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New Bern's Top Real Estate Team
The United States Department of Housing and Urban Development as posted the following suggestions to help homeowners facing foreclosure.
Don't ignore the problem and hope it will go away. The sooner you act, the easier it is to get help.
Contact your lender at the earliest indication of a problem . Lenders are required to file a Notice of Default if necessary in order to protect their own interests, however the last thing a lender wants is to take foreclose on your home. Open all mail sent from your lender. Ignoring the problem will not make it go and lenders often provide helpful information that may provide a few options during the early phases of delinquent payments. Later in the process, important information regarding legal action and responsibilities may be sent by your lender.
Read through your loan contract and contact your State Government Housing Office. Be well versed on what your lender may do if you can't make payments and the time frames and laws in your state.
Understand Foreclosure Prevention Options- A number of loss mitigation options are available including thatcould help you get current.
Contact a non-profit housing counselor- Counselors can help you with the laws and your options as well as organize your finances and represent you in negotiations. These counselors are available nationwide and are funded by HUD.
Prioritize your spending- Next to your health, keeping your house should be your number one priority. Review your spending to see what you can remove to make more room in your budget for your house payment. It is a good idea to contact the lender for your unsecured debt as well, as they may offer some options to help you manage your payments.
Utilize your assets- Review your assets for anything that you may be able to sell for cash to make your payment or reinstate your loan. This can include a second car, jewelry, electronics or a whole life insurance policy. Also, if possible, attempt to take on a second job. What is important in these situations is that you have demonstrated to your lender that you are attempting to reconcile your financial obligations. Even though the financial gain may not be enough to completely reconcile the account, the display of effort is just as important.
Avoid foreclosure prevention companies- With a number of non-profit agencies provided by the government, it is a good idea to avoid using for-profit agencies.
Be conscience of foreclosure recovery scams.
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Is your real estate search engine savvy? They had better be in todays world. When it comes to real estate today more so than ever homebuyers are goingto the internet to find their realtors and their homes.
Today consumers are so overwhelmed with advertising they are blocking most of it out. When they want to learn about real estate they go straight to the web. If your realtor has what they want 81% of the time they will buy from them.
The bottom line. Choose a realto that has a strong web presence. Choose the Tyson Group.
Steve TysonThe Tyson Group The Gold Standard in New Bern Real Estate www.newbern-nc.info 252 514 9157 cell 888 603 3215 fax
More bad news for the housing industry, or is it? Reports were out today that home sales dropped to the lowest level in 12 years. I have been saying for months that it is a bad time to sell but a goo time to buy. Buy now and get great interest rates and reasonably priced homes. Two years from now you will be glad you did.
Tueday night Obama gave his Living on a Prayer Speech and laid it all out. It is quite an ambitious agenda he has set for himself and the country. His critics state that he is asking for the impossible. I say he has no choice but to go for broke.
However it is not going to be easy for any of us particularly with this housing market.
As resistance to foreclosure evictions grows among homeowners, community leaders and some law enforcement officials, a broad civil disobedience campaign is starting in New York and other cities to support families who refuse orders to vacate their homes.
A coalition of 143 New York nonprofits called for a moratorium on foreclosures to give a $275 billion mortgage relief plan unveiled Wednesday by President Barack Obama a chance to work.
New Yorkers for Responsible Lending wants mortgage lenders and servicers to halt foreclosure actions on all primary residences in the state until at least eight weeks after the Obama administration’s proposal takes effect early next month.
“Even if Obama’s plan is put into place quickly, it’s going to take time for lenders to do modifications,” said Josh Zinner, co-director of the Neighborhood Economic Development Advocacy Project. “It’s absolutely critical that there be a foreclosure freeze to give this plan a chance to work.”
More than 32% of all subprime adjustable rate mortgages were seriously delinquent or in foreclosure in New York at the end of 2008, according to Mr. Zinner’s organization, meaning thousands of residents are in jeopardy of losing their homes.
What usually happens is that the banks forecloses on the property then sells it off to specialists in distressed properties. This is how the real estate food chain works and it results in lenders cutting their losses and investors getting great deals. Unfortunately, the former owners of these properties are left traumatized, physically, psychologically and financially.
It's harsh but that is how it works.
However with these developments, there is no incentive for people who specialize in distressed properties to get involved because they will be dealing with this type of resistance.
Does that mean one should not buy or invest in real estate? Absolutely not. There are some great deals out there. However I should urge that people should exercise due diligence to the point of paranoia. You need to know if the property you are interested in qualifies for the Obama housing plan, if the owner is distressed or underwater, how flexible the lenders are and by all means make sure if the property you want to own is the in the cross hairs of community activists.
The first group is made up of people who cannot afford their mortgages and have fallen behind on their monthly payments. Many took out loans they were never going to be able to afford, while others have since lost their jobs. About three million households — and rising — fall into this category. Without help, they will lose their homes.
The second group is far larger. It is made up of the more than 10 million households that can afford their monthly payments but whose houses are worth less than what is owed on their mortgages. In real estate parlance, they are underwater. If they want to stay in their homes, they will have no trouble doing so. But some may choose to walk away voluntarily, rather than continue to make payments on an investment that may never pay off.
Scratch beneath the details of any housing bailout proposal, and the fundamental issue is whether it tries to help the second group or just the first.
Mr. Obama has evidently decided to focus on the first group, based on the previews of his speech that aides have offered. In coming weeks, his administration will begin spending $50 billion to entice banks to reduce the monthly payments of people who otherwise couldn’t afford to stay in their houses. In effect, the government will split the losses on these mortgages with banks.
The $50 billion will come from the money Congress has already allocated for the bailout of the financial system. It is likely to be aimed at people who need a significant, but not an enormous, amount of help to meet their mortgage payments.
There are some big advantages to this approach. Bailing out all underwater homeowners would be tremendously expensive. All told, about $500 billion in mortgage debt is already underwater, and it’s impossible to know in advance who is likely to walk away. So the government would have to spend hundreds of billions of dollars to help millions of people who don’t need help staying in their homes.
I empathize with the people who are on the verge of losing their homes or have lost their homes. More than you will know. I understand their outrage and anxieties. A lot of these people were put in a situation by lenders where they were completely over their heads but did not realize it until it was too late.
I am also a believer of the philosophy that if s**t in your bed you should sleep in it.
In real estate appraisal there are 4 stages of a property which are Growth, Equilibrium, Decline and Revitalization. These stages also apply to a neighborhood. Suffice to say we are in the decline phase.
What usually occurs in this period is that the distressed investors come out in droves to cherry pick for the best deals that are out there. And despite the fact that the credit markets are pretty much in suspended animation, all you need to do is type in distressed properties sales.
However I am unsure if Obama's plan and stopping foreclosures will help. In fact I think it will just prolong inevitable.
Just because help is available does not mean people will take it. It all comes down to whether the aggravation is worth it. Owners who are underwater may realize they are overpaying for a home that has plummeted in value. Banks and lenders may also realize that after doing the numbers that restructuring does not make any sense for them to get involved with the Obama plan and resist any actions to be part of it.
What I see here is a messy convergence of forces that involve the government, distressed owners, community activism and lenders. Which is why I do not see any resolution to the housing crisis expedited in 2009. In fact it would not surprise me if we are still at square one in 2010.
As for President Obama's lofty ambitions, he really does not have a choice. I highly doubt Bernanke's assessment that the recession could end by 2009 and in fact it is possible that this could go on for more than 4 years. It is possible that Obama will be a one term wonder and no one is more aware of that than President Obama himself. So he has to push and he has to push hard.
Will this work? I have no clue. Maybe this will be all for naught. But the people are wailing for action and he is giving them a show.
As part of the American Recovery and Reinvestment Act of 2009 first time home buyers are now eligible for a tax credit of $8,000. Home owners who purchase their house between January 1, 2009 and December 1, 2009 will be eligible for the credit.
The law states that the credit is available to first time home buyers, however the law also allows anyone who has not owned a home for three years to qualify. For example, if you sold your home on June 1, 2006, you will have to close on your new home subsequent to June 1, 2009 to qualify.
You will receive the tax credit when you file your individual tax return. As part of this filing, you will need to complete Form 5405 which determines the amount of credit you will receive. The credit can be claimed on either your 2008 or 2009 tax return. If you already filed your 2008 tax return, you can amend the return to obtain the credit.
The good part. Everyone should understand that this is a credit to the tax payer, not a deduction. A tax credit is a dollar for dollar benefit to the tax payer. Unlike a tax deduction which merely decreases your taxable income a tax credit comes off the top of the taxes you pay. Additionally this tax credit does not have to be repaid to the government like the “credit” available to first time home buyers in 2008.
The credit shall be equal to 10% of the purchase price of the home, not to exceed $8,000. There are restrictions on who is eligible for the tax credit. A single taxpayer with a income up to $75,000 and couples with income of up to $150,000 qualify for the full credit.
For first time homebuyers or folks that have not owned a house in the last 3 years this is a great opprunity to get a home and let Uncle Sam foot some of the bill. Don't let this once in a lifetime pass you buy.
Below I have listed some of the top reasons that homes do not sale. In todays competitive market place you cannot afford to make a mistake in any of these issues. 1. Price-The failure to price your house correctly is the number one reason for homes not selling. Many sellers want to price for yesterdays market but that won't work. Price it right from the start.
2. Poor marketing. Is your realtor a professional when it comes to marketing? Are they internet savy? If not find one.
3. Is your house difficult to show? If so you better correct that. If not Realtors will avoid it like the plague. It's a competitive real estate market and you need to understand this. Don't make it hard for the realtors to show your property.
4. Stigma- If your property is stigmatized for any reason, price, condition, ect. buyers and realtors will avoid the property. Find out from your realtor if your house has any issues that need to be addressed and take care of them immediately.
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