Real Estate Information

In this month’s BLOG, we will discuss what HAFA is and how it impacts Surprise, Arizona homeowners in distress.

CASH FOR SHORT SALES

When your mortgage payments become overwhelming, Foreclosure is NOT your only option! Now, there’s a new program offering eligible homeowners $3,000 for a successful Short Sale.

The government’s Home Affordable Foreclosure Alternatives Program, or HAFA, gives financial incentives to homeowners and lenders who qualify, and shortens the process time.

The biggest impact of this government-backed alternative is that you have better alternatives to Foreclosure. Please contact me. As a CDPE-designated agent, I can show you all of your options and get you started on a path to resolution immediately. I’m here to help.

“We are all faced with a series of great opportunities brilliantly disguised as impossible situations.”

~ Charles R Swindoll


Last month, FHA released yet another mortgagee letter. This mortgagee letter clarifies FHA’s position regarding borrowers who recently had a short sale on a primary residence and want to purchase a new primary residence using an FHA loan.
 
Here are a few of the key points:

1. These changes are effective immediately
2. Borrowers are not eligible for new FHA financing if they pursued a short sale agreement on his or her principal residence simply to:

• take advantage of declining market conditions, and
• purchase, at a reduced price, a similar or superior property near the residence they completed a short sale on

 
Borrowers are eligible for new FHA financing if:

• All mortgage payments due on the prior mortgage were made within the month due for the 12 month period preceding the short sale, and
• All installment debt payments for the same time period were also made within the month due, and
• And the proceeds from the short sale serve as payment in full (another key point)

 
In some respect, this is progress.  Prior to this announcement borrowers needed to wait 3 years post a short sale to qualify for FHA financing. Feel free to contact me with any questions you have as I’m sure your head is spinning with what this really means.  I’m here to assist and walk you through the details.

You can reach me via telephone at 623-298-4557 or via E-mail.

Below is an embeded Video regarding the NEW HOME BUYER TAX CREDIT.  As you may have already heard, the tax credit was extended and it is also now available to second time buyers.  There are certain restrictions which apply to the new tax credit for first and second time buyers.  Below is a video directly from the Internal Revenew Service which details those rules/restrictions.  The new home buyer tax credit is perfect for Arizona buyers looking to purchase their first home, or second time buyers looking to obtain another property!

I Need Your Help!

For those of you who do not know me, my name is Elijah, but everyone just calls me "Jah-Jah".  You might be more familiar with Aida Rodriguez.  Everyone calls her "The Most Awesomest Realtor Ever", but I just call her Mommy.  You know when she rambles on and on about working so hard because her baby needs shoes? Well, if you haven't figured it out yet, she's talking about me!

I was wondering if I might be able to bother you for a minute to talk to you about a new years resolution that my mommy keeps nagging me about?  She is determined to get me to Harvard!

She wants to get me the best education so that I can be whatever I want when I grow up.  I keep trying to tell her that I don't need to go to Harvard if I want to be Mickey Mouse, but you know how she gets!  I'm not exactly old enough to be selling candy bars or to open up my own lemonade stand, but there is a way that you can help me be the smartest Mickey Mouse out there.

This year, my mommy has made a goal to generate at least 120 referrals.  That's 120 buyers looking to no longer throw their money away on rent and take advantage of the new homebuyer tax credit. Or, 120 sellers who want to take advantage of what is now a seller's market.  Or, any combination thereof.

How can you help?  It's easy!  Take a second to ask yourself these questions:

1. Who do I know who has expressed an interest in buying a home in 2010? Who do you know who might not realize that you can still by a home for no money down?
2. Who do I know who lives in a rental and may not be aware of how easy it would be to qualify for a home?
3. Who do I know who feels "Stuck" in their neighborhood because their home is no longer worth what it used to be?
4. Who do I know that has missed payments on their mortgage, has lost their job, gone through a divorce, is facing a relocation, or just simply no longer wants their home anymore?
5. Who do I know that is trying to get a loan modification, is facing an arm adjustment soon on their mortgage or is thinking about letting their home go into foreclosure?
6. Who do I know who would benefit from speaking to a real estate team that specializes in helping homeowners with no equity, homeowners looking to capatlize on a unique sellers market, or buyers searching for the perfect representation to purchase their new home?
7. Who do I know who might even have equity in their home and might be able to capitalize on this market and upgrade to a bigger home?
8. Who Do I know who is interested in purchasing or leasing commercial property?

Have you thought of anyone yet?  In this market, I am sure you have.  They don't even have to live in Arizona or have their home in Arizona!  If you would like, feel free to give that information over to my mommy!  As you know, she won't embarass you

She prides herself on delivering world class results! BUT, You can feel free to pass her information along to those who you feel might need it if that makes you a little bit more comfortable.  Within the next couple of days, you will all be able to track my mommy's progress via Facebook and via her website at www.ArizonaPhoenixGroup.com

I know it might be a lot to ask, but how can you say no to a cute little face like mine?  With your help, I know that I'll be at Harvard in no time!  Remember, I'm counting on you!

Love,

"Jah-Jah"

"Look not mournfully into the past. It comes not back again. Wisely improve the present. It is thine. Go forth to meet the shadowy future, without fear, and with a manly heart."


                                                           ~Henry Wadsworth Longfellow


We all make new years resolutions.  To lose weight, stop smoking, to go on that vacation that we have been dreaming about for years.  To organize our homes, get out of debt and to stop spending five dollars for a cup of coffee at Starbucks.  As we look back on 2009 (one of the worst real estate markets in recent memory) we are reminded that with great adversity comes great opportunity.  

For Buyers:

Home prices can't get much lower than they are now.  After all, we can't give these things away!  Interest rates hit a 50-year all time low in 2009.  This coupled with new tax incentives up to $8,000 for first time buyers and $6,500 for second time homebuyers makes 2010 the best year to buy!  100-percent financing is still available in some areas and there is an array of inventory on the market to choose from.  Buyers are now able to purchase properties with monthly mortgages lower than rents in most areas.  

For Sellers:

I'm sure you've heard by now that it is a "buyers market".  In reality, 2010 is actually a sellers market.  Although prices may not be as high as we want them to be, homes are receiving offers in as little as one day on the market.  This represents a truly unique opportunity for sellers looking to upgrade to a larger home, needing to move into another area, wanting to buy an investment property, or needing to sell in a down market due to financial difficulty.  New government regulations now allow a seller to short sale their property with no tax consequences (in most cases) and lenders are more flexible then ever on forgiving negative equity if you sell your home for less than the amount owed on the property.  

What are your new years real estate resolutions?  Have you been pre-qualified for a mortgage?  Have you received a current market analysis of your homes value?  Do you thoroughly understand the benefits of a short sale? Do you have a friend or neighbor that needs assistance?  If so, please forward our information along.  Have a question for yourself? Give us a call at 623-298-4557 or send us an e-mail.

Let 2010 be the year you put your plans into action!

As the leading distressed propety experts, The Phoenix Group at Pro-Formance Realty Concepts and it's team proudly closes a high volume of Short Sales in the West Valley.  Our team specializes in helping clients just like you - with little equity, no equity, or negative equity.  We are often contacted by clients who are unsure of the "ins-and-outs" of a short sale or what options are available to them outside of foreclosure.

What is a Short Sale?

A short sale, also known as a short pay or short payoff, allows a homeowner to sell their property for less than the amount owed to the bank. When the market value of the property is less than the amount owed, the owner is considered up side down. The proceeds from the sale are used to pay-off the outstanding amount of the mortgage. Although the proceeds will be "short" of the amount actually owed on the mortgage, it allows a homeowner the opportunity to avoid foreclosure. Ultimately it puts their credit standing in a better position than if an actual foreclosure were to take place. In our experience, the lender forgives the deficiency owed and often reports the debt as "Paid" or "Paid for Less than the Amount Owed".

The Benefits of a Short Sale:

• Avoid Foreclosure
• Less of an impact on your credit versus a foreclosure (Foreclosures can haunt your credit for 10 Years)
• Protects your ability to purchase in the future (You can purchase again sooner than if you foreclose)
• The lender agrees to not pursue the deficiency in court so you are not making payments on a home that you no longer own
• Homeowners are able to spend more time in their homes (as auction dates can be postponed)
• Foreclosures make it difficult to rent an apartment, borrow money, and in some cases to even find employement

Common "Myth-Understandings" of a Short Sale:

• I have to be behind on my payments in order for my lender to consider the sale
• Lenders don't approve short sales
• I have to move out of my home in order to sell
• I can't afford to hire a Realtor to Short Sale my home
• I owe too much and my lender will not absorb the loss
• I have already missed payments/my foreclosure date is scheduled and it is therefore too late

How We Can Help:

• Extend any current or future foreclosure dates so that you are able to stay in your home longer
• Directly negotiate the sale of your home with your lender
• Provide weekly updates as to the status of your sale so you are never left in the dark on your transaction
• Negotiate for your lender to not pursue the deficiency on your Short Sale
• Negotiate our fees directly with the lender.  You pay nothing for our services!

About The Phoenix Group:

Our team works tirelessly to complete your transaction all while treating your situation with the dignity and respect that it deserves.  We pride ourselves in being one of the only Real Estate teams that do not charge an upfront negotiation fee to people in an already financially difficult situation.  We hire in-house negotiators because we do not believe in contracting such an important transaction to a third party negotiator.  We love what we do, and our performance reflects it.

Contact us today for a short sale packet or with any questions you might have.  You can reach us via e-mail or via telephone at 623-298-4557.

Shaun Donovan, HUD Secretary, announced today that the $8,000 first time home buyer tax credit can now be used for down payment assistance for FHA Loans.    Details shall follow next week.  Rememeber, the tax credit is only eligible for first-time homebuyers that purchase homes before December 1, 2009.  That means we only have 6 remaining months to take advantage of this amazing opportunity!  A first time homebuyer is defined as a person which has had no property interest within the last three years.  Call or e-mail an associate today for more information.

The Teacher Next Door program that was established by the Department of Housing and Urban Development (HUD) is designed to offer single-family houses, townhouses and condominiums for sale to teachers at a 50 percent discount. The goal is to encourage teachers to buy homes in low and moderate-income neighborhoods.

These neighborhoods, referred to as revitalization areas, are specifically designated neighborhoods that are receiving targeted public and private sector assistance in order to promote local economic growth.

As a result, HUD is offering a 50% discount on qualifying homes. Since the supply of qualifying homes is severely limited, homes are sold through a lottery system. In addition, teachers purchasing qualifying homes with FHA-insured mortgages will only need $100 for a down payment (versus the traditional 3% required on other types of property).

The Teacher Next Door program is open to any state-certified teacher or school administrator from a private or public K-12 school or a federal, state, county or city educational agency. The applicant must be employed full-time and may only purchase qualifying Teacher Next Door homes located within the boundaries of their school system. This program extends to teachers, law enforcement, and EMT's.

A teacher must live in the home for a minimum of three years as his or her primary residence. A buyer cannot own any other real estate at the time of closing. In addition, the sales price of qualifying homes is not negotiable. An applicant must always pay HUD’s asking price.

Upon successfully winning the bid, HUD does not automatically discount the property by 50%. Instead of automatically giving the new home owner instant equity, HUD places a “silent second” against the home for the discounted amount. No interest or payments are assessed on the second lien if the home owner lives in the home for the required three years. All profits earned after the three year period are the home owners.

Depending upon the circumstances, failure to fulfill the three year residency requirement may have serious consequences. HUD may restrict the home owner from selling the property for no more than 110% of the original sales price. In addition, HUD may require all or part of the discounted amount to be repaid. Generally the pro-rated repayment amount goes as follows: repayment of 90% of the discounted amount during the first year, repayment of 60% of the discounted amount during the second year, and repayment of 30% of the discounted amount during the third year. Should fraud or other serious charges suspected, HUD may file criminal charges against the teacher, ban the teacher from further participation from any HUD, FHA, and other Federal programs, and may face the possibility of serious fines and potential prison time. HUD will conduct “spot checks” during the first three years to insure that the residency requirement is being fulfilled.

Qualifying homes are restricted to specifically designated single family homes, townhomes and condominiums that are located within the revitalization areas. Other types of properties, such as a duplex or triplex, do not qualify for this program. In addition, the homes must be HUD acquired homes and cannot be other real estate for sale in the area (i.e. VA foreclosure homes, resale homes or new construction). HUD sells all qualifying homes as-is. In other words, HUD does not provide any guarantees or warranties)

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates go up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.

The Housing and Economic Recovery Act of 2008 was just signed by President Bush with some amazing benefits for first time homebuyers. Call everyone you know who wants to buy their first home (or who hasn't owned one in three years), this is too good to miss - it's a $7,500 tax CREDIT (not deduction but a credit).

If you have not owned a home in three years, you qualify as a first time home buyer. If you buy a home after April 9, 2008 and before July 1, 2009, you qualify for this credit. Call your friends who just bought a home since April 9th and tell them they may take $7,500 off their tax bill if they qualify. It has to be your principal residence, so rentals do not count.

The tax credit is 10% of the cost of the home, up to a maximum of $7,500. This is not an additional deduction that lowers the amount of income to be taxed, it is a tax credit. In other words, you take $7,500 off your tax bill. But there is a catch; the credit you receive now is actually an interest-free loan that must be repaid.

The loan has no interest, and will be paid back over 15 years. You get the credit on your 2008 taxes, but you start paying it back on your 2010 taxes that are due in 2011, so you get at least two years without a payment. You pay back 6.67% of the credit each year, so for a $7,500 credit the payment is $502.50 per year. If you stay put for 15 years, you pay it off with no interest.

What happens if you sell the house? You pay the balance back at the closing. So, you get $7,500 now, and pay the rest of it back if you make money on the sale of your house. What happens if you do not make enough money when you sell your house? They forgive the rest of the debt.

Other restrictions stipulate that you have to buy your first house in three years before July 1, 2009, not have super high income, not use bond financing and buy anywhere in the US.

If you'd like to learn more about this program, please call me!