Which State Is No. 1 In Foreclosures?

Do you know who has held the No. 1 spot for foreclosures in the United States? It’s Nevada and they have held this title for awhile. While they are still number one Nevada did see a 40% drop in Foreclosure sales in the month of February, this according to ForeclosureRadar.

If Nevada is No.1 how does the rest of the West Coast stack up? Foreclosure sales dropped in Oregon by 32 percent, 22 percent in California, 17 percent in Arizona, and nearly 7 percent in Washington.

Nevada has seen dramatic decreases in its foreclosure sales and filings since the state implemented a new law that says lenders can be held criminally liable for any errors made in the foreclosure process. Other states are considering adopting similar measures.

How Does Your Credit Score Stack Up?

Your credit score matters! A good credit score can get you a better deal sometimes. As a key component in evaluating you as a credit risk, lenders use this information to see if you have missed payments, carry high balances, or are in other ways over extending yourself financially. 

Do you ever wonder how your credit score stacks up? The following categories are a general guideline to borrower creditworthiness (these are general guidelines only – other factors may be included in your credit evaluation and the approval process):

Excellent Credit  Credit scores of 720 and above 

• 5 trade credit lines (credit cards, auto loans, mortgages) each having been open for at least 24 months   
• All accounts have been paid as agreed   
• No public records of bankruptcy, foreclosure, serious past due accounts, or collections within the last 10 years   
• Low current credit balance relative to maximum available credit limit   
• Minimum number of credit inquiries 

Very Good Credit  Credit scores between 680-719 

• 5 trade credit lines (credit cards, auto loans, mortgages) have each been open for at least 24 months   
• All accounts have been paid as agreed   
• No public records of bankruptcy, foreclosure, serious past due accounts, or collections within the last 7 years   
• Low current credit balance relative to maximum available credit limit   
• Minimum number of credit inquiries 

Good Credit  Credit scores between 620-679 

• 5 trade credit lines (credit cards, auto loans, mortgages) have each been open for at least 24 months   
• Most accounts have been paid as agreed, with only occasional late payments   
• No public records of bankruptcy, foreclosure, serious past due accounts, or collections within the last 10 years   
• May have significant current credit balance relative to maximum available credit limit   
• Several recent credit inquiries 

Fair Credit  Credit scores between 580-619 

• 3 trade credit lines (credit cards, auto loans, mortgages) have each been open for at least 24 months   
• Most accounts have been paid as agreed, with only occasional late payments   
• No public record of bankruptcy, foreclosure, serious past due accounts, or collections within the last few years   
• May have significant credit balance relative to maximum available credit limit   
• Several recent credit inquiries 

Poor Credit   Credit scores 579 and below 

• One or more accounts have not been paid as agreed   
• May have had a bankruptcy, foreclosure, serious past due accounts or collections   
• High number of recent credit inquiries   
• Proportion of revolving balances to revolving credit limits is too high 

It’s a good idea for you to check your credit rating to ensure their are no mistakes. If you have questions contact us, 425-330-0663!

How long until you can buy again after short sale, bankruptcy, or foreclosure?

I get this question all the time and I finally got smart and decided to post it here for everyone. These are general guidelines and change often.

2011 FHA Waiting Guidelines

Bankruptcy – You may apply for a FHA insured loan after your bankruptcy has been discharged for TWO (2) years with a Chapter 7 Bankruptcy.

You may apply for a FHA insured loan after your bankruptcy has been discharged for ONE (1) year with a Chapter 13 Bankruptcy

Foreclosure – You may apply for a FHA insured loan THREE (3) years after the sale/deed transfer date.

Short Sale / Notice of Default – You may apply for a FHA insured loan THREE (3) years after the sale date of your foreclosure. FHA treats a short sale the same as a Foreclosure for now.

Credit must be re-established with a 640 minimum credit score

2011 VA Waiting Guidelines

Bankruptcy – You may apply for a VA guaranteed loan TWO (2) years after a Bankruptcy

Foreclosure – You may apply for a VA guaranteed loan TWO (2) years after a foreclosure

Short Sale – You may apply for a VA guaranteed loan TWO (2) after a short sale, unless it was a VA loan then restrictions apply

Credit must be re-established with a minimum 620 credit score

2011 Conventional Waiting Guidelines (Fannie Mae)

Bankruptcy – You may apply for a Conventional, Fannie Mae loan after your bankruptcy has been discharged for FOUR (4) years.

Foreclosure – You may apply for a Conventional, Fannie Mae loan SEVEN (7) years after the sale date of your foreclosure. Additional qualifying requirements may apply,

Short Sale / Deed in Lieu of Foreclosure – UPDATED 12/16/11 Currently treated the same as a foreclosure with a waiting time of SEVEN (7) years before you can buy again using a Fannie Mae conventional home loan.

TWO (2) Years up to Maximum 80% Loan to Value | 20% Down Payment

FOUR (4) Years up to Maximum 90% Loan to Value | 10% Down Payment – Subject to Private Mortgage Insurance underwriting guidelines.

SEVEN (7) Years above 90% Loan to Value | with less than 10% Down Payment – Subject to Private Mortgage Insurance underwriting guidelines.

Credit must be re-established with a minimum 660 credit score.

Fannie Mae has reduced waiting periods in cases of extenuating circumstances – The death of a primary wage earner seems to be the only one I have been able to identify up to this point.

Preparing to Buy Again after Bankruptcy, Short Sale or Foreclosure

You should begin looking at your credit at least six (6) months before you are ready to buy again.

Quite often there are things left over on your credit report that can delay your ability to qualify.

With a little head start and good advice, you can get your credit in line, qualify for financing and buy again in the lowest priced real estate market that we’ve seen in years!

We specialize in helping people make sense of Distressed Selling so feel free to drop me an email, call/text anytime.

Buy A Home With Less Than 20% Down

It seems to be the common perception that if you want to buy a home in today’s market, you need to put at least 20% down. We are happy to say that is not always the case!

Fortunately, for many home buyers, there are many exceptions to this rule. Lending Tree recently released a study claiming that the average U.S. mortgage down payment is about 12.25%.

The following scenarios may allow you to purchase a home for less than 20% down.

FHA Loans

FHA loans are the most popular low-down-payment mortgage loans. FHA loans allow down payments of as little as 3.5%. FHA mortgages traditionally have a clientele of mostly lower-income homebuyers and first-time homebuyers. However, they have become extremely popular since the subprime mortgage crisis as an option for a low-down payment home loan.

VA mortgages

The primary remaining source of no-money-down mortgages is the Veterans Administration through a VA home loan. To qualify, you typically have to have either served or be currently serving in the military.

Certain nonmilitary persons can qualify for VA mortgages also, including certain surviving spouses of veterans, officers of the Public Health Service or National Oceanic and Atmospheric Administration.

Conventional mortgages

With as little as 5% to 10% down, you may still be able to get a conventional or standard mortgage. Fannie Mae or Freddie Mac backs these loans, and they generally require better credit than the programs mentioned above.

A lender will be more likely to approve you for a mortgage with only 5% down if you’re buying a home in a local market where real estate values have been relatively stable.

Fannie Mae’s Homepath

Fannie Mae’s Homepath program is a low-down payment program that doesn’t required mortgage insurance. Homepath is Fannie Mae’s program for selling foreclosed properties that have come into its inventory. Homepath mortgages require only 3% down, there’s no requirement for mortgage insurance, and you can borrow up to an additional $35,000 for necessary renovations and repairs.

Credit standards remain high for Homepath mortgage loans.

Keep in mind that if you choose a low-down payment program and put down less than 20% down, your interest rate may be higher and in many cases, you’ll have to pay some sort of mortgage insurance.

To discuss mortgage loans options and whether a low-down-payment loan is right for you, give me a call at 425-330-0663.

Step Outside The Box When You Remodel This Room!

One of the most dreaded chores around the house is laundry. Maybe that’s why when selling a house, the laundry room is one of the most forgotten areas to get in shape. The machines are often dusty, with detergent dripping down the sides and lint and old socks on the floor. Yuck!

Yet it’s an area that doesn’t take too much time to clean and can really make a difference when showing your house to prospective buyers.

The easiest way to make a statement with a laundry room is by adding more energy-efficient washing machines and dryers. Recent statistics by the U.S. Department of Energy show that installing machines with the ENERGY STAR label will decrease water costs by up to 50 percent. There are also machines that automatically adjust the water temperature and the amount of water used for each load to prevent excess and waste.

Many new models are available with designer colors, pedestals and sleek designs, which can make a bold statement. When purchasing a new washer, you’re also going to need to choose between a front- or top-loading machine.

While a top-loading machine requires enough water to cover all the clothes in its drum, a front-loading washer needs only a third of that amount because its drum is set horizontally in the machine. It requires less water and allows for larger loads, and it looks great.

On the downside, a front-loading washer is more expensive and can develop mold because it doesn’t empty dirty water as efficiently as a top-loading machine.

When it comes to dryers, new sensor technology is the rage. Dryers with moisture sensors recognize when laundry is dry more quickly than traditional machines and shut down sooner. This saves energy, cash and wear and tear on your clothing.

The use of steam washers and dryers for greater energy and water efficiency is also a growing trend. Steam machines offer enhanced clothing-care options such as short, steam-only cycles that help to reduce wrinkles and remove odors from clothing without using water and detergent.

Laundry rooms used to be relegated to the basement, but today moany of our clients are finding space for washers and dryers in more convenient areas of the house like the kitchen or upstairs, near bedrooms. Housing experts agree that installing a laundry nook will raise the value of a home, and make it more convenient as hauling baskets of clothing up and down flights of stairs become a thing of the past.

I say anything that improves the task of laundry is a good thing!

Great News for Veterans!

We like working with Veterans, I’m a Veteran and anytime we can pass on a great deal to those that have served our country I’m excited!

Did you know home loans guaranteed by the Department of Veterans Affairs continue to have the lowest serious delinquency and foreclosure rates in the mortgage industry. Veterans have also taken advantage of their home loan benefit in record numbers, as VA loan originations reached their highest total in eight years.

“The continued strong performance and high volume of VA loans are a testament to the importance of VA’s home loan program and a tribute to the skilled VA professionals who help homeowners in financial trouble keep their homes,” said Secretary of Veterans Affairs, Eric K. Shinseki.

Last year, VA helped 72,391 Veterans and Servicemembers who were in default on their mortgage loan retain their homes or avoid foreclosure, an increase from 66,030 from the prior year. At the same time, foreclosures on VA guaranteed loans dropped by 28 percent.

According to the Mortgage Bankers Association National Delinquency Survey, VA’s foreclosure rate for the last 14 quarters and serious delinquency rate for the last 11 quarters have been the lowest of all measured loan types, even prime loans.

In fiscal year 2011, VA guaranteed 357,594 loans, an increase of nearly 14 percent over last year. There are currently over 1.5 million active VA home loans. The program makes home ownership more affordable for Veterans, active duty Servicemembers, and eligible surviving spouses by permitting no-downpayment loans and by protecting lenders from loss if the borrower fails to repay the loan.

Much of the program’s strength stems from the efforts of VA employees and loan servicers nationwide, whose mission is to ensure all Veterans receive every possible opportunity to remain in their homes, avoid foreclosure, and protect their credit from the consequences of a foreclosure.

“We are committed to making even more Veterans and Servicemembers aware of this important benefit and delivering the assistance they deserve when financial difficulties arise,” said VA’s Under Secretary for Benefits Allison A. Hickey.

For Veterans and Servicemembers who have trouble meeting their mortgage obligations or anticipate problems in the near future, VA first recommends contacting their loan servicer.

Depending on the situation, VA’s loan specialists can intervene on a Veteran’s behalf to help pursue home-retention options such as repayment plans, forbearances, and loan modifications. Veterans and Servicemembers can also call VA toll-free at (877) 827-3702 to speak with a VA specialist concerning foreclosure avoidance.

Veterans may obtain a certificate of eligibility and sign up for eBenefits through the web portal at www.ebenefits.va.gov. The Department of Defense and VA jointly developed the eBenefits portal as a single secure point of access for online benefit information and tools to perform multiple self-service functions such as checking the status of their claim.

Servicemembers may enroll in eBenefits using their Common Access Card at any time during their military service, or before they leave during their Transition Assistance Program briefings.

Veterans may also enroll in eBenefits and obtain a premium account by verifying their identity in-person at the nearest regional office or online depending on their status, or calling VA’s toll free number at 1-800-827-1000.

Since 1944, when home loan guaranties were first offered under the original GI Bill, VA has guaranteed more than 19.4 million home loans worth over $1.1 trillion. To obtain more information about the VA Home Loan Guaranty Program, please visit the program’s home page at www.benefits.va.gov/homeloans.

I’m a Veteran and I’d love to help other Veterans so call me, 425-330-0663!

Distressed vs Non-Distressed Properties

According to the latest information available, the price discount for distressed property relative to non-distressed property is in the neighborhood of 15 to 20 percent.

What does this mean to you?

On average, non-distressed property is basically a different market from distressed sales. We always caution our clients interested in non-distressed properties to have realistic expectations when comparing prices to distressed properties.

Relax, things are getting better!

Americans’ concerns over housing and the economy are subsiding. This good news is from Fannie Mae’s National Housing Survey from February. There are a few reasons this is happening:

A improving job market is a big part of what’s behind Americans feeling more confident about the housing market. “The pickup in the pace of hiring over the past few months has helped soothe consumer concerns, lifting their moods regarding their personal finances, the direction of the economy, and their views on the housing market,” says Doug Duncan, chief economist of Fannie Mae. “As a result, we’ve seen more potential for economic upside, creating a more balanced near-term outlook.”

The survey found that 28 percent of Americans expect home prices to increase over the next 12 months while 53 percent say prices will likely stay the same. Fifteen percent say they expect home prices to decline.

Meanwhile, the majority of those surveyed see rental prices continuing to increase over the next year.

Sixty-five percent of those surveyed say that if they were going to move they’d buy their next home; 29 percent say they would rent.

With low mortgage rates and falling home prices, 70 percent of those surveyed say now is a good time to purchase a home. Also, more Americans surveyed say now is a good time to sell, rising to 13 percent in February, which is the highest level in more than a year but still low by historic standards.

Overall, Americans expressed more confidence about their personal financial situation, with only 12 percent saying they expected their personal financial situation to worsen in the next 12 months — which is the lowest number in more than a year.

This is all good news. If you are looking to buy or sell give me a call 425-330-0663.

How can one man lift a big rock?

How can one man lift a big rock?  Why does Donald Trump win so often in high-stakes negotiations?  How can you buy five income producing properties with very little of your own money?

You’ve heard me talk about it often.  It’s leverage.  Let’s take a quick look at why the concept of leverage is so crucial to growing wealthy. Leverage is the ability to use a small amount of your own money to control an asset of far greater value. For example, when you put down 20% on the purchase of a single family residential home, you are essentially using the bank’s money to extend your own buying power.

Assume that you have $100,000 cash to invest. You could find a $100,000 house and purchase it outright. A better idea would be to find five single family residential properties each costing $100,000. Rather than plow all your resources into one property, put down 20% on all five, let the bank loan you the rest, and suddenly you have a portfolio of five income producing properties.

If you’ve done your homework and chosen appropriate deals that provide positive cash flow immediately, you’re sitting in the proverbial catbird seat. Later, you’ll refinance all five loans in seven to twelve years and use the resulting proceeds to buy as many properties as you have the down payments to afford. You should NEVER pay off your loans, but rather frequently refinance into more and larger real estate deals.

Here’s the reality of this type of investing. You use other people’s money (OPM) to buy assets that you will eventually own. Along the way, you also use OPM to cover the monthly expense of your investment, which is the mortgage payment. How do you do this?

By renting the place out! Assuming the deal is right, which it should be when you do your homework, a tenant’s monthly rent payment should cover the mortgage, all associated expenses, and still leave you with a little cash in your pocket. This is called positive cash flow.

Here’s the bottom line. There is no other asset which allows you to rent it out! Don’t try this in the precious metals market or on Wall Street. They’ll laugh you out of the place.

Let’s grab a cup of coffee and discuss the how investing can help you with your wealth goals!  Call me anytime at 425-330-0663.

Book em danno

Our team is always looking for tools and resources that will help our clients make informed decisions in home buying. Now you can see what crime is like in that area you’re thinking about living in with Trulia’s Crime Map.

Drawing from three data sources, Crime Map starts with a national view for cities with available data, and then zooms into specific areas. Darker red areas and larger circles on the maps indicate more incidents, whereas green areas and smaller circles represent the opposite.

Click on regions or the scaled circles to see details on individual crimes during the past year.

This is good stuff and very useful for both home buyers and sellers.  For example, if you are thinking of selling your home, check out the crime stats in your area.  You’ll see what buyers are seeing when it comes to crime.

And then there’s the little things like permalinks for locations, filtering by crime type, quick zooms to locations with the most crime, and discussion pages. It’s that little bit of awesome sauce that makes for an extra informative application.