The Times They are a Changin'....

We all know that it is coming ... and changes on the horizon with FHA are going to make business even more challenging.

On two different fronts, there are changes that are imminent that will affect how you do business with FHA buyers.

• First and foremost, we are all awaiting the announcement from FHA regarding its position on Seller Contributions that will be cut from a maximum of 6% to offset the closing cost on a purchase loan. That has been expected to be implemented by Summer and be reduced to 3% which will impact each and every deal in a negative way. In our market, it is predictable that the required contribution from a Seller to keep a Buyer at their minimum 3.5% exposure would necessitate a 3.5%+ concession and with that disparity, a typical FHA Buyer can now expect to have to come to the table with more of their own funds - making it tougher to find qualified Buyers. There are some aspects of the impact on this change that may still sort out to the benefit of the Buyer but in this economic climate all you can expect is that the Administration, in its infinite wisdom, is going to put more responsibility upon the borrower to obtain FHA financing. All of this is coming about in a time where we still need to improve upon business in Real Estate and not create disincentives for consumers. Solutions will come to light and some will be provided by Lenders themselves via rate selection and pricing that will certainly yield a higher rate offering to the borrower as a method of obtaining yield spread premium to be used as a Lender Contribution to offset the loss in Seller Contribution ... so look forward to that change and work closely as a team within your associations as Realtors and Lenders to provide the best deal for your mutual client.
• Secondly, as has been the case with other loan programs ... risk models have driven up the required credit scores for loan qualification. Borrowers will certainly be hit with a higher demand for credit scores which is bound to tighten up the pool of qualified Buyers. This will certainly create a sense of urgency for Realtors and Lenders alike, to draw as much interest as possible from any viable Buyer, to get into the game and buy a home before such changes create a barrier to entry for them.

After all ... aren't we all in the Business of Selling Real Estate and doing our part to improve upon the current economy?!

Short Sale-mania

The BUZZ word for the time being is SHORT-SALE!
What does that mean to you as a Buyer? Well ... it conjurs up the image of being able to get the bargain price on a home that you target while house hunting for these listings. Are deals out there? Yes ... BUT ... remember those old words "Caveat Emptor" - let the "Buyer Beware"! Now that the cat is out of the bag and you realize that deals may be available, you need to know the real world impact of this type of undertaking.
If you are targeting Homes that are listed as Short Sales ... then you need to take into account that your deal will not run along the lines of a standard purchase. Short Sales require 3rd Party approval. Depending upon the lien(s) that might exist on the property, such as 1st and/or 2nd mortgage, home equity line of credit, tax lien, etc..., there may be substantial delays in acquiring this type of home. The 3rd Party approval is undertaken by a Bank or other interest that may have a lien against the property and as such, they have the final approval in accepting the contract that may have already been accepted by the current owner.
In many cases, once the contract is accepted there is a substantial burden to deliver the purchase financing to settlement within a matter of days or weeks ... with substantial per diem penalties or fees against the Buyer if that is not accomplished. So again, Buyer Beware! If you want to undertake this approach to buying a Home, make sure that you work closely with your Realtor and your Lender to ensure that everyone is able to satisfy the terms of your contract in a timely manner.
First things first ... work with a Realtor who has experience in these matters and cannot only negotiate the best price and terms for you - but also is able to set realistic expectations with the other parties involved and deliver upon them. There is a LOT that is required of your Realtor including the development of a relationship with the Listing Agent to ensure a swift and smooth transaction.
Secondly, make sure that you are positioned to make formal application on the purchase with your Lender and be prepared to execute upon the Home Inspection, Appraisal and other expenses in lieu of the 3rd Party approval - because - once that approval is provided, they will demand a rapid settlement. Obviously, you cannot sit back without being proactive to ensure that you settle to satisfy the Bank/Seller and although it may cost money up front for these services - it is money well spent to make sure you satisfy your contract by settling on time.

HUD Single Family Mortgage Insurance Premiums

Good news for FHA Home Buyers! FHA is going to maintain its current standards regarding the mortgage insurance premiums. What does this mean?

When using a FHA loan, a buyer must pay an Up Front Mortgage Insurance Premium (UFMIP) as well as a monthly mortgage insurance premium. These charges were scheduled to increase in cost on October 1, 2009, however HUD has decided to maintain current standards which should afford FHA buyers the ability to qualify for a higher loan amount.

Mortgage Insurance is not designed to protect the home buyer. It is only there protect and insure the bank and FHA in the event of default. Even so, FHA mortgage insurance will continue to provide lower rates with lower down payments in comparison to higher rates and higher down payments for conventional loans.

The bottom line to this news is that by maintaining lower premiums, FHA will be used by both first time home buyers and others to continue the increase in home sales at least through 2010.

Tea and Taxes

Personal Tea Party

and your Tax Return

Today so many people are protesting the role of Government and the collection of taxes and its abuse of power and OUR money. So ... let's take a negative and turn it into a positive. Taxes obviously are viewed as the negative part of this day but I am positive that you can turn that in your favor!

If you are a first time Home Buyer, you have the ability to seize some of the money that you have been paying into the system and get that back in the form of a tax credit ... and still get that back here in 2009! When you buy a Home by December '09, even if it is after April 15th, you can obtain a copy of your settlement statement and use that to ammend your tax return for 2008 and with that, receive the $8,000.00+ soon thereafter. The reason you may actually get back more in the form of a tax credit, is a result of whether or not you may have paid any money into discount points - which are also tax deductible.

So ... go out there and beat the system and claim your own personal stimulus package by buying your new Home in Baltimore, Cecil or Harford County!

To find out more about the tax credit or how much you qualify for and what your monthly payment would be contact Frank Gilmartin with First Home Mortgage in Bel Air, Maryland at 410.808.5551 and visit his website at http://www.frankgilmartin.com/

To have current available home listings in Harford, Cecil, or Baltimore Counties sent to you or start your home search, contact Linda Greco with Integrity Realty Group in Bel Air, Maryland at 410.838.1266 ext. 105 and visit http://www.findahouseinmaryland.com/. To read more information, please visit http://activerain.com/blogs/agrecohome

Reward for First Time Homebuyers!

It is nice to know that those who are "Wanted" actually get the $8,000 REWARD!

The government is finally providing something as a "stimulus plan" for not only 1st time buyers but also for those who have not been on title to a home in over 3 years.

One of the best parts about this reward is that a buyer can still get the $8,000 this year! If you purchase a home before the program expires in December, you can ammend your tax filing and get money back this year without having to wait for your tax filing for 2009!

Obviously, the program is meant to be a stimulus to the Real Estate market but the best way to look at this as a home buyer is to view it as a rebate on your down payment from Uncle Sam!

There are some subtleties that apply into the program wherein a person who currently owns a rental home but is not on title to another home can actually qualify for this program as well.

To learn more about how you can take advantage of this REWARD please feel free to contact either Linda Greco or Frank Gilmartin, when it comes to respective questions regarding Real Estate or Mortgages. Call Linda at 410.838.1266 ext. 122 or Frank at 410.808.5551.

http://findahouseinmaryland.com/ Search homes

http://activerain.com/blogs/agrecohome More information

Other Foreclosure Opportunities

To start a home search, visit
http://findahouseinmaryland.com/ or contact Linda Greco or Frank Gilmartin by email or phone! Or, if you have a question, just post it in the comment section and we will answer it today!



Other opportunities exist for buyers who are either unable to qualify for the NSP program or have found houses that do not meet NSP property standards. One such program involves the FHA 203K loan which is designed for borrowers who have the need for low down payments. The 203K loan is offered as a Streamline program which allows up to $35,000 in repairs and a full 203K program which is only restricted by the total amount of repairs and the maximum FHA loan amounts per county. For those who might need to consider another option for distressed property or foreclosed homes in need of repair, there is a conventional loan alternative as well which requires more of a down payment.
To identify these homes and to consider all of your options, please contact either Linda or Frank to explore those possibilities ...

Frank Gilmartin, Loan Officer 410.808.5551
Linda Greco, Realtor 410.838.1266 ext. 122

NSP Program Benefits

Baltimore County is starting a program to encourage home buyers to consider homeownership in existing residential communities that have foreclosed properties in the 21207, 21220, 21221, 21234, 21244, 21133, and 21117 zip codes.
Before signing a real estate contract, a buyer must complete TWO workshops (home buyer and pre-settlement) and counseling with a Baltimore County affiliated Housing Counseling Agency.

Please contact me for a list of the approved agencies for this program. Some additional highlights of the program are listed below:
Buyer(s) do not have to be first time home buyers.
Buyer(s) can get up to $50,000 for down payment and closing costs.
Property must be in one of the zip codes listed.
Property must be a foreclosure or short sale.
Property must be vacant.
Contract must be written for 60 days.
Gift Contributions may not exceed 3% of the sales price.
Property must be purchased at minimum discount 5%; a 15% or more discount based on an appraisal is preferred.
Buyer(s) must have home inspection.
The cost of repairs required to correct housing quality standards (HQS) identified deficiencies can be included in the borrowers maximum loan amount up to $3,000.
NSP is a loan that is forgivable after 15 years.