FHA'S SHORT REFI PROGRAM FOR NEGATIVE EQUITY HOMEOWNERS

So FHA is boasting about launching it's new short refi program for underwater homeowners.  Woot, woot.  Have you actually LOOKED at their requirements?  It reminds me of the evil stepmother in Cinderella who tells the girl that she can go to the ball "IF" she can get an impossible amount of work done.  In other words, "NOT GOING TO HAPPEN!"

The U.S. Department of Housing and Urban Development (HUD) Mortgagee Letter 2010-23 lists the eligibility requirements for lenders and negative equity homeowners.  The first glaring issue is that the lender participation is "voluntary" and "requires the consent of lenders."  Oh, great.  Here we go again!

In order for a loan to be eligible, the following conditions must be met:

1.  The homeowner must be in a negative equity position;    (That's an understatment) 

 2.  The homeowner must be current on the existing mortgage to be refinanced;  (Really?  If they're current, they're awfully lucky!)

3.  The homeowner mut occupy the subject property (1-4 units) as their primary residence;(Reasonable)     

4.  The homeowner must qualify for the new loan under standard FHA underwriting requirements and possess a "FICO based" decision credit score greater than or equal to 500;    (Understandable)   

5.  The existing loan to be refinanced must not be an FHA-insured loan;  (Too bad for the folks who have FHA loans - guess they don't matter!) 

6.  The existing first lien holder MUST WRITE OFF AT LEAST 10 PERCENT OF THE UNPAID PRINCIPAL balance;   (Oh sure, THAT'S going to happen  - NOT!)   

7.  The refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75%;  (Ok)

8.  Non-extinguished existing subordinate mortgages MUST BE RE-SUBORDINATED and the new loan may not have a combined loan-to-value ratio greater that 115%;   (Oh sure, you wave your magic wand and the 2nd, 3rd, etc. liens just vanish...)

9.  For loans that receive a "refer" risk classification from TOTAL Mortgage Scoreboard (TOTAL) and/or are manually underwritten, the homeowner's total monthly mortgage payment, INCLUDING THE FIRST AND ANY SUBORDINATE MORTGAGE(S), CANNOT BE GREATER THAN 31% OF GROSS MONTHLY INCOME AND TOTAL DEBT, including all recurring debts, CANNOT BE GREATER THAN 50% OF GROSS MONTHLY INCOME;   (Wow.  And how are homeowners going to make that happen in this economy?)

10.  FHA mortgagees are NOT permitted to use premium pricing to pay off existing debt obligations to qualify the borrower for the new loan;  (Of course not - why make it easy for the borrowers?)

11.  FHA mortgagees are NOT permitted to make mortgage payments on behalf of the borrowers or otherwise bring the existing loan current to make it eligible for FHA insurance; and  (Again, why make it easy for the borrowers?)  

12.  The existing loan to be refinanced may not have been brought current by the existing first lien holder, except through an acceptable permanent loan modification, et al.

So folks, what FHA is basically saying is that they're not going to make it easy for borrowers to qualify for their new, wonderful "bail-out" program.  No siree!  But they're going to brag about the "progress" they're making and how willing they are to help homeowners.  I hope all Americans who own homes can see past this outrageous rubbish and raise a huge ruckus over this latest affront to our dignity and intelligence.

FHA needs to improve their short refi program for negative equity homeowners!

Michele Ashbarry, Owner, Realty Partners

(760) 440-9812

info@realtypartners4u.com  (email)

www.RealtyPartners4U.com  (website)

SELLING HORSE PROPERTIES

 Selling Horse Properties

I have been selling horse properties for many years, and it never ceases to amaze me how grateful my buyers are that I actually know about horses and their needs.  I own a couple of terrific horses myself, so I'm truly familiar with what it takes to have a horse on your property.

Apparently, many agents out there try to sell property to horse owners without even knowing whether or not the property is zoned for keeping horses, much less knowing what sort of accommodations horses actually need.

Knowing what horses need in a property is a real learning experience.  You have to know what type of horse(s) the buyer has, how many there are, if there are stallions, mares, geldings, etc., and what type of riding the buyer does.  Then of course there's the matter of where the buyer will purchase hay, grain, etc. for the horse(s) and how the feed will be delivered to the property. 

One reason for needing to know the type(s) and gender(s) of the horse(s) is simply because some horses need to be kept separate from others.  And as for feed, if there isn't a feedstore nearby, then the horse owner will have to have everything delivered and the cost of the delivery can depend on how far away the horse property is from the point of delivery.  There are many, many other facets of raising and keeping horses, and a good agent should know all of them.

If you are an agent who is interested in selling horse property but who doesn't know much about horses and their needs, I heartily advise you to become well acquainted with various horse owners so that you can learn what you need to know to do a good job for your buyers.

Have fun learning about and then selling horse properties!

Michele Ashbarry, Owner

Realty Partners

(760) 440-9812

www.realtypartners4U.com

Specializing in Short Sales, Divorce Real Estate, Property Management, Residential Real Estate, Land, Horse Property, Ranches

QUESTIONS DIVORCING COUPLES ASK US ABOUT DIVIDING THEIR REAL PROPERTY

Questions DIvorcing Couples Ask Us About Dividing Their Real Property.

My business partner and I are Certified Real Estate Collaborative Specialists-Divorce (RCS-D) Realtors.  This is a specialized certification that is recognized by CAR (California Assocation of Realtors) and NAR (National Association of Realtors). We specialize in assisting divorcing couples in the division of their real property.

Most divorcing couples have no definitive knowledge of the legal aspects of dividing their homes.  As such, they ask us a myriad of questions about the issues of divorce and real property.  Here are some examples of the questions they ask:

"Do we have to split the property equally between us?"

"If I quitclaim the property to him/her, doesn't that mean that I am no longer responsible for it?"

"How can I keep him/her from getting anything out of the property if I sell it?"

"What if I want to keep the property?"

"What if we owe more for the property than it's worth?"

"Can I qualify to purchase another property?"

"What if we want to rent the property instead of sell it?"

"Can't I keep the house and let him/her have the 401K?"

For answers to these questions (and any others you may have), contact Michele Ashbarry and Debi Purcell, Realty Partners, at (760) 440-9812 or via email at: TheDivorceRealtors@cox.net .  We'll be happy to help!

Unreasonable Appraisal Issues During Short Sales

Every once in a while, an appraisal issue comes up that leaves you scratching your head in puzzlement.  On our latest short sale, the appraiser clearly didn't want to bring the appraised value of the property in at the asking price (and, incidentally, the price the buyer was willing to pay).  Even though I provided excellent comps that sold well above the asking price of my listing, the appraiser was somewhat irritable and rushed through his evaluation of the property. 

When the appraisal came back, wonder of wonders - it came in $5,000.00 less than the asking price.  And, to make matters worse, one of the items the appraiser required was for the cement on the back patio to be painted. Yep, the cement had to be painted!  Ridiculous!  As if painting the cement would increase the value of the house.  The buyers requested a re-evaluation of the appraisal, and the appraiser grudgingly agreed to increase the property's value by $5,000.00.  But he stubbornly stuck to his demand that the cement be painted.  And, he wouldn't sign off on the appraisal until he personally verified that the requirement was fulfilled. 

The physical inspector of the property laughed when we told him about it - he couldn't believe that such a thing would ever be considered as an appraisal issue - especially when there was nothing wrong with the cement in the first place! 

Just when you think you've seen it all, something like this comes up!  I guess we've all got to roll with the punches!

How Important Are Home Inspections When Divorcing Couples Are Selling Their Home?

How important are home inspections to a divorcing couple who are selling their home?  Well, if the property is being split as part of the couples' assets, or if one of the spouses wants to keep the house, then a home inspection is vital. 

The divorcing couple needs to know the "true value" of the home - not just the appraised value.  An appraiser does not do a physical inspection of the property, and therefore cannot tell the sellers exactly what is wrong with the property, nor how much the repairs will cost. 

If the couple intends to sell the home and split the assets from the sale of the home, then it makes good sense to do a physical inspection of the property to determine what is wrong with it and how much it will cost to correct the problems.  This is also true when one of the spouses wants to keep the house.  In order to know the true value of the house versus, say, a 401K retirement plan, it makes sense to find out exactly what is wrong with the house and how much it will cost to fix the problems. 

Many attorneys are not cognizant of this course of action, and merely rely on an appraisal to get the "true value" of the home.  Oftentimes, the spouse who is keeping the house will be at a disadvantage because the needed repairs to the home are never determined during the divorce proceedings. 

Realtors who have attained the new credential of RCS-D "Real Estate Collaborative Specialists-Divorce" are aware of this problem and know exactly what to do when this situation arises.  If you have a divorce situation when you are selling a property, it will be to your distinct advantage to obtain the services of an RCS-D Realtor who can best serve your needs. This will show you how important home inspections are to divorcing couples who are selling their home.