Penalties Increase for Borrowers Who Walk Away

Borrowers who consider walking away from their mortgages have yet another reason to think twice.  Fannie Mae has implemented a new policy that penalizes borrowers who walk away even though they had the ability to pay or who did not complete a workout arrangement.  Such borrowers now will be ineligible to obtain a Fannie Mae-backed loan for seven years.  However, borrowers who experience extenuating circumstances may be eligible for a new loan within two to three years depending on the situation.  Fannie Mae is also considering legal action to recoup the outstanding loan debt from borrowers who strategically default on their loans in jurisdictions that allow for deficiency judgments.
Fannie Mae plans to instruct its servicers to monitor delinquent loans facing foreclosure and recommend cases that might warrant the pursuit of deficient judgments.

Staging Your Home-Leaky Faucets

Most faucet leaks can easily be fixed with a rubber washer, an O-ring or seals depending on what type of faucet it is.  By fixing the problem yourself, you can save a good bit of money since plumbers can be expensive and will charge you a standard fee even if it takes only 10 minutes to fix the problem.



Linda Shank Broker Owner Linda Shank and Company is a 32 year real estate veteran in Phoenix's Southeast Valley.  Contact her at www.ISellAZSunshine.com

Staging Your Home-Nail Pops

Nail pops are a annoying and seen in many homes especially in dryer climates.  The term comes from the nails that hold the drywall to the studs actually popping out through the face of the drywall.  This is from either a house settling, poor workmanship (? my opinion) or a home settling thus squeezing the nail out of the wood and pushing it through the drywall.  The fix for this isn't terribly hard but it's tedious because there are up to 32 nails in a 4 foot by 8 foot sheet of drywall.  My suggestion is to pound the nail through the drywall to the stud.  Then just above it place a drywall screw to hold the drywall to the sud and finish it off with a few coats of joint compound.  Finally, seal and paint it.  Many home improvement stores also sell nail pop kits that can make this job easier.


Linda Shank Broker Owner Linda Shank and Company is a 32 year real estate veteran in Phoenix's Southeast Valley.  Contact her at www.ISellAZSunshine.com

Home Closing Process - What Questions to Ask Your Agent Part II

If you are a buyer, these are questions you should be asking your agent:

*What if the seller decides not to sell and a purchase contract is already in force?

*What if the termite, home, roof or other inspections turn up more work than the seller anticipated and the expense for these repairs is much great than expected?

*What if the home suffers major damage in an earthquake, flood, fire or other act of Nature?

*What if liens or encumbrances are discovered which have been placed against the property?  For example, if the seller was handed a large tax lien against the property that had to be paid at or before the closing and the Seller would not have enough money to purchase their new home.  What could happen?

*What if the buyer changes his or her mind at the last minute and decides not to close the transaction for no apparent reason?

 Linda Shank Broker Owner Linda Shank and Company is a 32 year real estate veteran in Phoenix's Southeast Valley.  Contact her at www.ISellAZSunshine.com

Home Closing Process - What Questions to Ask Your Agent Part I

If you are a seller, these are questions you should be asking your agent during the sale process:
*What if the appraisal for the lender who is making the loan for the buyer comes in lower than the sales price and the loan amount is reduced?


*What if, even after an appeal, the lender refuses to raise the loan amount to the amount that the buyer needs to close the transaction?

*What if the sales price is altered due to a low appraisal?  Can the seller negotiate fees that they have agreed to pay such as repairs, inspections, loan fees or commissions?


*What if a buyer though they were pre-qualified does not ultimately qualify for the loan?


*What if the buyer tries to continue to negotiate throughout the closing process?


*What if the buyer, the buyer's agent, the lender, the appraiser, the different inspectors or the repair people are not doing their jobs within the time frames which were projected at the onset of closing and it now appears that these actions are going to delay the closing?


*What if a buyer has a significant change in his or her life before the closing (loses job, divorce or bankruptcy)?

Linda Shank Broker Owner Linda Shank and Company is a 32 year real estate veteran in Phoenix's Southeast Valley.  Contact her at www.ISellAZSunshine.com

Home Showing Hints

Follow these following hints for successful home showings and the Realtors will love you:

Staging - Staging is simply preparing your home as if you were setting a stage for a play.  Make it feel very complete and comfortable for the buyer as they tour the property.


Descriptive Signing - Another specialty technique involves the use of small, professionally printed signs approximately two inches high and two to four inches wide.  The signs can be placed throughout the home pointing out specific highlights of the property.


Should You be there? - It is almost always best that a seller vacates the property when it is being shown.  Many potential buyers feel uncomfortable if the seller is in the home as a buyer will want to look at the property very carefully (ie. storage areas, closets, cabinets, under beds and in the garage).


Children and Pets - If children are present during the showing, you should make every effort to keep them out of certain areas of the home while those portions of the home are being shown.  Also, some buyers are allergic or afraid of pets.  It's a good idea to keep pets out of the home or caged during the showing.


Cards Left at Showings - It is very important for you to provide the listing agent with all of the business cards of agents which have been left each time the property has been shown. The listing agent should receive the information on the cards as soon as possible.  This will allow your agent to make contact with the buyer's agent and receive feedback on the showing. 

Linda Shank Broker Owner Linda Shank and Company is a 32 year real estate veteran in Phoenix's Southeast Valley.  Contact her at www.ISellAZSunshine.com 

Staging Your Home--How to Remove Oil Stains on a Garage Floor

You can remove most of an oil stain with elbow grease and scrubbing.  Start removing the surface oil by sprinkling some cat litter on it to soak it up.  Then clear away the cat litter and concentrate on the stain.  Make a paste of hot water and dry laundry or dishwasher detergent.  Use a stiff bristle scrub brush to scrub the area with the paste.  Hose the area and let it dry.  Another way is to use a product such as Spray 'n Wash on the stain along with the detergent and let it sit for 10 minutes.  If that doesn't do the job then spray on some oven cleaner.  Use just a small amount, wash it down thoroughly and keep children and pets away from it.



Linda Shank Broker Owner Linda Shank and Company is a 32 year real estate veteran in Phoenix's Southeast Valley.  Contact her at www.ISellAZSunshine.com

Staging At Home 101 Part II

Removing clutter is only one aspect of getting a smaller home ready to sell---or just living contentedly in it.  Box up items you don't absolutely need (especially collections) as these tend to distract curious buyers.  Temporarily part with your modern abstract art or country-themed baskets of dried flowers.

Some big pieces of furniture won't fit in modestly sized homes.  Look at the scale of your furniture and don't forget depth.  Things can be a lot deeper than you realize and all of a sudden, there's no room to walk because that deep, comfy chair you love comes halfway out into the room.
Sellers remove furniture from rooms that feel overstuffed.  If you have a huge china cabinet in a small dining room remove it or at least take the Hutch off.  Otherwise, it's very distracting.

Chose your color palette carefully.  Bright, loud colors make a space feel smaller because they jump across the room at you.  You want the walls and your furniture to recede.  Don't be matchie matchie.  Eliminate the high contrasts....the same colors should move throughout the house.  Blend colors in more medium tones. Using the same color of carpet or the same hardwood throughout the home to maximizes your perception of space.

Linda Shank Broker Owner Linda Shank and Company is a 32 year real estate veteran in Phoenix's Southeast Valley.  Contact her at www.ISellAZSunshine.com

FHA Conditions that will Require Automatic Repair for Existing Properties

*Inadequate access/egress from bedrooms to exterior of home
*Leaking or worn out roofs (if 3 or more layers of shingles on leaking or worn out roof, all existing shingles must be removed before re-roofing)
*Evidence of structural problems (such as foundation damage caused by excessive settlement)
*Defective paint surfaces in homes constructed pre-1978
*Defective exterior paint surfaces in homes constructed post-1978 where the finish is otherwise protected.

While not all inclusive, this should give you an idea what issues might concern an FHA appraiser doing an appraisal on your home.


Linda Shank Broker Owner Linda Shank and Company is a 32 year real estate veteran in Phoenix's Southeast Valley.  Contact her at www.ISellAZSunshine.com

Minor Property Conditions that FHA does NOT REQUIRE Automatic Repair

 *Missing Handrails

*Cracked or damaged doors exit doors that are otherwise operable

*Crack Window glass

*Defective paint surfaces in homes constructed post 1978

*Minor plumbing leaks (such as leaky faucets)

*Defective floor finish or covering (worn through the finish, badly soiled      carpeting

*Evidence of previous (non-active) Wood Destroying Insect/Organism damage where there is no evidence of non-repaired structural damage

*Rotten or worn out counter tops

*Damaged plaster, sheet-rock or other wall and ceiling materials in homes constructed post 1978

*Poor workmanship

*Trip hazards (cracked or partially heaving sidewalks, poorly installed 

carpeting)

*Crawl space with debris and trash

*Lack of an all weather driveway surface

While not all inclusive, this should give you an idea what issues might concern an FHA appraiser doing an appraisal on your home.

Linda Shank Broker Owner Linda Shank and Company is a 32 year real estate veteran in Phoenix's Southeast Valley.  Contact her at www.ISellAZSunshine.com

Protecting Tenants at Foreclosure Act

The Federal Protecting Tenants of Foreclosure Act enacted into law a little over a year ago trumps Arizona law by requiring purchasers of home from foreclosure sales to honor certain existing leases.  They must also provide a 90-day notice prior to suing for eviction.  

There are exceptions and qualifications purchasers should be aware of prior to buying a foreclosure property.  Purchasers who buy with the intent to occupy the home as their primary residence are not required to honor existing leases but still must give the tenant a 90-day notice to vacate before they can sue to evict the tenant.  


The law also does not apply to tenants or leases that are not bona fide.  To qualify under the law the foreclosed owner or his/her spouse, child or parent cannot be listed as the tenant.  Furthermore a lease must be the result of an arms-length transaction and the set rental rate cannot be substantially below fair market.  Lastly, the lease must have been signed prior to the foreclosure notice being recorded.

Linda Shank Broker Owner Linda Shank and Company is a 32 year real estate veteran in Phoenix's Southeast Valley.  Contact her at www.ISellAZSunshine.com

Why is there a Limit on the Number of Financed Properties?

In 2008 Fannie Mae reduced the number of allowable financed properties from ten to five, only to reverse it a year later.  Unfortunately, a majority of the lenders have refused to change back to the ten mortgage cap.   Banks are licking their wounds with all of the foreclosed investment properties from back in the day.  Remember the 100% stated, investment program? Every bank is different.   Most banks will only permit up to four mortgages, maybe five, as long as the fifth property is a primary residence.  The lenders allowing financing for up to ten properties typically do not offer the best brother-in-law rates and may only loan on one property, limiting their investment exposure. Question:  A buyer would like to finance two investment properties.   He already owns three properties.  But there is a fourth his ex-wife received in the divorce and his name is still on the mortgage.   He is having a hard time finding a lender?  Why?   The issue with the property in the ex-wife's name is tricky.  Fannie Mae's guidelines state that if you have a court order (such as divorce decree); the lender is not required to evaluate the payment history.     Conventional Wisdom tells us that as long as there is a divorce decree that spells out the transfer of title to the ex-wife and she can provide bank statements and/or cancelled checks proving she has been making the payments out of her own checking account, that would be cool with the lender.  But lender's don't think that way in today's market.    The bank's will have their own interpretation. FYI:  Some lenders gauge the number of mortgages NOT properties.  So, if you have three investment loans, and a first and second on your primary, that may be considered five mortgages. Yes, It Is True: One bank will not allow out of state borrowers to finance investment properties.  It is gonna hurt if the loan officer is not aware of that cute nuance until underwriting.

FHA APPRAISAL REQUIREMENTS - GENERAL RULES TO REMEMBER

Think of Safety and Soundness as best describing the FHA Appraisal Requirements as listed below:

Safety - FHA underwriting guidelines require that lenders review the appraisal to see if the appraiser has made note of property conditions that will affect the health and safety of the occupants.

Soundness - FHA underwriting guidelines require that lenders review the appraisal to see if the appraiser has made note of property conditions that jeopardize the soundness and structural integrity of the home.

When an FHA appraisers do an appraisal they are making sure that their aren't any safety hazards and that home is structurally sound. 


Linda Shank Broker Owner Linda Shank and Company is a 32 year real estate veteran in Phoenix's Southeast Valley.  Contact her at www.ISellAZSunshine.com

Are You Eligible for HAMP-Home Affordable Modification Program?

In order to be considered for a loan modification under HAMP, you must meet the following basic criteria:

1. Primary Residence -This must be your primary residence.
2. Date - The loan must be dated prior to January 1, 2009.
3. Size Limit - The loan must be equal to or less than $729,750.
4. Hardship - Borrower must demonstrate a hardship or change in circumstances which make it more difficult to pay the loan such as a reduction in household income, increase in necessary medical bills or a significant increase in the monthly loan payment due to an interest rate increase.
5. Debt to Income Ratio - First loan payment which includes principal, interest, taxes, insurance and HOA dues equals more than 31% of the borrower's current gross income.
6. Current Income - Borrower must show adequate current income to make the reduced payment if the modification is allowed.


Lender loan modifications can be a forbearance agreement, interest rate reductions, conversion of ARM's to fixed rate loans, deferral of past due payments and in rare instances even principal reductions.

Unfortunately, negative equity is not sufficient grounds for a modification!!!!  So it's best to explore other options (with a lawyer or real estate broker) such as a short sale before walking away from a home and letting it go into Foreclosure.




Linda Shank Broker Owner Linda Shank and Company is a 32 year real estate veteran in Phoenix's Southeast Valley.  Contact her at www.ISellAZSunshine.com

Fannie Mae Conventional Loans are now requiring a 2nd Credit Report

Lenders must now obtain a 2nd credit report, no earlier than 7 days prior to funding, on all conventional loans.  Any new credit inquiries must be explained, and any new credit obligations must be re-underwritten with those debts included in the qualifying ratios.

Jay Starks @ Bell Mortgage states they will not be required to obtain a new credit score and they will not be charging the borrower for the additional credit report at this time.

Jay further comments that he would not be surprised to see FHA and VA follow this path. And, it is possible that investors may decide this is a great idea and require lenders to do the same on all loan files regardless of what the agencies mandate.

Linda Shank Broker Owner Linda Shank and Company is a 32 year real estate veteran in Phoenix's Southeast Valley.  Contact her at www.ISellAZSunshine.com 

Buyers Beware of a 2nd Credit Report done prior to Closing your Loan

This just in from Jay Starks @ Bell Mortgage:

FNMA and Freddie Mac are on the verge of requiring lenders to pull a 2nd credit report just prior to funding.  When they do, we expect all of our secondary market investors to do the same, and they will probably require us to do so on government loans as well as conventional files.  The ramifications of this are enormous:

 

1)  Small FICO score changes due to something as simple as a slightly higher credit card balance could change a customer's interest rate, or cause the loan to be denied, at the last minute.

 

2)  New debts or obligations could cause a customer to no longer qualify.

 

3)  Recently recorded judgments or collection accounts that were not on the original report could derail a transaction just before funding.

 

 

I know that many of you counsel your clients regarding their use of credit while they are shopping for homes or while they are in escrow, but it will be more important than ever going forward that we all work together to remind them of what can happen.

 

No more moving back in with Mom and living on charge cards while you save up your down payment!

 

How to Hold Proper Annual Meetings

To hold and have effective and by the book annual meetings, the HOA needs to consider the following issues:

Does your annual meeting have to be held on a certain date?

Which members are entitled to notice and/or entitled to vote?

When must notice of the annual meeting be given?

What is the quorum requirement for the annutal meeting?

Is Cumulative voting required or allowed, and if so, what does that mean?

What matters must be part of the meeting other than the elections of directors?


Must certain documents be included with the notice of the annual meeting?


Do the governing documents require the election to be held in a certain manner?


Is a nominating committee required?  If so, who appoints the members and when?


How many members need to be on the board?


What is the length of term of the board members?


Does your board have staggered terms?


If Board members have been appointed, when does their term expire?


Do board members need to be members of the association?


Do board members need to be members in good standing?


Are members of the architectural committee elected or appointed, and if elected, who elects them?

 If the association fails to follow the proper requirements for all of the above issues, a member could challenge the results of the annual meeting.  The association can change the requirements by amending the articles or bylaws.  If the association is violating any of the requirements, it should consider changed the requirements or changing the way in which it holds its annual meetings.

Linda Shank is a 32 year real estate veteran in Phoenix's Southeast Valley.  You can reach her at www.ISellAZSunshine.com

FHA Requires Buyer and Seller Signatures to be Live---Not Computerized

In the age of technology, even a signature on a document can be added by a computer program.  HOWEVER, FHA along with many of the large investors requires that the signatures of both buyers and sellers on all initial and final documents such as the contract and final settlement statement be "LIVE" or "WET".  Please keep this requirement in mind, especially when you are dealing with corporate sellers in the case of REO properties.  If you know ahead of time that a live signature is needed, it can help prevent delays to the closing process.

 Information courtesy of Sherri Buttler, Sun American Mortgage, 480-467-1088, Mesa Arizona.

Staging Your Home - First Impressions

When a buyer pulls up in front of your home this is your one and only 15 second chance for a POSITIVE first impression.  Here's what to do and not to do:


* Don't park yours cars in the driveway.
* Have some color in your yard....spring plantings or potted plants.
* A large tree or two can further enhance your home's curb appeal.
* Charm potential buyers with a courtyard fountain or some tasteful yard art by the entry.
* The backyard is important too.  Remove dead plants, trim trees, shrubs and add some flowers.

Linda Shank, a 32 year veteran,  is Broker Owner of Linda Shank & Company  Gold Canyon Arizona  Contact her @ http://www.ISellAZsunshine

What you Should Know about FHA loans

Loans can be underwritten by an approved lender which includes most of the major banks in the country.  FHA has the some high loan limits as Freddie Mac and Fannie Mae (which have been extended to the end of 2010).  You can buy a home with a 3.5 percent down payment as compared to at least 10 percent down for a Freddie Mac or Fannie Mae home.  You can get your loan scored for approval through a variety of underwriting engines including Fannie Mae's Desktop Underwriter and Freddie Mac's Loan Prospector.



 Linda Shank is a Real Estate broker in the Phoenix Southeast Valley Gold Canyon area.  She can be contacted at www.ISellAZsunshine.com