SHOW ME THE MONEY!!!

Jake Stiles (Keller Williams Realty) — Tue, 03 Mar 2009 08:28:49 -0600

It is true...the government is giving away money - but only to what they consider first time home buyers. The qualifications are really pretty clear. Here's the skinny: 1.) You have to be a first timer home buyer. What is a first time home buyer (you would think it's pretty self explanatory...but it's NOT!!!) A first time home buyer in the government's eyes is someone who HAS NOT owned principal residence in the past 3 years or a home at all. That means you could've owned a in the past, own a vacation home, own a rental home as long as the home you lived in the past does not have you as a title bearing owner in the past 3 years. 2.) It's technically not $8,000 they are giving you....it's UP TO $8,000 you can earn. Let me explain... They will pay you 10% of the purchase price up to $8,000. Therefore, to recieve the maximum benefit from this program you have to purchase a home for at least $80,000. If you purchase a home for $60,000 then you would only get $6,000 - not the advertised $8,000. (Don't get me wrong...it's still free money!!!) 3.) There is a time limit to cash in.... this year only. The dates that you have to purchase a home are from: January 1st, 2009 - December 1st, 2009 (not the 31st). 4.) There are income limits also (of course). The limits are $75,000 for an individual and $150,000 for a family. The income is "adjusted income" so they do take into account expenses - it's basically your taxable income they are looking at here. If you are above those limits you can still qualify for the rebate, but it will be reduced...if you want additional info just give me a call and we can discuss what you are looking at. 5.) Stay home. You have to live in the home you received the credit/rebate on for a minimum of 3 years. (which isn't a long time...my daughter was only 3 years old at the end of a 3 year time period.) If you don't they can take the money back (they call it a recapture clause). Extenuating circumstances do apply and there could be execptions to the recapture such as death of a spouse, etc. That's it! If you have any additional questions about the program just post them below and I will respond. This way anything I may not have explained clearly others can capitalize on the answers as well. Please remember to send me those referrals! Any of your family members or anyone you work with...send them my way ;-)

What to do if You are Behind on Your Mortgage Payments

Jake Stiles (Keller Williams Realty) — Wed, 19 Nov 2008 09:12:00 -0600

Thinking about selling because you can't afford your home anymore? Well, you aren't alone. The good news is that you have options. With homeowners giving their homes back in record numbers due to irresponsible lending practices of our industry the government has stepped up to the plate for us (finally). I have compiled a list of various options that you can look into or give me a call about any of these to get additional information. I will do anything I can to help you out.

If you are in a compromising situation - before making a decision - please consult with me, your mortgage company or someone in the industry so you can make an informed decision with a field expert.

Short Sale
What is a short sale? A short sale is when a 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 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 in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale.

Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market climate and the individual borrower's financial situation.

A short sale typically is executed to prevent a home foreclosure. Often a bank will choose to allow a short sale if they believe that it will result in a smaller financial loss than foreclosing. For the home owner, the advantages include avoidance of having a foreclosure on their credit history and the partial control of the monetary deficiency. Additionally, 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.

More Information to Know
When/if the lender decides to forgive all or a portion of a borrower's debt and accept less, the forgiven amount is considered as income for the borrower and is liable to be taxed. For example, if you owe $130,000 on your home and sell it for $90,000 you will actually be 1099'd (income earned) for the $40,000 difference and will have to pay taxes on it.

However, (here's the good news) after the signing of The Mortgage Forgiveness Debt Relief Act of 2007 by President Bush, amendments have been made to remove such tax liability and allow the borrower and lender to work freely together to find a common solution that is beneficial to both parties. This protection is limited to primary residences so consultation with a tax advisor is necessary ensure that a borrower qualifies.

If you are considering a short sale check with your lender as you will need to provide them certain information such as a hardship letter outlining your situation, a budget letter outlining your current financial obligations and various other items that are investor specific.

Short Refinance
The refinancing of a mortgage by a lender for a borrower currently in default on his or her payments. This is done to avoid foreclosure. Typically, the new loan amount is less than the existing outstanding loan amount and the difference is typically forgiven by the lender. A lender might do this because it is more cost effective than foreclosure proceedings.

Why Would a Bank Do This?
Foreclosure is an expensive solution for a lender for loans in default; not only does the lender not receive any payments for up to a year, but it may lose out on fees associated with the procedure. A short refinance is just one of several alternatives that might be more cost effective for the lender. It also allows the borrower to keep his or her home. Other potential solutions are entering into a forbearance agreement or a deed in lieu of foreclosure.

Sell It To An Investor
Many times an investor may be available to purchase your home for cash depending on how much you owe and how much your home is worth. Obviously, they are looking to "invest" so they are looking to purchase the home below market value. This is dependent on how much you owe and if you are willing to take less for your home to avoid a credit disaster.

Foreclosure
A situation in which a homeowner is unable to make principal and/or interest payments on his or her mortgage, so the lender, be it a bank or building society, can seize and sell the property as stipulated in the terms of the mortgage contract.

In some cases, to avoid foreclosing on a home, creditors try to make adjustments to the repayment schedule to allow the homeowner to retain ownership. This situation is known as a special forbearance or mortgage modification.

The bank will start this process if you have not made any contact with them to make other arrangements and you are 3 months behind on your payments. Contact your lender before you get to this!

HUD Backed Loans (FHA Loans)
There is an option that you can use that our government has put out to help stop the bleeding. You can visit the website here or call their 800 #: 1-800-995-4673. This website also has links posted for Fannie Mae and Freddie Mac. They have an alt website as well which is www.995hope.org.

In Summary
I really hope this helps anyone that is lost or confused by what your options are. I am very willing to do what I can to help anyone out. We are located in the Indianapolis market and provide services to all Metro areas of Indianapolis. Visit our website to learn more about us!

Jake's Blog

SHOW ME THE MONEY!!!

What to do if You are Behind on Your Mortgage Payments