Atlanta Real Estate Blog

Top 10 Short Sale Questions
March 24th, 2008 8:21 PM
 

Top 10 Short Sale Questions…

#10:  I can’t make my house payments, but I do have an ability to pay back all or part of the negative equity.  If  I want to preserve my credit score, is a short sale right for me?

Answer: Probably, not. In cases where the seller can pay back all or part of the negative equity (usually to the 2nd lien holder), it makes sense for them to work out a repayment plan.  The lender will then release the lien and allow the home to close.

 

#9: If I pay mortgage insurance and default on my loan, why wouldn’t my mortgage insurance cover the deficiency amount?
Answer: Mortgage insurance protects the lender against loss when a borrower defaults on a loan.  Mortgage insurance does not protect you, the borrower, at all.

#8: Do I have to have my home ‘Approved’ by the lender prior to offering it for sale as a short sale?
Answer: No. Technically speaking there is no such thing as being ‘Short Sale Approved’.  The actual approval only happens when the lender accepts a short sales offer from a buyer.

#7: I just missed a payment and I expect I will miss more, how long does the foreclosure process take?  Is there time to do a short sale?
Answer: The time required to complete the foreclosure process differs by state.  For example, in the Midwest, a foreclosure can take over a year.  By contrast, a California foreclosure may take more than 6 months.  In general, a well priced short sale being processed by an educated short sale listing agent will sell and close in less than 120 days.  Due to the time frame required to complete a short sale, the sooner you contact a real estate agent qualified to do a short sale, the higher the likelihood that you will avoid foreclosure.

#6: Will I still have to pay property taxes if I do a short sale?
Answer: Property taxes will always have to be paid as part of any accepted short sale.  Whether it’s you or the lender depends on their policies and the specific agreement you reach while negotiating the short sale.

#5: I owe more than my home is worth and I can’t make the payment.  Do I have to somehow qualify for a short sale?
Answer: The simple answer is NO.  If a borrower can’t make the payments and is otherwise insolvent, the borrower qualifies for a short sale.  Note: insolvent simply means their total debts are greater than their assets.

#4: Will I have to pay income taxes on the debt forgiven by the lender?   I have heard that I will get a 1099 from the lender.  Will the loss the lender takes be treated as a taxable gain to me, the seller?
Answer:  It WAS true.  Now it is not.  Consult your own Tax Attorney or Qualified CPA.  Very recently the tax law was modified and now most people who do a short sale will not have any tax liability.

#3: How does my listing agent get paid?  Who pays the agent's commission?
Answer: The lender pays the agent's commission along with all the other usual closing costs.  Lenders require that the borrower use a real estate agent to list the home as a condition of the short sale.  The lender wants validation that a real estate professional is actively engaged in marketing the  property.  Attempting to sell your property as a For Sale By Owner is not sufficient.

#2: Do I have to miss a payment to do a Short Sale?
Answer: No. Late last year most major lenders started accepting short sale offers from sellers who have never missed a payment.

#1: I want to do a short sale, but I have a 2nd mortgage.  Does this make me ineligible for a short sale?
Answer: No. Both of your lenders will need to be satisfied in some way to complete the short sale.  If your first lender will be paid off by the sale, then you just negotiate the terms with the second lender.  Most short sales do involve both the 1st and 2nd lien holders.

 

Tags: short sale, foreclosure, For Sale By Owner, forgiven debt, 1099, IRS, time for foreclosure, foreclosure process, negative equity, deficiency amount, 1st lien, 2nd lien, borrower default, 2nd mortgage, property tax, commission, notice of default, mortgage insurance


Posted by Lee Marlin on March 24th, 2008 8:21 PMPost a Comment (0)

Just Listed! 3097 Kirk Ct NW Kennesaw, GA 30152
March 17th, 2008 9:29 PM
Header
Header_2
Listings Photo
$215,000.00
3097 Kirk Ct NW

Kennesaw, GA 30152



Beds: 4.0 Rooms: 4
Baths: 2.00 Sq. Ft.: 0
Garage: 2.0 Built: 1974
 

This is a new listing that
I thought you might be
interested in. Visit this
listing online to see more
photos of the property,
Google Earth satellite
images, and much more.
 

If you have any questions
about this property or
require more information,
please feel free to call.

Lee Marlin
Lee Marlin-Atlanta Short Sales
404-384-2274
www.atlshortsales.com



 
  Visit this listing at Here

Posted by Lee Marlin on March 17th, 2008 9:29 PMPost a Comment (0)

FHA Raises Loan Limits
March 8th, 2008 7:40 PM

Potential Buyers AND Sellers

The FHA loan limit is now higher for metro Atlanta!  The single family loan limit for metro Atlanta is now $346,250.

 Here are some reasons FHA financing may be right for you:

  • Competitive interest rates (30-year fixed rate mortgages are right around 6.25%; ARMs around 5.00%)
  • Credit eligibility is based on the body of credit, not credit score.
  • Some lenders are not declining anyone based on credit score alone, while others require a minimum or 540 or 580 credit score to qualify).
  • FHA is not affected by "Declining market" policies, i.e., 5% or more Loan To Value (LTV) reduction required for properties*.
  • Downpayment assistance is still available through Nehemiah! (Low or No Money Down)

If you are outside of the metro Atlanta area, visit the website below to verify the loan limit for your county. 

 Go to:

                https://entp.hud.gov/idapp/fhagov/hicostlook.cfm.

 

* Mortgage Insurance (MI) companies are now requiring conventional loan limits to be reduced by 5% or more in cases where the appraiser determines that the property is in a declining market.  For example, suppose you have been approved for 100% financing on a conventional loan.  If the appraiser reports any one of the following: 

  • property values are declining, 
  • there is an oversupply of homes for sale, or 
  • marketing time is greater than 6 months, 

you may be required to put down 5% in order to meet the LTV limit reduction requirement.

Tags: FHA, Loan Limit, Mortgage Insurance, no money down, LTV, interest rates, declining market policy, conventional loan, appraiser, Nehemiah, credit score


Posted by Lee Marlin on March 8th, 2008 7:40 PMPost a Comment (0)

Mortgage Rates Surge In February
March 4th, 2008 6:54 AM

Waiting For Mortgage Rates To Go Lower?  Oops!

Freddie Mac reported in its Primary Mortgage Market Survey (PMMS) that 30-year fixed-rate mortgage (FRM) averaged 6.24 percent with an average 0.5 point for the week ending February 28, 2008, up from the previous week when it averaged 6.04 percent.  Last year at this time, the 30-year FRM averaged 6.18 percent.

The 15-year fixed rate mortgage averaged 5.72 percent with an average 0.5 point, up from the previous week when it averaged 5.64 percent.  A year ago at this time, the 15-year fixed rate mortgage averaged 5.92 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs)averaged 5.43 percent, with an average 0.4 point, up from the previous week when it averaged 5.37 percent.   A year ago, the 5-year ARM averaged 5.93 percent.

One-year Treasury-indexed ARMs averaged 5.11 percent with an average 0.7 point, up from the previous week when it was 4.98 percent.  A year ago at this time, the 1-year ARM averaged 5.49 percent

"Long-term fixed mortgage rates trended up for a third week, bringing rates on 30-year and 15-year fixed-rate mortgages backto their levels of last November," said Frank Nothaft, Freddie Mac vice president and chief economist.  "Refinancing activities, which had surged to a 12-month high in January, according to Freddie Mac's monthly refi share report, are likely to ebb following this recent rise in rates."

 

How Much Does A Half Point Rise In Rates Cost Me?

Take a look at the numbers.

You want to buy a home worth $375,000.  You have 20% downpayment ($75,000) and you want to finance the balance (80%).  You have chosen a 30 Year Fixed rate Mortgage. The table below shows the effect on the monthly payment at various interest rates.

 

Interest

Rate

$ per $1000 of Loan Amount per month

Principal &

Interest Monthly(*)

Increase in

Monthly Payment

Increase Over Life

Of The Loan

5.50% $ 5.68 $ 1,704 0 0
5.75% $ 5.84 $ 1,752 $ 48 $   17,280
6.00% $ 6.00 $ 1,800 $ 96 $   34,560
6.25% $ 6.16 $ 1,848 $ 144 $   51,840
6.50% $ 6.33 $ 1,899 $ 195 $   70,200
6.75% $ 6.49 $ 1,947 $ 243 $   87,480
7.00% $ 6.66 $ 1,998 $ 294 $ 105,840
7.25% $ 6.83 $2,049 $ 345 $ 124,200

 

* Only Monthly Principal &Interest are quoted since Private Mortgage Insurance and Taxes depend on the amount financed and on locality.  These figures are for illustration purposes only.  Check with your mortgage lender for their specific fees and expenses that may affect your situation.

 

Punchline

If you have been on the sidelines waiting for mortgage rates to fall and home prices to fall, you may have missed it. 

Call me now (404-384-2274) to discuss what housing opportunities are available to you.  

 

 

Tags: Freddie Mac, Mortgage Rates, ARM, fixed rate mortgages, adjustable rate mortgages, rising mortgage rates,defaults, foreclosures, buying homes, affordability, calling the bottom.

 

 


Posted by Lee Marlin on March 4th, 2008 6:54 AMPost a Comment (0)

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Lee Marlin-Atlanta Short Sales 3730 Roswell Road Suite 150 Marietta, GA 30062
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