New Condo Guidelines for Fannie Mae loans

Fannie Mae has issued new guidelines that Florida condos and condo conversions, and, in some cases, old condos, must meet before it will fund loans:

• At least 70 percent of the units in new condos must be pre-sold.

• No more than 10 percent of units can be owned by a single entity.

• No more than 15 percent of units in all condos can be more than 30 days past due on association fees.

• No more than 20 percent of a condo can be devoted to commercial use.

• All condos, new and old, must have fidelity insurance, which protects association funds from fraud.

• The seller is not allowed to help with down payments or offer other perks, like deductions of association fees, unless they are disclosed.

• Condos must have hazard insurance.

• When investors buy in established projects, at least 51 percent of units must be owner-occupied.

**If the condo you wish to purchase or refinance has any of these issue, it may still be possible to go FHA. Contact me with the address and I can check whether or not the project is approved by them...

Rates Plummet to mid 4's

US Treasury begins purchasing FNMA and FHLMC Backed Securities - On Monday January 5, 2009, The US Treasury initiated their purchase of mortgage backed securities as previously announced on November 25, 2008. As a result, mortgage rates have plummeted to the mid 4's causing a renewed interest in refinance applications and those buyers willing to jump back into the real estate market yet another incentive to buy now.

HOW TO - Break The Cycle of DEBT

With all that has happened over the last three short years; from the housing crisis causing mortgage companies to go out of business (or get absorbed) ceasing lending as we knew it, to the stock market crash and the Credit collapse…to our personal rising debt trying to make ends meet in this crap economy where layoffs and downsizing are the norm. Not to mention the Trillion Dollar debt of our own government which have been “surfing” their debt for years with no solid plan to deal with it…has given me a sore distaste for borrowing money.

Let’s face it, if we all lived within our means, only bought what we could afford, and saved up instead of borrowed money to buy large items, none of us would be suffering right now.

Up to this point, I have never thought of debt as a negative but rather a tool to create more wealth. That was, of course, until I lost the means to pay that debt off. I now understand that we as a society have it all wrong. DEBT IS NOT OK and we cannot continue down this road and expect to be fine.

One can argue that the only exception to this are mortgages on investment properties, but due to the drastic drops in home values, we are learning the negatives of leverage the hard way on that as well. If you have purchased or refinanced within the last 4 years, chances are you are now upside-down on your equity.
-Average homeowners stay in their homes for 7.1 years [NAR®]. With an average 7% mortgage, they will sell their homes still owing over 90% of the principal. If they continue this trend, they will NEVER pay off a home in their lifetimes!
-85% of Americans have a true net worth of less than $250! - Social Security Administration
-The average savings of a retired couple is only $7,000!
HOW DO WE BREAK THE CYCLE?!?
Step 1- You have to stop taking on new debt.
If you cannot stop the flooding, how can you keep from drowning? Which brings us to…

Step 2- Make a list of ALL your expenses. Click here to download my spreadsheet
This is vital as you need to know exactly how much you are spending every month and compare it to your net income. If you have money left over (discretionary income) then you are on the road to financial freedom. If not, look hard to see what can be cut or adjusted. Even if you only have $1 left over, you are on your way!

Step 3- Invest in a program that will guide you to financial freedom.
Make no mistake; this undertaking will require discipline and determination. The idea is to payoff your highest rates or highest monthly payments first to free up cash flow that can then be applied to your next debt paying it off quicker and so on until you are debt free.

Step 4- DO IT AND LIVE IT! Becoming debt free will not happen overnight, but imagine 8-13 years from now with NO Mortgage, NO credit card debt, NO car loans, and taking ALL that money you would have spent on interest and investing it in a safe 2-5% return over the next 10-20yrs. We are talking Hundreds of Thousands of dollars set aside for your retirement!

This is real and this is the pyridine shift we need to make as a society if we ever wish to regain balance and power.

Short Sale FAQ

Question: What is a Short Sale?
A short sale occurs when the proceeds of a real estate sale fall short of the balance owed on the property. In a short sale, the mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the owner. This negotiation is all done through communication with a bank's Loss mitigation department.

Question: Can I do a Short Sale myself?
Negotiating a short sale is a long and complex procedure that requires a strong knowledge of the process and should be left up to a professional. In this difficult market, it would be in your best interest to use a competent Realtor to find a buyer and negotiate the sale. Mishandling a file can cost you precious time and put you in danger of foreclosure.

Question: So if I choose to list my property with a Realtor, who pays your commission?
The bank will pay the commission along with all the other usual closing costs. A properly executed short sale should cost you nothing!

Question: I just missed a payment and I know I will miss more...how long does the foreclosure process take and is there time to do a short sale?
Typically, the process begins in the 90-120 days late area and can take an additional 4-6 months after that. Nowadays lenders are very willing to postpone or prolong foreclosure if you have listed the property and have a willing and able buyer. Hiring a knowledgeable Realtor who can handle this for you is extremely important.

Question: If I pay mortgage insurance and default on my loan, why wouldn't that cover the deficiency amount?
The mortgage insurance is not there for your protection, just the mortgage lender.

Question: Do I have to have my home "Approved" by the lender prior to offering it for sale as a short sale?
No. Technically speaking there is no such thing as being "Short Sale Approved." The actual approval only happens with an accepted offer.

Question: Will I still have to pay property taxes if I do a short sale?
Property taxes will always have to be paid as part of any accepted short sale. Whether it's you or the lender depends on their policies and the specific agreement you reach while negotiating the short sale.

Question: I owe more than my home is worth and I can't make the payment. Do I have to somehow qualify for a short sale?
The simple answer is NO. If someone can't make their payment and they are otherwise insolvent, they qualify for a short sale. Note: insolvent simply means their total debts are great than their assets.

Question: Do I have to pay income taxes...I have heard that I will get a 1099. Will the loss the bank takes be treated as a taxable gain to me...the seller...is this true?
It WAS true, now it's not. Consult your Tax Attorney or Qualified CPA. Very recently the tax law was modified and now most people who do a short sale will have no taxes due.

Question: Do I have to miss a payment to do a Short Sale?
No, most lenders will consider a short sale without being in default assuming you can still show hardship and do not have the assets to pay down the mortgage.

Question: I want to do a short sale and have a 2nd mortgage, does this make me ineligible?
No. Both of your lenders will need to be satisfied in some way to complete the short sale. If your first lender will be paid off by the sale, then we just negotiate the terms with the second lender. Most short sales do involve 1st and 2nd lien holders.

Question: How long do bankruptcies and foreclosures stay on a credit report?
Bankruptcies and foreclosures can remain on a credit report for seven to 10 years. This is one of the main benefits of a Short Sale and also a reason why you should not wait to the last minute to do one. The more proactive you are about your situation, the better off your credit will be...

If you have any questions, feel free to contact me at (954) 441-5366 or email me @ HomeCounselor@bellsouth.net for a no obligation consultation.
I am here to support you!

FANNIE AND FREDDIE TO ASSIST OWNERS IN FORECLOSURE

- On Monday, November 10, 2008, Fannie Mae and Freddie Mac announced they are going to work with homeowners that are in default of their mortgages. Where TARP and Hope For Homeowners have sorely disappointed to date, Fannie and Freddie are taking a real first step at trying to address the number of foreclosures. Fannie and Freddie will be modifying loans by temporarily or permanently reducing the interest rate and / or extending the loan, and deferring a portion of principle interest free to bring the debt to income ratio to 38%.

The homeowner must meet the following criteria to qualify:

1. The loan must be owned by Fannie Mae or Freddie Mac
2. It must be the borrower's primary residence. (They must still live in the property)
3. The loan to value must be greater than 90%
4. The homeowner must be at least 3 months behind on their mortgage loan
5. The borrower has NOT filed for bankruptcy
6. The borrower must have reliable and verifiable income