Saturday, August 30, 2008

Citi Residential-You Want WHAT?

Citi Residential is supposedly one of the few lenders who works with the seller at the beginning of the Short Sale process. At least, they used to. In my case, a house listed in Navarre, Florida, where Citi Residential (not Citi Mortgage) was contacted by the seller at inception of the process, had a pro-active appraisal done, and bi-weekly check-in calls by the company to find out how the Short Sale was going. The second was GMAC (worthy of another blog or three). Anyway, I thought "Great! This will make the whole process easy". Not so. We received an offer in May. The Citi Residential negotiator was receptive to an emailed contract, HUD, etc. He wasn't easy to reach, but that's not unusual in Short Sales. After a few weeks, he required more detailed information, and I faxed him a 42-page package. A few weeks later, he said the price wasn't high enough. I sent him proof that the offer was actually slightly over-market. A few weeks later, still no actual "counter", so I continued my phone calls and emails. The rep was on "vacation". The substitute rep asked for the proof of market value to be re-sent. I did so.

A couple weeks later... Phone call from Citi... The rep is "no longer with the company. We have to start at the beginning. We need your letter of authorization and listing agreement, then we'll tell you what we need to do the Short Sale." "You are KIDDING?" I ask in polite and incredulous terms. They are serious. This is ridiculous. So, yesterday I faxed in the listing agreement and letter of authorization-AGAIN. Today they fax back they want all the standard Short Sale items, PLUS Preliminary Title Work and a Termite Report. And, the rep called me on the phone to say they also want the "written approval from GMAC" before proceeding. (Of course, GMAC won't give written approval until they have approval from Citi.) And who is going to pay for the termite inspection and preliminary title work? Bottom line is their new requirements are going to lose many opportunities for sellers to do Short Sales.

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Search Destin Florida real estate and vicinity.
Short Sale Pre Foreclosure Help.
Read my Blog.

Specializing in real estate sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Copyright © 2008 By Wendy Rulnick. All Rights Reserved. *Citi Residential-You Want WHAT?* Contact Wendy Rulnick regarding Destin Florida real estate and vicinity.

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Call the Police! Buyer Moves In Before Closing!

Yesterday was one of the most bizarre days in my real estate career. My assistant got a call from a condominium association trying to verify ownership of one of my Destin Florida foreclosure listings. The bank-owned condo was under deposit, and scheduled to close at the end of September. The condo association said they had been told the buyer had already moved in and was claiming to be the owner. "No way!" I thought. "This cannot be true!" So, I hopped into my car, my heart racing, with two of my assistants, in case it was true and there was a confrontation. We got to the unit, right down the street from my office, opened the lockbox and found the key was missing. We drove back to the office, got a back-up key, and returned. Wow! Was this the right unit? It was newly and completely furnished. Sofa, chairs, coffee table, lamps, tv's, beds, night-tables, end-tables, dining room set, bar stools, patio furniture, dishes, towels, new refrigerator and oven. New ceiling lights. New window blinds installed. The cable had been hooked up and the television worked. I couldn't believe it!

What if the buyer returned while I was there? Who should I call first? The police, the locksmith, the bank, or the buyer's agent? I immediately called the locksmith and the police. The deputy arrived first. He shook his head in dismay. I had the file from the office. The buyer was from California. There was a car with California tags parked in front of the unit. The deputy checked, and bingo-- it was the buyer's car. I had the buyer's telephone number. The police called him. He claimed he felt it was convenient to move his things in, as he had gone back to California, and wouldn't return until January. "What do you want to do?" the deputy asked me. "Did you want to press charges?" I told him I would try to reach the bank, but it was late in the day, right before Labor Day weekend.


Meanwhile, I called the buyer's agent. He claimed he had left the key with the buyer and his inspector, and had to leave early, with instructions to the buyer to re-insert the key in the lockbox. He said he had no knowledge of what the buyer had done. I reached the bank, a huge foreclosure processor. The rep was in shock. After I told him what happened, he put me on hold for about five minutes. When he picked back up, he said unequivocally, the contract had been revoked due to the buyer's action, I was to press charges, and they were going to start the eviction process. I re-called the police, made my statement, and finally left the office around 7:30 p.m. Who knows what tales will unfold next week?


P.S. The funny thing is, I wrote about this same buyer a few weeks ago in Foreclosures: Multiple Offers - Deceipt & Subterfuge.


It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Search Destin Florida real estate and vicinity.
Short Sale Pre Foreclosure Help.
Read my Blog.
Specializing in real estate sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Copyright © 2008 By Wendy Rulnick. All Rights Reserved. *Call the Police! Buyer Moves In Before Closing!* Contact Wendy Rulnick regarding Destin Florida real estate and vicinity.

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Sunday, August 24, 2008

Short Sales with PMI - Strategy Session

This week I've had one of the best Short Sale experiences with a company to date. That is- United Guaranty, a mortgage insurance company. I have a Short Sale in Destin, Florida. The property, a condo, was purchased in 2005 for $580,000. Today, it is worth around $270,000. My seller purchased the unit as an investment. He planned to rent it out as a vacation-rental. The income should have offset the mortgage expenses. Well, the rental market has plummeted along with the sales market, and coupled with his diminished income, he has been unable to keep up with the payments. He hired me to help him before foreclosure ensues. He has a first and second mortgage, Countrywide.

We've had three offers on the unit, but the buyers all withdrew, citing they still believed the condo market was in decline, and were unsure if they were overpaying. Finally, we get a buyer whom we know will stick with it. Well, in the midst of the Short Sale process, Countrywide collects from the MI company, United Guaranty, who take over the liability on the second. I am told to contact them directly, and to see if they'll take Countrywide's offer of $3000.

I called UGI, and they requested: letter of authorization for me to talk to them, letter of authorization for them to talk to Countrywide and vice-versa, contract, listing agreement, comparative market analysis, and HUD reflecting $6340, not $3000 that Countrywide wanted to offer them. I asked them if I should verbally relay that to Countywide first, and they said it was a better "strategy" to present it in writing with, hopefully, an approval letter from them. The rep said that Countrywide would be far better off paying $6340 than having to foreclose. I joked with the rep, "Do you want me to tell them that?" Anyway, I got the information together and emailed it on Tuesday. I received the approval letter on Friday! The rep called me to say my market narrative was excellent, "Exactly what we wanted" and the key to the approval.

I sent the HUD with UGI's approval letter to Countrywide on Friday. They have not rejected the $6340, but told me they will need more details to get through their approval system due to the huge loss. They want a detailed listing history, history of offers with buyers withdrawing, date of birth and address of buyer. OK, I'm on it.

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Search Destin Florida real estate and vicinity.
Short Sale Pre Foreclosure Help.
Read my Blog.

Specializing in real estate sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Copyright © 2008 By Wendy Rulnick. All Rights Reserved. *Short Sales with PMI - Strategy Session* Contact Wendy Rulnick regarding Destin Florida real estate and vicinity.

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Thursday, August 21, 2008

Another Countrywide Short Sale Approved

I know everyone likes to complain about Countrywide Short Sales, but you know what, I like them. They are consistently inconsistent. I've had approvals from them in five weeks, without even a phone call from the negotiator, to five months, after them losing information, switching negotiators four times, and forgetting to order BPO's. At least it's a behemoth of a "system", and the consistency of the agent is the key to success with them.
My most recent approval is a condo in Destin, Florida. The drill was the same as most other short sales, with the key to the magic "approval" near the end. Here's the typical scenario from the listing agent's perspective:

Qualify seller

Obtain and prepare seller package

Price property at fair market value

Market property Field calls from agents asking "How far along in the process is the short sale?"

Field calls from agents asking "Do you have any offers on the property?"

Explain process to agent who is going to write offer

Once under contract with seller, send package to Countrywide

Follow up diligently with Countrywide

Buyer threatens to walk

Follow up diligently with Countrywide

Buyer threatens to walk

Obtain counter from Countrywide

Buyer says no, he'll walk

THE KEY, since this is a good offer, PROVE offer is good to Countrywide

Wait for approval

Buyer threatens to walk

APPROVED


Skill sets of the listing agent come into play in all aspects. Prepare well, get the details right, follow up, see the big picture, and get your approval.

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.

Search Destin Florida real estate and vicinity.
Short Sale Pre Foreclosure Help.
Read my Blog.

Specializing in real estate sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Copyright © 2008 By Wendy Rulnick. All Rights Reserved. *Another Countrywide Short Sale Approved* Contact Wendy Rulnick regarding Destin Florida real estate and vicinity.

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Tuesday, August 19, 2008

Florida: Short Sale Sellers Pay Extra Taxes

Incredible! My state, Florida, has decided to reap additional taxes on those who have the unenviable position of having to do a Short Sale to save themselves from foreclosure or other financial ruin. Florida, like some other states, has a standard tax to the seller whenever there is a sale of real property. It is based on the sales price. Some states call this a "conveyance" tax. Florida calls it "Documentary Stamps on the Deed". It's a tax. The calculation is the sales price multiplied by .007, roughly. Thus, a sale of $300,000 would trigger taxes due at closing to the State of Florida for $2,100. What title agents, also called closing agents, have done up until now is to collect this tax based on the sales price in the contract. But now, in a letter dated August 7, 2008, the Florida Department of Revenue has made it clear to title agents that they must charge this tax on the full amount of the forgiven debt. So, in the case where a home is sold for $300,000 and mortgage debt of $100,000 is cancelled, Florida wants an additional $700. Apparently, they want their money now. Thus, we have title agents scrambling to collect extra taxes on past closings. How are they going to get that money? I doubt the lenders will cough it up so quickly. And, who is really paying here? This extra tax might seem like a gold mine to Florida. It probably totals in the millions. Again, who is really paying this fee? I see it as opportunistic only.

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.

Search Destin Florida real estate and vicinity.

Short Sale Pre Foreclosure Help.

Read my Blog.

Specializing in real estate sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Copyright © 2008 By Wendy Rulnick. All Rights Reserved. *Florida: Short Sale Sellers Pay Extra Taxes* Contact Wendy Rulnick regarding Destin Florida real estate and vicinity.

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Are Your Computers Safe from Hurricanes?

Are your business computers safe from pending hurricanes or other natural disasters? I am concerned, as I wrote in Oh No- Hurricane Season- Here It Comes! In preparation, consider the following advice courtesy of my computer guru, John Wright of Accelerated Solutions....

>>>There are plenty of sources for hurricane preparedness to protect lives, homes, pets, and property... but what about the computer systems?<<<

With this pending storm and those that will follow, make sure your business has a solid hurricane safety plan for your computer systems.

How can a small business owner protect their data in a hurricane, tropical storm, or flood?

>>>A full backup of all computer systems should be made including E-mail, Contacts, Documents, Financials, Databases, Etc.<<<

>>>Backed up information should be stored in two separate locations.<<<

Replacing mission critical data may be impossible, please cover all your bases.
A simple external hard drive for $100 or less can save your data and possibly your business.

Checklist:

Update your contact lists

Unplug & Move Electrical Equipment to higher/safer locations & Disconnect from data lines

a. Telephone equipment
b. Network equipment
c. Servers, Desktops & Peripherals

Remove/secure all antennas and satellite dishes

Check and replenish, if necessary, stocks and supplies (plan for both before, during, and after a storm as supplies may not be available for purchase immediately following event)

Clear all unnecessary items out of vulnerable areas and areas which may need to receive moved equipment

Advise main and remote offices of preparatory actions they should take at work and at home

Verify switchboard/phone forwarding & relocation works to alternate numbers (cellular, etc.)

Notify employees of potential actions that may need to be taken

Have tarps/plastic available to cover equipment to protect against damage should structure failure occur

Secure and lock down all workstations, offices and work areas

Individual offices and work areas should be checked and "storm readied"

Close and lock all windows - Computers and electrical equipment should be moved away from windows

If you require assistance or have questions please contact us at 850.650.8961

Thanks,
John A. Wright
The Accelerated Group, LLC
Technology Consulting & Integration
Miramar Beach, FL
850.650.8961

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Search Destin Florida real estate and vicinity.
Short Sale Pre Foreclosure Help.
Read my Blog.
Specializing in real estate sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204
Copyright © 2008 By Wendy Rulnick. All Rights Reserved. *Are Your Computers Safe from Hurricanes?* Contact Wendy Rulnick regarding Destin Florida real estate and vicinity.

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Saturday, August 16, 2008

Oh No - Hurricane Season - Here It Comes!


Oh no- here it comes! Tropical Storm Fay is predicted to become a hurricane today. It could reach the U.S. by Thursday. Dr. Jeff Master's Wunder Blog says the storm may become a Category 1-2 by tonight. Living on the Emerald Coast, in Destin Florida, past pre-hurricane flutters are rushing back. "We should get ready now!" I tell my husband. "Do we have extra gas? Cat litter? Tranquilizer for Micah?" (Michah is one of my three cats. He meows every ten seconds during our evacuation trips to Atlanta or Huntsville.) I am anticipating watching the Weather Channel every hour for an update, and checking the National Hurricane Center for the projected path. Wish us all luck!


It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.



Specializing in real estate sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204


Copyright © 2008 By Wendy Rulnick. All Rights Reserved. *Oh No - Hurricane Season - Here It Comes!* Contact Wendy Rulnick regarding Destin Florida real estate and vicinity.

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Friday, August 15, 2008

Rulnick Realty: 2 New Agents

What a fabulous week. I would say, full of "serendipity! I've hired two new agents to work at Rulnick Realty. The first, Beverly Dudley, has several years real estate experience. She will also fill the role of my executive assistant. I was looking for an additional staff member, as we are overwhelmed with new listings and short sales. Each day, my office manager, Gareth Wood, and I fill every every second multi-tasking, eating at our desks, phone, email and writing simultaneously. It's been crazy. That's why I knew I needed to expand my staff to keep up with the flow of new business. Beverly will help with prospecting, closing coordination and filling in as necessary. She previously worked for a top agent (now retiring) in my area. She sold new construction homes and townhomes in Santa Rosa Beach, as well as beachfront condos in Destin. Beverly's got a great, outgoing personality. One thing that impressed me was when she said, "When I get a contract-it closes!" Now, that's confidence.

My other new agent is Carl Hoskins from Santa Rose Beach. Carl was in the U.S. Air Force for many years, acting, believe it or not, as secretary to generals! He's been in real estate for two years. What's quickly evident is- he is meticulous about what he does. He has a solid grasp of the market, is detail-oriented, and has a warm, people-loving personality. He has many military connections and enjoys building relationships. What a great combination!

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.

Search Destin Florida real estate and vicinity.

Short Sale Pre Foreclosure Help.

Read my Blog.

Specializing in real estate sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Copyright © 2008 By Wendy Rulnick. All Rights Reserved. *Rulnick Realty: 2 New Agents* Contact Wendy Rulnick regarding Destin Florida real estate and vicinity.

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Tuesday, August 12, 2008

How "Not" To Buy A Short Sale

Yesterday I received an offer on a Short Sale listing in Destin Florida. The list price was $216,000, a bit below market, and the house had been for sale for over five months. An agent produced an offer for $175,000 and it was contingent on seller's lender approval within 45 days. It also stated "The buyer has the right to withdraw the offer at any time prior to seller's lender's approval".

I presented this offer to my seller. We both knew $175,000 was nowhere in range of market value. Additionally, 45 days for lender approval is not realistic, with Short Sale approvals sometimes running 120 days or more. Finally, the buyer having the right to withdraw the offer at any time, made it a non-offer. So we countered as follows:

-Purchase price: $210,000
-No right to withdraw at "any time"
-90 days for bank to approve, with additional 30 days if needed


The buyer's agent responded the next day: "My buyers have decided not to accept the counter offer conditions, they don't want to wait 90-120 days to find out whether or not their offer will be accepted. If they knew within a few weeks that the seller's lender would take their offer but it would take that long to close then they wouldn't mind waiting. It would tie them up too long and they want to find a place soon. I explained to them the timing of the short sales and they will try to find something that isn't one."


This agent should have found them a non-short sale in the first place, if that was the buyer's outlook, and the agent should have educated the buyer about the Buying Short Sales. Instead, the buyer was attempting to tie up the property, generate an avalanche of paperwork and phone calls, and then say "no" at any time. The practice of agents writing offers with the buyer's right to withdraw at any time has grown for two reasons. One, because many Short Sale listing agents send multiple, sometimes unsigned offers to the lender in a "bid" situation, and the other, by buyers simply frustrated with waiting. When more listing agents practice One Strong Contract principles, buyers will become confident that the their Short Sale contract will close. But before then, these types of offers will continue to run rampant in the marketplace.


It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.


Search Destin Florida real estate and vicinity.
Short Sale Pre Foreclosure Help.
Read my Blog.


Specializing in real estate sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204


Copyright © 2008 By Wendy Rulnick. All Rights Reserved. *How "Not" To Buy A Short Sale* Contact Wendy Rulnick regarding Destin Florida real estate and vicinity.

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Friday, August 8, 2008

Multiple Offers- Foreclosures

Yesterday I was in the midst of a multiple offer situation. The property was a Destin foreclosure, a condo near the Gulf of Mexico. There were two offers, and the seller, a bank, asked for "highest and best offer" from each party, a standard practice in the foreclosure industry. While driving back to my office from an appointment, I received a call about the condo on my cell phone. Here is the conversation, I have changed names for the sake of confidentiality.

Buyer: "My name is Joe Garbled and I am calling about your Piper condo! What can you tell me about it?"

Wendy: "Are you an agent?"

Buyer: "No, l am a buyer".

Wendy: "Sir, there are two offers on the property. It may be sold by tomorrow..."

Buyer: "Is the offer cash? Is it under 180,000?"

Wendy: "Sir, I cannot say. Do you want to make an offer on the property?"

Buyer: "Yes, but is the offer cash? Is it under 180,000?"

Wendy: "Sir, I am driving now, cash doesn't matter to this bank, they want the best net offer."

Buyer: "Call me when you know something!!"

I thought the call was quite strange, and it put me into a delicate situation regarding disclosure. The seller had not instructed me to divulge price and terms of either offer. Anyway, I proceeded to follow up with each of the buyers' agents to make sure they had received the multiple offer paperwork from the foreclosure bank. Agent #2 said yes, but his buyer wanted to call me directly to ask me some questions, and he told him not to. I asked, "Is his name Joe?" "Yes".

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.

Search Destin Florida real estate.
Short Sale Pre Foreclosure Help.
Read my Blog.

Specializing in real estate sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Copyright © 2008 By Wendy Rulnick. All Rights Reserved. *Multiple Offers- Foreclosures* Contact Wendy Rulnick regarding Destin Florida real estate and vicinity.

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Monday, August 4, 2008

HOPE for Homeowners

I have been getting calls from sellers with rising mortgage bills or from those who have lost income or jobs, to find out if they are eligible for the favorable refinance benefits recently passed in the Housing and Economic Recovery Act of 2008. Following is quoted directly from the Senate Banking Committee. To find out if you qualify, you should call your mortgage lender.


Summary of the "HOPE for Homeowners Act of 2008"

The "HOPE for Homeowners Act of 2008" creates a new, temporary, voluntary program within FHA to back FHA-insured mortgages to distressed borrowers. The new mortgages offered by FHA-approved lenders will refinance distressed loans at a significant discount for owner-occupants at risk of losing their homes to foreclosure. In exchange, homeowners will share future appreciation with FHA.

The program is built on five principles:
1. Long-term affordability. The program is built on the idea, expressed by Federal Reserve Chairman Bernanke, that creating new equity for troubled homeowners is likely to be a more effective way to avoid foreclosures. New loans will be based on a family's ability to repay the loan, ensuring affordability and sustainable homeownership.
2. No investor or lender bailout. Investors and/or lenders will have to take significant losses in order to benefit from the proceeds of the loans refinanced with government insurance. However, these losses would be less than the losses associated with foreclosure.
3. No windfall for borrowers. Borrowers will share their new equity and future appreciation equally with FHA. Borrowers will pay for the FHA insurance.
4. Voluntary participation. This will be a voluntary program. No lenders, servicers, or investors will be compelled to participate.
5. Restore confidence, liquidity, and transparency. Credit markets are fearful and frozen in part because banks and other financial institutions do not know what their subprime mortgages and related securities are worth. The uncertainty is forcing lenders to hoard capital and stop the lending necessary for economic growth. This program will help restore confidence and get markets flowing again.

Eligible Borrowers. Only owner-occupants who are unable to afford their mortgage payments are eligible for the program. No investors or investor properties will qualify. Homeowners must certify, under penalty of law, that they have not intentionally defaulted on their loan to qualify for the program and must have a mortgage debt to income ratio greater than 31 percent as of March 1, 2008. Lenders must document and verify borrowers' income with the IRS.

New Loan Amount. The size of the new FHA-insured loan will be lesser of the amount the borrower can afford to repay, as determined by the current affordability requirements of FHA; or, 90% of the current value of the home. Loans must be 30-year, fixed rate loans.

Equity & Appreciation Sharing. In order to avoid a windfall to the borrower created by the new 90% loan-to-value FHA-insured mortgage, the borrower must share the newly-created equity and future appreciation equally with FHA. This obligation will continue until the borrower sells the home or refinances the FHA-insured mortgage. Moreover, the homeowner's access to the newly created equity will be phased-in over 5 years.

Existing Subordinate Liens. Before participating in this program, all subordinate liens must be extinguished. This will have to be done through negotiation with the first lien holder.

Program Sunset. The program will begin October 1, 2008 and sunset on September 30, 2011.
The complete summary is on the Senate Banking Committee website.

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Specializing in Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Search Destin Florida real estate.

Short Sale Pre Foreclosure Help.

Copyright © 2008 By Wendy Rulnick. All Rights Reserved. *HOPE for Homeowners * Contact Wendy Rulnick regarding Destin Florida real estate and vicinity.

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