David & Lisa 's Blog

Beautiful Piney Orchard Condo for Sale

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Thu, 08 Oct 2009 08:28:14 -0500

Beautiful Piney Orchard Condo

Overview
Maps
Photos
Description
Neighborhood

$224,900

Condominium
For Sale

Main Features

2 Bedrooms
2 Bathrooms

Location

702 Orchard Overlook
#304
Odenton, MD 21113

David & Lisa Webber

(410) 320-0230
webberteam@aol.com
http://www.webberteam.com

Listed by: RE/MAX Executive

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Beautiful Piney Orchard Condo
WATERFRONT LOT ON NABBS CREEK

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Every Seller Needs To Know, What Sells a house?

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Sun, 04 Oct 2009 10:43:48 -0500

Carra just wrote a great blog that I wanted to share about what really sells a home. She is right on the money with this and every seller should read this before attempting to sell their home!

Via Carra Riley CRB, CRS, GRI (Carra Riley Inc.- Real Estate Consultant, Author, Speaker ):

Every Seller Needs To Know, What Sells a house?

There are four varibles that sell a house.

1. Price

2. Terms

3. Condition

4. Location

All four of the variables go together to create the "perfect sale." Each aspect must be taken into consideration if you want a property to sell.

1. Price fixes everything! Don't let anyone tell you different. When the buyer perceives there is a value because of the price, they will buy the home.

The other three varibles always can effect the price.

There are circumstances where a buyer has lost the ability to qualify for a traditional loan because of a foreclosure or bankruptcy and the buyer needs owner financing. With Owner carry Terms that particular buyer may be willing to pay more because they have ownership with possibly a small down payment.

Conversely, if the Condition is bad the price will have to be reduced to reflect a value in the home where a buyer will have to come in and do repairs or cosmetic updates.

Location is the toughest variable in the sale to compensate for. Most people have heard about in Real Estate the terms Location, Location, Location. If the location is bad.. ONLY price will sell the property possibly combined with terms so exciting that a buyer will not be able to pass up the deal.

2. Terms. If the Terms are attractive, sometimes a seller can get more money for the home. For example: a home with a value of $325,000 listed with owner carry terms of $25,000 down and no bank qualifing might be able to sell at $350,000 because of the terms.

Under any owner carry situation, it is important the seller speak with their accountant and attorney before accepting any contract and agreement to finance. The seller should be completely aware of the liability and consequences in owner financing. This is just an example how price can increase with the right terms.

3. Condition is a key factor in selling a home. When the property is in top condition, looking like a show home the seller may get top market value for the property. In times where homes are selling at a slow pace, in order to procur a sale, the home should be the BEST property at the Lowest price to get to the closing table.

Taking a seller on a preview tour of the homes in the area similar to their property can save months of discouragement with a home not selling. When a seller can see the competition and accepts the fact their home needs to be the Best house at the lowest price to sell, the home will sell and the seller will see what they are up against in comparison.

Carpet or paint allowance does NOT work in selling a home. If the home needs carpet, put it in. If the home needs painting, get it painted. Many times this can cost a seller $5,000 to $8,000 to do those upgrades. Investing, yes, investing is the correct term, for getting the house sold. The money invested will come back in the form or a quick sale at full market value.

A picture is worth a thousand words so think about how the property looks and even take some pictures to see what a buyer is looking at. Sellers should look at the pictures like they were a buyer and ask, "would I buy this house in this condition for this price?" Are the kitchen counters cluttered? Are the closets a mess? What does the front door look like and the yard when people drive up to the house?

A seller has 8 seconds for a buyer looking at a home to decide if they really like the house and if it will go on the A list. The buyer starts the decision making process when driving up to the home while looking at the surrounding properties and the entrance to the home.

There are many agents are trained in "staging" a home and there are "staging services" which help a seller to understand what needs to be done to create a "marketable product." Listen to these people if you want to get the house sold.

The seller needs to separate from the house and see it as an investment or product that needs to be sold. The seller needs to take all the emotions out of the happy memories in the home if they are serious about selling.

4. Location is the only variable which cannot be changed. A bad location, is a bad location so only price and terms are going to help this situation.

It does not matter that the same model home across the street sold for thousands more, because it was ACROSS THE STREET and did not back to the highway. A seller needs to get a reality check on location and think about when they purchased. If the seller got a good deal when they bought because it had a bad location then they have to give the new buyer the same good deal to sell.

Sellers should take all the emotion out of the business of selling a home and treat the transaction as an investment decision.

If the goal is to get the home sold then listen to the professionals and let them do their job.

As Donald Trump would say, "It's only business."

Cosmic Cow Pie

Carra Riley

6 Reasons why your house won't sell.

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Thu, 20 Aug 2009 09:00:02 -0500

Alan May just posted a great blog on the reason your house won't sell and we agree 100%! Most of the time it comes down to price. Time and time we've seen where a house isn't getting any showings and then you drop it down to the next pricepoint ($25k increments on realtor.com) and then all of a sudden there is interest and GOOD feedback whereas when the house was at the higher pricepoint, the feedback was not good because the house was competing with houses that should be in the higher pricepoint. Bad smells are a huge problem as well - buyers won't even consider a house that smells bad because there are just too many available. Thans for letting me share this Alan!

Via Alan May, Coldwell Banker Evanston Realtor, North Shore Realtor (Evanston Real Estate, Evanston, IL):

1. Your photos are unimpressive. The vast majority of home buyers start their search for a home on the Internet, your house had better look great in print. Not just nice... downright fabulous. Today we are considering internet views as a 'virtual showing'... if your house gets past that, then they might (just might) make an appointment to see it in person... We consider that your SECOND showing. Today's buyers are expecting good quality photos (and lots of them... just 1 shot from the street won't cut it!), a virtual tour, maybe even a floor plan, if applicable.

2. It's overpriced. You've got to view your own property as objectively as possible. Look at the home like a "buyer"... if necessary, go out with your Realtor and view other homes that are priced comparably to yours. Be objective. Given the other options on the market (and yes, you DO have to include short sales and foreclosures on your list... your potential buyers are!), would YOU buy your home, over the others on the market?

If no, then you either have to "update" your home to meet or beat the competition... or lower your price to adjust for it. if you can't afford to sell for the price, that you KNOW it sell for, you may want to consider just removing it from the market.

3. It shows poorly. This could mean almost anything... from the barky, barky dog, to the smell of the diaper pail. Maybe the carpeting is a bit worn, or the woodwork shows a lot of wear. All things that don't show up on the internet, but whoa.... once you get inside the house... they show up, like a cat-urine-smell on a 95 degree day in New Orleans!

4. You're invisible. Today's buyer comes from the internet, almost exclusively. Have you (or your agent) simply plopped the property on the MLS, and started praying? Are you on all the websites...(Trulia, Zillow, Craig's List, Google Base, etc...) all the places that buyers are searching? If not, you want to be.

5. Your listing is tired and stale on the market. Okay... yes, you overpriced your home initially when you first came on the market 2 years ago. But since then you have reduced your price almost monthly... constantly chasing the market down.... Now, finally you're truly priced where you should be... but your listing is tired and stale. Everyone looking for your type of property (ie: 3br/1.1 bath) in your area has already seen it, sometimes twice... and they remember that there was "something" about it that they didn't like... but what they don't remember is... what they didn't like.... was the price. Time to take the listing off market. Let it cool off (3-6 months), and bring it back on fresh in the Spring. Yeah, you'll have 6 mos. worth of holding-costs... but you'll more than make up for it in your purchase price.

btw... Avoid the temptation to bring the house back on at a higher price, than when you left the market. Just "don't do it"!

6. Your house won't appraise. The house looks great... you've finally gotten someone to bring you a bid on your slightly over-priced, but beautiful pied-a-terre. But the bank appraiser says it's worth $20,000 less than what they've agreed to pay. Heavy sigh... bite the bullet.... negotiate with them. If you have to drop the price $20,000 to make it work.... "make it work"... chances are, anybody else trying to buy your house will run into the same problem.

SHOULD I PAY MY MORTGAGE? SHOULD I STOP PAYING MY MORTGAGE?

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Wed, 24 Jun 2009 13:40:55 -0500

Richard Zaretsky has many very informative articles about short sales on his blog and this is one of them. I am often asked about the exact procedures for a short sale and unfortunately I don't have exact procedures and timelines because they vary from bank to bank. We've had some close in as little as 60 days and others that take 6 months or more. Frustrating to say the least but what Richard says about it being "uncharted waters" and that there is no industry standard when it comes to short sales or loan modifications.

Via Richard Zaretsky, Florida Real Estate Attorney (Richard P. Zaretsky P.A. ):

This seems to be THE NUMBER ONE question I get. Unfortunately there are several answers and which is correct for you depends on the Circumstances. I will address the common scenarios in this article.

Policy in my office is to never "tell" - as in "instruct" - our borrower client to pay or not to pay their mortgage. Paying or not paying has a lot of collateral effects and the borrower needs to know what they are before making the decision. We don't make the decision for the borrower (our client) because the effects of paying or not paying are not going to affect me - but they will affect the client, so it is the client that must make the final decision.

Let me make one issue clear - when we are hired to help facilitate a short sale or loan modification it is far easier for us to negotiate with the lender if the payments are late, but it is almost never a requirement. The exceptions to which will be discussed later in this article. Additionally, internal rules change at the banks constantly. A new client came in totally frustrated. They called their bank to help with a modification and the bank said they could not address their situation until they were at least 60 days late. So the near perfect (800+) credit score couple stopped paying for 60 days and then called the bank back. Now the bank says that because they are 60 days late they cannot speak to them about a modification! The point is, if you don't have to be late then why voluntarily create a late payment credit history that will adversely affect your credit-dependent life almost immediately and for years to come?

SO LET'S GET INTO IT - Danger - this is a long article and it covers a lot of ground!

Short Sale:

A borrower that is current and contemplating a short sale wonders if they should stop paying their (first) mortgage. They are upside down and until now they have been current. However they are paying the mortgage at a cost of not paying other bills. (Other or different facts may be that they are paying all their bills but taking the money from savings or a pension fund to make those payments, or they are borrowing money from another equity loan).

Generally, it is not a good idea to get into debt to pay your mortgage, unless you have a solid plan to both (i) keep the mortgage current and (ii) repay the additional indebtedness you are creating. It is not like taking from one pocket to put into another - it is more like taking from someone else's pocket to pay your bills. This would include credit card loans as the source of funds. It all has to be paid back, so if you don't have a plan to pay it back, don't borrow it in the first place! You are only digging a bigger hole for yourself and making it harder to get out of the hole.

If you are taking from your pension or savings money, again you better have a rock solid plan to get that money back into those accounts, or there is no sense in giving up that hard earned and usually irreplaceable retirement money, especially considering these are monies that are usually protected from creditors' judgments including those your mortgage lender could obtain (deficiency judgment)..

Of course the "amount" of money you have "in reserve" comes into consideration. If you have 2 million dollars in reserve and you decide to spend 10% of it to keep the loans current until you can short sale the property, that plan has a basis that the 10% is not going to make a difference in the way you run your life over the remaining time you have left as a mere mortal.

Sometimes, but rarely, we run into a lender that says they won't approve a short sale or modification because the borrower is current with his payments. When we have encountered this it is in most cases associated with a government backed loan, (but later on we will show you why this may be motivated by plain greed on the part of a loan servicer). A properly compiled financial snapshot of the borrower should show why they are current and what will happen if the short sale or modification is not approved.

Your decision on how to proceed should be based on what goal you are trying to accomplish and how you plan to get to that goal (see how to determine your goal).

Mortgage Modification:

Apart for some voluntary government programs regarding (Fannie Mae or Freddie Mac) government involved mortgages, I know of no lender that absolutely will not deal with a borrower who is current with their mortgage payments. Lenders deal with all sorts of situations and "absolutely not" is just not in the vocabulary. A typical borrower calling a lender may hear that they must be late, but that is more of a "vetting" statement than an absolute policy.

The exceptions are some government program guides for modification. The first step to seeing if your loan comes within this exception is to see if it is a Fannie Mae or Freddie Mac loan. You can do this online at the Making Home Affordable site. Many servicers and lenders whose loans are not "government backed" are now choosing to follow this government plan (known as the Home Affordable Modification plan or more affectionately called the "Obama Plan" - see below) for the simple reason that they are being compensated by the government for each successful modification they execute within its guidelines, and either the servicer or lender receive a residual bonus for the loan staying current under the modification. In these cases we have seen non-government backed loans insist on the borrower being late to qualify for modification as well. What is confusing on this point is that when the plan was introduced it included modifications (and compensation for such) for current loans as well. However, we are told time and time again from the lenders directly that they must be late to qualify. There is no such rule in the guidelines.

While this is contrary to what has been published by the government about the plan, keep mind that following the plan and any of its various aspects is entirely voluntary and up to the Lender or servicer. They can pick and chose from this plan as they see fit for their own internal reasons. Here is a more interesting twist - a servicer that modifies a delinquent loan is paid more under this incentive plan than if the borrower were to modify while the loan is current! If the borrower is current, the servicer can receive up to $3,500 in incentive fees from the government. If the borrower is delinquent, the servicer can receive up to $4,000 in incentive fees from the government. Thus it seems that it pays ($500 to)the servicer to encourage a borrower to be delinquent!

We often see a client that fits the profile for modification under this government plan. Some of these plans are said to require that to be qualified the borrower must be late 60 days (see Guidelines page 5 at bottom). But in fact, being late is not a requirement, but only one factor of many (see Guidelines page 16 at the top - "However, a NPV (net present value) positive result is not necessary to qualify a loan for a Home Affordable Modification"). If the goal is to qualify under such a plan as put in place by the lender at that time, then to accomplish that qualification the borrower may need to make themselves late, but that cannot be determined in a 2 minute telephone call with a lender representative. I cringe when we go this route because just like these "plans" came into existence, I can see them change the plan thus leaving the now 60 day late borrower with ruined credit scores that occurred needlessly.

Generally about a quarter of our modification clients never go late and still get a modification offer from the lender. However, keep in mind that nearly all lenders put up as their first line of defense the policy that going late is a necessity to qualify. We can only speculate this is done to deter the enormous inflow of loan modification requests from borrowers that would come in if this was NOT said to be a requirement. It also helps address those in the most dire amount of need first.

The Pro's and the Con's:

The general rule of thumb we use is if you can pay your mortgage and maintain your life's necessities, you may consider keeping the loan current, taking the points in this article into account. However, if you need to choose between buying food or medications and paying the mortgage, the decision that should be made is clear: your life necessities take precedent.

Here are the pro's to consider when in the short sale or modification process. Keeping the loan CURRENT has the following benefits:

a) Your credit score is not dinged until the short sale transaction occurs (and not at all in most loan modifications) and your overall credit score reduction will be minimized, and b) You will remain in good standing with your lender without worry of penalties, fines, or a foreclosure.

The "con's" of keeping the loan current are that:

(a) You will be out of pocket for the monthly mortgage payment (monies which you may or may not need to survive), and

(b) Your lender may question the sincerity of your claimed hardship, and you may be spending funds that would otherwise be potentially (but rarely) forgiven by the lender. In addition, occasionally the lenders in a short sale may require a lump sum payment above the sale amount from the borrower to forgive the debt. Coming up with that money is sometimes the difference between a deal or no-deal. If you can put your mortgage payments aside and stockpile them, it will help you cover that potential lump sum.

A similar pro/con approach applies to GOING DELINQUENT with your mortgage. In favor of going late is being able to keep the unspent mortgage payments in your pocket (or applied towards other necessities as the case may be) in which event your hardship may appear more sincere to the lender. On the other hand, there are very real consequences to going late with your mortgage payment:

a) You WILL incur late fees and other penalties on the late interest. Usually this is not a large issue as it is part of the forgiven debt in a short sale and usually forgiven in a modification, but it is something to consider,

b) Your credit score downgrade will be harder as you will compound the short sale hit with a 30 day late, 60 day late, etc, (and if this is a modification you will make a non-negative credit score event turn into a negative credit score event), and

c) You will eventually cross a threshold (typical industry standard of 90 days late) where the lender will initiate a foreclosure action in State court.

Going Late on Your Second Mortgage:

Often a borrower comes to us and says that they are late on the first mortgage but current on the second mortgage. The second mortgage is almost always totally upside down with no equity left in the property to secure that financial obligation. The borrower says they paid the second mortgage because they had the money for the smaller payment (second) mortgage but not the larger amount first mortgage. Our answer - if you don't pay the first mortgage they are going to foreclose it and then paying the second mortgage is not going to save your house.

Lately we have seensecond mortgage lenders with 90 day late mortgages skipping the foreclosure process (since if they cause a sale of the house it is sold subject to the first mortgage, and thus any buyer still has to pay the first mortgage, which usually makes no economic sense). Instead the second mortgage lender sues the borrower on the promissory note only and gets a money judgment that they can keep for a long time (20 years in Florida).

So if a client says they are paying the second mortgage but not the first mortgage, we usually suggest they look at the common sense approach and what are they likely to gain or lose by doing so.

Effect of Non-Payment / Late Payment on Credit Score:

This is a big question and nowhere is the answer clear cut. Definitely if you get a report on your credit that you were "late" (in mortgages that means 30 days or more late) then your credit has been "dinged" and your credit score is adversely affected.

Credit scores are used for many purposes, including the amount of credit you can get on a credit card, the interest rate you get on credit cards, car loans and mortgages, your ability and price of life and disability insurance and even car or house liability insurance, your ability to get a certain type of job, or to establish business relationships, and your ability to rent a place to live, to name a few. So credit scores are important. If you want to better understand credit scoring you can see the Federal Reserve Board's Report to Congress from April 2008.

How much your credit score is affected by a 30, 60 or 90 day late report depends on a lot of other factors about your financial well being, your past credit history and myriad other issues. Generally though we have our clients reporting drops of as little as 50 points for a no late payment short sale or up to 150 points for a short sale with multiple late payment reports. We have seen an 800 go to 720 and we have seen a 740 go to 500. It all depends on too many uncontrollable credit issues to be able to give a formula that works for everyone. For a discussion on credit scores this our past article.

Confused?

Rightfully so. The fact of the matter is that we are in uncharted waters and there is no industry standard for Short Sales or Loan Modifications, which makes pinning down exactly what the Lenders may do near impossible. Pile on the fact that there are a large number of lenders out there and each have their own internal policies which change as readily as the tides. The best anyone can hope to do is make an educated decision, set a plan, and be ready for anything.

Copyright 2009 Richard P. Zaretsky, Esq.

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website www.Florida-Counsel.com. See our easy to find articles at SHORT SALE AND LOAN MODIFICATION TABLE OF CONTENTS

$8,000 First Time Homebuyer Tax Credit - Approved by FHA/HUD 5-29-09 - But buyer BEWARE !!!

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Fri, 29 May 2009 12:31:06 -0500

Here's the mortgage expert Jeff Belonger again, explaining what the FHA/HUD finally decided to do with the idea of borrowing the $8000 tax credit in advance.

Unfortunately as it stands now, a first time buyer still has to come up with the 3.5% downpayment and can use the $8000 in addition to that or as closing costs.

This really hasn't solved the problem of a first-time home buyer coming up with the downpayment money they'll need but we'll stay tuned.......

Via Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages - USDA loans (Infinity Home Mortgage Company, Inc):

BUYER BEWARE of Tax Credit

The first time homebuyers tax credit of $8,000 has been approved by HUD for all FHA loans. But don't get too excited too quickly. If you get a chance to read the mortgagee letter, ML 2009-15, it states that you can't use this tax credit for the required down payment of 3.5%.

HUD originally put out mortgagee letter 2009-15 on May 12th, but was rescinded the next day. Please read about that here : $8,000 tax credit rescinded by HUD. For some reason, it was prematurely placed on HUD's web site, but apparently wasn't finalized. Now we have a new version and if not read correctly, you could be putting misinformation out there. So what does the new mortgagee letter state?

Here is the positive part about the tax credit. You can receive the first time homebuyers tax credit upfront, but not through the IRS. This would be illegal. Please read : It's illegal to receive your tax credit before you close on your home. Buyers - BEWARE, please read that, because too many people are saying that you can get the money directly from the IRS prior to closing. The IRS & HUD both say no!!!

So how can you receive this upfront? It can be given to you as a second or a silent second from any Federal, State, or local agencies, and any FHA mortgagee or any FHA approved non-profit organization. People, in layman's terms, this is already acceptable by HUD's standards, except for the lender that is now able to give the monies upfront in a form of a 2nd mortgage. Another terminology is that this can be an advance loan from any of the entities mentioned above.

Summary : Essentially, this means that the entities mentioned above, are purchasing this tax credit on your behalf and giving it back to you. The short version of this is that you can use some of the money from the $8,000 Tax Credit as your down payment, but after you put down the first 3.5% of that down payment. Meaning, you have to come up with 3.5% of your own money still. With FHA loans, it can still be a gift from a relative/family member. It also can come from non-profit or government agencies to be used as your initial down payment, but not used through the tax credit. Overall, the tax credit that is advanced, can be used for all closing costs. But you can't receive monies back at closing.

And again, keeping in mind, it's illegal to receive this tax credit upfront directly from the IRS. There is more verbiage in the mortgagee letter 2009-15 , but the main point is that you have to have 3.5% of the downpayment yourself, before you can use the tax credit that would be 'loaned' to you.

THOUGHTS??? - Well, in all honesty, how does this truly help? What is the gov't thinking here? As a buyer, I would still need the initial 3.5% of my monies for the down payment. Again, needing money to buy. I know some of you are for this fact, that buyers should have skin in the game. But keep in mind, this was not the true demise to our foreclosure mess. We need to sell houses to keep this economy going. Just my opinions and food for thought. thanks

My Series on the First time homebuyers $8,000 tax credit - Everything you need to now, from start to finish - What's allowed and what's not allowed :

The $8,000 tax credit for first time home buyers - The basics - What to know about it - Understanding what the tax credit is all about.

Use a 6 month gift from a relative to buy a home, thanks to the Tax Credit - How to get creative in using the tax credit and some FHA mortgage guidelines in helping you use this tax credit to your advantage.

Using First-Time Homebuyer Tax Credits for the Downpayment - It's GONE !!!! - The story of the $8,000 tax credit - The bottom line, you can't use the actual tax credit as your downpayment.. for your downpayment, unless you get it from other sources prior to buying the house and receiving the tax credit.

FRAUD ALERT - Advice on the $8,000 first time homebuyers Tax Credit - Do you chance it??? - This explains to you that it's fraud if you directly obtain the money from the IRS before you actually purchase the house. Even HUD and many lenders/investors acknowledge this also.

The $8,000 tax credit for First Time Homebuyers - How & when to get it legally - So how can the tax credit be received legally for your downpayment? Just be careful of those that promise other ways not mentioned. I talk about what is illegal in the previous blog above. Please click the link.

The First time homebuyer $8,000 tax credit has been amended - May 29th, 2009 - Buyer, beware !!! You still need 3.5% of your own money for the down payment. It can't come way of an upfront loan through the tax credit.

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages -

- Conventional Loans - 203 k loans -

- Mortgages -

Experience & Knowledge at its BEST !!!

_________________________________________________________________________________________

For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!

Copyright © 2009 by Jeff Belonger

Beautiful Parkville Townhome

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Wed, 13 May 2009 11:14:36 -0500

************************************************************************************* To list your property for sale or to purchase a property in Maryland, call Lisa & David Webber, ABR, Licensed Realtors®. For more information on our services, please visit our profile or our website. To view all the Maryland Homes For Sale Click here and then click on Property Search on the left hand side. We know Anne Arundel, Howard, Calvert, Charles, Baltimore, and Prince George's Counties and look forward to the opportunity to serve you.

FHA & The $8000 Tax Credit

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Wed, 13 May 2009 08:36:32 -0500

I'm sure you've heard of the $8000.00 first time homebuyer tax credit. That's a great credit and you can even ammend your 2008 taxes and get the refund after settlement. That's all fine and well, but what if you need the $8000 to go towards your downpayment? Now the FHA is going to work with their approved lenders to do a sort of bridge loan so that first time buyers can take advantage of the credit BEFORE BUYING and use it towards their downpayment. We don't have all of the details yet and it sounds like the kinks are being worked out, but if this works out, renters can more easily become buyers.

A first-time homebuyer in our area would be in about the $200,000 to $300,000 price range, most likely purchasing a condo or townhome, but in a few areas you can even buy a single family home. You would normally need a minimum of 3.5% for a downpayment, so about $7000-$10,500 out of pocket cash. You can be "gifted" this downpayment from Mom & Dad if they are feeling especially generous, but if you are like most people, Mom and Dad want you to come up with the money yourselves (or their 401Ks have been depleted so they don't have it to give!).

If FHA lenders can stay within the guidelines and work out bridge loans to enable you to use this $8000.00, that would cover your entire downpayment for a $200,000 condo and most of it as you get closer to $300,000!

This is the opportunity that many people who are renting have been waiting for. If your credit is decent, about 620 FICO and above, your American Dream could come true soon.

We work with several great local lenders who can explain how this works and see if you're qualified to become a homeowner. Several of them provide free credit counseling and repair and will work with you over time to get you qualified for your loan, just give us a call and we'll provide you with all the information you need.

Here's the announcement of this big story:

http://www.realtor.org/press_room/news_releases/2009/05/re_summit?lid=ronav0019

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To view all the Maryland Homes For Sale Click here and then click on Property Search on the left hand side. We know Anne Arundel, Howard, Calvert, Charles, Baltimore, and Prince George's Counties and look forward to the opportunity to serve you.

Beautiful Bowie Town Center Condo

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Mon, 11 May 2009 09:17:06 -0500

Relocating to Fort Meade or other areas in Maryland? Temporary Housing Solutions

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Sun, 10 May 2009 17:22:55 -0500

If you find yourself relocating to Maryland, you may end up needing temporary housing until you can settle on your home. We're working with a military couple right now who is relocating to Frederick from Germany. The wife flew in several weeks ago to go house shopping and Dave spent three days with her, looking at all her favorites after eliminating many by shopping on the internet.

She chose her favorite which is a bank foreclosure and we're scheduled to close on June 2nd. Only problem is the bank came back and had us do an addendum to extend the settlement until June 18 if necessary because they are so overwhelmed with foreclosures. That means they are going to need a place to stay for longer than originally planned.

Extended Stay America has locations that fill the gap for many people and they have a lot of different locations around the area. Their hotes are designed for longer stays with studios featuring fully-equipped kitchens and plenty of work space. You'll have a refrigerator, microwave and stovetop, workspace with computer dataport, wireless internet, iron and full size ironing board, guest laundry, dining and cooking utensils and some of the rooms are pet friendly as well.

Homestead Studio Suites is another option, similar to Extended Stay America, Homestead Studio Suites offers a comfortable room, fully-equipped kitchen, workspace with wireess internet, and onsite guest laundry. They have nightly, weekly,and extended stay rates. This option also works well for business travelers or vacationers.

If you are relocating to Ft. Meade, Maryland, Shelter Cove apartment complex off Rt. 32 that has regular 1, 2, and 3 bedroom apartments that come unfurnished or furnished. Shelter Cove will let you use your Realtor to help you rent an apartment there and have their apartments listed in the multiple list system.

These temporary housing solutions can also be perfect for you if you have a contract on a short sale property and are unsure as to how long it will take to settle. When you purchase a short sale property, if you have a home to sell, it can be very difficult to coordinate the settlement dates. A solution to this problem is to sell your current home, have your belongings moved to storage, and stay in an extended stay hotel until you are able to settle on your new home. Many times the savings you can get by purchasing a short sale property are worth the short-term inconvenience of a temporary living arrangement.

Your professional Realtor can help you with your relocation plans including obtaining financing for your new home, shopping for your home, previewing potential homes, navigating through the inspection process and paperwork for you when you are not able to be present, so that your move goes as smoothly as possible.

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FHA Loans vs Conventional Loans - 5% down - Things you need to know !!!!

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Thu, 07 May 2009 21:33:32 -0500

BUYERS - this is a great, well-written blog by Jeff Belonger describing different home-buying scenarios. Most of our first time home buyers are around this price range, about $300K, which makes this especially helpful. Most of them are also choosing FHA which is a fine loan. We have seen many properties that some people will say "Oh, that can't go FHA", but many can. If the property really needs a lot of work or if it just needs cosmetics like paint, carpet and appliances, the FHA 203K is a good choice because you can borrow the money to fix up the home as well!

Via Jeff Belonger -- The FHA Expert.com -- FHA Loans -- FHA mortgages - USDA loans (Infinity Home Mortgage Company, Inc):

For several of you that read my blogs, I try and do a FHA vs Conventional purchase comparison once every few months.

FHA loans have been more wisely used in recent months as the choice of mortgages. What I hate hearing is that they have taken the spot of the subprime loans. This is not true by any part of the imagination. This statement is from those that are inexperienced in both the mortgage and the real estate industries. The realization has been that 30% of the subprime mortgages in the last 5 years previous to the last 2 years should have been FHA mortgages, not subprime. A recent survey has stated that FHA loanscould be more than 60% of all loans originated for the 2nd quarter of 2009.

To compound this, so many said just because you had a conventional loan, you had the better loan. This was not always true when putting 3 percent down or even 5 percent down. In most cases, you were told this, because that particular lender was not FHA approved. Now? Even with 10% down and credit scores less than 700, FHA loans in many cases, will be the best mortgage for you.

So you could argue the fact that this is just my opinion, that FHA mortgages in many cases would be better for you. True, even though I have over 16 years of experience as a loan officer in the mortgage industry. But numbers don't lie. Let me show you..... and in this scenario,

The example below is based on a $300,000 purchase price with 5% down. One reason why conventional rates are a little higher in this scenario as in FHA rates is because Fannie Mae and Freddie Mac have added penalties per se. If you are putting down less than 30% and your credit score is less than 720, certain fee penalties would apply to you, which would increase your rate. The FICO (credit score) that I am going to use is 679, which is above the average credit score and I will still show in this example that FHA loans are cheaper, even with 5% down.

***And keep in mind, some lenders have penalties on FHA mortgages with credit scores under 660 now. We don't. And many lenders can't do FHA loans under 620. I can still do them down to 600. Just beware of those promising you FHA loans under 600, they don't close as much as promised.***

Disclaimer : These rates are examples, but the spread shown in the example is real. To compare this scenario apples to apples, the fees are the same and with 1.75 points. In this scenario, there are no lender fees. The conventional rate also includes the penalty for the 679 credit score.

Okay, Jeff, you used 4 total examples. I am confused. A better than average loan officer will use all 4 comparisons, to show you the bang for your buck. I will explain each one below.

Conventional vs FHA - Your monthly savings is $170.36, favoring the FHA loan. Some of you might be saying that you will be adding $4,897.00 onto your principal balance if you did the FHA mortgage because of the FHA one-time mortgage insurance premium. This is correct and I don't want to confuse you with more numbers and charts. But here is a quick breakdown. If you kept your house for 5 years, which most people sell in a 6 year period, you would have saved $11,115.00 in payments in 5 years. This is a difference of $6,218.00 that you have saved!!! And one other thing that is very small, but still makes a difference.

Conventional Financed MI vs FHA - On the conventional loan, you can get a huge discount by adding the mortgage insurance onto your loan amount. Now your FHA monthly savings is only $37.83 a month, but you are now adding $4,560 to your total loan amount on the conventional loan. That comes out to an additional $76 a month over a 5 year period, if you wanted to pay down your mortgage to the same as the FHA loan. So now your total monthly savings is $113.83. Yes, you do get a larger tax write off on the mortgage insurance being financed, but with the lower rate on the FHA loan, you also subtract more off the principal quicker.

Conventional Lender Paid MI (LPMI) vs FHA - On the conventional loan, you are paying a higher rate, which part of it pays for your monthly mortgage insurance. Your monthly savings on the FHA loan is only $74.44. In 5 years, you saved $4,466. But you added $4,897 onto the FHA loan, which means that in 5 years, you came out $431 better on the conventional loan in 5 years. But hold the presses... You get a higher tax write off, because you added more money onto your FHA loan and you are slightly reducing your principal because you have a interest rate that is 1.25% lower than that of the conventional loan.

The end result on the 3rd comparison? You will still come out ahead on the FHA loan. But let's take it a step further. Take your savings of $74.44 a month and add it back into your payments monthly for 5 years. Guess what, my principal balance in 5 years on the FHA mortgage is $5,199 lower than that conventional mortgage.

Again, a very good loan officer should understand these comparisons and be able to show them to you, if you need to see the numbers to help make your decision. I have heard many borrowers in the past say that their loan officer did these comparisons and suggest the conventional loan. Rut row... I didn't fudge these numbers. ... just a FYI.

Another Footnote : You will be subtracting a few more dollars per month from your principal because your interest rate is lower, which would offset the interest that you would write off on the higher rate. Just something else to remember, but consult your tax consultant or CPA.

For more updated information on Conventional PMI (private mortgage insurance) - Please read this detailed blog by Robert Rauf. The new world of PMI - update (FHA loans save the day)

For more FHA loans vs conventional loans comparisons :

FHA loans vs Conventional loans - A true numbers comparision with 5% down - Using a 710 credit score

FHA loans vs Conventional loans - A real comparision with 5% down - Using a 659 credit score

FHA Loans vs Conventional Loans - 20% down - A Rude Reality Check - Would you believe that FHA loans could be cheaper even with 20% down? Come see why and how.

FHA Loans vs Conventional Loans - 5% - 4 comparisons that you need to know - Comparing a FHA loan against 3 types of conventional loans with different types of monthly mortgage insurance. Guess who won while still using a 679 credit score.....

- FHA Loans - USDA Loans - VA Loans -

- Energy Efficient Mortgages -

- Conventional Loans - 203 k loans -

- Mortgages -

Experience & Knowledge at its BEST !!!

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For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!

Copyright © 2009 by Jeff Belonger

Beautiful Glenridge Rancher in Hyattsville, Maryland

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Thu, 07 May 2009 13:50:10 -0500

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To list your property for sale or to purchase a property in Maryland, call Lisa & David Webber, ABR, Licensed Realtors®. For more information on our services, please visit our profile or our website. To view all the Maryland Homes For Sale Click here and then click on Property Search on the left hand side. We know Anne Arundel, Howard, Calvert, Charles, Baltimore, and Prince George's Counties and look forward to the opportunity to serve you.

IndyMac & PMI Short Sale Fiasco

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Mon, 04 May 2009 09:36:09 -0500

We've been working on a short sale for a townhome in Elkridge, Maryland. The home is in a nice neighborhood and was purchased at the height of the market, right before the mortgage meltdown in 2007, for $375K.

The people who bought the home are a lovely couple with2 small children; he is a military veteran and she is a social worker. Like many families, they are so busy and admit they didn't have a good grasp on their finances and didn't realize when he got out of the military, their take home pay would be a lot different. In any event, they were put into a mortgage that they couldn't afford from the beginning.

Very long story short, they were unable to afford the home from the beginning and were living off of credit cards because the mortgage was over 50% of their income. They declared bankruptcy in July 2008 based on the advice of an attorney. After their other debts were wiped out, they were still unable to afford the $3300/month mortgage and were discussing a loan modification with Indymac. These people loved their home, it was the first home they ever purchased and they wanted to keep it.

They began paying a modified amount and after a couple months, Indymac came back and said they were sorry but because the couple declared bankruptcy and did not reaffirm the loan, they were unable to modify the loan. You see what happens with a bankruptcy and a mortgage is if you do not reaffirm the loan after the bankruptcy, you are no longer responsible to pay it. The loan (same thing as with a car loan) has been settled, but with a mortgage or a car loan, they are backed by collateral so if you don't make the payments, you cannot keep the collateral. If you continue to make the payments as they were, then you're fine and can stay in the house, but if you need modification, you need to either reaffirm the loan during the bankruptcy or reopen the bankruptcy and reafirm it. This entire process was so stressful for the family and the rep from Indymac suggested they do a short sale; at this point that was a good option, so they called and asked us to try tofind a buyer for their house.

We had the home on the market for $299K and had 66 showings before getting an offer. That tells me that we were priced in a good range. The offer was decent considering the current market so we submitted it to Indymac back in January. We have waited patiently through the process, the buyers have been extremely patient. After many weeks, the BPO has come back and we're close enough that our negotiator said they could probaby work with the offer. Then she discovered the loan has PMI, mortgage insurance. When a loan has PMI, the insurance company covers the difference between what the bank is able to get out of the home verses what is owed. In order to qualify for the insurance, the bank has to cooperate with the rules of the PMI company.

PMI came back and demanded the sellers take back a promissory note for $20,000. They said it was originally going to be higher, but due to the circumstances, they would make it only $20,000. Now the problem is, remember these people already declared bankruptcy and the bankruptcy judge ruled that they are not responsible for the mortgage any more. They are still trying to do the right thing for moral reasons, to keep another foreclosure from hitting the neighborhood, have kept their association dues paid, and have kept the power on in the home to help keep up the condition of the property. They did move out recently because they needed to find a home in the same area so their children wouldn't have to switch schools and a home came available - they were worried the house could go into foreclosure and they wouldn't be able to find a home when they needed to. But as far as their credit goes, the mortgage is already showing as being included in the bankruptcy. They do not want to take on any more debt at this point because they feel like they have been cooperative with the whole process and they are no longer in the home.

PMI came back and denied the short sale based on the sellers not taking back a promissory note. Our negotiator at that point became rude and uncooperative. I wrote a long letter to the agent at PMI asking them to reconsider and he did call me. We spoke about the situation and he said the sellers did not have a "HARDSHIP". We explained that they were put into a loan they couldn't afford from the beginning (they admit it was a huge mistake) and told him about the other bills, the bankruptcy, the fact that their payment was over 1/2 of their income, etc. If the bank ends up foreclosing on this home, it will sit vacant and uncared for over a period of months and many things can happen to homes once the power goes off in a warm, humid climate. We have seen countless of foreclosed homes where mold has begun to grow within weeks and has caused tens of thousands of dollars in damage to the home. By that point you can only have a cash or conventional buyer which further limits your buyer pool and lowers the price.

PMI's standpoint is they still have the same jobs that they had when they applied for the loan and PMI does not feel that they have a "HARDSHIP". I told him the bank would lose more money if they have to foreclose on the property and he said PMI does not care; the difference to them is negligible. I asked if the potential buyer could come up on their offer to make up the differece and he said no, it would't make any difference to PMI, it would only make the loss to Indymac less.

PMI did call the sellers directly to discuss the situation with them two weeks ago and was supposed to call me with either the same decision (no) or a revised decision, but they have not. I have called and the seller has and we have had no updated response. Our old negotiator at Indymac has changed departments so I got the information for the new negotiator and am going to try to call her again today to see if we have any updates.

We have contacted Senator Sarbane's office and they said they can file a complaint with Indymac, but I'm not sure where that will go.

It really seems like we have our hands tied as PMI is calling the shots. It's a shame to have yet another foreclosure and have Indymac lose even more money because of "policies" that are being adhered to.

Does anyone have any suggestions or ideas as far as how to proceed? I have a feeling this one is going to foreclose. Very sad.

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1587 Snug Harbor Road, Shady Side Maryland

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Sat, 02 May 2009 11:24:34 -0500

Foreclosure Deficiency Judgment Compared to Deed In Lieu and Short Sale Scenarios

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Tue, 24 Mar 2009 20:18:40 -0500

I have found a wonderfully written article comparing short sales verses foreclosures verses deed in lieu of foreclosure. We're in the process of working on several different short sales now and this information is invaluable.

We recommend that you seek legal advice when deciding which path to take when you need to move or come to the point where you can't afford your mortgage payment. If you do decide to attempt a short sale, please feel free to call us and we'll set up an appointment to discuss the process with you.

In the meantime, read the below post and the other posts that Richard Zaretsky has written about short sales. I'm not a lawyer, but the scenarios that he is discussing sound very similar as far as how mortgages in Maryland are handled. Each short sale is different, each bank is different and each outcome is going to be different based on all of the variables involved, but the more educated you are about the process, the easier it is!

Via Richard Zaretsky, Florida Real Estate Attorney (Richard P. Zaretsky P.A. ):

Basic Primer - the Mechanics of a Mortgage Foreclosure Deficiency Judgment Compared to Deed In Lieu and Short Sale Scenarios-

We get so many questions about having a "deficiency judgment" entered and how it differs from other possibilities in a deed in lieu of foreclosure or short sale, that a refresher article seems appropriate for Activerain. If you are unsure of what a Short Sale is, then first read the Back to Basics - a Review on Short Sales .

This article is written based on Florida law, but most state laws are similar. Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.

The Law of a Mortgage Foreclosure:

A mortgage foreclosure (some incorrectly call it a "Lis Pendens") is filed by the lender when the Promissory Note that is secured with a Mortgage on some real estate (usually the home) has not been paid on time (the "default").

Let me clarify an important issue that will have meaning later. A "Mortgage" is NOT the obligation to pay the bank. The obligation to pay the bank back the money it loaned along with interest is called the "Promissory Note". The bank makes two types of loans. Secured loans are when the bank wants the Promissory Note to be collateralized with something of value. In real estate that "something of value" is usually a "Mortgage" and it collateralizes or secures the Promissory Note with the house or other real estate. So when we say only the word "Mortgage", technically you are referring only to the security document and not the Promissory Note. Likewise when we say the words "Promissory Note", we are referring only to the obligation to repay the bank.

If there was only an "unsecured" Promissory Note and there was no Mortgage, the suit would demand payment of the Promissory Note and then the judge after hearing the evidence, would likely issue a Final Judgment against the borrower and in favor of the bank for the amount of the unpaid Promissory Note along with accrued interest, late fees and court costs and attorney fees. The Final Judgment would also be entitled to interest (in Florida that rate is now 11% a year) until the Final Judgment is paid in full.

A mortgage foreclosure is actually a four step process.

The first step is to file suit (called the "Complaint") on the non-payment of the Promissory Note. (Yes, there are other reasons for a foreclosure suit to be filed, like an unauthorized transfer of the real estate, or non-payment of the real estate taxes, but we are going to focus on not paying the Promissory Note). An action (the suit) is filed at the courthouse and it consists of 3 documents. The first is a Summons, which directs you to answer the Complaint. The second is the Complaint, which describes why the bank is entitled to the relief it is asking for - the payment on the Promissory Note. The third is the Lis Pendens, which puts the public at large on notice (since the lis pendens is filed in the public records where the property is located) that anyone dealing with the property should know that a claim has been made against the property in the Mortgage. (Lis Pendens literally means "pending litigation" and is one of those fancy Latin words that we lawyers banter about).

Step One: The Complaint will describe that there was a Promissory Note signed by the borrower to evidence that it was to repay the bank the money, and that to induce the bank to make the loan the borrower also signed a Mortgage on some real estate that promised that if the Promissory Note was not paid, the real estate could be sold and the proceeds would be used to pay the Promissory Note. It will also say how much is unpaid and what additional money the bank may want for the non-payment of real estate taxes, for example. It will finally make a "demand", which will ask that if the borrower does not make payment on the Promissory Note to the bank, then the real estate should be sold under court supervision at a public auction, and if there is insufficient money bid for the real estate, the court should give to the bank a judgment for the shortfall (the "Deficiency Judgment")

Step Two: After statutory time periods have run (for example, 20 days to answer the Complaint, the bank can more for a final judgment. This is usually accomplished (in Florida) with a Motion for Summary Judgment, or similar name. Another 20 days must elapse before this hearing can take place, once the motion is filed. In reality (at least in Palm Beach County right now) that time period can be several months before a court date on the Motion for Summary Judgment can take place.

At the Motion for Summary Judgment hearing the bank must prove that there is a valid Mortgage securing a valid Promissory Note and that it is unpaid. The judge will then issue a Final Judgment of Foreclosure that says (1) if the borrower does not pay the bank the amount the bank proved is due to the bank within usually 30 days, the real estate is ordered to be sold by the clerk of the court to the highest bidder, and if the highest bidder bids less than the amount due to the bank then the bank can come back to court and request a Deficiency Judgment. It is important to note that the Final Judgment of Foreclosure is NOT a money judgment against the borrower! However, depending on step three below the bank can move to obtain a money judgment later on.

Step Three: Assuming that the borrower has not paid the bank to the bank's satisfaction during that 30 day period, the public sale (the "foreclosure sale") will occur. It is conducted by the Clerk of the Court and it usually occurs "on the courthouse steps", but more usually in a courtroom or meeting hall or even in a large hallway in some courthouses. The property is announced and bidding starts at $100 and goes up from there. The bank is able to bid for the property and it will do so to "protect" the collateral up to the amount (and usually beyond) the bank has determined the property is worth. Usually the bank will bid up the amount of the judgment it received from the judge. (This is great news for the borrower, but that is another article I need to write). More often than not the property gets sold to the bank for a mere $100 and there are no other bidders at the foreclosure sale.

Step Four: I am now again making as assumption. The assumption is that the bank ended up with the property at the foreclosure sale by bidding one hundred dollars. In that event the borrower still owes the bank money to satisfy the promissory note. The amount of the remaining balance is what is in question.

To figure get the balance of the monies the bank must go back to court to ask the court to award it a "Deficiency Judgment". The amount is what is in question and the amount is measured using various rules. In our example the bank bid $100. The court is not going to say that the house was worth $100 and $324,900 is still owed. For our assumption and as an example we will say that the property is worth $200,000 and the foreclosure judgment is for $325,000. That means the court will ask for an appraisal of the property as of the day of the foreclosure sale and the judge will likely give it that value. So it will be the appraisal value less the judgment amount which will equal the Deficiency Judgment. If the appraisal is $250,000, the Deficiency Judgment would be $75,000. Now if there was real bidding at the foreclosure sale the judge could consider that bidding and instead adopt the selling price under the competitive bidding process that occurred at the foreclosure sale. Then the Deficiency Judgment would be the difference from the foreclosure judgment and the winning bid amount. If the competitive bid was $240,000, then the Deficiency Judgment would be $85,000.

A little issue that comes up is how long the bank has to get the deficiency judgment. The Florida Statute of Limitations (time to enforce) the Promissory Note is 5 years from the time it went into default.

There is also a rule on how long a plaintiff can keep open a lawsuit that has no activity. That rule says after 1 year of inactivity, the lawsuit can be dismissed by the court. The rule is referred to the "Failure to Prosecute Within One Year" rule. IF the court dismisses the lawsuit after one year and before the bank asks for a deficiency judgment, it could be argued that the bank cannot again seek to enforce the promissory note. This concept is untested in the courts of Florida, but see the next paragraph.

Florida courts have noted that a claim for deficiency in a foreclosure action does not accrue until the foreclosure sale has occurred. Thus the five year period starts at the time of the foreclosure sale (not the time of the default). The courts have not addressed the one year "failure to prosecute" issue, but it is likely that a decision on it would consider that a deficiency action is separate and could be filed as new action based on the accrual of the event at the time of the foreclosure sale that resulted in the deficiency. (See Chrestensen v. Erogest, Inc., 906 So. 2d 343 (Fla 4th DCA 2005). So notwithstanding that the court could dismiss the case after one year, that dismissal would not bar the re-filing of the claim during the 5 years after it accrued. [UPDATE; Florida case law now says that the time to file a claim or for a deficiency judgment or new suit for amount of balance of note has a starting date as of the foreclosure sale date.]

Almost every client I meet with first starts out wondering if they should "just give the property back to the bank". I tell them first off that, "it ain't so easy."

A Deed In Lieu has many prerequisites. The first is that the property cannot reasonable expect to be able to be sold within a reasonable period of time. The second is that the bank to receive the Deed In Lieu must be the only lienor. This means there can be no second mortgage and the borrower must be clean of any claims or judgments from other creditors. In other words the title to the property must be "clean" except for the bank's mortgage. (Note that if the bank with the first mortgage also has the second mortgage or HELOC, the Deed In Lieu is still a possibility.)

The issue becomes what becomes of the disposition of the Promissory Note? There is documentation in a Deed In Lieu that is very important to the borrower. This documentation can be an agreement in conjunction with a deed to the bank, or it can be written right into the deed to the bank from the borrower for the subject property. In any event the document(s) must provide that as part of the consideration for the giving the property to the bank the Promissory Note is satisfied in full. If this language is included, then there is no further liability of the borrower to the bank and no lawsuit to enforce the Promissory Note can occur. Most of all, banks don't like to have to sell your property so they don't like taking property to have to manage and sell. It is expensive to take in your property and unless your property is worth more than the amount the bank loaned to you, the bank is likely to only loose more money than if you sold it for them. That is why the do short sales and deeds in lieu.

Short Sale Negotiation:

A short sale by its nature does not encompass a law suit to foreclose the Mortgage or a lawsuit to enforce the Promissory Note and that is one of the primary advantages of this method of loan workout. On the other hand, there is often a Mortgage Foreclosure Suit already in progress when a short sale is attempted to be negotiated. [It is important to realize that a short sale "attempt" does NOT stop a Mortgage Foreclosure Suit. The bank may instruct its attorneys to delay acting on certain aspects of the suit - usually getting the Foreclosure Judgment or if one is issued, then delaying the actual conducting of the Foreclosure Sale].

The short sale does often times result in a "Release" of the lien of the Mortgage but not a "Cancellation" or "Satisfaction" of the Promissory Note. It is this remaining financial obligation that is the crux of so much discussion about "1099's" and forgiveness of debt. Sellers Always Have Income is a comprehensive article on the subject and also deals with recent legislation on how income does not have to be recognized.

Unless a release or satisfaction of the entire Promissory Note or in the case of a property with more than one loan, then each Promissory Note is obtained, there remains the ability of the bank or banks to sue the borrower for the balance of the unpaid promissory note. In the case of a 2^nd Mortgage, this might be the entire amount of that loan if the 2^nd Mortgage bank took nothing so the short sale could succeed.

The documentation regarding a short sale is very important. The borrower needs to know what further obligations could be in the future as a result of the short sale. Like the Deficiency Judgment statute of limitations, the balance of the Promissory Note must be enforced within 5 years of the default or the demand for payment by the bank. The rule about the one year dismissal for lack of prosecution does not apply to the short sale scenario.

If the unpaid balance of the Promissory Note is enforced by the bank, then it can file a lawsuit against the borrower (if done within that 5 year period) and the result will likely be a Judgment for the payment of money in the amount of the unpaid portion of the Promissory Note. Many persons that short sell and do not get a release of the Promissory Note utilize an offer to pay back all or a portion of the Promissory Note balance with a new unsecured promissory note. This new promissory note replaces the old Promissory Note. The new promissory note can also be enforced by the bank in the same way as the old Promissory Note, but the time to enforce it will be based on whatever new default might occur if the terms of the new promissory note are not followed by the borrower.

The Second Bite from the Apple

An interesting twist is being used by the banks. They take the now unsecured remaining balance of the promissory note, or the new negotiated promissory note, and sell it to investors for 5 to 10 cents on the dollar. Then the new investor tries to collect on the promissory note. This is mentioned in my article on Negotiated Paybacks. Obviously this represents an opportunity to negotiate the remaining balance a borrower may have on the old loan - sort of a second bite at the apple.

Opportunity abounds for finding solutions for those that need a short sale or find themselves in a foreclosure action. No solution is a panacea for the borrower's troubles, but the solutions present an ability for a borrower to make a bad situation a little less bad, and it gives some control to the borrower over what is otherwise a nightmarish situation.

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 RPZ99@FLORIDA-COUNSEL.COM - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com

copyright 2008 Richard P. Zaretsky

What a Difference the New Year Makes

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Sun, 15 Mar 2009 10:27:19 -0500

It's interesting to me that the news media still continues to imply that foreclosures are found everywhere and they make it seem that you can buy homes for pennies on the dollar. It sure isn't happening here. Prices have come down substantially compared to 2005/2006 but only in some areas. It realy depends upon where the majority of the foreclosures and short sales are.

The neighborhoods in Maryland where we are seeing most of this are the newer neighborhoods with large colonials. For example, the neighborhood of Perrywood in Upper Marlboro. These homes were built just before and during the "boom years" and many of them were purchased with adjustable rate mortgages that are ballooning and they are unable to refinance their homes in this market. In past years, purchasers were able to obain "stated income" loans so that they could purchase more home than they would income qualify for and now you have to show paystubs in order to obtain mortgage money.

So now you have a situation where a high percentage of the homeowners are unable to pay their mortgages and are unable to refinance so they are needing to work out a short sale, where the bank accepts less than what is due on the mortgage rather than foreclose, or the bank is foreclosing.

In those situations, you can sometimes get a real bargain. We found one of those recently for a client who will be moving the end of the month. This home is a large, brick front colonial with 2 car garage. Now the owners of this home were so upset that it was foreclosing that they took the entire kitchen out, the bathtubs (!), washer and dryer and also put animal waste in the sump pump.

So the bank was stuck with this 4400 square foot home (including fully finished basement) with no kitchen or functional bathrooms. The bank actually replaced the whole kitchen, bathrooms, sump pump, and now it looks like a brand new home. The list price on this home, sitting on .32 acres is only $370K. Amazing deal! In 2006, some of these homes were selling for over $600,000.

In other areas you won't find very many short sales or foreclosures and the home prices are more stable. As a buyer, you'll want to choose your own buyers agent to take you around and discuss market conditions in different neighborhoods and what to expect. Having your own buyers agent normally doesn't cost you anything and they'll negotiate for you and help do the research to make sure you are getting what you want.

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Are Banks Still Lending Money?

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Tue, 10 Feb 2009 07:49:20 -0600

Since the first of the year, we've been so busy I've hardly had a free minute. I'm certainly not complaining mind you, but in the course of the day as I'm returning another call from a potential buyer, she asks:

"But are banks still lending money?"

Really? That's the impression some people are getting because of all the media hysteria.

BANKS ARE LENDING MONEY EVERY DAY TO NEW HOME BUYERS!

The only thing that has changed is we're back to basics. If you're looking to buy a home today, you need to show your pay stubs and tax returns to the mortgage lender so that you can show them you can afford to pay the loan back. You'll want to make sure you have reasonable credit, paying your bills on time on a regular basis. You can actually get an FHA loan if your FICO score is below 600, but the higher the better (less risk to the bank, less cost to you).

Many buyers, first time or not, are choosing FHA loans. These loans are insured by the government and you only need to put down 3 1/2% for the downpayment and many times you can have the seller pay your closing costs if you negotiate that with the home purchase.

There used to be loan programs where you could have the seller pay the downpayment and they might come back. If you want me to put you on a notification list for when/if this happens, just call or email.

If you are military or former military, you can use your VA benefit and possibly buy a home with no money down, or very little.

There are still the "standard" conventional loans where you will want to have 20% down and a decent credit score to get the best rates.

If you'd like to see if the banks will LOAN YOU MONEY, just give us a call and we'll see if we can get you pre-qualified for a loan to buy your own home!

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Crime Victims Mortgage Help????

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Thu, 22 Jan 2009 15:04:17 -0600

We were asked today about a program that I've never heard of and wanted to ask for any information that anyone might know.

A client of ours owns a home that she wants to move out of because her roommate was shot in the head in the home and she came home and found the girl. Fortunately the roommate lived and they just arrested the person who did it.

Our client was approached by a local Realtor who told her that she was a victim of a crime and as such, she could sell her house, the government would pay for any difference that she is upside down, and she could purchase another home with only $1000 down.

I have never heard of such a program and would love to know if one exists or if she is going to be taken advantage of. Thanks for any information!

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The Perfect Storm Has Arrived

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Tue, 06 Jan 2009 13:59:50 -0600

This may be "the perfect storm" here in the Anne Arundel/Howard County area as far as home sales go.

Rates are again BELOW 5% as of today, historically low, and prices have come way down throughout most of the state of Maryland. Homebuyers now, even first-time homebuyers have their choice of some really nice homes. There are bank foreclosures being listed in nice neighborhoods where you would not expect to see foreclosures and "short sale" properties as well. These bank sales are bringing prices down among regular home sellers as well.

For a complete list of homes available in the areas you are looking, give us a call or e-mail and we'll get it out to you. Includes "best buys" and foreclosures!

Your first step is to see what rates you'll qualify for - FHA is even below 5% today! If you'd like a recommendation for a good lender, give us a call; we use several really good mortgage brokers in the area that can help get you approved for your new house then we can go shopping so you can take advantage of this PERFECT STORM!

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Elf Yourself For Fun!

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Sun, 07 Dec 2008 19:01:28 -0600

OfficeMax has a program that is great fun - "Elf Yourself" - where you can take photos of your family members including pets, and turn everyone into "elfs" that dance to your choice of music - disco, country, charleston, or the "classic" theme that they had last year. Check this out - we "elfed" our family:

http://elfyourself.jibjab.com/view/NBvCiSE5QHIPrpmr#/owner/NBvCiSE5QHIPrpmr

Send your own ElfYourself eCards

International Supermarket in Glen Burnie

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Sat, 06 Dec 2008 19:52:42 -0600

They have largetanks of live fish and good prices on regular and exotic produce. They also sell medium and large containers of really good Kimchi at awesome prices. I found a great grocery store that sells all types of international foods right in Glen Burnie. Fresh World International Supermarket/El Grande Supermercado is located at 7927 Ritchie Highway is located in the old Giant Grocery store location, across from Marley Station Mall. The store is more than 5,000 square feet and stocks Korean, Chinese, Japanese, Pakistani, Indian, Filipino, Hispanic, Thai and Malaysian food.

Growing up in Korea, I developed a love for the people and the FOOD and it can be hard to get good Korean food locally. There is a Korean restaurant in Glen Burnie, but sometimes it's nice to be able to just buy the food and bring it home. They have everything you could possibly want including many different brands and types of large packages of dried seaweed. Their prices on seaweed are very good too, much better than at Giant or Shoppers. This is one of my favorites:

You can use this for making your own sushi, or "kim bap" if you'd like, or just use it to wrap up your rice and kimchi. I like to take a sheet of this yummy, salted seaweed, tear it into smaller strips, pile on a scoop of rice and a piece of kimchi.

They also have marinated bulgogi meat in the meat section that you can purchase by the pound. Bulgogi is a dish that many Americans like, even those that don't otherwise like exotic foods. It's basically thinly sliced beef strips, marinated in a special sauce with soy, ginger, garlice, onions, etc. It cooks up quickly on the grill or in a skillet for a great lunch or dinner. They also have all those interesting cuts of meat that you don't find at your regular grocery store.

You can also get all of the pre-made side dishes like seasoned bean sprouts and that other green veggie, can't think of the name of it.

They have largetanks of live fish and good prices on regular and exotic produce. They also sell medium and large containers of really good Kimchi at awesome prices.

The last time I was there, they were preparing a restaurant area with tables and chairs so you can stop for lunch!

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First Time Buyers - Don't Fear the Foreclosure

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Sun, 30 Nov 2008 16:33:20 -0600

As a first time homebuyer, there are a lot of things to consider when purchasing a home and many people will recommend that you stay away from foreclosures but I think that they can be some of the best bargains in this market. There are other bargains of course including motivated sellers that have been in their homes for a length of time and have a good amount of equity, people who are in a divorce situation, or people relocating out of the state.

Some foreclosures are not for the faint of heart, this is true. But most of the foreclosures we're seeing in todays market were just sold between 2005 - 2007 and were in geat condition when they were purchased by the previous owner. Many people who have lost their homes are not trashing them. Some are angry and damaging walls and taking appliances, but some almost look like model homes - it's true!

You will want to make sure you are pre-qualified so you know exactly the price range you're going to want to look in. You'll want to research the areas that you are thinking about living including types of homes and prices so that you'll know when that bargain hits the market. You'll want to have your Realtor put you on an automatic e-mailing so that every single day as a new home with your criteria is listed for sale, it will be in your e-mail box and you'll have the information right away. The best deals are going under contract in less than a week in most cases so you'll need to be ready make a decision quickly. And that quick decision can get you a home with thousands, many times tens of thousands of dollars in instant equity, even in this market!

There are some potential pitfalls when dealing with purchasing foreclosures, but get yourself a good Realtor with foreclosure experience and they'll school you on the process. Remember, the bank will even pay for your Realtor so you'll have an expert to help guide you through the process!

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Foreclosure Buying & Mold Remediation

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Sun, 30 Nov 2008 16:14:05 -0600

Most of the homes I've been showing lately are bank foreclosures.

I can certainly understand why - some banks are putting homes on the market for so far under current market values they are absolute STEALS!

What I'm also seeing in many, if not most, bank foreclosures is mold in the basements. This happens fairly quickly when the houses are closed up and utilities are off. Normally you'd be running air conditioning or heat, running the sump pump in the basement, and keeping the humidity down in the home.

But the banks right now are holding so many foreclosures on their books and are not paying the monthly costs to keep the utilities on so the homes are building up moisture on the inside and mold is growing.

When some people hear "mold", they don't want to have any parts of it and I can understand why. I've seen the news programs showing homes that have "toxic black mold" in them making people terribly sick. But there are different types of mold and the most common mold that grows in the basements of these homes is annoying and does need to be removed (it's most harmful to people that have asthma or suppressed immune systems), but in most cases is more nuisance than deadly.

I'm not a mold expert, but here is a great article containing an interview with a home inspector. If you're in the market for a foreclosure in this market, make sure to click on the link below and read this so you can educate yourself on the subject:

Mold Is The Issue

If you're in the market for a bank foreclosure, make sure to give us a call and we'll take you around to see some bargains!

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Get Local Deals on your Cellphone

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Mon, 17 Nov 2008 16:33:50 -0600

I found this cool website called Cellfire; www.cellfire.com. You can explore deals by zipcode and download them to your phone so you don't have to carry around a coupon.

For example, if you go to Caribou Coffee over in the Waugh Chapel shopping center today in Gambrills and buy a pound of coffee, show your phone with the deal and you gActiveRain Real Estate Networket a free drink as well, any kind. In that same shopping center is a Game Stop where you can get 20% off used games today. Then go across the street to KFC and use the buy one get one free chicken snacker.

Gotta love this new technology!

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Annapolis Doubletree - Ladies Night Out - Complimentary Drinks/Food - Shopping

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Thu, 13 Nov 2008 08:13:38 -0600

This event sounds like a lot of fun - "Ladies Night Out" at the Doubletree in Annapolis - put it on your calendar for Thursday evening, November 20th.

I'm planning on attending and a lot of my girlfriends are going as well (yes, this is Lisa, not Dave! LOL).

LOCATION - Doubletree Hotel, Annapolis

210 Holiday Court, Annapolis, MD 21401

DATE - November 20, 2008

TIME - 6:00 - 8:00 pm

Phone - 410-224-3150

Complimentary cocktails and hors d'oeuvres will be provided.

They will have local vendors displaying jewelry, makeup, handbags, fitness trends, and much much more.

Exciting door prizes will be given away throughout the evening.

We are looking forward to seeing you there!

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What ELSE do you do for a living?

David & Lisa Webber, www.webberteam.com (RE/MAX Vision) — Sat, 08 Nov 2008 16:02:34 -0600

I was talking about Real Estate with a gentlemen the other day and he asked what else I did for a living and was shocked when I told him I work, live, breathe, love real estate and that's all I do for a living. I'm guessing the other agents he knows have other jobs.

I told him that Dave and I have committed to 8 hrs of training a week of real estate education. We know that top performing Doctors must have 8 hours of education a week also to keep them sharp. Then, he asked me to "diagnose" his problem like a doctor.

Then he began his real estate story, and let me tell you the story was long, with many twists and turns along the way. I listened and listened. Sometimes saying "uh huh" and "ohh" like a doctor would when evaluating the symptoms.

Then, I pulled the most recent stats out of my purse and was able to consult with him, the number of homes that have sold, the average sold prices in Anne Arundel County, and was able to show him that prices have actually increased by 2% from October 2006 to October 2008 in his price range. I also shared various important information he needed to make an informed choice on his options.

He was so thankful to now have met Agents that actually know real estate that he asked if he could send his friends, co-workers and family to us for real estate consulting. (Which we said, yes, we are accepting new patients at this time.)

Morale of the story... When you know your business you are valid. No one asks a Doctor what else do they do for a living, and after today, we have added a potential client whose sphere of influence won't be asking us, because they will already know we are valid!