Urban Life

Help For Phoenix Home Buyers

Have you thought about buying a home in Phoenix Arizona, yet you don’t have the money for a down payment and closing costs? Help may be yours under the Neighborhood Stabilization Program.

The city of Phoenix Neighborhood Stabilization Program (NSP) offers a home ownership assistance program providing $15,000 for down payment and closing cost assistance.  Eligible buyers must be

• Buyers must be able to qualify for an FHA loan.
• Have completed the NSP-required eight-hour Home Ownership Education Class and Credit/Budget Assessment counseling course.

There are a few other requirements to consider:

• Buyers must maintain the property as their principal residence.
• The total household income must be below 120% of area median income. 
• Program participants must contribute a minimum of $1,000 of personal funds for down payment or closing costs.
• The $15,000 is paid back to the city when the home-buyer sells the home or refinances. 

The program targets foreclosed single-family homes, town-homes and condominiums (condominium conversions are not eligible) that meet HUD Housing Quality Standards (HQS).  The purchased home must be a foreclosed home anywhere within the city of Phoenix limits and meet other eligibility requirements.

Many mortgage lenders can assist you with this program. We’ve had good results with:

Judy Giel
MetLife Home Loans
602-494-6000 x222
jgiel@metlife.com

Ron Hall
BNC National Bank
623-293-6970
rhall@bncnationalbank.com

Best to you,

Gene Urban
The Urban Team at Realty Executives
602-234-5777

What Is Homepath Financing and What are Home path Loans

Homepath is a FNMA, Fannie Mae, loan product for properties that FNMA has foreclosed on and have qualified for special financing. So what makes it so special? Well there are a few things:

• No mortgage insurance: This is the insurance that is required by a lender if you stop making payments.
• No appraisal: This is a house by house rule but they do waive the appraisal on properties.
• Low down payment: 5% in the Phoenix market, depending on your market that could be higher or lower.
• 15 to 30 year fixed mortgage at competitive rates.
• Protection for first time home buyers:

What is First Look for Fannie Mae Homes?

First Look is designed to provide owner occupants and buyers using public funds a “first look” at Fannie Mae homes. Under First Look, Fannie Mae will only consider offers from owner occupants and buyers using public funds during the first 15 days a property is listed in the local multiple listing service (MLS). If the property is still for sale on the 16th day, investor offers may be submitted and will be considered

I saved the best for last! FNMA is having a sale and here are the details:

Special Offers:

Fannie Mae is offering a 3.5% incentive* for buyers who purchase and close on a Fannie Mae-owned home between January 28 and April 30, 2010. Buyers purchasing properties listed on this site that are closed within this period may receive up to 3.5% of the final sales price for:

• Closing costs.
• The purchase of new Whirlpool® appliances by Fannie Mae.
• A mix of closing costs and appliances, at the buyer’s discretion, up to the maximum 3.5%.

*** Lenders may impose their own limitations on the use of the 3.5% incentive, so buyers should consult their particular lender for guidance.

To be eligible for this incentive:

• Offers must be accepted after January 28, 2010
• Property sales must close escrow before May 1, 2010
• Buyers must be owner-occupants, investors are excluded.

Who Can Provide a HomePath Loan?

FNMA has limited the number of mortgage companies to just a few of hundreds of lenders. If you would like to find one in your area, here is a link to the “find a HomePath Lender” site. Below you will find contact information on an Arizona lender who can help you in our fine State.

If you would like to search Fannie Mae’s inventory of HomePath authorized homes we’ve made it easy. Just use this link to our home search site.

If you are looking to buy a home there is an unprecedented level of first time home buyer incentives.

________________________________

We want to thank our lender buddy, Ron Hall, for providing this HomePath information. You can reach Ron at 623-293-6970 with your mortgage questions or on his web site: http://www.bncnationalbank.com/scottsdale/rhall.

Have a great weekend…

Gene Urban
The Urban Team at Realty Executives
602-234-5777

HUD Makes Buying and Selling Flip Homes Easier

Out friend and senior mortgage consultant, Ron Hall, passed on the following article about the changes in HUD policy on flipping homes.

In the past, an investor would have to wait a minimum of 90 days before selling a home they bought to flip. The new rules will make life a bit easier for all.

If you have specific questions drop Ron Hall an email or call him at 623-293-6970...he is a darn savvy mortgage guy. Here is the article:

WASHINGTON - In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan today announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration commitment to addressing foreclosure. Just yesterday, Secretary Donovan announced $2 billion in Neighborhood Stabilization Program grants to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes.

"As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential home-buyers," said Donovan. "FHA has an unprecedented opportunity to fulfill its mission by helping many home-buyers find affordable housing while contributing to neighborhood stabilization."

With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.

"This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed," Donovan said.

In today's market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

"FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties," said FHA Commissioner David H. Stevens. "This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity."

The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of "flipping" where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:

• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
• In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions.
• The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Specific conditions and other details of this new temporary policy are in the text of the waiver, available on HUD's website.

Have a great day,

Gene Urban
The Urban Team at Realty Executives
602-234-5777

FHA Loans and Non-Permited Rooms and Additions

As we have mentioned in the past, FHA loan requirements have gotten tougher these days. One of the changes is when you are considering buying or selling a home with non-permitted rooms or additions. Our friend Jenna Hirth with PMAC Lending in California has provided us a little insight into the changes that can affect a real estate transaction where un-permitted work was performed.

Good Old Days- Up until a year ago if a property transaction had unpermitted additions or improvements we use to have the appraiser verify that the work was done in a “workmanlike manner” and give it no value on the appraisal report.

Reality with Current Market – Lenders and investors now are much more strict about properties with unpermitted areas. If the unpermitted area has any electrical, plumbing or heating that may pose a potential health and safety issue after the transaction closes, they will want the those items capped or removed. If there is lighting they would need to remove the fixtures and cap the electrical and if there was a sink added they would want removed and plumbing capped off. Once these corrections are made the appraiser would go back and inspect.

Of course when possible they can always try to get the improvement permitted. This is all about health and safety and marketability when the loans are sold and insured. If you come across a property with permit issues like these discussed, it would be a good idea to check with the city to see if and how long it would take to get a permit and if that won’t work contact the potential lender to confirm exactly what will be required for the loan approval.

Financing Option – Many lenders offer the FHA 203K Rehab loan that would allow a borrower to finance needed repairs and improvements that could also include items needed to obtain final permits.

Best to you in 2010,

Gene Urban
The Urban Team at Realty Executives
602-234-5777

What is an LSR, Loan Status Report, used in Arizona real estate purchases?

Many people ask us, "What is an LSR?" We could answer lipolysis stimulated lipoprotein receptor, however, we think most people are referring to a real estate addendum called a Loan Status Report.

Simply stated, the Loan Status Report (LSR) is a standardized pre-approval letter a lender provides for purchasing residential real estate in Arizona. Prior to the creation of the Loan Status Report lenders would supply a pre-qualification letter that varied in content and quality of information. The LSR provides a form for information deemed important to both buyers and sellers of residential real estate.

Some ask if having an LSR is mandatory when financing the purchase of residential real estate in Arizona. It is only mandatory if one is using the ADRE Purchase Contract to write and submit your offer. Since most residential real estate purchase contracts are written using the ADRE form, a LSR is commonly required.

Below is an introduction video provided to help you better understand the LSR document. If you have questions about this or any document used in a real estate transaction, we recommend you contact qualified counsel.

We hope this post and video have been of help. If you have questions, know we are delighted to be of help.

Gene Urban
The Urban Team at Realty Executives
602-234-5777

What You Need To Know About Loan Modifications... the real truth

One of the information sources we subscribe to is Inman News. Its a great real estate news site with loads of information. An article in today's feed caught our eye. It has to do with the Federal Government backed loan modification program. What was interesting is what they called The Ticking Time Bomb. 

Most people are not aware of a balloon payment often added to the back side of your loan after modification. Isn't there is always a hook with a government back program?

Rather than summarize the article by noted columnist Marcie Geffner, we thought we'd just give you a link. If you or someone you know is considering loan modification, this is am important read... don't pass it up!!

Here is a link the the Inman News article on loan modifications. 

If you have any question or need a referral to an honest loan modification specialist, please let us know. In addition, we wrote an article on the subject you may want to read as well. Below is a link to our article on loan modifications.

Loan Modifications... what they are and how to do them.

Hope you have a great day and thanks for spending time at Urban LIfe. Come back often to see what's new on the real estate front.

Gene Urban
The Urban Team at Realty Executives
602-234-5777

FTC & Several States Go After Mortgage Modification & Rescue Scams

We get a few calls a week from people asking who to turn to for help with loan modification. We ended up writing a post on the subject of loan modification help. Here is a link to the article on loan modifications.

However, we've also heard about many people being taken advantage of by companies promising help, yet delivering none. Personally, I think such pond scum should be given lethal injections... how can you take advantage of people who are in trouble, scared and reaching out for help? Just makes me crazy.

Anyway, the Federal Trade Commission in a coordinated effort with many state attorney generals are going after these low-life scoundrels. Below is a partial list of companies who have been identified by the FTC as alleged rip-off artists.

• US Foreclosure Relief
• Lucas Law Center
• Loss Mitigation Services
• Apply2Save
• Lighthouse Services
• Pacific Shore Financial
• California Foreclosure Services
• HE Sevice Company
• Safe Harbor
• Pomery & Associates
• Homeowners Legal Assistance
• Future Financial Services, LLC
• Synergy Financial Management Corp. dba Direct Lender
• Home Relief Services
• US Homeowners Assistance
• RMR Group Loss Mitigation
• United First

A couple of months ago we were contacted by one firm who offered us up to $1500.00 for every referral we sent their way. Naturally, we declined the offer and let the firm know we did not feel they had the client's best interest in mind. As I recall we told them we considered their tactics as predatory and evil.

If you are considering a loan modification or mortgage help and assistance, be careful and wise. Below is a little video from the FTC that may help you avoid being scammed.

Gene Urban
the Urban Team at Realty Executives

Urban Team & MetLife Home Loans Announce Real Estate Seminar

Some of our readers know about our new blog site, Real Estate Investing 101. If not, here is a quick overview of why we launched the site and what the seminars are about.

There are a lot of people teaching folks how to get rich-quick in real estate. They put on seminars, sell books, CD's, software and "stuff". When the seminars are happening in Phoenix we, as Realtors, know because of the calls we get. Seminar attendees call real estate agents and brokers asking us to make offers on their behalf... lots of offers. They do not want our advise or counsel, only our access to ARMLS and the ability to write contracts. Ron and I have gotten to know a few of these people and some of what they are taught is misleading or outright dangerous.

One example were two brothers from the the southeast. We asked them lot of questions and the answers were either vague such as' "oh they have that handled for us" or the response was simply bad information. The bottom line was last summer, when the market was really tanking, these two brothers were being taught that flipping properties was a great way to make a killing. Those of us in the business knew this was a risky proposition and probably a great way to lose a fortune rather than make one. We tried to caution them and were met with deaf ears.

In response, Ron and I decided to create a web site dedicated to providing new or would be residential real estate investors quality information and advice. To supplement the web site we've created a series of seminars designed to educate people about the ins and outs, dos and don'ts, and nuts and bolts of becoming an owner of residential rental property.

Our first seminar is being co-hosted by the good people at MetLife Home Loans. Ron Urban, who was the designated broker of a mid-size property management firm for several years, will be leading the discussion. His experience at buying and/or managing over 150 investment properties provides the foundation for the class and Judy Giel with MetLife Home Loans will discuss several loan options. A Q & A session will be part of the evening.

To learn more, get time and dates, or sign up for this fun event, go to our investment web site... Real Estate Investing 101. You can sign up for the workshop via a Meet-Up.com link provided on the site or by sending us an email. Naturally, if you have a friend or know someone at work who has an interest, pass on the link to them. The more the merrier is what we say.

Have a great Friday and we hope to see you at one of our events.

Gene Urban
The Urban Team at Realty Executives
602-234-5777

Media Says Foreclosures Down Due to Government Plan... Is that the real truth?

Many of you probably saw the story on AZCentral touting the government's Homeowner Affordability and Stability Plan (HASP) as the reason for foreclosures being down and banks responding to homeowners in trouble. Personally, I believe it has much less to do with the plan and more to do with banks finally having the infrastructure to deal with the problem.

The AZCentral article is an example of a reporter being too lazy or ignorant to understand an issue. The result is an article that simply does not reflect the facts. Judging by the 10+ pages of comments from readers, I don't think I am alone in these feelings.

The HASP has been helpful, but it is not the main reason banks are being more responsive to troubled homeowners. I do believe Obama's message opened the eyes of people facing foreclosure and helped prompt some into action.

I believe much of the change has been due to the banks finally having sufficient staff and systems in place to handle the work load. Look at it from a business standpoint.

Let's say you operate a car repair shop and suddenly your business increases 20% in two months. You probably respond by working your staff harder and trying to handle the load within the systems you have in place. Then the work load increases another 300% in the next 6 months. Your waist-deep in work now. You can't keep up with the work and you don't have the time to find solutions. This is what the banks faced in 2008.

At one point, bank management recognized the severity of the problems and started tackling them. Banks, traditionally, are not rapid responders. The problem has to be studied, departments have to learn to share data, solutions need to be evaluated, reviewed by attorneys, reevaluated and so on. It's a slow process and the solutions were often outdated before being implemented... a bit like our freeway system updates. In late 2008, new systems are in place, additional manpower hired/trained, computer systems bought, software reconfigured and they, the banks, are in a position to better serve their customers.

In February 2009 the politicians step in, create pretty policy and announce how they will get to the bottom of this problem and solve it. 

As Realtors we witnessed the change in bank performance regarding the sale of foreclosure properties. Last Fall it we often waited as long as three weeks to get a response to an offer made on an REO home. Today, the response time is 24-48 hours. The reason is simple... they have systems and personnel in place that can better handle the workload. They are still underwater but not like they were  a few months ago.

In conclusion, let's give credit where it's due. The Government's policy would have had little effect if the banks had not put in place the people and procedures to better serve the public.

Gene Urban
The Urban Team at Realty Executives
602-234-5777

Loan Modifications, What They Are, How to Do Them, and HopeNow.Com

Jim Murphy, a Phoenix-based real estate attorney with Carmichael & Powell PC, spoke at our office meeting this morning. He discussed a number of issues including loan modification. I thought I’d pass on some of his wisdom, as well as our thoughts on the subject.

Let’s say you find yourself unable to pay your current mortgage payment. Maybe the interest rate went up, your employer cut your hours… something changed. One of your options is to seek a loan modification from your lender.

Simply stated, a loan modification is exactly what it sounds like.. a modification to the terms of your loan.

• Your lender may agree to extend the payment period and re-amortize the loan.
• The lender can lower the interest rate.
• The lender may tack any amounts in arrears to the principle balance and re-amortize the loan.
• Sometimes, not often, lenders reduce the actual loan amount.

In other words, you and the lender try to find a way to make the payments affordable and keep you from defaulting on the loan.

How do you proceed with a loan modification? There are a few ways: