Michael Mergell's Blog

Gorgeous 4bd home on Senie Lane in Carmel!! Open House Sun 1-3! Price Reduced!!!

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Fri, 14 May 2010 21:17:59 -0700

http://www.postlets.com/res/3295290 Gorgeous 4 bedroom Home in Carmel Indiana!! Open House this Sunday 1-3PM!! New Reduced Price!!! >>>>>>>>>>> $244,900<<<<<<<<<<<<<<< COME SEEE!! Great Sunny Weather and Lunch Served!

A Senior Moment...not quite a RE story

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Fri, 19 Feb 2010 08:43:45 -0800

I was a little distracted over the very difficult listing appointment I had just come from. How did they get me to cut my commission. $5.37. That's what the kid behind the counter at Taco Bell said to me. I dug into my pocket and pulled out some lint and two dimes and something that used to be a Jolly Rancher. Having already handed the kid a five-spot, I started to head back out to the truck to grab some change when the kid with the Emo hairdo said the harshest thing anyone has ever said to me. He said, "It's OK. I'll just give you the senior citizen discount." I turned to see who he was talking to and then heard the sound of change hitting the counter in front of me. "Only $4.68" he said cheerfully. I stood there stupefied. I am 41, not even 50 yet much less 55 or 65? A mere child! Senior citizen? I took my burrito and walked out to the truck wondering what was wrong with Emo. Was he blind? As I sat in the truck, my blood began to boil. Old? Me? I'll show him, I thought. I opened the door and headed back inside. I strode to the counter, and there he was waiting with a smile. Before I could say a word, he held up something and jingled it in front of me, like I could be that easily distracted! What am I now? A toddler? "Dude! Can't get too far without your car keys, eh?" I stared with utter disdain at the keys. I began to rationalize in my mind. "Leaving keys behind hardly makes a man elderly! It could happen to anyone!" I turned and headed back to the truck. I slipped the key into the ignition, but it wouldn't turn. What now? I checked my keys and tried another. Still nothing. That's when I noticed the purple beads hanging from my rearview mirror. I had no purple beads hanging from my rearview mirror. Then, a few other objects came into focus. The car seat in the back seat. Happy Meal toys spread all over the floorboard. A partially eaten doughnut on the dashboard. Faster than you can say ginkgo biloba, I flew out of the alien vehicle. Moments later I was speeding out of the parking lot, relieved to finally be leaving this nightmarish stop in my life. That is when I felt it, deep in the bowels of my stomach: hunger! My stomach growled and churned, and I reached to grab my burrito, only it was nowhere to be found. I swung the truck around, gathered my courage, and strode back into the restaurant one final time. There Emo stood, draped in youth and black nail polish. All I could think was, "What is the world coming to?" All I could say was, "Did I leave my food and drink in here?" At this point I was ready to ask a Boy Scout to help me back to my vehicle, and then go straight home and apply for Social Security benefits. Emo had no clue. I walked back out to the truck, and suddenly a young lad came up and tugged on my jeans to get my attention. He was holding up a drink and a bag. His mother explained, "I think you left this in my truck by mistake." I took the food and drink from the little boy and sheepishly apologized. She offered these kind words: "It's OK. My grandfather does stuff like this all the time." All of this is to explain how I got a ticket doing 85 in a 40. Yes, I was racing some punk kid in a Toyota Prius.. And no, I told the officer, I'm not too old to be driving this fast. As I walked in the front door, my wife met me halfway down the hall. I handed her a bag of cold food and a $300 speeding ticket. I promptly sat in my rocking chair and covered up my legs with a blanky. The good news was I had successfully found my way home. -*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*- READ BELOW ! Just in case you weren't feeling too old today. The people who are starting college this fall were born in 1991. They are too young to remember the space shuttle blowing up. Their lifetime has always included AIDS. The CD was introduced two years before they were born. They have always had an answering machine. They have always had cable.. Popcorn has always been microwaved. They never took a swim and thought about Jaws. They don't know who Mork was or where he was from. They never heard: 'Where's the Beef?', 'I'd walk a mile for a Camel ', or 'de plane Boss, de plane'. McDonald's never came in Styrofoam containers. They don't have a clue how to use a typewriter.

Indiana House Bill 1359

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Mon, 15 Feb 2010 06:16:04 -0800

"Requires a creditor, a mortgage servicer, or an agent of a creditor to acknowledge a written offer made in connection with a proposed short sale of property that is subject to a mortgage transaction that is at least 60 days delinquent. Provides that the acknowledgment must be provided not later than 10 business days after the date of the offer. Requires the creditor, servicer, or agent to accept or reject the short sale offer not later than 30 business days after receipt of the offer." Sounds great for all us Short Sale Realtors in Indiana. What will it mean, will it help. What we are finding is that most lenders especially the large ones just ignore the Bill and its terms. Or they simply quickly reject the offer.

Mortgage Forgiveness Act: What it Means

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Mon, 15 Feb 2010 06:07:59 -0800

An Act To amend the Internal Revenue Code of 1986 to exclude discharges of indebtedness on principal residences from gross income, and for other purposes.Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled , SECTION 1. SHORT TITLE. This Act may be cited as the ‘‘Mortgage Forgiveness Debt Relief Act of 2007’’.SEC. 2. DISCHARGES OF INDEBTEDNESS ON PRINCIPAL RESIDENCE EXCLUDED FROM GROSS INCOME. (a) I Revenue Code of 1986 is amended by striking ‘‘or’’ at the end of subparagraph (C), by striking the period at the end of subparagraph (D) and inserting ‘‘, or’’, and by inserting after subparagraph (D) the following new subparagraph: ‘‘(E) the indebtedness discharged is qualified principal residence indebtedness which is discharged before January 1, 2010.’’. (b) S N GENERAL.—Paragraph (1) of section 108(a) of the InternalPECIAL RULES RELATING TO QUALIFIED PRINCIPAL RESIDENCE I adding at the end the following new subsection: ‘‘(h) S NDEBTEDNESS.—Section 108 of such Code is amended byPECIAL RULES RELATING TO QUALIFIED PRINCIPAL RESIDENCE I ‘‘(1) B income by reason of subsection (a)(1)(E) shall be applied to reduce (but not below zero) the basis of the principal residence of the taxpayer. ‘‘(2) Q purposes of this section, the term ‘qualified principal residence indebtedness’ means acquisition indebtedness (within the meaning of section 163(h)(3)(B), applied by substituting ‘$2,000,000 ($1,000,000’ for ‘$1,000,000 ($500,000’ in clause (ii) thereof) with respect to the principal residence of the taxpayer. ‘‘(3) E TAXPAYER not apply to the discharge of a loan if the discharge is on account of services performed for the lender or any other factor not directly related to a decline in the value of the residence or to the financial condition of the taxpayer. ‘‘(4) O or in part, and only a portion of such loan is qualified principal residence indebtedness, subsection (a)(1)(E) shall apply only to so much of the amount discharged as exceeds the amount H. R. 3648—2 of the loan (as determined immediately before such discharge) which is not qualified principal residence indebtedness. ‘‘(5) P the term ‘principal residence’ has the same meaning as when used in section 121.’’. (c) C (1) Subparagraph (A) of section 108(a)(2) of such Code is amended by striking ‘‘and (D)’’ and inserting ‘‘(D), and (E)’’. (2) Paragraph (2) of section 108(a) of such Code is amended by adding at the end the following new subparagraph: ‘‘(C) P OVER INSOLVENCY EXCLUSION UNLESS ELECTED OTHERWISE to which paragraph (1)(E) applies unless the taxpayer elects to apply paragraph (1)(B) in lieu of paragraph (1)(E).’’. (d) E shall apply to discharges of indebtedness on or after January 1, 2007. NDEBTEDNESS.—ASIS REDUCTION.—The amount excluded from grossUALIFIED PRINCIPAL RESIDENCE INDEBTEDNESS.—ForXCEPTION FOR CERTAIN DISCHARGES NOT RELATED TO’S FINANCIAL CONDITION.—Subsection (a)(1)(E) shallRDERING RULE.—If any loan is discharged, in wholeRINCIPAL RESIDENCE.—For purposes of this subsection,OORDINATION.—RINCIPAL RESIDENCE EXCLUSION TAKES PRECEDENCE.—Paragraph (1)(B) shall not apply to a dischargeFFECTIVE DATE.—The amendments made by this section SEC. 3. EXTENSION OF TREATMENT OF MORTGAGE INSURANCE PREMIUMS AS INTEREST. (a) I the Internal Revenue Code of 1986 (relating to termination) is amended by striking ‘‘December 31, 2007’’ and inserting ‘‘December 31, 2010’’. (b) E shall apply to amounts paid or accrued after December 31, 2007. N GENERAL.—Subclause (I) of section 163(h)(3)(E)(iv) ofFFECTIVE DATE.—The amendment made by this section SEC. 4. ALTERNATIVE TESTS FOR QUALIFYING AS COOPERATIVE HOUSING CORPORATION. (a) I Internal Revenue Code of 1986 (defining cooperative housing corporation) is amended to read as follows: ‘‘(D) meeting 1 or more of the following requirements for the taxable year in which the taxes and interest described in subsection (a) are paid or incurred: ‘‘(i) 80 percent or more of the corporation’s gross income for such taxable year is derived from tenant- stockholders. ‘‘(ii) At all times during such taxable year, 80 percent or more of the total square footage of the corporation’s property is used or available for use by the tenant-stockholders for residential purposes or purposes ancillary to such residential use. ‘‘(iii) 90 percent or more of the expenditures of the corporation paid or incurred during such taxable year are paid or incurred for the acquisition, construction, management, maintenance, or care of the corporation’s property for the benefit of the tenant-stockholders.’’. (b) E shall apply to taxable years ending after the date of the enactment of this Act. H. R. 3648—3 N GENERAL.—Subparagraph (D) of section 216(b)(1) of theFFECTIVE DATE.—The amendment made by this section SEC. 5. EXCLUSION FROM INCOME FOR BENEFITS PROVIDED TO VOLUNTEER FIREFIGHTERS AND EMERGENCY MEDICAL RESPONDERS. (a) I the Internal Revenue Code of 1986 (relating to items specifically excluded from gross income) is amended by inserting after section 139A the following new section: N GENERAL.—Part III of subchapter B of chapter 1 of ‘‘SEC. 139B. BENEFITS PROVIDED TO VOLUNTEER FIREFIGHTERS AND EMERGENCY MEDICAL RESPONDERS. ‘‘(a) I volunteer emergency response organization, gross income shall not include— ‘‘(1) any qualified State and local tax benefit, and ‘‘(2) any qualified payment. ‘‘(b) D of a qualified volunteer emergency response organization— ‘‘(1) the deduction under 164 shall be determined with regard to any qualified State and local tax benefit, and ‘‘(2) expenses paid or incurred by the taxpayer in connection with the performance of services as such a member shall be taken into account under section 170 only to the extent such expenses exceed the amount of any qualified payment excluded from gross income under subsection (a). ‘‘(c) D ‘‘(1) Q ‘qualified state and local tax benefit’ means any reduction or rebate of a tax described in paragraph (1), (2), or (3) of section 164(a) provided by a State or political division thereof on account of services performed as a member of a qualified volunteer emergency response organization. ‘‘(2) Q ‘‘(A) I any payment (whether reimbursement or otherwise) provided by a State or political division thereof on account of the performance of services as a member of a qualified volunteer emergency response organization. ‘‘(B) A determined under subparagraph (A) for any taxable year shall not exceed $30 multiplied by the number of months during such year that the taxpayer performs such services. ‘‘(3) Q ORGANIZATION response organization’ means any volunteer organization— ‘‘(A) which is organized and operated to provide firefighting or emergency medical services for persons in the State or political subdivision, as the case may be, and ‘‘(B) which is required (by written agreement) by the State or political subdivision to furnish firefighting or emergency medical services in such State or political subdivision. ‘‘(d) T to taxable years beginning after December 31, 2010.’’. H. R. 3648—4 (b) C is amended by inserting after the item relating to section 139A the following new item: N GENERAL.—In the case of any member of a qualifiedENIAL OF DOUBLE BENEFITS.—In the case of any memberEFINITIONS.—For purposes of this section—UALIFIED STATE AND LOCAL TAX BENEFIT.—The termUALIFIED PAYMENT.—N GENERAL.—The term ‘qualified payment’ meansPPLICABLE DOLLAR LIMITATION.—The amountUALIFIED VOLUNTEER EMERGENCY RESPONSE.—The term ‘qualified volunteer emergencyERMINATION.—This section shall not apply with respectLERICAL AMENDMENT.—The table of sections for such part ‘‘Sec. 139B. Benefits provided to volunteer firefighters and emergency medical responders.’’. (c) E shall apply to taxable years beginning after December 31, 2007. FFECTIVE DATE.—The amendments made by this section SEC. 6. CLARIFICATION OF STUDENT HOUSING ELIGIBLE FOR LOW- INCOME HOUSING CREDIT. (a) I Internal Revenue Code of 1986 (relating to certain students not to disqualify unit) is amended to read as follows: ‘‘(I) single parents and their children and such parents are not dependents (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of another individual and such children are not dependents (as so defined) of another individual other than a parent of such children, or.’’. (b) E shall apply to— (1) housing credit amounts allocated before, on, or after the date of the enactment of this Act, and (2) buildings placed in service before, on, or after such date to the extent paragraph (1) of section 42(h) of the Internal Revenue Code of 1986 does not apply to any building by reason of paragraph (4) thereof. N GENERAL.—Subclause (I) of section 42(i)(3)(D)(ii) of theFFECTIVE DATE.—The amendment made by this section SEC. 7. APPLICATION OF JOINT RETURN LIMITATION FOR CAPITAL GAINS EXCLUSION TO CERTAIN POST-MARRIAGE SALES OF PRINCIPAL RESIDENCES BY SURVIVING SPOUSES. (a) S of the Internal Revenue Code of 1986 (relating to limitations) is amended by adding at the end the following new paragraph: ‘‘(4) S SPOUSES an unmarried individual whose spouse is deceased on the date of such sale, paragraph (1) shall be applied by substituting ‘$500,000’ for ‘$250,000’ if such sale occurs not later than 2 years after the date of death of such spouse and the requirements of paragraph (2)(A) were met immediately before such date of death.’’. (b) E shall apply to sales or exchanges after December 31, 2007. ALE WITHIN 2 YEARS OF SPOUSE’S DEATH.—Section 121(b)PECIAL RULE FOR CERTAIN SALES BY SURVIVING.—In the case of a sale or exchange of property byFFECTIVE DATE.—The amendment made by this section SEC. 8. MODIFICATION OF PENALTY FOR FAILURE TO FILE PARTNERSHIP RETURNS; LIMITATION ON DISCLOSURE. (a) E Internal Revenue Code of 1986 (relating to failure to file partnership returns) is amended by striking ‘‘5 months’’ and inserting ‘‘12 months’’. (b) I 6698(b) of such Code is amended by striking ‘‘$50’’ and inserting ‘‘$85’’. H. R. 3648—5 (c) L S C XTENSION OF TIME LIMITATION.—Section 6698(a) of theNCREASE IN PENALTY AMOUNT.—Paragraph (1) of sectionIMITATION ON DISCLOSURE OF TAXPAYER RETURNS TO PARTNERS,ORPORATION SHAREHOLDERS, TRUST BENEFICIARIES, AND E (1) I to disclosure to persons having material interest) is amended by adding at the end the following new paragraph: ‘‘(10) L —In the case of an inspection or disclosure under this subsection relating to the return of a partnership, S corporation, trust, or an estate, the information inspected or disclosed shall not include any supporting schedule, attachment, or list which includes the taxpayer identity information of a person other than the entity making the return or the person conducting the inspection or to whom the disclosure is made.’’. (2) E shall take effect on the date of the enactment of this Act. (d) E (a) and (b) shall apply to returns required to be filed after the date of the enactment of this Act. STATE BENEFICIARIES.—N GENERAL.—Section 6103(e) of such Code (relatingIMITATION ON CERTAIN DISCLOSURES UNDER THIS SUBSECTION.FFECTIVE DATE.—The amendment made by this subsectionFFECTIVE DATE.—The amendments made by subsections SEC. 9. PENALTY FOR FAILURE TO FILE S CORPORATION RETURNS. (a) I the Internal Revenue Code of 1986 (relating to assessable penalties) is amended by adding at the end the following new section: N GENERAL.—Part I of subchapter B of chapter 68 of ‘‘SEC. 6699. FAILURE TO FILE S CORPORATION RETURN. ‘‘(a) G section 7203 (relating to willful failure to file return, supply information, or pay tax), if any S corporation required to file a return under section 6037 for any taxable year— ‘‘(1) fails to file such return at the time prescribed therefor (determined with regard to any extension of time for filing), or ‘‘(2) files a return which fails to show the information required under section 6037, such S corporation shall be liable for a penalty determined under subsection (b) for each month (or fraction thereof) during which such failure continues (but not to exceed 12 months), unless it is shown that such failure is due to reasonable cause. ‘‘(b) A amount determined under this subsection for any month is the product of— ‘‘(1) $85, multiplied by ‘‘(2) the number of persons who were shareholders in the S corporation during any part of the taxable year. ‘‘(c) A (a) shall be assessed against the S corporation. ‘‘(d) D of chapter 63 (relating to deficiency procedures for income, estate, gift, and certain excise taxes) shall not apply in respect of the assessment or collection of any penalty imposed by subsection (a).’’. (b) C of subchapter B of chapter 68 of such Code is amended by adding at the end the following new item: ENERAL RULE.—In addition to the penalty imposed byMOUNT PER MONTH.—For purposes of subsection (a), theSSESSMENT OF PENALTY.—The penalty imposed by subsectionEFICIENCY PROCEDURES NOT TO APPLY.—Subchapter BLERICAL AMENDMENT.—The table of sections for part I ‘‘Sec. 6699. Failure to file S corporation return.’’. H. R. 3648—6 (c) E shall apply to returns required to be filed after the date of the enactment of this Act. FFECTIVE DATE.—The amendments made by this section SEC. 10. MODIFICATION OF REQUIRED INSTALLMENT OF CORPORATE ESTIMATED TAXES WITH RESPECT TO CERTAIN DATES. The percentage under subparagraph (B) of section 401(1) of the Tax Increase Prevention and Reconciliation Act of 2005 in effect on the date of the enactment of this Act is increased by 1.50 percentage points.Speaker of the House of Representatives. Vice President of the United States and President of the Senate.

Born Again: When will you be eligible for a mortgage after a foreclosure or short sale?

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Mon, 15 Feb 2010 06:00:55 -0800

Did you miss the fact that foreclosure filings were up 71% in the third quarter? Which makes it a good time to remind everyone of the rules that govern when and how you'll be eligible for a mortgage after you've been foreclosed, surrendered a deed, or negotiated a short sale. For borrowers with a foreclosure, short sale, or deed in lieu of foreclosure on their credit history, the following timelines apply before they'll be eligible for a conforming, conventional mortgage (Fannie Mae/Freddie Mac): •Foreclosure: 5 years from completion date, minimum 680 FICO and 10% down for 7 years, investment property, second homes, cash out refinances not allowed for 7 years. •Deed-in-Lieu of Foreclosure: 4 years, at least 10% down required for 7 years. •Short Sale: 2 years. 4 years for Freddie Mac For what it's worth, under FHA rules you have to wait two years before you are born-again. Goes without saying that if you do wind up with a foreclosure (or one of it's close cousins) on your record, unless you handle the period after the foreclosure properly by re-establishing credit - no easy trick with a serious derogatory on your record - and accumulating a sizeable down payment, you are likely to be renting for a long, long time. Or, another way to look at this: At some point in the next five years, buying may look really cheap, and you'll be locked out of the game.

Indiana Foreclosure Law Summary

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Mon, 15 Feb 2010 05:57:27 -0800

A Quick Look - Judicial Foreclosure Available: Yes - Non-Judicial Foreclosure Available: No - Primary Security Instruments: Mortgage - Timeline: Typically 150 days - Right of Redemption: Yes - Deficiency Judgments Allowed: Yes In Indiana, lenders may foreclose on a mortgage in default by using the judicial foreclosure process. Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, the property will be auctioned off to the highest bidder. However, there is a wait time between the date the suit was filed and the day the property is sold. In Indiana, the date the mortgage was signed determines the length of time a lender must wait between filing the suit and proceeding with the foreclosure sale. The wait time is anywhere from three (3) to twelve (12) months, but the owner may file a waiver of the time limit, which allows the sale to proceed without delay. When this occurs, the lender loses the right to pursue a deficiency judgment. The foreclosure sale process involves publishing an ad once a week for three weeks. The first ad must be run 30 days before the sale. At the time the first ad is run, each owner must be served with notice of the foreclosure sale by the sheriff. The sheriff conveys title by a deed given immediately after the sale. The owner may reside in the property, rent free, until the foreclosure sale, provided the owner is not committing waste, which means tearing up the property. More information on Indiana foreclosure laws. Michael Mergell (317) 645-8717

What is a CDPE

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Sun, 14 Feb 2010 09:40:09 -0800

A Certified Distressed Property Expert® is a real estate professional with specific understanding of the complex issues confronting the real estate industry, and the foreclosure avoidance options available to homeowners. Through comprehensive training and experience, CDPEs are able to provide solutions for homeowners facing hardships in today’s market, specifically short sales. The prospect of foreclosure can be financially and emotionally devastating, and often homeowners proceed without guidance of any kind. The developers of the CDPE Designation believe that the best course of action for a homeowner in distress is to speak with a well-informed, licensed real estate professional. They have the tools needed to help homeowners find the best solution for their situation. Often, when other options have been exhausted, CDPEs can help homeowners avoid foreclosure through the efficient execution of a short sale. While enduring financial difficulties is challenging for any family, the process of finding a qualified real estate professional should not be. Selecting an agent with the CDPE Designation ensures you are dealing with a professional trained to address your specific needs. For more information, contact a CDPE in your area.

How To Short Sale

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Sun, 14 Feb 2010 09:36:56 -0800

A short sale in real estate is not always a pleasant transaction. There are many ways to lose a home but signing away ownership in a manner that destroys credit, embarrasses the family and strips an owner of dignity is one of the hardest. For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of those options is called a "short sale." More than half of my sales in Sacramento over the past few years are short sales. That's how prominent short sales have become. When lenders agree to do a short sale in real estate, it means the lender is accepting less than the total amount due. Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose; moreover, not all sellers nor all properties qualify for short sales. If you are considering buying a short sale, there could be drawbacks. For your protection, I suggest that all borrowers: •Obtain legal advice from a competent real estate lawyer •Call an accountant to discuss short sale tax ramifications As a real estate agent, I am not licensed as a lawyer nor a CPA and cannot advise on those consequences. Except for certain conditions pursuant to the Mortgage Forgiveness Debt Relief Act of 2007, be aware the I.R.S. could consider debt forgiveness as income, and there is no guarantee that a lender who accepts a short sale will not legally pursue a borrower for the difference between the amount owed and the amount paid. In some states, this amount is known as a deficiency. A lawyer can determine whether your loan qualifies for a deficiency judgment or claim. Although all lenders have varying requirements and may demand that a borrower submit a wide array of documentation, the following steps will give you a pretty good idea of what to expect. •Call the Lender You may need to make a half dozen phone calls before you find the person responsible for handling short sales. You do not want to talk to the "real estate short sale" or "work out" department, you want the supervisor's name, the name of the individual capable of making a decision. •Submit Letter of Authorization Lenders typically do not want to disclose any of your personal information without written authorization to do so. If you are working with a real estate agent, closing agent, title company or lawyer, you will receive better cooperation if you write a letter to the lender giving the lender permission to talk with those specific interested parties about your loan. The letter should include the following: •Property Address •Loan Reference Number •Your Name •The Date •Your Agent's Name & Contact Information •Preliminary Net Sheet This is an estimated closing statement that shows the sales price you expect to receive and all the costs of sale, unpaid loan balances, outstanding payments due and late fees, including real estate commissions, if any. Your closing agent or lawyer should be able to prepare this for you, if you do not know how to calculate any of these fees. If the bottom line shows cash to the seller, you will probably not need a short sale. •Hardship Letter The sadder, the better. This statement of facts describes how you got into this financial bind and makes a plea to the lender to accept less than full payment. Lenders are not inhumane and can understand if you lost your job, were hospitalized or a truck ran over your entire family, but lenders are not particularly empathetic to situations involving dishonesty or criminal behavior. •Proof of Income and Assets It is best to be truthful and honest about your financial situation and disclose assets. Lenders will want to know if you have savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate or anything of tangible value. Lenders are not in the charity business and often require assurance that the debtor cannot pay back any of the debt that it is forgiving. •Copies of Bank Statements If your bank statements reflect unaccountable deposits, large cash withdrawals or an unusual number of checks, it's probably a good idea to explain each of those line items to the lender. In addition, the lender might want you to account for each and every deposit so it can determine whether deposits will continue. •Comparative Market Analysis Sometimes markets decline and property values fall. If this is part of the reason that you cannot sell your home for enough to pay off the lender, this fact should be substantiated for the lender through a comparative market analysis (CMA). Your real estate agent can prepare a CMA for you, which will show prices of similar homes: •Active on the market •Pending sales •Solds from the past six months. •Purchase Agreement & Listing Agreement When you reach an agreement to sell with a prospective purchaser, the lender will want a copy of the offer, along with a copy of your listing agreement. Be prepared for the lender to renegotiate commissions and to refuse to pay for certain items such as home protection plans or termite inspections. Now, if everything goes well, the lender will approve your short sale. As part of the negotiation, you might ask that the lender not report adverse credit to the credit reporting agencies, but realize that the lender is under no obligation to accommodate this request. Credit report status is not always negotiable.

Short Sale Defined

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Sun, 14 Feb 2010 09:35:15 -0800

A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan. It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. This agreement, however, does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency.

Dealing with Short Sale Rejection.

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Sun, 14 Feb 2010 09:32:25 -0800

Buying houses by means of a short sale can be a great way to make significant amounts of money, but they're not for everyone. You have to find a seller who will work with you to persuade the lender to sell the home rather than allowing the foreclosure process to continue. Then you have to submit an offer that's low enough to make a profit, yet not so low as to be rejected altogether. If a lender does reject your offer, all isn't lost. The first thing to do is to try to determine why your offer was rejected. There are many possible reasons, and if you want the sale to go through, you must job find out exactly what the lender wants in order to make the sale happen. Here are possible reasons. First, your offer may simply have been too low, which meant the lender would be taking too big of a hit by accepting it. They also may believe they can do better once the foreclosure has been completed, or since loans are often sold to investors, it's also possible that the holder of the note wouldn't accept the loss. Perhaps the borrower's financial difficulty wasn't stated strongly enough to make a persuasive case for a short sale. If that's the case, the lender might want to work out an alternative payment schedule with the homeowners rather than entering into a short sale. Since most lenders will require a broker's price opinion (BPO), make sure your offer is somewhere near that figure. Otherwise, a lender will be convinced that they can do better on the open market once the foreclosure is complete. There may be other reasons, but the number one reason short sale offers are rejected is simply because they're too low. After all, lenders are in business to make a profit, and even when appears there's no profit to be made in a particular home; they want to cut their losses as much as possible. So don't get greedy. You'll rarely be able to steal a home, but you can often get a substantially lower price than you would on the open market. One of the best ways to avoid coming in too low is simply to ask the lender how much they hope to net from a short sale. They may not tell you, but you'll never know if you don't ask. Even if you don't get an answer in the beginning, you'll have another chance to ask before they make a counteroffer. Be courteous, but emphasize that you're really hoping to make the sale happen. Again, you may be surprised by the figure you receive, and if it's acceptable, jump on it. Don't kill your sale by being too greedy. If your short sale offer is rejected, don't give up. Probe for more information about why your offer didn't fly and then try to satisfy whatever they ask for before making your counteroffer. You won't be stealing the home, but there's often plenty of profit to be made.

It's only business... don't take it personally.

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Thu, 04 Feb 2010 08:46:38 -0800

Now's the time to gear up and get your ducks in a row. Make those big changes, get on course, hold your course and make the best of 2010.

It's gonna be a great year.

Michael Mergell, RE/MAX

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Fri, 20 Mar 2009 05:34:15 -0700

A little about Michael... With over 15 years of real estate experience, Michael has seen and done just about everything in real estate. Michael Mergell has a Passion for Providing an Outstanding Experience...In life; there are those who forget the importance of friends and family, and the value it brings to an individual. Michael Mergell is one of those rare individuals who understand that without his clients (all called friends) he would have grown into the quality person he is today. Indeed, anyone who knows Michael will tell you, he is a man defined by his genuine attitude. Those who've worked with Michael, whether during his days with Davis Homes, through his youth coaching commitments or church, know him as someone who does what it takes to get the job done. But, more importantly, they know him as someone who truly cares about making a positive difference in the lives of those around him especially his clients. It's an attitude that has also reflected in Michael's career. Accomplishments Managing Broker, RE/MAX Ability Plus-Fishers Graduate UCLA, Los Angeles B.S. Degree Balanced Man Scholarship Sales Person of the Year 1995, 1996 Melody Homes Sales Manager of the Year 1999 Davis Homes A Full Time Realtor With Experience Stemming Over 15 Years Resident of Hamilton County Indiana Enthusiastic, Reliable, Committed, Honest and Hard Working Current Member MIBOR Current Member HAMCO CSS & CSP Designations #8 Realtor in Indiana RE/MAX 2003 100% Club Member RE/MAX Chairman's Award RE/MAX Lifetime Achievement Award 2009 RE/MAX Largest RE/MAX Indiana Commission 2004

Michael Mergell, RE/MAX

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Fri, 20 Mar 2009 05:31:36 -0700

Michael Mergell

Managing Broker

RE/MAX Ability Plus

8935 Technology Drive

Fishers, IN 46038

(317) 645-8717 Cell

(317) 581-2620 Fax

Stimulus...Not So Stimulating

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Fri, 20 Mar 2009 05:28:02 -0700

The new stimulus package may hurt the very industry that could save us.... While the bill could increase home buying, it doesn't do nearly enough to jump-start building or stem the foreclosures that are driving down prices, many real estate observers say. The major housing addition to the Senate's version of the package, an up-to-$15,000 tax incentive for home buyers, was stripped from the bill on Wednesday. Real estate trade groups felt that provision had the greatest potential to reignite the market. The National Association of Home Builders projected it would increase sales by almost 500,000 and create more than 255,000 jobs. The tax credit that survived was closer to a temporary one passed last year by Congress. It is capped at 10 percent of the home price or $8,000, whichever is less, and restricted to first-time buyers who make purchases before Dec. 1, 2009. After some political wrangling, it was determined the money would generally not have to be repaid, preserving a key distinction of the Senate version. "Overall, I would say this is a mild positive," said Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley. "They had the provision in there that would have led to a wildfire in demand for housing and they took it out." The National Association of Realtors, in a prepared statement Thursday, said the final tax credit provision could stimulate 200,000 home sales. But Joseph Perkins, chief executive officer of the Home Builders Association of Northern California, said $8,000 has a negligible effect in high-cost housing markets such as the Bay Area. On the other hand, the stimulus bill does temporarily increase loan caps for Federal Housing Administration, Fannie Mae and Freddie Mac mortgages in expensive areas from $625,000 to $729,750. That effectively lowers the cost of borrowing that amount or less, providing "big help" to markets like the Bay Area, said Robert Kleinhenz, deputy chief economist with the California Association of Realtors. Also scaled back in the final bill was a provision that would have allowed industries, including home builders, to use 2008 and 2009 losses to offset tax liabilities going back five years, a considerable benefit for a sector that is currently cash-strapped and highly unprofitable. In the end, it was limited to small businesses with losses in 2008. Other real estate proposals pushed by the housing industry and consumer groups - including lowering mortgage rates to around 4 percent and protecting struggling homeowners from foreclosures, respectively - never made it into final versions of the bill in either the House or Senate. In general, many were surprised that the stimulus package didn't do more to prop up the industry at the heart of the downturn. "I don't see how we can do an economic recovery package that gives short shrift to housing," Perkins said. "The meltdown in the financial sector was driven by the collapse in housing." It's been widely reported, however, that the Obama administration plans to push additional legislation aimed at bolstering the housing industry, probably focused on preventing foreclosures. The plan would seek to lower interest rates for struggling borrowers through government subsidies. Chris Thornberg, economist with Los Angeles research firm Beacon Economics, said the stimulus package is necessary to help revive the economy, but that the home building industry doesn't require or deserve any special consideration. "The housing industry broke first, but it was only a symptom of the underlying problem in the U.S. economy ... a 12-year spending binge based on overinflated values of our homes," he said. The reconciled stimulus bill, which still must pass both houses of Congress and be signed into law by President Obama, also provides billions of dollars for renovating public housing and foreclosed homes and similar projects.

Real Estate 101-RE/MAX

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Fri, 20 Mar 2009 05:21:57 -0700

Real Estate 101 Class is in session. Proceed at your own pace to learn about: Buying a home, including advice on where to start, and how to select the right property at the right price. Whether you've spent years saving and preparing to buy a place, or are still unsure about what you can afford, the questions surrounding real estate can feel endless. You can find the answers - and peace of mind - by working with RE/MAX, the industry leader in experience and service. Selling a home, with advice on showing buyers your property's best side and increasing its value. As a homeowner, you can play an important part in the timely sale of your property. When you take the following steps, you’ll help your agent sell your house faster, at the best possible price. The easiest and most reliable way to improve a home's appeal is to enlist an expert who can help you highlight its best attributes. Working with an agent, including tips on finding the right real estate professional to meet your real estate needs and making your experience the best it can be. Selecting the right professional to help you buy or sell your home is essential to a smooth transaction. Why use RE/MAX? A skilled and knowledgeable real estate agent saves you time and money. RE/MAX agents lead the industry in experience and education - and results. Consummate professionals, RE/MAX Associates on average lead agents of competing brands in advanced real estate education and production. That's why they're known as "The Real Estate Leaders®" and why no one in the world sells more real estate. The real estate glossary demystifies real estate jargon, from "amortization" to "wraparound mortgage." MLS Listings are the core of the real estate buying and selling process, providing agents and consumers with comprehensive insight into a market's past, current and pending sales activity.

Short Sale Defined

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Fri, 20 Mar 2009 05:19:19 -0700

In real estate, a short sale is a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold.[1] In a short sale, the bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor. This negotiation is all done through communication with a bank's loss mitigation or workout department. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender, sometimes (but not always) in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale. Many Short Sales leave a deficiency balance for which the Mortgagor / Borrower is still liable. In 99% of all cases it is not a settlement-in-full. A deficiency balance will remain as a potential liability for the Mortgagor / Borrower. The bank's opportunity of pursuit of a deficiency judgment will vary from state to state Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market and the borrower's financial situation. A short sale typically is executed to prevent a home foreclosure, but the decision to proceed with a short sale is predicated on the most economic way for the bank to recover the amount owed on the property. Often a bank will allow a short sale if they believe that it will result in a smaller financial loss than foreclosing as there are carrying costs that are associated with a foreclosure. A bank will typically determine the amount of equity (or lack of), by determining the probable selling price from a Broker Price Opinion BPO or through a valuation of an appraisal. For the home owner, advantages include avoidance of a foreclosure on their credit history and partial control of the monetary deficiency. A short sale is typically faster and less expensive than a foreclosure. In short, a short sale is nothing more than negotiating with lien holders a payoff for less than what they are owed, or rather a sale of a debt, generally on a piece of real estate, short of the full debt amount. It does not extinguish the remaining balance unless settlement is clearly indicated on the acceptance of offer. Short sales are common in standard business transactions in recognition that creditors are not doing debtors a favor but, rather, engaging in a business transaction when extending credit. When it makes no business sense or is economically not feasible to retain an asset, businesses default on their loans (called bonds). It is not uncommon for business bonds to trade on the after-market for a small fraction of their face value in realization of the likelihood of these future defaults.

Don't Foreclose...Modify.

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Fri, 06 Mar 2009 11:41:57 -0800

Worried about Foreclosure? Loan Modification is the Answer.

There are Ways to Avoid Foreclosure! We can help you find a solution.

You must understand that you have options when you are facing foreclosure. The white paper will help you make informed decisions about how to handle your pending foreclosure. If you would like to speak to a foreclosure prevention specialist directly please call our offices at the number at the bottom of the page.

We have helped homeowners avoid foreclosure and we may be able to help you!

What is Loan Modification?

Loan modification is a permanent change in one or more of the terms of your loan. We work with the homeowner and the lender to change the terms of a loan in order to help the borrower stay in the home and avoid foreclosure. The new terms will be shaped by your ability to pay. It is important to note that a loan modification is not a new mortgage. A loan modification is the renegotiation of an existing loan.

With a loan modification, it's possible that a homeowner's:

interest rate may be decreased
interest rate can be changed from an adjustable to a fixed rate
time the borrower has to pay the loan back can be lengthened
loan principal may be decreased
late fees may be waived
second mortgage could be waived or wiped off of the books

You must act fast to save your home!

www.ReliantLoanModification.com

Negotiating The Deal 101

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Fri, 06 Mar 2009 11:37:39 -0800

Michael Mergell, Managing Broker RE/MAX Ability Plus (317) 645-8717

I guess I will start a little line about negotiating your deals. I know a lot of people out there are starting out and there are some things that you should know and learn.

First is empathy, and rapport. These are essential to establishing the reason that someone will buy from you. No matter what you offer, or even if two people offer the same amount the seller is going to sell to the buyer they have a level of rapport with. The person they "like" will win every time.

So let's talk about rapport. In a drawn out way let me give you a story on rapport. When I was a restaurant manager, I had a waiter that consistently sold more than everyone else working, every night. He was a big guy and used to play college football, so I naturally thought he scared them to death until they bought whatever he told them to. He never seemed to get in the weeds like everyone else in the store and could handle as many table as I dared to give him. One night I had a conversation with him about this, and he allowed me to follow him all night and explained a few things. First he said that the key was to identify with them, next was to put yourself on their level, and never stand over them looking down. After that he said you must lead them to what you want for them. Now let's apply that to houses.

The rapport starts with the phone call, when you receive it you must start building this rapport. You must identify with them by sharing something that is similar to what they are going through. Don't rush them off the phone take your time. Usually, when people call us (investors) they are in trouble, so in a lot of situations part of your job is to listen. They just want to vent some of it to someone that will not judge and we are perfect, they probably will not ever see us again. Ask open ended questions like "tell me about your house" and "it sounds nice why would you want to sell it". This is to get them talking about their situation so that you can establish the level of motivation, and connect on a emotional side as well. Once you get that rapport built, the next thing to do is set the appointment to go out and look. It is important to note here that if it is in the area that you like to buy in, I did not say "how much equity do you have". Doesn't matter, if they are motivated enough they will make it happen and so will you, but beyond that you have to realize that this is part of the reputation that you are building.

So let's go there now; most investors get a call screen because of equity, and then determine that they cannot make a deal and don't call back or follow up with the potential client. If they do go out, even on a call that has some equity, they have their numbers down and usually within the first 30 seconds with the seller they are trying to make a low ball offer. Then afterward, everyone wonders why didn't they get the house, and why do people think investors are bad. Go figure!

So for you as an investor, you should think enough of your marketing, and enough of your clients to go out and meet with them. There is no sense in doing heavy screening if it is in an area that you will buy in ( or you have a buyer that will buy in) just go and meet the seller. You go and meet them and pick up where you left off on the rapport building. Sit down and ask them about their house, and how they got in the situation they are in. How did they hear about you? Wow, I notice you are in to hunting, me to, what do you hunt? That type of thing. Establish a medium between you and the seller so that they understand you can identify with them. Also this is the part of the meeting where you plant seeds. Talk about the market and how hard it is to sell, or how much of a problem that buyers are having getting financing. Also you need to mention basic fees involved in selling a house such as sales commissions, closing costs, holding costs, insurance, and the fix up of the house. I usually let them give me some numbers here, like "how much you think that roof will cost to replace". You know your numbers, so if theirs are higher use theirs.

Once this is established you can then go and check out the house. Take a notebook or clip board to write notes on. It is important to note here that it does not help or even do you any good to bash someone's house. You should not say "crap this room is ugly" or "wow your house is a piece of crap". In most cases this is where they have raised their kids, spent Christmas, thanksgiving, and other family times. It will not help you to bash that. In fact you may want to stress that you understand that specifically by saying something like "I understand that you have raised your family here, but please understand that for me as an investor I could never make an offer that would do justice to the memories you have made here". That being said you can also let them know that you have to make an offer that make business sense to you. These types of hints start to plant the seed about what you are going to offer. What is acceptable to do for conveying the stuff that you will work on is to make a "hmmmmm" noise, or just touch the spot without saying anything. Make a noticeable attempt to write down the defect. This puts a spot in their head regarding the defect, without you saying "damn lady you sleep here". Believe me they know what is wrong with their house, you do not have to tell them.

So once you have made your pass around the house and looked at everything it is time to prep them a little more. Let them know that you are going to work the numbers out and see what the offer will be, but want to cover a couple of things. Cover everything that you have done and talked about, mention everything before, and then go to the car to figure your numbers. This gives separation between you and the seller, long enough for you to think and work out your numbers, but also to allow them time to mull over the offer that you are about to make them. You can even get the in the "ballpark" before you go out to the car with something like "so let be clear here, we think this house will be worth xxx when it is fixed, and we got at least xxx in repairs, but I will figure those numbers out, so if I can be around xxxx are we going to be able to do business?" Then go figure out what exactly your offer will be, but take at least 8-10 minutes on it. When you go back in you can go through your blank contract to let them know about it. I like to be able to paraphrase it for them, and then when you are done you write the amount in the price line and push it in front of them and say "I can offer you xxxxx" and be quiet. Don't say a word until they do. The first one that talks looses.

www.MichaelMergell.com

How To Make Money In Real Estate Investing

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Thu, 05 Mar 2009 11:25:00 -0800

Michael Mergell, Managing Broker RE/MAX Ability Plus-Fishers

Real estate investment limited to earn their profit mainly from inactive sources that are rents, interest, dividends, and gains from sales. And they were designed by national legislation to provide assets to the advance marked. In real estate include multifamily retail, office, industrial, heath care, and hotel properties in the real estate investment. Real estate investment are broadly trade companies that pool investor properties to invest in a assortment of real estate ventures, such as building, office, apartment shopping centers, and hotel. In real estate investment trusts the companies related to reciprocated funds that hold portfolio in real estate and economic instruments for the assistance of their shareholders.

Finance and economics have near connection Real estate investments. The term real estate "security" refers to any note stock, treasury stocks, bond, debenture, evidence of indebtedness, transferable shares, real estate investment securities, certificate of deposit for real estate security and a lot of other things are commonly called as security.

In real estate be inclined to pay high returns making them charming investment opportunities, especially when the stock market is falling. In high service requires them to pay out at least 90 percent of their taxable income each year in order. There are three main types of real estate investing mortgage, equity, and hybrid. The Real Estate Investment is an expectation that uses investor's money to invest in real estate properties or mortgages. A financial device that invests for the most part of the real estate such as apartments, offices, hotels, shopping centers, or warehouses.

Real estate investor individuality, long and short-term investing, finding a property, inspecting a property, flipping a property and land lording duties as the result real estate learning becomes more difficult through out the world. This real estate buy decision is taken by the people after realizing the value of the property or when they are looking for an investment property. Real estate investment has very well terminologies. When decided to buy a property in the any place, locate the place carefully whether the property has a high value in that area. Only after collecting proper details and information regarding that area, then move on to that area. Real estate markets started moving up after equity markets have rallied, normally real estate market has a laggard effect to the equity markets investing in real estate can be a high profitable. But it also has potential pitfalls that need to be avoided and questions that need to be answered if to achieve long-term financial security and success.

Common examples of real estate investment are separated owning various pieces of real estates one of which is his first residence and others are occupied by tenants from where the rental income accrues. Person issues or proposes to issue the security, person means any individual, a corporation, a partnership, an association, joint stock. Capital budgeting is present days treated as a most important case in real estate investment.

MICHAEL MERGELL (317) 645-8717 MICHAELMERGELL@REMAX.NET

Loan Modification Explained

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Thu, 05 Mar 2009 11:21:50 -0800

Michael Mergell, Managing Broker RE/MAX Ability Plus-Fishers

With the recent foreclosure storm happening, mortgage loan modification is getting increasingly popular as an escape route when you want out of mortgage trouble. There's a whole process involved, but studying how it works can get you out of financial hardship and save you a lot of money. Let's look at the mortgage loan modification process.debt piling up. A mortgage loan modification is a way to adjust your mortgage contract and bring the monthly payments down. Depending on the negotiations, the principal balance may be decreased and interest types may be changed.

When you suspect you're going to get in trouble with your mortgage payments, you should warn your bank in advance. This way, you can still speak about mortgage loan modification without the added pressure of

As with all bank procedures, there is some paperwork involved with a loan modification. If you're having trouble getting through this process, you can solicit the help of an expert. Many lenders are willing to help you out with the paperwork of a loan modification. If you don't know a good lender now, ask around for referrals.

If you don't get any referrals, search the web for a good loan modification expert. See what kind of information they provide. Who knows, you might figure out how to do it yourself.

There is a lot of knowledge about loan modification available. You can get it from books, the Internet, a professional or your bank. It takes time to study the process of mortgage loan modification, but when you get to keep your home, it's definitely worth it.

MICHAEL MERGELL (317) 645-8717 MICHAELMERGELL@REMAX.NET

Buying Your Dream Home Can Be A Reality

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Thu, 05 Mar 2009 11:11:45 -0800

Michael Mergell, Managing Broker RE/MAX Ability Plus-Fishers

There is no greater joy then being able to purchase your own home. Now it is getting even easier to find lenders who are willing to finance your purchase for a new home, a dream home. There are many mortgage programs from which to choose and even more homes for you to review in your quest for that home of your dreams.loan officer to determine what your target purchase price can be. Then make sure you have funds available to put down as an earnest money deposit once you have found the home you wish to purchase.

Mortgaging a home is a big step for many but one that is easier than you may think. One way to start is by meeting with a

This will hold the home for you, while you go through the due diligence period and loan processing and will be applied towards your costs at closing. The bigger your down payment, the less you have to finance or the less closing costs you have to come up with.

Renting is still a very popular way of living for many people, especially young people. While it seems like a good idea at the time, because you don't have to worry about owing the bank any money and it is sometimes less of a cost per month, it still is money out of pocket every month that is not going into something of value that you own. Mortgage financing can be affordable for practically anyone, even low income and first time home buyers.

Banks are in business to lend and collect money on real estate transactions. A bank can be found locally or even online. Mortgage brokers will help you find the lender that can offer you the best mortgage program to fit your budget. Why pay a landlord any more money when it can be so easy to purchase your own home?

What should you do first? One of the smartest things you can do is find a real estate broker to work with. You simply let them know what you are looking for and what price range you can afford. They will get right to work in coming up with some options for you to look at.

Working with a broker can save you time and money and get you to the closing table even quicker. Lenders like working with brokers also, because the broker doesn't get paid if they deal doesn't close, so they'll work extra hard to make sure it does.

Your dream home could be right around the corner. Start looking today and find out what lenders are willing to offer to you for financing. You won't find your dream home if you don't take some action to get out there and look for it. Good luck and happy house hunting.

MICHAEL MERGELL (317) 645-8717 MICHAELMERGELL@REMAX.NET

The Flurry of Info abouth the Government's Homeowner Affordability and Stability Plan (HASP)

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Thu, 05 Mar 2009 11:00:01 -0800

Michael Mergell, Managing Broker RE/MAX Ability Plus-Fishers

It was coming in from all sides yesterday ...... by air, by land, by sea, by attachment. I ended up with some 14 separate "documents", all pertaining to the HASP in one way or another. Executive Summaries, Fact Sheets, Remarks, Guidelines, Case Studies, Details, Elements, Blogs, Examples, Scripts, Job Aids ...... all of it good stuff. Sent out on a day when the stock market didn't tank, to boot!

The HASP -- huh? The Homeowner Affordability and Stabilization Plan is one part of the ARRA (American Recovery and Stabilization Act), which President Obama signed into law on February 17th. HASP is just one of many "initiatives" the ARRA covers -- and it's the one that is of the greatest interest to us. Why? Because it is here to solve the housing crisis. It is here to stem the spread of foreclosures and falling home values. It is here to keep responsible homeowners in their homes. Basically, we have three HASP initiatives to look at:

1) The Home Affordable Refinance -- A refi program for solid homeowner's who have an existing mortgage with Fannie Mae (FNMA) or Freddie Mac (FHLMC). The property must be owner-occupied, must be a conforming loan ($417,000 and up to $729,750 in certain areas), must have an LTV no greater than 105% of the current value of the home -- yes, you read that right, 105%. The whole reason for this initiative is to make it so that some homeowner's who are current on their payments (now and historically) can take advantage of today's low interest rates and/or to refi into a fixed rate (30 or 15 year) mortgage. While those folks have been ready, willing and able -- they've not been able to move forward because of their LTV ..... many owe more on their home than what the home is valued at these days. And while some borrower's fall into an LTV bracket we allow (80-95% on some programs in some areas), getting the necessary mortgage insurance is a "whole 'nuther story". So they're sunk -- correction ..... they WERE sunk. NOW, if they fit the bill as mentioned above and their value isn't TOO far into the tank, they will be able to refi WITH THE LENDER WHO CURRENTLY SERVICES THE SUBJECT FANNIE OR FREDDIE MORTGAGE. Let's look at a current $300K mortgage balance ..... on a property that is now worth $286K -- can we refi? Yes ($300K / $286K = 104.9%); however, there would be NO room to roll in any cc's, pp's, or extra payoff costs. Let's look at a current $147K balance on a $152K value -- can we refi? Yes ($147K / $152K = 96.7%); and there is room to roll in costs. Lastly, let's look at a current $224K balance on a $190K value -- can we refi? No ($224K / $190K = 117.9%), because this LTV is over the 105% max. Wondering where our current soft market policy fits into all this? Me too, but I am assuming that there IS no fit ..... because all bets will be off relative to soft vs non-soft markets. (The reason FOR this initiative is to address property refi's in those very "soft market" areas.) Wondering where mortgage insurance fits into all this? Me too, but I am assuming that there will be either 1) no "new" MI at all (for those loans that are refi'ing and that did not carry MI to begin with), or 2) the existing MI on the current loan will carry over (with the gov't working out some kind of arrangement with the MICO regarding coverage). This type of detail is what is being hammered out, as we speak. This types of detail is why we can't let 'er rip immediately to the public.
2) The Home Affordable Modification -- A mod program for homeowner's who are struggling to afford their mortgage payments because of the recession -- yet can't sell their home because of fallen/falling prices. Look at this as a shared partnership between the homeowner, the lender and the Government ..... because all three participate in this mod effort. I'm not going to go into the detail on this one -- waayyyyyy too much to present here. But, nutshell: For owner occ borrower's only (max LA of $729,750 conf); the borrower does not have to be behind already, but must demonstrate imminent risk of default. The lender first gets the DTI down to 38%; then the government (Treasury) gets the DTI further down, to 31%. How? By a combination of lowered interest rates, increased loan terms (ex: a 40-year term), possible forebearance of principal at no interest, or lender foregiveness of principal. The government has made it attractive to lenders, servicers, and even borrowers via varied "incentives" to participate. A much lower monthly payment will keep many IN their homes. When modification doesn't work, Treasury is incenting to take alternatives to foreclosure -- like short sales or deeds in lieu. (By doing so, there is a reduction in vacancy, neighborhood decline, and overall costs for lenders and borrowers.)
3) Support of lower rates by strengthening confidence in Fannie and Freddie -- which will create forward confidence, funds, and special programs (such as support to State HFA's). The "beefing up" of the GSE's ...... for our future.
*******
HASP = Homeowner Affordability and Stabilization Plan
ARRA = American Recovery and Reinvestment Act (2009)
EESA = Emergency Economic Stabilization Act
HERA = Housing and Economic Recovery Act (July 30, 2008)
TARP = Troubled Assets Relief Program
TALF = Term Asset-Backed Securities Loan Facility
FSP = Financial Stability Plan
I'm sure there is more new to come.

Michael Mergell www.MichaelMergell.com michaelmergell@remax.net

That's "FTHB" for "First Time Home Buyer"...

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Mon, 02 Mar 2009 16:02:25 -0800

I did that fun thing again today where I call the IRS & wait on hold for an hour while their music drives me insane. Of course, I did it for all of you & your clients, so you can send a thank you card to my office address any time :)
I asked two scenario questions today:
1. Married Couple, but Hubby is a first time buyer. Wife is not, but she is NOT going to be on the loan or title to the new home. Can hubby claim the tax credit (thinking he may have to file "seperately" and only get half the credit, but hey, its something, right?). I was told that whether they file jointly or seperately, it does not matter. He cannot claim the credit at all. "If they are married, BOTH must qualify for the credit for either to take advantage of it."
2. Married Couple ("Mr. & Mrs. Youngcouple"), but need Dad (a NON-first time buyer) to co-sign. Dad will be on the loan & title with Mr. & Mrs. Youngcouple. Now...Dad will not be filing taxes with Mr. & Mrs. Youngcouple; he is only on title/mortgage to the real estate that is their first home. Can Mr. & Mrs. Youngcouple claim the FTHB Tax Credit? Answer: "That's a great question. We don't know. We will research it & call you back within 15-days. If you don't get a call back within 15-days, please call with your message number."

Bad Credit Loans

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Sat, 28 Feb 2009 08:09:53 -0800

Michael Mergell, Managing Broker RE/MAX Ability Plus-Fishers

Many people make the assumption that since they have less than perfect credit, they are barred form owning their own home. They are under the impression that no one will trust them with a mortgage; while this may have once been the case, the rules have loosened up somewhat in the last several years. Rather than eschewing providing mortgages to people with a poor credit rating as they were traditionally prone to doing, banks and other mortgage providers have instead come up with mortgage products which are great for people with bad credit. These bad credit mortgage loans can help families who otherwise would be unable to buy a home.loan, however.

You could have ended up with a bad credit rating for any number of reasons. You may have overextended yourself financially with a credit card, had emergency medical expenses which you were unable to repay or a variety of other reasons. However it happened, you can still qualify for bad credit mortgage loans. There are some very important differences between these bad credit mortgage loans and an ordinary mortgage

Most noticeable is the difference in interest rate between a traditional mortgage loan and bad credit mortgage loans. While persons who have a good credit history can get loans with an interest rate ranging between 5-7%, your interest rate will be significantly higher if your credit history is a poor one. The bank does this as a way of protecting themselves from the risk of default. You should shop around to find the lowest possible interest rate. This can take a while, but will pay for itself in the savings you will see.

You should be mindful of the down payment percentage when shopping around for bad credit mortgage loans. This is a small percentage of the total payment, usually around 5% - this may be higher with some bad credit mortgage loans however - this is something else to keep in mind as you look around.

The monthly mortgage payments can be rather high with these loans. You can reduce this by choosing a 30 year mortgage rather than a15 year one. For example, if you buy a home which costs $150,000, you will pay about $800 per month on a 15 year mortgage, as opposed to a little over $400 on a 30 year mortgage. This amount, it should be noted, does not include interest.

MICHAEL MERGELL (317) 645-8717 MICHAELMERGELL@REMAX.NET

Investing in Real Estate...

Michael Mergell (Michael Mergell, RE/MAX Legends Group) — Sat, 28 Feb 2009 08:07:17 -0800

Michael Mergell, Managing Broker RE/MAX Ability Plus-Fishers

Are you thinking about investing in real estate? It can be a great way to make money. Some of the world's richest people-Donald Trump and Suleiman al-Fahim, for example-made their fortunes in real estate. Real estate is a great way to generate passive income. If you have enough passive income streams, you can quit your job and live off the residual income from your investment properties! It is worth bearing in mind, however, that like anything with huge potential payoffs, real estate investment is risky. There are no guarantees in the world of real estate investment, but if you learn good business principles and sound real estate investment strategies, you can dramatically increase your odds of succeeding in the difficult yet rewarding world of real estate investment.

Don't have a lot of money? Credit score so-so? No savings to speak of? Don't give up on learning real estate investment strategies; you can still get in on the game and in on the profits, and you just might improve your credit score in the process. There are ways to approach real estate investment that don't require a lot of money for the initial investment. The one thing you cannot do without when you approach learning real estate investment is knowledge. It's vey important to acquire a broad knowledge of real estate investment strategies, so that as you progress in your real estate career you can adapt to your circumstances and the fluctuations of the economy and the real estate market.

There are many different possible strategies to real estate investment. For example, you could choose to pursue foreclosure opportunities. Investing in foreclosures can be an incredibly lucrative experience. To master this real estate investment strategy, you have to know the various distressed property types, as well as the laws regarding them in each state, so that you can evaluate these potentially lucrative opportunities.

Foreclosure opportunities are far from the only possible type real estate investment opportunity, however. There are lease options, rent to own options, real estate flipping opportunities, real estate control strategies, government sponsored programs, For Sale By Owner (FSBO) options and a host of other real estate investing strategies for you to learn and master. As a beginner it's important that you understand all of these options and then narrow it down to a real estate investing strategy that best suits your needs.

The best way to master these investment strategies is by receiving the best possible training from knowledgeable, successful real estate investors.

Reading is great, but it will not be enough. You need first hand feedback from real live experts. You may consider taking a class, this can be an option especially for beginners. However, the best way to learn these strategies is to have an expert, successful real estate investor as your coach or mentor. Once you learn strategies, you will have to implement them if you hope to make money, and you will be likely to ramp up faster if you have a coach who gives you feedback on the fly.

MICHAEL MERGELL (317) 645-8717 MICHAELMERGELL@REMAX.NET