BluefoxOutlook

Southern Highlands - Las Vegas NV - mortgage recipients have new foreclosure defense weapon

Sat, 07 Nov 2009 22:25:46 -0600

Southern Nevada - with communities of Henderson, Anthem, Summerlin, Green Valley, Silverado Ranch and Mountains Edge - is in the very eye of the tornado when it comes to real estate markets sucked into its furious spin. Home loan foreclosures here are now as commonly talked about as the weather. Many homeowners have given up on trying to hang on to their properties while some are tenaciously seeking solutions to stay on. The latter have several avenues to explore, either directly through their mortgage lenders or then with assistance from a legal counsel.

Now they have a new weapon to deploy. It's called the retro appraisal.

It simply is an appraisal that is based on a past date. It could be three years ago, or five years ago. Normally appraisals are done for the present to be part of a mortgage application, vouching for the collateral's value.

Lawyers representing Las Vegas homeowners in mortgage foreclosure cases, foreclosure mediations and home loan modifications can now rely on these retro appraisals. The basic argument is that lenders were approving loans back in the day using inflated appraisals, largely ignoring any risk management protocols they may have had in place. As the infamous bubble was gathering steam the goal generally was to close mortgage loans as soon as possible for maximum profit and then sell them off to investors. The housing market was piping hot and everybody wanted to make the most of it.

A rather high number, put at 70%, of appraisals for mortgages were plenty overstated between 2005 and 2007, says Retro Appraisals, a firm that has created the back-looking valuation method. "The historical revised real estate appraisal is extremely helpful to a borrower or his or her counsel when seeking to modify a mortgage, defend against a foreclosure or take part in a court-ordered mediation," explains the company's co-founder.

This instrument can be truly effective in the more severely affected housing markets like Las Vegas and much of Arizona, California and Florida. The bubble really galloped out of control in them, artificially pushing up prices that then in many cases became the official appraisals for mortgages. If employed properly, it can be a useful bargaining tool.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Home loans in Southern Nevada - including Las Vegas, Summerlin, Henderson, Green Valley, Mountains Edge, North Las Vegas, Southern Highlands, Anthem, Boulder City, Pahrump and Mesquite - and all of Nevada.

Home loan modifications turn creative - Las Vegas mortgage borrowers could benefit

Thu, 05 Nov 2009 20:22:31 -0600

Mortgage lenders and servicers have generally been going at a snail's pace, or slower, in modifying homeowners' loans. Many applications to do so have been actually declined for a variety of reasons. Some borrowers have just plain given up on the process due to all the hoops they have to jump through and still not get anything meaningful done. And all the well-meaning government programs introduced so far have produced at best mixed results.

A major mortgage provider, Wells Fargo, is doing something different now. It is taking the lead in home loan mods by taking in the so called Pick-A-Pay mortgages, an option ARM product it inherited with the recent Wachovia purchase, from distressed borrowers and replacing them with interest-only paper with due dates possibly as far down the road as 6 to 10 years.

The plan also includes the much sought-after mortgage principal reduction that every home owner who is underwater can appreciate. According to Wells Fargo its modifications to date have resulted in about $2 billion worth of balance cutbacks, averaging roughly $46,000 per loan. From what it looks like is that the bank is offering to reduce the underwater portion by about half. Let's say a home has a loan balance of $400,000 and is now worth only $200,000, Wells Fargo would propose a new interest-only mortgage amount at $300,000.

Las Vegas valley - including Summerlin, Henderson, Southern Highlands, Anthem, Mountains Edge and Green Valley - home owners who are currently on Wells Fargo mortgages could benefit from this. It's predictable that it is mainly targeting the most-ravaged real estate markets where being underwater is very common. Las Vegas certainly qualifies here. This could also inspire other mortgage lenders to come up with similar modification programs.

People are increasingly walking strategically away from their home loans which has obviously influenced Wells Fargo's decision makers. It clearly makes decent sense to give up half of the negative equity than the whole thing when a foreclosure sale is the other option. Every home owner isn't going to buy into this plan because it can still leave them on the hook for years to come. Most-affected Las Vegas residents, for instance, are likely looking at years in double digits before their home values recover to match their mortgage balances, provided the economy here gets back on its feet soon.

The healing of the housing market, in Las Vegas and nationwide, will come. Although it could be painfully slow. Wells Fargo is evidently betting that it is doing that within ten years and it could be right. Everyone would be happy to hoist a cold pint for that.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Las Vegas mortgage defaults increasingly strategic - mortgage walkaways rise among wealthy

Tue, 03 Nov 2009 17:12:41 -0600

The real estate market has been cruel, to be perfectly honest, to homeowners across the country. Housing values in many cities and regions have dropped so far and fast that it's sometimes hard to keep track of it all. Much less understand how the utter devastation is possible. But that is the cold reality every homeowner is faced with today.

Southern Nevada - with communities like Las Vegas, Summerlin, Henderson, Southern Highlands, Anthem, Green Valley and Mountains Edge - has absorbed some of the most severe blows of them all to its real estate prices. In the same boat are at least Arizona, California and Florida. Industry observers are talking about values often dipping below replacement cost. With that type of erosion comes another grim problem; dragging scores of mortgage borrowers underwater on their homes.

Many Las Vegas homeowners are increasingly thinking of walking away from the obligation. The more they are upside down, or underwater, the more likely it is that they'll do just that. It's hard to consider moral responsibility that much any more when in-the-red numbers are typed in six figures.

What's noteworthy is that the well-off are now more liable to execute a strategic walkaway from a mortgage than others. Experian, the credit firm, and Oliver Wyman, a management consulting shop, have conducted a study on this and it proves the intriguing trend. The reasons of course are many, although the availability of money is not one of them.

Perhaps some of these mortgage borrowers feel that Wall Street operators are largely responsible for the real estate fiasco and their own current troubles and this is payback time. Wall Street banks and investment firms created the subprime home loan products, packaged a multitude of loans into complicated mortgage-backed securities for sale to investors and colluded with bond rating agencies to hype the bonds' potential. Many of them are now surviving on taxpayer largesse, but are still reluctant to help homeowners in distress.

Also, these people probably have the confidence in their ability to recover in a reasonable time frame from any damage to their credit. They often have a decent knowledge base of how credit works. They are fairly secure in their employment even in this down economy and in case a job loss is inevitable have predictably put away a sizable safety fund to draw from for months.

That well-to-do homeowners are more apt to pull off a strategic mortgage default is in some ways unsurprising. In pure monetary terms they usually are underwater the most, like when a $1.2 mil mini mansion in Las Vegas loses 50% of its value, that's $600Ks. That's a bundle.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

How Much Is My House Worth?

Mon, 02 Nov 2009 20:46:02 -0600

Here is a solid take by Alex on home price development during bubbles and so on. Good read.

Via Alex Silberman (Keller Williams):

As it frequently happens when I’m at a party, the subject of occupation comes up and when people discover I’m a realtor, the conversation usually gets very personal because people immediately want to know from an insider how they’ve been affected.

This weekend was no exception. We were at an excellent Halloween party (no you don’t get pictures of my costume) and the subject of a particular market came up. Although it seemed as if different price ranges were talking, the question was the same: What is my house worth and when will I get my money?

How should someone who is contemplating the value of their home feel?

As always, it depends when one bought, and when they are thinking of selling. If someone bought their home in 2001, they enjoyed six unrealistic and unsustainable years of 10-20% appreciation, while traditional appreciation had been closer to 4-5% per year.

Let’s compare a hypothetical 25% loss of value between 2007 to today with what reality should have been. Yes, I’m using a post bubble lens but bubbles are only real for brief periods, and that’s the best lens we have.

If a $500K house were bought in 2001 and appreciated 12% yearly until 2007 then depreciated 25% from 2007 to today, the house would be worth just over $764K. On the other hand, if that house appreciated a consistent and mere 5% (boy doesn’t that sound good), that house would be worth less than $739K!

Yeah, I know it hurts, and it’s not politically prudent to tell you, but you shouldn’t be complaining. That $45K was monopoly money you get to keep.

If you bought that same house in 2006 for $881K, then things are a bit different for you as it will take you four years (at 4% appreciation) to get back there. The good news for you is that get back there you will, if you don’t need to sell sooner.

Many have genuinely suffered over the economic downturn in the past year and a half, but many also are still enjoying the benefit of the crazy price climb.

The financial crisis has been a bitter pill to many people, but we shouldn’t be quick to forget the honey we’re still tasting.

You know where to send your hate mail.

Alex

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Using your mortgage and real estate blog to enhance existing relationships - a response to Bob's challenge

Fri, 30 Oct 2009 18:09:01 -0500

When I launched a monthly Las Vegas email mortgage and housing newsletter a few years ago the main challenge was to produce articles with solid content for my past customers and those who had signed up for it. The plan was to have four articles in each issue. To write in the last week of every month four of them just for this purpose seemed like a lot. But around that time I joined ActiveRain and began blogging here and soon enough this great big light bulb goes on in my head. Why not use recent mortgage and real estate posts from AR for this newsletter. The material is fresh and broad and many recipients probably are happy to receive a short collection of the best I have to offer once a month. And voila.

Nowadays the newsletter starts with an update on mortgage interest rates, something that I don't blog about at AR. So three spots are now left for genuine AR posts. Every so often I fiddle with what type of a lineup will be presented for the next several months, so that's how the interest rate roundup sneaked in there. Moreover, each blog gets only the first two paragraphs pasted on the newsletter and then there is a link below that takes the reader to my AR blog for the rest of the material. The idea is to keep the newsletter rather short and to the point.

Since I am a mortgage consultant these blogs in the newsletter cover the home loan market on a national scale, but I also include material on the real estate sector. Being in Las Vegas local housing will certainly get its share of attention. The mortgage topic earns at least one blog, sometimes two, per issue. It depends on what had happened in the last few weeks. Then the others are on the real estate side, one for sure about how Las Vegas housing stats turned out the previous month. This way the presentation is more or less balanced. These blogs are always from the past two or three weeks, so the info is current. That's what clients expect.

Here are examples of the blogs that were included in my past email newsletters:

October 2009

- Southern Nevada existing housing stats down a bit in August
- Fed to continue buying mortgage securities into 2010
- Las Vegas real estate prices slow to recover?

September 2009

- Las Vegas resale real estate numbers remain steady in July
- Home buyers beware - walkable neighborhoods command higher prices
- Sin City real estate among most affordable again

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Subprime home loans are back - Las Vegas mortgage borrowers go FHA

Thu, 29 Oct 2009 18:23:28 -0500

Mortgage loans that were labeled subprime just a few years ago were partly responsible for the notorious real estate bubble. When it burst and let all the air out, the subprime product quickly disappeared from the bloodied scene. Many housing observers warmed up their fingers over keyboards and wrote all these tearful obituaries, believing it would be gone for good. But guess what? It's now back.

This much-criticized mortgage segment has adopted a new backer, however. Subprime used to be pretty much exclusively conventional lenders' territory, until the recent thermonuclear event. With their exit a new player emerged to fill the void, Ginnie Mae, a wholly-owned government corporation created within HUD. Ginnie Mae is another adorable name in the mortgage arena, besides Fannie Mae and Freddie Mac.

Ginnie Mae operates a little differently from its above-mentioned and better-known sister agencies. It guarantees investors timely payment of interest and principal on MBS, or mortgage-backed securities, supported by federally insured loans, meaning FHA, and federally guaranteed loans, in this case VA. The majority of its guarantees go to these two organizations. Ginnie Mae is not in the business of buying or selling loans or issuing MBS.

According to the Federal Reserve Bank of San Francisco, FHA mortgage lending has skyrocketed in the last several months, achieved with the Ginnie Mae's guarantees. In 2006 subprime paper accounted for about 20% of all home loans. Then its market share plunged to near zero and now it is climbing back up again. San Francisco Fed asserts that today mortgage borrowers nationwide with FICO scores under 660 command slightly over 20% of the market. In short, it's back to where it was only three years ago. That raises some eyebrows. And rightfully so.

FHA has flirted with trouble lately as mortgage loan losses are mounting. Sinking property values have a lot to do with this, as are the lenient underwriting guidelines FHA uses, in other words subprime lending, and the generally weak economy. As of right now it looks as if it doesn't need a government bailout, feared by many. If home prices stabilize soon across the board, it'll be safe.

Las Vegas valley - including communities of Mountains Edge, Summerlin, Anthem, Henderson, Southern Highlands, Green Valley and North Las Vegas - has benefited greatly from FHA mortgages. Especially first-time home buyers have been using them and the nice tax credit to provide demand in an otherwise sluggish market. Without FHA the light at the end of the tunnel for Southern Nevada housing market would be just a tiny speck

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Reestablishing Your Credit To Get A Mortgage Loan

Wed, 28 Oct 2009 23:34:02 -0500

Take a look at John's excellent post about reestablishing credit. Well worth your time.

Via John Jones (Keller Williams Elite, Dallas/Park Cities):

REESTABLISHING YOUR CREDIT TO GET A MORTGAGE LOAN - DALLAS, TEXAS HOMES AND REAL ESTATE

Despite the various reasons why people may find themselves in a financial bind that damages their credit rating, the major obstacle that stops most from rebuilding their credit is lack of knowledge regarding how credit scoring works and what specific steps should be taken to ensure a quicker recovery.

The popular myth is that once a person's credit score is damaged from late payments, collections, a bankruptcy or even a foreclosure, those issues must be resolved or removed from their credit report or they face a seven year curse of bad credit.

It's almost like the old tale about breaking a mirror - once the damage is done, the only thing that can remove the curse is to wait around for the seven years of bad luck to pass.

This myth ends up becoming a self-fufilling prophecy because doing nothing instead of taking proactive steps to rebuild credit will often guarantee a prolonged period of bad credit. And when it comes to qualifying for a mortgage loan, lenders are usually forgiving of past mistakes if a new track record of responsible credit history can be established after the fact. And that is true even in today's new reality of tighter mortgage qualification guidelines.

In many cases, a person who encounters a major setback such as a repossession or bankruptcy may be able to qualify for a mortgage in as little as two years.   In other cases of minor credit issues, such as sporatic late payments and/or collections, the wait time to qualify for a mortgage might even be less than a year, depending on the overall situation.

In cases where a home loan applicant has experienced past credit issues, a mortgage lender will typically want to see THREE things before they will consider approving them for a loan:

An explanation and sometimes documentation of the reason for the bad credit and some type of assurance that this resulted from circumstances that are not likely to recur. Some oversimplified examples of this would include a job loss, a divorce or ending of a relationship, an illness or injury, a death in the immediate family or some other type of event that most everyone experiences at some point in life that results in a financial hardship. Even an admission of irresponsibility with regards to past finances may be acceptable, provided the applicant has since demonstrated the ability to manage their finances properly.

A twelve month history of on-time payments on at least three accounts, preferrably accounts that report the payment history to the credit bureaus. This usually also includes a satisfactory rental or mortgage payment history for the last 12 months. This is a MANDITORY MINIMUM REQUIREMENT to obtain most types of mortgages. It is also the one thing that most consumers aren't aware of that keeps them from qualifying for a home loan for a much longer period of time after experiencing a financial setback that adversely affects their credit rating. Many assume that since bad credit lingers on their report for seven years, it may take that long before they can qualify for a mortgage. The secret is knowing how to obtain credit with a bad credit rating.

Proof that the applicant has sufficient resources to afford the monthly mortgage payment and that they will likely be able to pay on time each month. Of course, this is something required of all home loan applicants regardless of past credit history. This boils down to character, capacity and capital, known as the "three C's of underwriting". Character can be summed up to a person's overall credit and payment history, capacity is their ability to repay (income and stability of employment) and capital is both the down payment (equity) and the amount of money they will have left over after closing. Every loan has specific requirements for each of these, and a strength in one area may help to overcome a weakness in another, depending on the overall picture.

So the real question is "How does a person with bad credit go about obtaining credit in the first place?" Well that's actually easier than most people think. Secured loans and secured credit cards are a form of credit that can be obtained by virtually anyone, regardless of past credit history.

What is secured credit? It's basically any type of credit that is secured with collateral (in this case, CASH). Most banks and nearly every credit union offers secured credit cards, but very few actually promote this service.

A secured credit card usually requires a minimum security deposit of $300-$500 dollars, which is held as collateral for repayment of any balance incurred on the card. The credit limit is usually equal to the amount of the deposit. In other words, a fully functional, major credit card that reports to all three credit bureaus can be obtained by nearly anyone by simply putting up a cash deposit in a savings account with a bank or credit union that offers this service.

And in addition to secured credit cards, many of these institutions offer secured installment loans as well.

But why on earth would someone put up a $300 deposit to obtain a credit card with a limit of $300? Doesn't it make more sense to just spend the cash and avoid credit entirely? Well, normally it would. But the purpose of obtaining a secured credit card isn't to actually borrow money, it's to reestablish a solid credit history.

Unfortunately the credit bureaus can only generate a credit score based on data that's reported to them by creditors, not on other factors such as income, employment or a person's ability to save money. And paying bills such as insurance, utilities and rent do not usually help one's credit score since these companies rarely report the payment history to the credit bureaus.

So unless there's something to report, the bad credit from the past is the only thing the credit bureaus have to consider. And that's where people get into a pickle with credit once they've had a setback and have closed all of their past accounts. The secured credit card is the catalyst that helps to actually rebuild the credit score.

Having said all of this about credit repair and restoration, I would not recommend someone buy a home that isn't financially ready for the challenge. Owning a home isn't like renting, it requires a steady supply of time and money to own and maintain a home. There is no maintenance man to call when the toilet overflows at 4AM or the air conditioner stops working in August.

Rebuilding credit is very important, but rebuilding and reestablishing overall financial health, including building up a six to twelve month reserve of cash, should be top priority for anyone who has experienced a financial setback.

IF YOU HAVE HAD A PERSONAL FINANCIAL AND/OR CREDIT SETBACK AND WOULD LIKE MORE INFORMATION ON THE RIGHT STEPS TO TAKE TO REBUILD YOUR CREDIT, PLEASE CALL OR EMAIL ME TO SET UP A CONSULTATION.  I WORK WITH A NETWORK OF LENDERS THAT SPECIALIZE IN CONSULTING WITH CREDIT-CHALLENGED CLIENTS THAT NEED SOME FREE GUIDANCE ON WHAT STEPS TO TAKE TO QUALIFY FOR A HOME LOAN AS QUICKLY AS POSSIBLE.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Las Vegas real estate values rise thanks to Washington

Mon, 26 Oct 2009 19:00:21 -0500

Housing prices have been in a free fall in most sectors of the nation for a long while, much longer than any real estate expert had predicted. When mortgage financing is hard to come by and supply far outpaces demand that's usually what will follow. The weak economy is also a major contributor to this. Lately, though, prices have begun to stabilize across the colorful map.

Southern Nevada - Las Vegas, Henderson, Green Valley, Summerlin, Southern Highlands, Pahrump, Mountains Edge and Mesquite among its communities - is a good example of that. The lower end of the marketplace is rather busy here as investors and first-time home buyers do their thing and pick up bargain properties. The statistics are somewhat slanted because of the proportionally high impact of this particular segment. The mid-range and upper end in Las Vegas are still quite soft due to lack of demand, as expected, and difficulties in securing home loan approvals.

In a housing study Goldman Sachs just published it says that home prices have been nationally steered higher by 5% on average on account of government incentives and interventions.The number can be debated until mouths foam, but the fact right now is that Washington is largely making the housing market what it is. Mortgage money is kept affordable by the Fed buying just about everything that has a mortgage bond stamp on it. Then there are all these home loan modification and rescue plans, with eye-catching acronyms, that most consumers are liable to lose track of. But regardless, they at least slow down the supply of homes being foreclosed and dropped on the already saturated marketplace. The first-time home buyer tax credit has given a nice boost to the demand side. And by the way, it looks as if a similar program will come out of Congress in a little bit to replace it.

Las Vegas metropolitan area - as are many other markets throughout - is still grappling with many challenges in the mortgage and real estate arenas. It would be in much worse shape, though, without Uncle Sam's charity and efforts. Eventually it has to stand on its own again, and it will. It's already taking some wobbly steps using crutches toward that goal, but obviously needs more time to fully recover.

Photo by RyanGWU82

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

HOME INSPECTIONS PROTECT HOME BUYERS - THEY ALSO PROTECT SELLERS AND AGENTS!

Sat, 24 Oct 2009 16:02:51 -0500

This step in the home buying process is really a must. Lenn goes over all the vitals here, so take heed.

Via Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate:

HOME INSPECTIONS PROTECT HOME BUYERS - THEY ALSO PROTECT SELLERS AND AGENTS!

Probably the single most important step a home buyer can take as a part of the home purchase process is the home inspection. No one can guarantee the condition of a resale home. Therefore, the home buyer should understand that

1. You, a home buyer, cannot rely on the seller for information about the condition of the home they are offering for sale.

2. Buyers can protect themselves with a home inspection.

3. Some states go farther than others in providing protections for home buyers with required seller Property Condition Disclosure, while other states follow the "caveat emptor" rule which requires that the "buyer beware".

PROTECT YOURSELF WITH A HOME INSPECTION

We, as your agent, will do our very best, based on our experience with hundreds of home sold, to make you aware of potential problems with appliances; heating/cooling, interiors, exteriors and things we can see. However, a trained home inspector will not only test the mechanicals and appliances in a house, they will also inspect the structure, materials and condition of the components of a property. Cosmetics are not a part of a home inspection.

A good home inspector will examine the house from top to bottom. Most inspections in Maryland and Virginia will evaluate the physical condition: structure, construction, and mechanical systems. They will identify items that need to be repaired or replaced. They will also give you an estimate of useful life of the roof, appliances, mechanicals and any other equipment included with the home purchase.

You have negotiated all price, terms and conditions of the home purchase and now you want the home inspected. Good. Let's walk through a home inspection. At this point, a successful home inspection should be a contingency, meaning that, if the home inspection reveals serious defects, the home buyer can void the contract and be refunded their earnest money deposit. If the buyer decides to negotiate with the seller for repairs or compensation for defects, that stage requires that the buyer and seller negotiate repairs or agree to void the contract. So, the home inspection is a very important aspect of buying a home. A home warranty is not a substitute for a home inspection. Most home warranty policies do not protect for pre-existing conditions.

WALK THROUGH A TYPICAL HOME INSPECTION
STRUCTURE
The home inspector will look for structural integrity, They will evaluate the quality of construction and materials used.

EXTERIOR
A thorough inspection of the roof should reveal any past or present leaks. The exterior finishing will be inspected for cracked bricks, loose siding, improper grading and anything else suitable for your purchase.

INTERIOR
The interior will be observed for signs of movement. A good home inspector will look for signs of unusual cracking, separating, shifting in the house.

MECHANICALS
The heating and air conditioning will be tested, temperature permitting, and since this is an expensive appliance, the inspector may recommend servicing of the unit if it appears that the present owners have neglected this important duty.

APPLIANCES
All kitchen appliances will be run through their cycle to make sure that they function properly. The refrigerator will be tested for temperature and seals. The range, microwave, disposer will all be run to make sure they know what to do.

PLUMBING
All bathrooms, kitchen, laundry, exterior plumbing will be tested and inspected. This task has become very important since builders have been downgrading building materials for several years to compensate for escalating land costs.

ELECTRICAL
All visible wiring, panel boxes, fixtures, switches, outlets will be tested for operating condition and safety. Often we find home owner repairs will be the most hazardous. If the homeowner did not obtain a permit and have work inspected, it may be defective and dangerous. A good home inspector spends a lot of time looking at electrical components of a house.

WHAT HAPPENS AFTER THE HOME INSPECTION??
If the home inspector finds serious problems such as structural defects, you will have to make a decision as to whether or not to go through with the purchase. If the home inspection shows defects that are repairable or replaceable, your agent will write an addendum requesting the repairs to be made by the seller prior to settlement. The seller may agree, refuse or negotiate a cash settlement to compensate you for the defects found.

You and your agent will decide on the best way to handle any defects found. The important thing is that you are an EMPOWERED HOME BUYER when you know the good AND the not so good about a home.

Your Buyer's Agent may recommend local home inspectors or you can find home inspectors trained and certified by the American Society of Home Inspectors, ASHI.com.

* * * * * * * * * *

Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988, E-mail.

"NEVER A FEE TO BUYERS"

Maryland and Northern Virginia Real Estate homes for sale HERE - Search Homes for Sale in Maryland and Northern Virginia.

Contact us to tour homes, 800-711-7988.

For your copy of the Homefinders.com home buyers relocation package, just give me a call. Whether you're moving to Maryland or Northern Virginia from out of the area or just across county. We can help.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Mortgage foreclosure will affect credit score, but how much?

Thu, 22 Oct 2009 22:19:54 -0500

The home loan and real estate markets we are currently slogging through are unprecedented in their severity. The last time something similar happened was so long ago that few are still here to remember it. As a result millions of people are unable to make their home loan payments and subsequently will have their credit damaged. Three basic events can lead to that.

In short sale the mortgage lender agrees to let the homeowner sell the property for less than the underlying loan balance. Deed in lieu means that the borrower gives the deed, or keys, to the home loan provider before it starts foreclosure action. And then there is the foreclosure itself. All three will slam the homeowner's credit generally up to seven years. By how much depends largely on how many other accounts are in distress.

These guidelines evolved gradually during "normal" housing market conditions. At times when there weren't millions of borrowers in trouble with their mortgage payments. But today things are different. The real estate scene is uniquely clobbered, bringing along with it a historic price adjustment, too. One that was actually badly needed to better reflect a sustainable value structure.

What FICO, the most widely used credit standard, does is use its computer model to predict future borrower behavior, in other words assess risk. FICO score, say, eight years ago was able to lay out a rather representative picture of a mortgage borrower. But from about 2007 onward a totally new class of a credit applicant was introduced to be rated. An unusually large segment of today's homeowners who in some shape have defaulted, or will default, on their mortgage have had a decent to excellent credit rating up until this meltdown. Keeping that in mind, their current FICO score would not be as accurate a predictor employing the standard model. Once the economy improves and most of them will obviously recover financially and become good credit risks once again, they'd still be carrying for years dings to their credit.

Las Vegas valley - with localities like Mountains Edge, Summerlin, Henderson, Southern Highlands, Anthem, North Las Vegas and Green Valley - has its share of homeowners who fall under this category. Real estate upturn here in Southern Nevada - and throughout the nation - will be undeniably delayed because many home loan applicants just can't get approved due to FICO's slow update policy. But there is hope.

The mortgage industry still has those with the spirit of entrepreneurship. Some scattered portfolio lenders are already underwriting mortgages for borrowers with recent foreclosure on their record. They keep the loans in their own books since Fannie Mae and Freddie Mac won't touch them. And it's foreseeable that more will start doing that as they realize what untapped market it is.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Buyers are speaking, are sellers listening?

Tue, 20 Oct 2009 15:32:34 -0500

The Green concept is becoming more important to both home buyers and sellers, for obvious reasons. Read more about that here from Terrylynn.

Via Terrylynn Fisher, Realtor Realtor Alphabet Soup on request (Diablo Realty - BuyStageSell.com):

Buyers are speaking, are sellers listening?

Recently I did a consultation with a real estate client about what they should do to improve their home so that a few years from now when they sell, they can maximize their equity. The subject often goes to the fact that people do upgrades just to sell and they could actually be enjoying the upgrades while they live there. I happen to agree that they should enjoy their improvements themselves while they live there, but taking that a step further, to environmentally friendly upgrades and improvements this gets to be an easier answer, don't you think?

When deciding which new furnace to put in would you chose a 80% or 90% efficient furnace? What is the cost difference, a few hundred dollars? It sounds like a no brainer, right? The future costs of running the furnace and air conditioner are escalating to the point that the more efficient unit will start saving you money NOW...and often you get rebates for installing them.

But do buyers really look to that to make a decision on a house to buy? The NAR 2008 Profile of Home Buyers and Sellers gives you the answer. When asked, buyers stated that 43% feel it is VERY IMPORTANT to consider heating and cooling costs when buying a home. 26% feel it is important to have energy efficient appliances. Sellers may not think buyers actually think that far, but more and more they do because it affects their pocketbook. This economic downturn in my opinion has taught us to be concerned about where our money goes and think ahead.

I know my buyers these days are asking the hard questions about the home and how much the utility bills are. When showing a buyer recently, we saw about 7 homes on a very hot California afternoon. One home (the one they put an offer on later), was cool when we walked through the door with no air conditioning on. It had new doors and windows and it turns out R30 upgraded insulation in the attic. We could FEEL the difference. What did that do to their decision, well first off it was a stark and dramatic comparison to all the other homes and the money they would have to spend on them to bring them up to this level, second it actually told them that the owner of this home had taken care to make it nice and keep it nice for themselves. It made a difference to their feeling of confidence about what they were buying. I couldn't make this up, it actually unfolded in their thought process and decision making.

So, my advice about making energy efficient improvements, like new windows and doors, added insulation, and furnace and air conditioning units is ABSOLUTELY, it will save you money now and possibly be a determining factor for a buyer when you go to sell later on.

DRE # 615420
LGLS CP and GREEN Realtor, EcoBroker...thoughts from the field.

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Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
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My cell: 702-499-1006

Mortgage securities rating agency Moody's and the whole system under fire

Mon, 19 Oct 2009 21:26:38 -0500

Mortgage-backed securities, or MBS, played a pivotal part in the recent galloping real estate market and in its eventual and memorable collapse. These bonds get rated based on risk before they are offered for sale so that potential investors - pension funds, university endowments, international investors, among others - know what they are fiddling with. Moody's is one of the top three in U.S. to do that, the others being Fitch Ratings and Standard & Poor's.

When Moody's was spun off from Dun & Bradstreet early in the decade, the long-time corporate philosophy of honest and quality ratings was supplanted with a more pro-business one. In essence it would now pay more attention to the bottom line than accurate mortgage and other bond ratings. It needed to keep its market share, and possibly even increase it regardless of the means. That looks like a dangerous shift in corporate strategy. And it was.

Writing countless AAA ratings for mortgage bond issues - and also doing packaging of securities - earned Moody's superb fees. Later on many of the issues were rated no more than junk. The ratings were based on mathematical models that were far from accurate and often hopelessly out of date. Perhaps so by design. Anyhow, life was good. Not only for Moody's but the other players as well. Global investors trusted their advice, liked the yields and were writing checks left and right. And then the unthinkable happened. A thermonuclear event blew up the mortgage industry.

Another aspect about the mortgage bond rating regimen that skews its results is how the agencies are compensated. For decades now Wall Street itself has been paying the fees, the same investment firms that benefit from top ratings - no matter how erroneous - when marketing their products. That smells of a major conflict of interest. How objective can a rating be when it's done this way? Not very. Decades ago, before the new setup was approved it was the investors who plunked down cash for the ratings. That makes much more sense and should be considered for revival.

Government regulation - currently through Securities and Exchange Commission (SEC) - of this particular segment needs to be carefully assessed and preferably tightened. The big investors were badly scorched in this recent home loan and real estate meltdown. They formed the backbone of the secondary mortgage market here and they are needed there again. But to convince them to return requires new procedures and rules that would assure them the securities they are considering are thoroughly and competently researched and then rated accordingly. After all, the Fed, having largely replaced the no-show investors to keep the secondary mortgage market alive and liquid, can only do it for so long.

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Esko Kiuru
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My cell: 702-499-1006

Las Vegas short sales can sting homeowners later on

Thu, 15 Oct 2009 16:02:46 -0500

Mortgage banks have been pushed between the rock and the hard place in today's reeling real estate market. They are trying to make the right moves to keep their bleeding books from totally blowing up during this perfect storm as more and more home loans go bad. To deal with that, they generally look at three basic options; a mortgage loan modification, a short sale or then the foreclosure, the infamous word that has been in the media a lot lately.

Southern Nevada - with communities like Henderson, Boulder City, Summerlin, Mountains Edge, Southern Highlands, North Las Vegas and Green Valley - homeowners are increasingly finding themselves underwater, meaning that their mortgage balance is higher than the underlying property's value. Many have been able to convince their home loan providers to go for a short sale, whereby the bank will accept a sale that is for less than the mortgage balance. If so, once the deal is closed - it can take months by the way - the homeowner usually thinks the nightmare is finally over.

After all, at some point - normally soon after the settlement - the mortgage loan company sends the homeowner an IRS form 1099C spelling out that the debt has been canceled. The law requires that any canceled debt over $600 must be so reported to IRS and the borrower. And since this is his principal residence he's not obligated to pay income tax on the canceled debt. All this appears reassuring enough.

But the pain may not be over after all for the homeowner.

When the mortgage firm agreed to the short sale, did it also include in writing that it was fully releasing the borrower from the debt? If it did not, things can turn rather nauseating from the settlement on out. What is happening at increasing frequency now is that many home loan companies are selling their real estate debts to collection outfits that then come after the unsuspecting borrowers. All of a sudden a major problem seemingly solved turns into another bad dream.

Obviously mortgage lenders interpret the situation so that they can come after the difference if they didn't explicitly and in writing agree to a complete release. While the homeowners believe the IRS form settles the issue in their favor. Who is right? Hard to say off hand at this stage. The courts are going to have to make a conclusive ruling on short sales and the debt forgiveness.

So, Las Vegas mortgage borrowers who enter into a short sale agreement without a written release from the bank run the risk of being chased for the remaining liability. Historically it has rarely happened, but today things appear to be heading into a different direction.

Photo by tomsaint11

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Esko Kiuru
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My cell: 702-499-1006

15 Year versus 30 Year Mortgage: Give this a thought

Wed, 14 Oct 2009 18:40:18 -0500

Here is an eye-opening take on these two popular mortgage products. Makes you reconsider which one will work best for you.

Via Tim McIntyre (Coldwell Banker Residential Brokerage):

Graph A

It is a common misconception among borrowers that a 15-year mortgage is a better use of their money than a 30-year mortgage, but for the disciplined borrower, that is not necessarily true. Take the example illustrated in Graph A.

At the end of 15 years (180 months), the borrower with the 15-year mortgage, will have paid off his mortgage in full. At the end of the same period, however, the borrower with the 30-year mortgage will still owe $217,677. On the surface, it appears that the 15-year borrower is in a much better financial position.

But let's look a little closer. The 15-year borrower has been paying $676 more every month than the 30-year borrower. If the 30-year borrower were to invest that same $676 and, over the long term, earn an average of 10% interest, at the end of 15 years (180 months) that investment would be worth $280,207. Taking this into account, the 30-year borrower, who still owes $217, 677, actually comes out $62,529 ahead of the 15-year borrower.

Graph B

Now, let's look at the second 15 years to see the true opportunity cost of the 15-year mortgage. Let us assume that the 15-year borrower begins investing the entire $2,572 he has been spending on his mortgage payment and the 30-year borrower continues making his mortgage payment and investing $676.06 a month. In Graph B you can see that by the time the 30-year borrower pays off his mortgage his investment account will be valued at $1,528,225 while the 15-year borrower's account will be valued at $1,066,130. Due to the 15 years of missed investment opportunity the 15-year borrower ends up missing out on a potential $462,995 in growth.

This article was written by one of the Mortgage Bankers I work with, Robert Reilley of Vision Mortgage. You can visit Robert's website by clicking here.

I know many people have different opinions regarding paying off a mortgage as quickly as you can afford, or using the above strategy. I wanted to share with you that I believe that the above strategy is a real option, and it's something that makes sense.

Everybody's situation is different, and everyone feels differently about the mortgage interest deduction. It's important, though, to consider all of the options you have available when making a decision about your financial future. I'm always available to talk to you about your situation, and your options. Right now, 10% would be a really great return, and returns fluctuate, so the above information is just an example of what is possible. For a complete discussion, give me a call.
Tim McIntyre, GRI
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Visit my website at www.timsellshomes.com.

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Esko Kiuru
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My cell: 702-499-1006

MBA, NAR and NAHB push hard for tax credit expansion, yes expansion

Tue, 13 Oct 2009 16:56:21 -0500

Affordable mortgage money and in many areas really mouth-watering prices are helping the real estate market out, but it needs much more than that in this frustrating economic environment. The famous up to $8,000 tax credit, it is due to expire at the end of November, for first-time home buyers did boost sales a degree or two. Still, the housing sector keeps on drifting along without too much purpose.

Mortgage Bankers Association, or MBA, National Association of Realtors, or NAR, and National Home Builders Association, or NAHB, are the heavy hitters on the real estate scene who now are twisting arms in Washington to get the soon-to-expire tax credit expanded. Not just extended but broadened. What they have in mind, as the main points, is to hike the credit up to $15,000, include all buyers and do away with income limits. Their lobbying efforts have so far spurred 20 or so different bills, more are probably on the way, in Congress to address the issue. That's a big surprise. Everybody and his nephew obviously wants to get credit for doing something for the doubtful and besieged voter.

The real estate market could truly use such an expansion. The demand side is still quite soft and this would give prospects some more incentive to begin chipping away at the high inventory of homes for sale out there. Housing is a key component of the whole economy and it needs to get healthier to give the much anticipated recovery a strong leg to stand on.

Besides, the government has so far - for the most part - been pouring gazillions on irresponsible Wall Street operators to keep them afloat while largely ignoring the average consumer. Despite the taxpayer charity mortgage lenders inexcusably continue to drag their feet in doing timely home loan modifications, expediting short sales and helping out otherwise. It's about time that more focus is shifted toward the consumer. With the right length of carrot he'll step forward and start lifting housing out of the gutter.

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Esko Kiuru
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My cell: 702-499-1006

Remodeling Your Home? Think Like an Investor!

Mon, 12 Oct 2009 16:33:43 -0500

Solid information on the topic from Mike. Think like an investor and come out ahead of the game.

Via Mike Hogan, MBA, EcoBroker (Pioneer Realty):

Walk in to any big box home improvement store and you'll be faced with tons of magazines about remodeling your kitchen...your bath... your garage... your whatever they think they can make money on. Seriously....if you're considering remodeling your home...think like an investor.

Most of us remodel our home because we want something more modern, more comfortable, more functional or just more appealing to our friends. But remodeling has an big financial impact on the values of our homes. There are tons of national magazines touting return on various remodeling projects. Typically- they tell you kitchens and baths bring the biggest return. In fact...usually they say the average bath remodel will cost somewhere around $5,000 but the value added is about $5,800. It looks great on paper...wow a 16% return in just a few weeks. Let's start rolling!!

But what you don't understand is that magazine is trying to sell ads to home improvement product companies who obviously want you to take on that expensive remodel project.

So how do you think like an investor when deciding where to spend money in your home?

Bring Your Home Up to Par

When investors look for a home- they look for the ugliest home on the block. Then they bring it up to standard with the rest of the neighborhood. They don't over-renovate because they know that making the house toooo nice wont add to the incremental value.

The lesson for homeowners...look for improvements where your home is below standard. And bring it up to standard. Don't overspend with the hopes of recouping that cost when you sell.If youre in a neighborhood of four bed two bath homes...and your home only has one bath...spending to add that second bath makes a lot of sense.

Restoring

There are many cases where your home is in an older neighborhood that is seeing a resurgence. Investing in modern touches such as Paperstone countertops or dual flush toilets can make your home appeal to a whole new crowd. This is especially true in Urban historic areas that are experiencing an influx of young hip buyers looking for luxury at affordable prices.

The Numbers

Another way to look at remodeling from an investor standpoint is to analyze the potential returns of your project compared to your desires. If that new kitchen is going to cost you $30,000 but will add $20,000 in value... then you just got your shiny new kitchen for a net cost of only $10,000. The question you have to ask yourself is...is this kitchen really worth an extra $10,000 in costs for you? If that answer is yes...then go for it!

Check with your REALTOR

One thing investors have learned... a good REALTOR is worth their weight in gold. Notice I said GOOD. Investors rely on their REALTOR to help them understand a neighborhoods standards. What improvements will add value and which one will not.

Even if you're not considering selling anytime soon- a REALTOR is always ready to start a new relationship and will gladly share their knowledge of the neighborhood and give you advice on which remodeling projects make the most sense. With the help of an experienced real estate agent, you can make much better investments in your home. And the great thing about these investments...you get to enjoy them every day. Happy Remodeling!

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Esko Kiuru
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www.eskokiuru.com - complete mortgage platform
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My cell: 702-499-1006

Las Vegas real estate numbers show small improvements in September

Sat, 10 Oct 2009 18:36:44 -0500

Southern Nevada - accommodating communities like Anthem, Summerlin, Henderson, Mountains Edge, North Las Vegas, Southern Highlands and Pahrump - resale housing segment took a cautious step forward in September, after going the other way in August. A curious trend might be developing, actually so predicted by some industry experts, where the real estate market will find the bottom and then will bounce along there for some time. Despite very attractive mortgage money and truly appealing home prices that may be all it can do for now, as the economy remains weak and unemployment is pushing deeper into double digits.

For September there were 3,358 single-family residences sold, so reported by GLVAR, the Greater Las Vegas Association of Realtors. That amounts to a nice 4% improvement from August and a solid 20.7% jump from the same month last year. The buyer base is rather narrow, though. It's dominated pretty much by the first-time homeowner and the investor, both of whom aim at the lower end of the price scale.

Las Vegas single-family inventory dipped by less than 1%, a marginal change. It settled at 20,801 and continues to find the road ahead rocky while seeking to breach through the 20,000 mark.

The median price here in Southern Nevada took a turn up in September, going to $138,000, or 1.8% increase. That's perhaps the best news in the report. After losing ground little by little over the last few months it's now showing some backbone. Maybe, just maybe?

Las Vegas homeowners and real estate observers clearly can do nothing about it if riding along the bumpy bottom is the only choice they have. It, however, always beats sliding south on the slippery slope that has been the norm for too long. The wish on everyone's lips must be that the uncomfortable journey is reasonably short.

Photo by wjklos.

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Esko Kiuru
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www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

New Housing Bill Will Force Loan Modification

Fri, 09 Oct 2009 18:48:56 -0500

This bill, if passed, would put quite a bit more urgency on mortgage lenders to do more loan modifications, as Claudette's blog here explains. Good read.

Via Claudette Millette - Metrowest Mass Exclusive Buyer Broker (The Buyers' Counsel):

Four senators are putting their muscle behind a new housing bill intended to prohibit lenders operating in the U.S. from foreclosing on home owners without first having discussed reasonable modification options with the borrowers.

The bill, called the Preserving Homes and Communities Act is being sponsored by Rhode Island Senator Jack Reed, Illinois Senator Dick Durbin, Jeff Merkley of Oregon and Sheldon Whitehouse of Rhode Island.

Under this bill, lenders will be forced to the negotiating table under the threat of stiff fines and other legal penalties.

All lenders will be required to perform what the bill terms as a "net present value" test for all seriously delinquent borrowers. The test would be a financial analysis weighing the benefits of a modification of loan terms against the benefits of foreclosure.

For borrowers who do not fit into this program, the bill would create a multi-billion national fund for states to make loans or grants in order to prevent foreclosures.

The senators' rationale behind the creation of this bill is that they are frustrated with the slow pace of current loan modification programs and feel that they are not keeping up with the record numbers of foreclosures this year.

"Voluntary efforts to keep families in their homes have failed," said Durbin. "This bill will force lenders to modify qualified mortgages rather than letting them move quickly to foreclosure, which destroys households and neighborhoods."

The act will also set up a mortgage payment assistance program to provide money to state housing agencies to assist people who have lost income and face the prospect of foreclosure.

The most significant aspect of this bill would be to create "mandatory mediation" requirements forcing lenders to allow some mediation efforts between them and their borrowers before being able to file foreclosures against home owners.

This proposal will, no doubt, be met with opposition by banking and mortgage lending groups. It is, however, currently favored to be supported in the House.

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Mortgage market to get boost from Fannie Mae and Freddie Mac

Thu, 08 Oct 2009 19:00:40 -0500

One of the key mortgage segments funding home purchases in the recent past has been warehouse lending. The concept can be defined as short-term lending by large commercial banks or other financial institutions for non-depository mortgage brokers and bankers. Using originated mortgages as collateral, the warehouse lender makes available interim financing until the loans are sold off on the secondary mortgage market.

The housing meltdown has been devastating to the home loan business. Every financial institution has suffered from its effects, some more some less. Warehouse lenders generally were the backbone for the smaller mortgage originators, but have lately been cutting off their lines of credit, putting restrictions on them or exiting the business altogether. This has inevitably forced smaller home loan firms to curtail their product offerings and giving consumers fewer options when looking for a mortgage.

Call Fannie Mae and Freddie Mac, the two mammoth operators on the secondary mortgage market, to the rescue. The Wall Street Journal is reporting that they soon will launch, it's still unannounced, a pilot program to address warehouse lending. Basically what they plan on doing is to some degree replace the traditional warehouse lenders to provide more liquidity to the still reeling marketplace. So they'll step into the vacuum left by the private investor.

The mortgage industry has seen dramatic consolidation in the last year or two. In 2007 the three largest private mortgage providers held about 35% of the market, while through the second quarter in 2009 that share had grown to about 50%, according the WSJ's estimate. That rapid growth has pretty much come at the expense of the independent home loan lender. The regulators in Washington see the dangers of this trend and are now working to reverse it.

This is good news for the smaller, independent mortgage firm. It may never get back all the market share it previously had, which was somewhere over 60%, but it can possibly recover some of it. Yet, the main beneficiary actually will be the consumer. The more there is competition, the more choices he has at the lowest possible price.

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Esko Kiuru
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www.eskokiuru.com - complete mortgage platform
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esko@eskokiuru.com
My cell: 702-499-1006

Las Vegas mortgage lenders to dissect MGM Mirage's CityCenter price rollbacks

Tue, 06 Oct 2009 17:33:30 -0500

The real estate market blowup hasn't spared any segments from its fury here in Southern Nevada - including Henderson, Anthem, Mountains Edge, Southern Highlands, Summerlin and North Las Vegas. Condominiums have been spanked as harshly as the single-family houses. Luxury high-rise condos on the Strip and elsewhere in the vast valley, thought by some to be above the tussle, have absorbed the same unhealthy punishment. No project could hide from it.

CityCenter by MGM Mirage, the $8.5 billion upscale mission, also has a large condominium component in it, beside the usual chic casino, convention, hotel and retail offerings. It'll have about 2,400 units in all split between the Veer Towers, Vdara and The Residences at Mandarin Oriental. CityCenter itself will begin opening in stages in December and the condos are scheduled to start closing sales in January.

As the Las Vegas condo market tanked stunningly, CityCenter advance buyers grew quickly uneasy about their purchase agreements and began talking about legal action. Either they wanted their deposits back or then the prices would have to be sliced with a heavy cleaver to reflect the present value setting. With that in mind the project was weighing carefully its options and finally decided on price reductions.

The condominium prices will be adjusted down by 30%, says CityCenter now. It's official. No more rumors about it one way or another.

Is that enough? To most buyers it likely will be, although according to the Las Vegas price grid it may come short of the real market. Anyway, a condo originally costing, let's say, $1.3 mil will now go for $910,000. That will definitely help any size wallet. Those who are still unhappy probably will face a long legal battle that may not be worth it at the end.

Las Vegas mortgage lenders have still to be convinced that the values are there, otherwise underwriting will stall. Currently standard condo financing in Southern Nevada is very tight. To provide funding for their customers CityCenter may have worked out private arrangements with a select few mortgage banks that will solve the problem. Similar to what Palms Place managed to do when it got the financiers of the condo project to also supply the needed mortgage funds for buyers. As a side note, a share of the sales predictably will be cash.

The price adjustments CityCenter has decided to do is a long positive step in making the colossal development more viable in this testing economic environment.

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Esko Kiuru
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www.eskokiuru.com - complete mortgage platform
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My cell: 702-499-1006

Short Sellers Beware--Your Lender May Lie

Mon, 05 Oct 2009 19:09:02 -0500

Very timely info for Las Vegas, Nevada, homeowners, and others around the nation, who are contemplating a short sale.

Via John Mulkey, Housing Guru (TheHousingGuru.com):

Behind on your mortgage, underwater and thinking about a short sale for your home? Short sellers beware—your lender may lie. According to recent reports, almost 8% of all home mortgages are now at least 30 days past due; and with more than a million owners who haven’t made a payment in more than a year, the number of sellers attempting a short sale is increasing. With the hope of salvaging some dignity and a little of their credit rating, home owners are turning to short sale “specialists” to help them deal with the complex and often confusing procedures of many lenders.

And many of those who have already begun the short sale process assume that finding a buyer will get them off the hook. What most short sellers don’t know is that the bank may proceed with foreclosure even though they have agreed to consider short sale offers. And, regardless of what a bank’s representative tells a seller, promises are worth nothing until the sale is closed.

Homeowners who are attempting a short sale must understand that whatever can go wrong—will. Murphy’s Law seems to have been written with short sales in mind, and there are several reasons for this.

•The lender may actually benefit from a foreclosure. Never assume anything, regardless of what the bank representative tells you. The risk of foreclosure does not decrease with an agreement to consider a short sale.

•The lender may be so overwhelmed with defaults, short sale requests, and foreclosures that they cannot respond to your request.

•Many have referred to short sale transactions as cases of the right hand not knowing what the left is doing. However, with most lenders, it’s a case of only having one hand; most find it impossible to do two things at once.

And even those homeowners who successfully negotiate a short sale could still owe money to their bank. (See Article) Some lenders are pursuing sellers for the deficiency—the difference between the mortgage balance and the short sale proceeds—and, if the debt is turned over to a collection agency, the owner could be harassed for payment years after the sale. And though some might say otherwise, it is possible to owe taxes on the “forgiven” amount of the debt. There are specific IRS guidelines that sellers must meet in order to avoid paying taxes on the deficiency.

Finally, the best course is to seek the guidance of a “trusted” professional. Be wary of those who make bold promises or guarantees regarding your credit rating, avoiding deficiency judgments and tax liability, or who advise you in legal or financial matters for which they lack qualifications. An experienced short sale professional should be able to provide sellers with a list of references for whom they have successfully conducted short sales.

The Housing Guru: The one source for all your housing questions

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Esko Kiuru
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www.eskokiuru.com - complete mortgage platform
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esko@eskokiuru.com
My cell: 702-499-1006

Mortgage lenders now more inclined to lower principal

Sat, 03 Oct 2009 18:47:26 -0500

The home loan industry has been steadily resisting giving homeowners any principal reduction breaks throughout this real estate inferno.The government has been all over it to do mortgage modifications at a reasonable clip in an effort to keep the foreclosure epidemic from getting out of control. The banks have been slow in helping out even with them. The ones they have channeled through have generally been rather tame, all too often leading the borrower to redefault within months.

Mortgage loan providers, banks and investors that is, have obviously decided to change course somewhat.In a fresh report from OCC, or the Office of the Comptroller of the Currency, a regulator of national banks, the numbers show that in the first quarter 3.1% of loan modifications included principal cutbacks. More importantly, in the second quarter it had jumped to 10%. The report offered little information on how much of a reduction was done on an average. Still, the implication is that more of the same should be coming.

The real estate market continues to struggle and mortgage foreclosures threaten to go on, or even grow, at an alarming pace.Banks must have realized that a meaningful rebound is still a distant dream, and even if it comes soon, it predictably will be a gradual one. Therefore, to cut their losses a principal reduction increasingly appears to be the thing to do. It doesn't have to be all the way down to current market. As long as it is large enough to keep the homeowner in his residence with an affordable mortgage payment, both sides are likely to end up winners.

Southern Nevada - Las Vegas, Henderson, Anthem, Summerlin, Green Valley, Southern Highlands and Mountains Edge among its communities - homeowners would be some of the major beneficiaries of this shift in thinking. Scores of them are underwater here and are straining to hang in there with high mortgage payments. Many have decided to walk away from it, just handing the keys back to the lender. This development, by the way, probably is also weighing in on the banks' decision making. Although there are no stats to back it up, it is easy to see that the hard-hit areas, like Arizona, California and Florida, Nevada's partners in crime, are getting more attention tied to this issue than others.

Many banks are now in a better financial position to loosen up their strategic thinking. The siege mentality seems to be lifting. Some have even been able to raise new capital to start tidying up their demolished balance sheets. This new direction, as long as it holds, will also assist in keeping Congress from enacting the cram-down legislation, rumored to be still alive and kicking.

Realistic thinking appears to be making a comeback to the mortgage marketplace.

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Esko Kiuru
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www.eskokiuru.com - complete mortgage platform
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esko@eskokiuru.com
My cell: 702-499-1006

USDA Rural Development loans are NOT out of money, and other important facts…

Fri, 02 Oct 2009 18:44:26 -0500

Gerry gives a timely update on USDA mortgages, the rural home loan finance alternative. Excellent program to look into and see if it is applicable.

Via Thomas Mortgage, Florida's FHA Loan Pro:

Last Friday the USDA formally announced it was entering its annual "roll over" of funding as of its new fiscal year October 1^st. This mainly administrative action results in USDA's funding being delayed until it's made available through the General Accounting Office (GAO). This by no means indicates the USDA is out of funds! What it does do is delay funding for loans and guarantees. While there are still a number of lenders that can and do close and fund loans during this period, the vast majority of lenders do not. This doesn't mean your loan won't close, it just means you may have to wait a bit. How long? Last year the funds were made available by October 17 and this year they expect funds allocated within three weeks.

This means you may have to wait that long to close your loan, or take your loan to a lender that does fund in anticipation of the new allocation. Do note, by the time you can get an appraisal recertified, docs transferred, loan re-underwritten, etc. it's rarely worth it so you're likely best off to sit tight with your lender and wait for a late October close.

The great news is that in spite of crushing volume the USDA actually has $2 billion in funds to carryover from last year! In Florida we went from 2084 loans to over 7000 last year. The increased volume has increased the time it takes to get approvals from the USDA so depending on your area you may need to add from 3 days to two weeks to the process. This will become very critical as we near the deadline for the Tax Credit and the desperate scramble to close by November 30, so plan in advance and plan accordingly.

Lastly for those lenders interested in learning more about the program, consider signing up for the WebEx training offered nationally. This link will take you to the registration page for more information.

Realtors and lenders, if you haven't familiarized yourselves with this incredibly successful 100% financing program you are missing the boat. Home buyers, if you haven't spoken to your lenders and Realtors about the program you may be missing out on the least expensive low down payment program available.

Gerry Suarez, Jr.

Your FHA Loan Pro!

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Las Vegas claims top spot in an upbeat housing study

Thu, 01 Oct 2009 13:31:38 -0500

Southern Nevada - including Henderson, Summerlin, Southern Highlands, Green Valley, Mountains Edge, Anthem and North Las Vegas - has graced the pages of many publications in recent years regarding the improbable real estate meltdown and subsequent mortgage foreclosure rampage here. It usually ended up topping many of the national statistics that measured how deeply these negative housing market conditions have affected the area. That has not been fun reading for the locals. Going from a boom town to a bust town so quickly can be rather deflating.

Las Vegas real estate news have got cautiously better, though, in recent months. And another good piece was just published in Forbes magazine. Altos Research provided Forbes the data that it used to study 20 large housing markets in a somewhat unusual way. It measured the changes in price reductions in homes listed for sale. In other words, if a given market sees a growing number of price cuts, then that area is still getting worse. And vice versa. A refreshing method indeed.

Southern Nevada occupies the number one spot in this ranking of 20 major markets. In January 2009 54% of homes for sale here had seen a price reduction, according to Forbes. Fast forward to September 11, a few weeks ago, and that had happened "only" in 30% of them. A genuine improvement that propelled Southern Nevada to the top of the heap. Obviously this positive change comes from the demand side. When more people are looking for homes to buy, price reductions start disappearing.

Of course, this is just an indication that the housing market in Las Vegas is heading in the right direction, is about to find the bottom. The city is still weighed down by some fundamental problems, like high unemployment and mortgage foreclosures, that will slow things down. But nevertheless, the good news are beginning to appear again and predictably give everybody in the valley a much sought-after lift.

_______________________________________________________________________________

Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

10 Ways to Get a Better Appraisal

Tue, 29 Sep 2009 17:15:30 -0500

Sharon goes over plenty of critical stuff about appraisals. Take a look.

Via Frank & Sharon Alters, CDPE-Short Sales Jacksonville-Orange Park-Fleming Island (Watson Realty -):

Appraisals are an important part of the process in purchasing or selling a home. More than ever, the appraiser has the power to determine whether or not a sale goes to the closing table.

As if it were not difficult enough to value some homes in today's real estate environment where often there are no comparable sales in the last year or more, the government swoops in to 'correct' the abuses in the appraisal system, and the consequences of HVCC are that appraisers are traveling a long distance sometimes and are doing more work for less pay. Even if an appraiser has local knowledge, they may or may not do a thorough investigation of the comparable properties and they may choose to use Comparable Sales that are not ideal.

It is imperative that a real estate agent meet the appraiser when one of their listings has sold. This is not to try to influence the appraiser in any illegal way, but to give them the best information, so that the appraiser can value the property accurately. An added bonus is the information you will learn from the appraiser if you ask questions.

10 Ways to Get a Better Appraisal

1. Meet the appraiser at the house. Take the lockbox off the door after you get a contract so an appointment will have to be made.

2. Give the Appraiser as many Comparable Sales as you have for the subject property. If it's a property where there are few or no comparable sales, go out in a radius search until you find some. Go back as far as a year or even more if it's a special type property (waterfront, for example). Realize that the appraiser may deduct value if the sale is further than 3 months out.

3. Call the agents for the Comparable sales to get as much information as possible for the appraiser. The house that sold down the street that needed a new roof - they need to know that, but it's probably not in the MLS information.

4. Give a complete list of every upgrade and improvement that has been performed during the seller's ownership. Be sure to include maintenance items as well as cosmetic upgrades. There is a category for "condition" on appraisals and although it won't match dollar for dollar, it will be mentioned.

5. Be sure to note when flooring is "hardwood" instead of "wood" or "laminate." Be specific about other surfaces (granite vs. corian) and improvements. A glazed 42" raised panel cabinet with full coverage costs most than Level 1 42" cabinets. Thermador appliances are more valuable than GE Profile, for instance, and an appraiser's quick trip through the house may not take in such details.

6. Give them a copy of your Marketing materials, including the beautiful photos you have of the interior, exterior and grounds.

7. Be sure to note anything about the lot - the Preserve not only on the side but across the street, for instance. Note the size of our lot vs. any comparable sales (if it's to your advantage).

8. Local appraisers probably know the Community amenities, but it never hurts to also give a list of those as well.

9. If there are communities nearby that are not really good comparables, a map with some notes about the lack of amenities, production starter homes vs. your community with custom homes on estate lots, etc., can be very helpful to someone from out of the area.

10. Be gracious, not pushy. Even if the appraiser is from 100 miles away, respect and helpfulness will go much further than a condescending, "You drove all the way from there?" attitude.

If you make the effort to be sure the appraiser is well educated about your listing, you have a much better chance of the house appraising and the sale going through. Appraisers' work hasn't lessened but many times their fees have been cut in half or more. Anything we can do to help is in the Sellers', Buyers', ours, and the community's best interest.

Happy Selling!

Original Photography, All Rights Reserved. *10 Ways to Get a Better Appraisal*

_______________________________________________________________________________

Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006