Pending Home Sales Index for the month will be released October 1st the association says.

There is no better time to buy a new home in Idaho! First Time Home Buyer Tax Credits won’t be around for long; prices and rates are at historic lows! Seize the opportunity of a lifetime – invest in your future; invest in real estate in Idaho with Kecia & Co. !

Home Purchases are Up!

Purchases of new homes in Idaho and the US jumped more than forecast, helping demonstrate the first signs of rebound from the worst recession since the 1930′s. The window of historically low mortgage rates and home prices is narrowing; while that is good news for the economy it may signify that the best time in years to purchase a home in Idaho may soon be history.

Home sales increased 9.6 percent in July, the most in four years, to a 433,000 annual pace according to figures from the Commerce Department. Other reports from the department indicate bookings for durable goods climbed 4.9 percent, showing a rippling effect throughout the economy as a whole.

Government efforts to thaw credit markets and revive demand are stemming the biggest housing slump since the Great Depression. Reports on orders signal business investments picking up and this has triggered economists at Morgan Stanley to lift growth estimates for this quarter.

“We might be seeing a broadening-out of the economic recovery,” said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “That makes growth more sustainable. The stimulus is providing a floor.”

Many economists forecast new home sales will rise to a 390,000 rate, according to the median of 71 projections in a Bloomberg News survey.
July’s sales pace was the highest in 10 months and exceeded all estimates, which ranged from 365,000 to 420,000.

Lower Home Prices

Median home prices of new homes decreased 12 percent to $210,100 from $237,300 in July 2008. Sales of new homes were down 13 percent from a year earlier. This jump in sales was led by a 32 percent surge in the Northeast. Home purchases increased 16 percent in the South and 1 percent in the West.

Home builders had 271,000 houses on the market last month, down 35 percent from July 2008 and the fewest since March 1993. It would take 7.5 months to sell all homes at the current sales pace, the shortest time since April 2007. With home sales responding to policy efforts such as an $8,000 tax credit for first-time buyers; the Fed keeping its benchmark interest rate near zero and central bank purchases of mortgage-backed securities to free up funding for housing.

“We’re likely not to experience a lot of downside from here,” Pulte Homes Inc. Chief Executive Officer Richard Dugas said. “It could remain a ‘tough environment for a while…’” he added.

Some economists warn that the magnitude of the gains in housing is not likely to be maintained after the first-time buyer credit expires at the end of November.

“I think we will see a drop-off in sales, the question is how large the drop will be,” Patrick Newport, an economist at IHS Global Insight, said in an interview on Bloomberg Television. “I don’t think anyone has a good handle on it.”

Don’t miss out on some of the best real estate market conditions in years! There is no better time to invest in real estate by purchasing a home in Idaho. Contact Kecia & Co. today to get in on this unique time in history to invest in your future through the purchase of a new home in Idaho!

$8,000 Home Buyer Tax Credit as a Down Payment

Will Uncle Sam Make My Down Payment?
HUD has plans to modify the $8,000 tax credit rules to allow first time homebuyers to get instant down payment assistance.

Idaho home prices are lower than ever, affordability is at a record high, and the Idaho real estate market is rife with distressed properties just waiting for buyers.

The only obstacle for many first time home buyers? Cash for down payments. On average first time buyers have only saved enough money to cover about 4% of the purchase price according to the National Association of Realtors.

As part of the stimulus package, Congress created a refundable first time homebyer tax credit in hope of helping hesitant buyers to take the big step of buying their first home. However, buyers couldn’t collect the $8,000 credit until tax time rather than at closing time when it is needed most.

Thanks to the U.S. Department of Housing and Urban Development that may change! The agency is working on a new plan that will allow Federal Housing Authority approved lenders to provider these new home buyers with the tax credit up front.

“We all want to enable FHA consumers to access the tax credit funds when they close on their home loans so that the cash can be used as a down payment,” said Shaun Donovan, HUD secretary, in a speech last Tuesday before the National Association of Realtors.

While Donovan did not reveal many details, it is reported that the plan could be modeled after programs in Colorado, Missouri, New Jersey, Pennsylvania, Washington, and Tennessee. In order to get cash flowing quickly into their housing markets, these states have created “bridge loans”, allowing home buyers to borrow against the $8,000 credit and then repay it with their tax refunds.

Missouri was the first state to launch such a plan, by rolling out its Missouri Housing Development Commission Tax Credit Advance Loan program on January 14, taking the initiative a full month before Congress approved the stimulus package. Since that time, Missouri has approved over 300 applications for borrowers and closed on 128 of them.

The typical first time home buyer can use the program to augment their down payment when buying their new home.

For instance:

A couple purchases a four-bedroom, three-bath split-level home for $150,000, putting about 6% down. Much of that $9,000 will come from the loan program, which they tapped so they wouldn’t have to drain their reserves. This allows the new home buyers to use the money they might have been saving up for a down payment to help pay for moving costs, or for items needed in their new home.

At closing, these home buyers, like all buyers in the program, would sign for their first mortgage, plus a second mortgage issued by the state. The second note is good for 6% of the price of the home, up to $6,750; while there is a set-up fee, no interest is charged if the debt is repaid by June 2010.

You may notice that in Missouri, borrowers can only access $6,750 of the $8,000 credit for down payments; there is good reason for this. “We wanted them to have a cushion below that $8,000 in case other tax liabilities show up,” said Greg Spurgeon, of the Missouri Housing Development Commission.

Should borrowers be unable to pay off the note, it then becomes a 10-year fixed-rate mortgage with an interest rate one-half percentage point above that of their first mortgages. For example, borrowers paying 6% on their first mortgages would be charged 6.5% on the second.

So far a significant protion of the participating home buyers have repaid their loans; most of the others are expected to do so before the deadline, with the penalty of additional monthly costs added to their house payments as good incentive.

Have questions about the first time home buyers tax credit? There has never been a better time to buy a new home in Idaho. The Idaho real estate market is flooded with attractive, affordable homes, and with these extra plans and credits it is truly a home buyers market. Contact Kecia & Co to find out what experienced Idaho Realtors can do to help you find your new home!

Avoid Foreclosure Pitfalls!

Home inspectors are reporting there are abundant opportunities for qualified homebuyers in the Idaho real estate market, triggered by a 28% rise in foreclosure activity. While the Presidents $75 billion loan modification and refinancing of the Homeowner Affordability and Stability Plan may help many struggling homeowners, it won’t save all of those facing foreclosure, resulting in prime deals for qualified Idaho Home Buyers — especially First Time Idaho Home Buyers!

While there are a number of great deals to be had in this property rich environment it is important to remember that proper preparation is KEY to successfully making the most of the Idaho foreclosure market. Working through the tangled web of foreclosures will be less difficult for those consumers who educate themselves about the process, and who are working with a skilled Idaho Real Estate Agent.

Properties in different stages of foreclosure can not only represent great opportunity, but also danger for the unassuming buyer. Lower asking prices are an instant draw of course but the buyers need to do their homework and be aware that the property may have hidden or unique challenges in owning it – ranging from abuse, neglect, or poor maintenance on the part of the previous owner, to simply having disagreeable neighbors. Potential Home Buyers have to do more than grab the first thing they can afford – they need to look into the deeper, down the road, costs involved in owning the home they have found.

Just because a foreclosure is a great buy doesn’t mean it is going to be completely hassle-free, home buyers need to be educated on the property itself as well as the foreclosure process or they can end up making poor investment decisions. “Buyers must take proper precautions to ensure they are making informed real estate decisions, and are aware of property conditions that can greatly affect the home’s long-term value,” said Kathleen Kuhn, president of HouseMaster, a nation-wide home inspection company.

A home inspection by a qualified home inspector can provide buyers with a working education on the home they have in mind; can help avoid potential pitfalls. Educating yourself about the home in question, and the foreclosure process, is key when buying a foreclosed property as it not only helps the buyer understand their options but also helps to avoid making potentially devastating financial mistakes.

HouseMaster, a leader in home inspection, states that there are five main physical conditions that are most often found in a foreclosed property:

Moisture-related problems
Defective Gaskets, valves or hoses
Vandalsim, especially if the home has been vacant
Insect or rodent infestations
Blocked, or damanged waste or sewer functions

Don’t let these things scare you, let them prepare you! There has never been a better time to buy homes in Idaho, or invest in real estate; we are not likely to see a real estate buyers market like this again! Amidst this great opportunity however, there can be some risk if you go in unprepared – don’t let lack of understanding be your downfall. Get educated on Foreclosures in Idaho, as well as Idaho Real Estate itself by working with an experienced team of Idaho Realtors like Kecia & Co. – they have the skills and knowledge you need to make your next real estate transaction a roaring success!

The Silver Lining on Today’s Real Estate Market

These days bad economic news seems to be happening so fast that often we overlook some of the more positive trends that may be going on like amazingly low mortgage rates, record-setting affordability, new tax credits,and the exploding home buyers market.

Let’s not kid ourselves, these economic times are among some of the most difficult that have been seen in generations. Consumer confidence is down and that effects everything from local businesses, new development, and of course home buying. Coupled with rising unemployment and it’s just a simple fact that someone won’t be as likely to consider buying a new home if they are afraid of losing their job.

Despite all of those factors, however, there are some genuinely positive developments going on out there.

Housing Affordability
This very well may be what turns the real estate ball around thanks to the recent growing ability of ordinary consumers to afford to buy a home with their existing income – in part largely due to lower than ever mortgage rates. Right now the home affordability equation is at its most favorable point in decades.

In the Idaho real estate market and across the country, more households with median incomes can now afford to buy homes than at any time since the 70′s, when the National Association of Realtors first began its “Housing Affordability Index.” This is doubtlessly thanks in part to rising household incomes and the continuing decline in the prices at which housing is being sold – the Housing Affordability Index currently stands at a record high!

Real Estate Market Turn Around
Nearly every economist you ask will tell you that the biggest obstacle standing in the way of a full real estate recovery is the current surplus of unsold houses in the inventory of many local and national real estate markets. Thankfully, inventories are steadily declining over these past couple of months, and have dropped another 3 percent to the lowest level in more than two years.

The Light is Just Around the Corner!
The home buyers market that has been created over the last year by these trying economic times is actually helping trim down the surplus of unsold houses permeating real estate markets, which may be the harbinger of more stable home prices in the months to come. It is also cutting out alot of the small time real estate agents and smaller real estate offices that could not bear the strain of these thin times, making for a stronger Realtor base in general.

Home Owner Tax Credits
The above factors combined with Congress’s new $8,000 nonrepayable tax credit for new home buyers, who haven’t bought a house during the past three years, and there is the potential to pull hundreds of thousands of potential home buyers into the healing real estate market in the remainder of 2009.

Take these turbulent times in with a deep breath, and know that there is hope just around the corner for the real estate market as a whole – and in the meantime it very well may be the best time in a very long while to get your piece of real estate, as a home buyers market like the one this year is not one likely to be seen again.

Ready to make the move? Contact your Idaho Real Estate Expert Kecia Mortenson and see how her team of Idaho Realtors can help you find homes in Idaho that meet your needs and fulfill your dreams…

What is a Short Sale?

Well, many of you have heard this term thrown around the Idaho real estate industry and probably have your own idea of what it means. When my clients ask me about short sales, they, almost 100% of the time, think that it means the sale of a home will go fast. Ironically, this couldn’t be farther from the truth. “Short sales” actually takes much longer to close escrow, usually a minimum of 30 days, but more likely 60-90 days.

The term “short sale” is used in the real estate industry to refer to the sale of a property where the balance owed to the bank is more than what the home can sell for.
In these sales, one must get approval from the bank to sell it for less than what is owed (hence, short) and the bank agrees to the loss (short).

This is a very long process taking 30- 90 days just to get an answer from the bank as to if they will agree to sell at a price that has been offered by a home buyer. Many or most of these homes are listed by a Realtor in their MLS databases and are not guaranteed to be accepted by the bank at the list price.

So once a buyer comes along and makes an offer, this is when the fun begins (the process starts). Most banks will not even consider if they will take a loss until the property is listed and has an offer to purchase presented to them. At this point there is a long process of going through several customer service reps at the bank until the file is assigned to one of their “negotiators” or “mitigators”. This part usually takes 3-6 weeks. If the Realtor has done a good job, they usually have the prep work completed before an offer comes in, this being a financial analysis and “hardship letter” from the owners. If not, add another 2-3 weeks to the already long process.

Once assigned to a mitigator, the bank will order an appraisal or a BPO (broker’s price opinion) to see what the property is really worth. Once received by the bank, the negotiator will accept or counter the offer on the table. This part of the process takes another 3-6 weeks.

And, as if this isn’t long or complicated enough, sometimes there is a  2nd mortgage on the home and this same long process has to happen twice…once with the first mortgage, once with the 2nd. And both banks have to agree on the offer, sometimes competing with one another on how much loss each will take, with the Realtor being the go-between, trying to get them to agree. Wow, this is when it really gets fun!

I know this seems like an unusually long time, but keep in mind that these Mitigators only make about $25000-$30,000 a year. They sit in a cubicle all day long with a stack of short sale file requests on their desks, (as many as 300 at any one time) and have to listen to homeowners’ sad stories and Realtors continually calling and checking on the status of the file.

It’s really quite a miserable job and the turnover is high.  As well, it is a lot of extra work for a Realtor and requires much patience from client buyers.

Short sales can be really great buys, but my suggestion if you want to buy one…make sure you have plenty of time before you have to move, have a lot of patience and most importantly, don’t get your heart set on the home because even though they have a fairly high success rate of getting accepted, many times there are competing offers bumping you out of first position. (This part is really dependent upon how the Realtor handles it.) There are some very important questions, we as Realtors, know to ask the listing Realtors to see how quickly and smoothly the process will go because, trust me when I say, not all short sales are created equal!

Why Overpricing Can Be Dangerous

You will lose the excitement that a new listing generates. REALTORS are working with buyers who have seen what is currently on the market and are waiting for something new to be listed. Therefore, the most activity will take place in the first 30 days of a listing. Your home will probably receive its highest and best offers during this time. After that initial period, most of the people to look at your home will be new buyers in the marketplace just shopping and starting to kick tires, undecided if they are ready to buy.

You can lose the most qualified prospects! Buyers will not just “make an offer” because they probably will never see your property. They will view the properties that are priced within their purchase power range, knowing that they cannot afford anything above their price range. And for the buyers who are in your price range, they are viewing homes more accurately priced and comparing them against yours…well no competition. You lost those qualified prospects.

Overpricing helps sell other, more competitively priced homes first. Your home may be used to demonstrate the good value of other properties. Your objective should be to enter the market in a position that will attract prospects, not drive them away.

Your home may become stale on the market. Prospects may wonder why it has been on the market so long, or if something is wrong with the property, even after you lower the price. You may even have to settle for less than market value. A house takes on a reputation surprisingly fast, so don’t wear out your welcome on the market.

You lose a strong negotiating position when your house is on the market a long time, both financially and mentally. Prospects will not “rush” to make an offer on an overpriced property, and you may feel compelled to accept less when they finally do.

If you do get an offer, the contract may fall through because of appraisal problems. The lender must justify the price to the market.

Welcome!

Buyers:

I currently work with many clients via my Idaho real estate website, about 65-75% because they love the hassle-free detailed service I offer. (My system also works especially well for out of state clients). Basically it is a system of offering the client desired education and self service information. Through my websites (realtor.com, ida-homes.com, more), you can retrieve instant self service relocation information, Idaho demographics, Idaho neighborhood info, Idaho school info, Idaho state economic, employment and tax info. But what my clients most appreciate is the MLS listings I directly send to them. These are much more comprehensive than most other website home searches. Through being able to view an unlimited number of homes, you are educated on market conditions and area pricing, so that when you are ready to purchase, you feel confident that you have made a wise decision.

Sellers:

It has been my experience that you want advertising and communication, of course aside from getting your asking price. I do extensive print advertising, and offer above average exposure on the internet via my 4 Idaho real estate websites, including “Realtor.com” (the top visited home search website on the internet –over 4 million visitors a month). Statistics show that 87% of buyers today start their home search on the internet.

Most houses receive virtual tours as well as plenty of photos on all 4 Idaho real estate websites.

There are a variety of other real estate marketing tools I use, as my listing plan is customized for each property. In addition, feedback on showings, follow-up and updated market conditions are key to keeping the seller informed. Sellers need to know their closing cost, net profit and possible market time prior to listing.

One unique marketing strategy I specifically utilize is to market your property to other Realtors. This is crucial because there are approximately 3,000 Realtors in the Treasure Valley; and combined, they have more home buyers at any given time than myself.

Lastly, I get you more qualified buyers! I belong to an exclusive financial network that allows me to pre-qualify possible buyers for your home. Because this network is made up of private investors as well as conventional lenders, I can get people qualified other lenders cannot. This affords me the unique ability to bring more buyers to your home.