by Brandon Brittingham
In an attempt to help more consumers who are facing foreclosure, Chase has streamlined their requirements in order to expedite their short sale process. We will cover the basics on the process and timeline in this post. Chase will let you start the short sale process prior to having an offer on your property. However, in order to start the process, you have to show a legitimate financial hardship; meaning your financial picture has changed since you have taken out the loan.
Here are examples of what most lenders and investors accept as hardships:
Hardships that Qualify for a Short Sale:
1.Loss of employment
3.Damage to the property (could have been under insured)
4.Death of a Spouse or wage earner
5.Death of a non-wage earner. For example, a family member who was watching the seller’s children and now the seller has to pay to put the children in child care; or they were a financial contributor even though they weren’t on mortgage.
7.Inheritance (inherited an underwater property, cannot pay taxes etc…)
11.Payment increase or mortgage adjustment
12.Insurance or tax increase
14.Too much debt vs income
16.Combination of above
These are all pretty self-explanatory but you need to remember that, whatever the hardship, it has to be documented and provable. If there is an income change, you will need to document it to the lender via pay stubs and tax returns; if it is an illness, you will have to provide medical records; divorce – you have to show the divorce decree. Regardless of the hardship, the more information you provide to support the claim the easier it is to show the bank there is a true hardship.
The very first step in the short sale process with Chase is to gather all of the documents needed for the short sale package. You can go directly to their website to download the package and get information on what you need. You can get it here:
You cannot start the short sale process with Chase until they receive your financial package. To perform a short sale with Chase, you will also have to list the property for sale. You should have most of your financial package together when you are ready to list your property to avoid any time delays.
Once Chase has your package and you have it listed, they will verify that you qualify for a short sale and they will set you up with a “list assist professional” that will work with your agent to order a valuation on your property and verify all documents throughout the process. The list assist professional will inform your agent of the value range once it is received and will work with your agent until you receive an offer. It will then be assigned to a negotiator who will review the actual offer.
Here is some information on timelines based on who the investor of the loan is (meaning who actually owns the loan). Please note that these timelines are based on the time it will take after the bank has received a complete package from you.
Timelines based on investor for contract and short sale approval:
•FHA backed mortgage 45-60 days from receipt of complete offer
•Fannie-Freddie backed 60 days for approval
•USDA 60-75 days for approval
•VA 60-75 days for approval
•Portfolio owned (meaning Chase owns the loan) 45-60 days (these are closer to 45 days as Chase does not have to get approval from the investor when they can make the decision in-house).
In order to meet these timelines, it is important that you and your agent start the short sale process prior to having an offer so that:
1.Your documents can be reviewed
2.Your eligibility can be determined
Both of these steps have to take place whether or not you have an offer. Chase, like Wells and Bank of America, will review a borrower for short sale eligibility prior to having an offer on the property. For the best results get your package organized early in the process and submit it right away!
About The USDA / Rural Housing Mortgage
If you’ve never heard of the USDA loan program, you’re not alone. It’s a niche product serving a fraction of the U.S. housing market, and most banks don’t offer them.
The program’s full name is the USDA Rural Development Guaranteed Housing Loan program. Most people call them “USDA loans”, “Rural Housing Loans” or “Section 502 loans”.
USDA loans are insured by the U.S. Department of Agriculture and their biggest feature is an option for “no money down” financing. Via the USDA, you can finance 100% of a home’s purchase price.
USDA loans are the same as most other mortgages in that they don’t have “crazy payback schedules” or come with prepayment penalties. Furthermore, program guidelines are semi-loose as compared to conventional programs via Fannie Mae and Freddie Mac, for example.
Rural loans can be used by first-time buyers and move-up buyers, too. Homeowner counseling is not required.
USDA Loan Guidelines : Rural And Suburban Mortgages
In 2012, in changing its Rural Housing program, the U.S. Department of Agriculture took a page from the book of the Federal Housing Administration (FHA).
Formerly, the loan program was taxpayer-subsidized. Today, however, it’s self-funded. To remain free of taxpayer-subsidy, then, the USDA chose to change the way it charges its borrowers mortgage insurance.
Effective October 1, 2012, USDA mortgage insurance rates moved to :
•For purchases, 2.00% upfront fee paid at closing, based on the loan size.
•For refinances, 2.00% upfront fee paid at closing, based on the loan size.
•For all loans, 0.40% annual fee, based on the remaining principal balance.
So, for example, a $100,000 loan size, would require a $2,000 mortgage insurance payment at closing, and $33.33 of mortgage insurance paid monthly.
These mortgage insurance rates are much less costly than the the FHA’s mortgage insurance premiums, which charge 1.75% upfront and as much as 1.55% annually. Furthermore, USDA mortgage rates are often below those from other government agencies.
Summarizing The USDA / Rural Housing Mortgage Program
The USDA loan guidelines are straight-forward. You must qualify for the program and your home must, too. Here are some common USDA mortgage questions.
How do I check if my home is USDA / Rural Housing-eligible?
With the USDA Rural Housing Program, your home must be located in a rural area. However, the USDA’s definition of “rural” is quite liberal. Many small towns meet the USDA requirements, as do suburbs and exurbs of most major U.S. cities.
What is the USDA program’s minimum downpayment?
The USDA has no downpayment requirement. You can finance 100% with a USDA loan.
Is the USDA loan program limited to first-time buyers?
No, the USDA Rural Housing Program can be used by first-time buyers and repeat buyers.
Can I finance the Upfront Mortgage Insurance into my mortgage?
Yes, the USDA will let you finance your Upfront Mortgage Insurance payment into your loan size. For example, if you bought a home for $100,000 and borrowed the full $100,000 from your lender, your Upfront Mortgage Insurance would be $2,000. You could then raise your loan size to $102,000.
What mortgage products are available with a USDA mortgage?
The USDA / Rural Housing Program offers 30-year fixed rate mortgages only. There is no 15-year fixed rate mortgage. There are no adjustable-rate mortgages. 30-year fixed only.
How much are the closing costs for a USDA mortgage?
Closing costs vary by lender and location. For example, some lenders have high origination charges. Others do not. The same is true for state and local governments. Some states have high costs, others have low costs.
I can’t afford closing costs. Can I get a gift for my closing costs?
Yes, USDA loans allow gifts from family members and non-family members. You will need a gift letter to accompany your loan application. Your loan officer can give you one. If you don’t have a loan officer, get today’s rates here.
I negotiated to have the seller pay my closing costs. Is that allowed?
Yes, the USDA Rural Housing Program allows sellers to pay closing costs for buyers. These costs can include state and local government fees, lender costs, title charges, and any number of home and pest inspections.
Can I use the USDA loan program for a vacation home?
No, the USDA Rural Housing Program is for primary residences only.
Can I use the USDA loan program for an investment property?
No, the USDA Rural Housing Program is for primary residences only.
Is there a minimum credit score for the USDA loan program?
There is no minimum score, per se, but 640 is generally regarded as a cutoff point. If your FICO is below 640, you should be prepared to explain why your credit score is below 640, and provide documentation. If you are without a credit score, your lender may accept “alternate” tradelines to establish credit history.
I recently went back to work. How long until I am USDA-eligible?
If you are a W-2 employee, you are eligible for USDA financing immediately; you don’t need a job history. If you have less than 2 years in a job, however, you may not be able to use your bonus income for qualification purposes.
I am self-employed. Can I use the USDA loan program?
Yes, self-employed persons can use the USDA Rural Housing Program. If you are self-employed and want to use USDA financing, as with FHA and conventional financing, you will be asked to provide 2 years of federal tax returns to verify your self-employment income.
Can I do a “cash out” refinance with the USDA program?
No, the USDA Rural Housing Program is for purchases and rate-and-term refinances only.
Can I use the USDA loan program for my working farm?
No, the Rural Housing Program is for residential property.
Are USDA mortgage rates good?
Yes, USDA Rural Housing Program mortgage rates are often as low as comparable conventional 30-year fixed mortgage rates. And because mortgage insurance rates are lower, with a small downpayment, U.S. Department of Agriculture loans can often be a better deal.
by Dan Green
The 14 Best Housing Markets For The Next Five Years
Mamta Badkar|May 20, 2013
National home prices are down 29.1% since their Q1 2006 peak.
But over the next five years they are expected to rise 3.9%, according to the latest CoreLogic Case-Shiller report.
We drew on the latest data to identify the best housing markets for the next five years.
The top 15 cities are ranked by the projected annualized change in home prices between Q4 2012 and Q4 2017.
We also included the median home price , median household income, unemployment rate, and the change in home prices since their peak, to offer a broader view of the local economy and housing market.
Note: The median family income and home price is for Q4 2012. Unemployment data is as of February 2013, and population data for the metros is for 2011.
9. Tucson, Arizona (tie)
Annualized expected growth from Q4 2012 – Q4 2017:
Tucson’s home prices have plunged 38.6% since their Q1 2006 peak. The metro has a median home price of $172,000.
It has a population of 989,569, a median family income of $58,100, and an unemployment rate of 6.8%.
Data provided by CoreLogic Case-Shiller Indexes
Read more: http://www.businessinsider.com/best-housing-markets-for-five-years-2013-5?op=1#ixzz2UEB4G8V3
Online, you can find dozens and dozens of return-on-investment (ROI) calculators which aim to do the math on whether a given home improvement project is worth the money (or not). They tend to focus on how much of the remodeling spend will come back to you in the form of added value when the home is sold. I submit that this is only one part of the equation, as the primary measurement for many home improvement projects should be tallied up in terms of lifestyle improvement over the years you plan to benefit from the increased comfort, joy or efficiency of your newly-improved home.
Surprisingly, this calculus of what home upgrades are (and aren’t) worth doing gets slightly more complicated in the context of preparing a home for sale. It seems like it should be even more simple – dollars in vs. dollars out. But most agents or stagers will tell you that preparing a property for listing is more art than science, in that there are many human factors that must be weighed and balanced against the costs involved.
For instance, whether a given project is worth doing sometimes depends on the current state of the property vis-a-vis local buyers’ expectations at that price range. It can also depend on the relative aesthetic and perceptual boost that a particular project promises, and on any negatives that the property needs to compensate for. The seller’s budget and even local municipal codes all must be factored in.
Accordingly, there’s no single set of black-and-white rules that apply to every property and every seller. But here are some rules of thumb and food for thought that you should walk through with your agent or stager if you’re in the process of trying to figure out which tasks to do – and which to leave for your home’s next owner – before you put your place on the market.
FIX: Paint. There is simply no accounting for the massive upgrade a fresh coat of paint can bring to the look and feel of your home, inside and out – especially given the relatively low cost and high do-it-yourself-ability of painting. A home that is freshly painted inside and out reads as fresh, clean and ready for new life, from a buyer’s perspective. A taupe wall with white trims and moldings has essentially become the new white wall of this generation – the aim is to go neutral, not boring.
If you can’t afford the time or cost to paint everything, take a hard look at your walls and rooms and see which hallway or room(s) need it the most. Also, painting your trims, doors and moldings can go a long way toward de-shabbifying a place. Similarly, on the exterior of your home, I cannot overstate the polish potential of painting the trims a bright or deep, color. Changing the color and refreshing the paint on your exterior shutters, doors and eaves gives a powerful update and burst of color to the place.
Check in with your stager and agent about your color palette for any pre-listing paint projects before you have the hardware folks mix up a vat of chartreuse semi-gloss for the kitchen walls.
DON’T FIX: That uber-luxe kitchen remodel you always wanted. Do gorgeous kitchens sell homes? Yes. But they also easily run into the tens of thousands of dollars. Unless your home’s existing kitchen is truly cringe-worthy, a high-end overhaul just before listing is not likely to even recoup what you spend on it. I advise sellers who are hemming and hawing about a kitchen remodel to do it while they and their families can still enjoy it. If you’ve already decided to move on from the home and the kitchen is so bad as to render the place un-sellable, your agent and stager can help you come up with a moderate plan for whipping it into shape without breaking the bank. Repainting or refacing cabinets (instead of replacing them), installing butcher block counters (vs. marble or stone) and replacing your avocado green appliances with nice GE or Kenmore versions (vs. Wolf and Miele) might be the route to go.
Caveat: if your home is competing with luxury properties and you insist on listing it at top dollar, you might actually have to go with a higher-end kitchen upgrade plan before you list it. Think long and hard about whether this make more sense than simply discounting the property or offering a kitchen upgrade credit to the buyer.
FIX: Plumbing problems. Plumbing leaks make noise, cause damage to the wood structure and areas around them and are often believed by buyers to cost more to fix than they actually do. In some parts of the home, plumbing leaks are prone to being called out as conditions conducive to long-term structural problems by pest and structural inspectors. If you can have a handyman or plumber come in and eliminate drips and leaks, you will simultaneously eliminate some buyers’ objections or concerns about your home.
And this goes for sewer line issues, too. An increasing number of areas are now requiring that the sewer line from home to the sewer main in the street be inspected before or during a home’s sale – and be repaired or replaced if it is cracked or broken. If you’ve had chronic backups or your home’s sewer line is simply due for an inspection, work with your agent to get the appropriate inspector out there now to get an understanding of what sewer line work will need to be done to comply with any local point-of-sale ordinances.
A new sewer line is a great draw for a buyer, as is one with a clean bill of health. If your line does need work, you and your agent might decide not to repair or replace it, based on your budget, how much of a seller’s market your area is currently experiencing, legal requirements and standard practices in your area. But you should have the state of the sewer line in mind, for better or for worse, before you set the list price for your home and begin preparing your disclosures for prospective buyers.
DON’T FIX: Malfunctioning, costly appliances. Consider offering a credit for the buyer to use to replace appliances that don’t work – or don’t work well. Buyers appreciate the ability to select their own new appliances on your dime. That said, it can be difficult for some buyers to get past the collective aura of bad repair that arises when a home has a whole host of really old or beat up appliances. In some cases, it might even make sense to simply remove an appliance entirely, without replacing it at all. In others, a replacement or a credit might make more sense – this is a topic for discussion with your listing agent, who should have a good understanding of what’s normal in your area and important to local buyers.
If you do decide to replace an appliance, consider resources like Craigslist, where you might be able to find used items in good repair at a fraction of the new cost.
Caveat: if you are in a price point or area where the average buyer uses an FHA loan to finance their home, there are certain appliances which must be in the home at closing, like a functional stove. Discuss with your agent before you start ditching the old appliances.
FIX: Old and outdated hardware, fixtures and finishes. Hardware can refer to the little metalworks that make things work (or not) throughout your home, like hinges that make a door hard to close, cabinet and drawer handles and pulls or your closet door and drawer slides. These are all the sorts of things buyers test out while they’re viewing a home. However, it also includes things that might work fine, but look outdated, like light switches, door knockers and kick plates. Hardware, as a general rule, is inexpensive as home fixes go – if it will make your home function more smoothly and look like it’s been well cared-for, the low investment is well worth an upgrade.
Scuffed and scratched wood floors; 80’s era carpet, gold-plate lighting and faucet fixtures and even more recent upgrades that have seen better days (e.g. bowing and warped laminate floor sections) should all go on the list of finishes and fixtures to fix or replace before you list. All cracks, chips, scuffs and nicks should go on the list, for that matter.
The rationale is the same: they are a highly cost-efficient fix vis-a-vis the big bang they make on your home’s appearance to buyers.
DON’T FIX: Replacing old windows. This is a project that many crave to do, especially if the windows are single-pane, aluminum framed, or involve rotten wood casings. But it’s also a project that can easily become extremely expensive, and one that often snowballs into costly, time-consuming framing repairs. Aluminum frames around windows can sometimes be spruced or painted to make them look at bit better, if absolutely necessary. And even old wood windows that have issues often create a generally charming feeling that helps a buyer see the home’s potential they can restore, better than if you replace it with inexpensive fiberglass windows before listing the place for sale.
This advice is primarily for those tempted to replace a whole house worth of windows – if you have one window that is particularly offensive or allows water in, or even have multiple window panes that are cracked or broken, these are things you might want to repair or replace. Your agent can help you make a suitable action plan on this score.
By contrast, if you have old, dinged, ugly or broken doors, toilets and sinks anywhere in your house, these are things you may want to rip out and replace before listing your home. You might be amazed at how fast and inexpensively these fixes can be done, and how much of a stylistic upgrade and update you can get out of them.
Recent Sellers: What fixes did you do before you listed your home? How did that work out, in the end?
Agents: What other fixes do you recommend sellers-to-be do – or refrain from doing? Why?
by Tara-Nicholle Nelson
Are you hearing that it’s “a great time to buy a home” from your REALTOR®? Based on the evidence, the old maxim may be right..
Lifetime-low mortgage rates and still-cheap home prices have rendered U.S. homes more affordable than at any time in recent recorded history. Home affordability is high nationwide.
If you plan to buy a home in 2013, the best time to buy a home may be today.
Low Rates Put Homeownership Within Reach
Each quarter, the National Association of Homebuilders (NAHB) measures the median household income of 225 metropolitan areas nationwide, and maps those findings against each respective areas’ median housing costs.
The result is what’s called the Home Opportunity Index (HOI), a quarterly report of home affordability nationwide.
The Home Opportunity Index makes a few assumptions. First, it assumes a 10% downpayment by the buyer. Second, it assumes that mortgage rates are equal to a weighted average of the quarterly fixed- and adjustable-rate mortgages. And, lastly, it assumes that a home buyer’s monthly housing payment won’t exceed twenty-eight percent of the area monthly median income.
Using these values, the NAHB Home Opportunity Index found that nearly 3 in 4 U.S. residents could “afford” to buy a home.
The Q1 2013 reading of 73.7 marks the 17th straight quarter during which home affordability topped 70%, dating to early-2009. Affordability has been boosted by low mortgage rates and low home prices, as well as an increase in the jumbo loan limits for FHA, VA and conventional mortgages.
A Home Buyer’s Last Chance For Cheap Housing?
In 2007, the economy took a beat-down. Home prices sunk and mortgage rates lowered from 7.00 percent and into the 3s.
Today, though, the economy mends. More than 5.3 million jobs have been added back; home prices are rising in many U.S. markets; and consumer spending is on the rise. Home affordability is among the lingering effects of last decade’s recession. Soon, however, homes won’t be so affordable.
If you plan to buy a home in 2013 or 2014, consider moving up your timeframe. Beyond the cliché, it really is a good time to buy. Get started by seeing how much home you can afford. Get a rate quote online and start to build your budget.
by Dan Green