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First time home buyers-first time home buyer loans - what's with the foreclosure freeze?

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Mortgage and Lending with Platinum Home Mortgage NMLS ID#283159

 


First time home buyers and the foreclosure freeze

 

First time home buyers in the process of buying their first home or those just “shopping” for their first home, have to be wondering what this foreclosure freeze means to them. In just the two weeks since my previous post, the landscape for first time home buyers has changed yet again.
To be an informed consumer it’s important that you know what is going on now and what is likely to happen in the future, and how it will affect the search for your first home.
Read the previous post- First time home buyers and the foreclosure freeze
Since that post on October 14, the Attorneys General of all fifty states have called for a foreclosure freeze, until they can verify that lenders are conforming with the laws of their state as it relates to the foreclosure process. Most of the major banks have performed their review or are in the process of completing it and reported they are in compliance.
The bigger “elephant in the room” is MERS, the Mortgage Electronic Registration System. For years lenders have transferred mortgages among themselves using an electronic transfer. As a result, many lenders have not been able to produce the original documents required to prove they are in a legal position to foreclose. This shouldn’t permanently  prevent foreclosures because most lenders will eventually be able to produce the documents.
So what does it all mean to you the first time home buyer?
IMHO, lenders are going to figure out ways to improve their short sale processes, so they can sell more homes via short sale rather than going all the way to foreclosure, which is undoubtedly going to result in more legal challenges.
Short sales may be getting easier for first time home buyers
One of the major title companies has reported that, up to 45% of short sale escrows that are opened in Southern California don’t close. More than half of those were due to the short sale not being approved, the other half because the buyer didn’t qualify for the loan.
Educated first time home buyers can cut this number in half by educating themselves and by hiring a professional Realtor and lender to guide them through the process.
First time home buyers don’t need a Realtor - they need a GOOD Realtor
The internet gives today’s first time home buyers the opportunity to be the most educated home buyers ever. With this opportunity, comes the responsibility to:
1) Educate yourself on how the short sale process works.
2) Identify if the short sale you’re considering has a chance of closing.
3) Make sure your financial house is in order before you start.
First time home buyers it’s time to step up
This is the first in a series to help first time home buyers navigate the short sale process, subscribe the feed to get the latest and greatest.
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First Time Home Buyers – is it the right time to buy
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