Mortgage Anyone? To Dream The Impossible Dream?

Hi Everyone,

   Welcome to another Sizzling Summer Friday!

   Unless you've been living under a rock for the past few years (or you just don't follow the Real Estate Lending market, but if you didn't, I guess you wouldn't be reading this), you know that mortgages and lending has been tight and more stringent as opposed to the pre-housing bubble days.

   In a recent CNN Money article from Les Christie ("Secrets to getting a mortgage with so-so credit"), Christie concurs and says that, "Getting a mortgage can be tough these days -- even people with near-perfect credit have been rejected for loans". Christie points to a conference in which Fed Chairman Ben Bernanke said lending standards for mortgages have tightened so considerably that "the bottom third of people who might have qualified for a prime mortgage in terms of, say, FICO scores a few years ago -- cannot qualify today."

   Is there money to lend? Christie quotes the acting commissioner for the U.S. Department of Housing and Urban Development (HUD), Bob Ryan, who said that mortgage money "is flowing, it's stable, it's tightened from the boom years, but it's there.". "The belief is that you can't get a mortgage at all -- but you can," says Keith Gumbinger, of the mortgage information provider HSH Associates.".

   Christie writes about a loan officer who had a client with a 700 FICO a couple million dollars in assets, and he wanted to refinance. He was rejected! Apparently, his report showed an investment property he could not (housing bust), and had to do a short sale, and that blemish "resulted in an automatic rejection of his refinance application."

   So, are things really that bad?

   "Depends on who you ask", says Brian Willingham, a Loan Officer with FitzGerald Financial Group.

   "Lending has gotten a bad rap lately", adds Christopher A. Potter, a Loan Officer at GuardHill Financial.
  
   "Basically, these days you actually have to be able to afford what you want to buy (and disclose your true income on your tax returns).", says Willingham. Potter adds that now banks, "want to see that you can actually afford it. This is just common sense and will benefit all in the long run.". He also said that it's, "not that difficult assuming that you qualify.", and that people are so used to easy credit standards ("It used to be that all you needed was a pulse to get a loan.", adds Potter).

   Nicole Tucker, a Licensed Texas Real Estate Consultant, says that even though the requirements are tighter that several years ago, "it is not difficult to get a mortgage if a borrower has verifiable and steady employment and decent credit. You do not have to have stellar credit." Willingham continues this point, and agrees that for people with "sufficient, stable income it's a lot of paperwork but it's not "hard" to get a loan.", but adds that if your credit is "poor" and "you don't have a stable work history and stable income, it could be pretty difficult."

   So, on that note - less-than-stellar credit - is FHA still an option?

   In the article from Christie, he quotes Gumbinger as saying that "The FHA is just about as free and easy as it was in the go-go days,". Christie says that the standards are, "flexible and aimed at making mortgage borrowing easier, especially for working-class Americans.". Potter agrees, and says that the "FHA is extremely flexible with credit issues and there are plenty of lenders with "common sense underwriting". Melanie Roussell, a spokeswoman for the FHA, explained that "the agency is willing to overlook a blemish on a credit report -- even a big one -- if other factors are favorable", as written by Christie.

   Tips? Pointers?

   Paul McFadden of The Legacy Group, tells us that the most important thing is "to have all your documentation in order (income and asset information) along with a flexible attitude if letters of explanation need to be written." He summarizes the process as follows; "A borrower needs to work with a great team that would include a loan officer and possibly a realtor to make sure they are approved and their loan closes."

   Have you tried applying for a mortgage? Before or After the Housing Bubble? How was your experience?

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Have a Great Weekend, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #mortgage #loan #credit #refinance #FHA #FICO #HUD #LoanOfficer #RealEstate

Do Banks Really Forgive a Mortgage Balance After a Short Sale?

Hi All,


   I hope you had a great week, and if you're in the bulls eye of the next snowstorm as we are, I ask you to be careful and drive slowly !

   We recently received the same question from a few different people, and we would like to address that question today. We were asked approximately, "how often is a mortgage balance "forgiven" after a Short Sale?". We posed a few related questions to some professionals with quite a bit of experience, and we'll cover each question along with the answers below.

Question #1: "Will the house loan company forgive an outstanding balance after a home is sold on a short sale"

   David Bartels, an agent and a short sale negotiator, tells us that, "Absolutely. This happens almost every time on transactions we negotiate". Greg Cook, a Mortgage Professional, says that, "In a short sale when the balance of a mortgage debt is "forgiven", the lender almost always will issue a 1099 for that amount.", and continues to say that, however, the "the Mortgage Debt Forgiveness Act of 2007, provides for no tax liability on owner occupied properties up to $2,000,000. So while the debt may be forgiven there is no income tax liability." Cook adds that, "Whether or not a lender chooses to pursue a deficiency judgement for that amount is 1) at their discretion (and) 2) subject to state laws, and this can vary from state to state". Robert Nagle, an attorney in Phoenix, says that he has, "represented over 200 homeowners regarding strategic default. In Arizona, due to the anti-deficiency statutes, most first mortgages (purchase money and refi) forgive deficiencies, and certainly purchase money seconds do, too."

Question #2: "Are there any "rules" that say what amount, if any, will be forgiven?":

   Bartels responds and says that, "Each lender has their own guideline they use to determine whether or not to pursue a deficiency balance. They are not disclosed to anyone. Pursuit of deficiency judgment varies widely and is determined by the investor (owner of the loan).". Additionally, he says that, "For the most part the lender you are negotiating with just services the loan. They do not own it and take direction from the actual investor (owner or the loan)."

Question #3: "Do these rules differ from state to state?":

   "Yes", says Bartels, "CA for instance is a no-deficiency state. This means a lender cannot pursue a deficiency on short sales in CA. On Jan 1 this was expanded to include non owner occupied homes. Exceptions are some(times) made if the homeowner took cash out and used it for something other than improvements on the subject home."

Question #4: "Do they differ between a first house loan and a second house loan (i.e. first is paid off, but a balance remains on the second)?":

   Bartels reminds us that, "A short sale cannot occur unless 2nd releases the lien on the property. This is done via the short sale negotiation. There is no circumstance where a short sale could occur, but the 2nd lien holder does not release the lien.". Cook adds that, "Second mortgages are an entirely different game and will depend on lender and state law.", and adds that, "I was on a conference call with the head of loss mitigation (western division) for Bank of America and he said he had not heard of one lender pursuing a deficiency judgment. Reason? "You can't get blood from a turnip" and pursuing the judgment only increases costs to the lender and the former homeowner is likely to BK out of it anyway." Nagle chimes in on the equity second loans, and says that, "The rule of thumb that I feel the lenders are following is 10 cents on the dollar and a full release IF the borrower does a short sale. The gloves come off if the home has gone through foreclosure."

Question #5: "If it is not forgiven, what happens then?":

   Bartels says that the short sale negotiation and the release of lien negotiation are separate, and that, "When we get an approval that is conditioned on a cash contribution or a deficiency, we have a 2nd negotiation to pay the amount or pay an amount in exchange for no deficiency judgment. There are several ways to do this. We have been successful 100% of the time eliminating deficiency judgements post short sale for our clients so far." Cook says that, "In California, there is no deficiency judgment allowed on owner occupied properties for the loan used to purchase or renovate. As of today, refinanced loans may still be subject to deficiency judgment, but that is likely to change once the new legislature gets their feet under them (it passed in the last session but was vetoed by the Governator)."

   Overall, if you are facing a short sale as an option, it is important that you speak with your mortgage company (all of them), obtain approval for the short sale, consult an agent and also a Real Estate attorney. Make sure you have a plan from A to Z in place before setting it in motion.

   Have we missed anything? Comments? Suggestions?

Have a Great Weekend, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com

Tags: #shortsale #foreclosure #lossmitigation #loan

UPDATED: Private Money...Any Available For Real Estate Deals?

Hi Folks,


   Happy Mid-Week to everyone, and welcome back.

   When we posted on the topic, "Best Markets For Commercial Real Estate Investing", we had a few requests to cover the topic of "Private Money", so as per your request, that is our topic for today!

   We spoke with 3 respected figures in the field to gauge their feeling on the topic. All 3 of them seem to agree that there is private money out there that is available for Real Estate deals, and we present their viewpoints below.

   Alfred Miller, President, Private Lending Solutions, LLC, states that, "Capital isn't scarce; vision is. There is tons of money available for real estate deals.", but says that he wants his, "money invested in solid deals (diamond in the rough)!" and the deals can be either residential or commercial.

   Vernon Martin, a commercial appraiser with American Property Research, who specializes in serving private lenders (96% of his work is for private lenders), says that, "There's no shortage of money waiting to be lent, but there also seems to be a shortage of credit-worthy deals.", which is similar to what Miller has said. "Most loan applications to private lenders are for refinancing deals which are already over leveraged, so there is no way the borrower can pay off existing debt at a safe loan-to-value ratio", says Martin.

   Martin also says that private lenders are, "very interested in financing REO purchases by new investors.", and provides an example, where last week, he worked "on a $35 million construction loan that is being purchased for only $5.2 million. The private lender feels safe in lending $2.8 million. The difference is that loans can be underwritten at today's market values without any disappointment to the borrowers.". Martin points out that some private lenders are looking overseas for deals in potentially "stronger markets" (i.e., "Canada, Australia, Fiji, Barbados, South Africa, Mexico, Costa Rica and Jamaica.")

   Dennis P. Fassett, a Real Estate Investor who interacts with many sources of private money, says that, "there's quite a bit of private money out there. But it's gotten more difficult to get to, despite what the late night gurus want people to believe.", which he attributes to, "the stock market crash and Bernie Madoff scandal". The impact of the crash and the scandal had a few ripple effect impacts on private lending, Fassett says, such as, "with people out of the market, there is a lot more money on the sidelines looking for a reasonable rate of return", and "the Bernie Madoff scandal has made a lot of people quite wary of where they invest their money.",and says that, it's ironic that the scandal has also helped make local real estate investing more attractive, because the investor can go drive by the asset that they either lent against or have an equity piece of."

   Fassett provides a hint into the mentality of the private investors. He finds that, "the private investors that I deal with are looking for a track record for one and a sense of stability by me as well. I'm fortunate that I have couple of dozen deals and now own or control 54 rental units in nice areas that are all doing well. I had one investor tell me that one of the reasons that he invests with me is because I have a whole lot to lose if I screw up in terms of reputation in the community.", and he continues to say that he's also finding that, "the direct approach to getting private money doesn't work anymore, as people are getting pitched to death about everything under the sun, so I have switched to an oblique approach that focuses on drawing people into being interested in my business to the point where they ask questions and close themselves."

   As the recession lingers on, Michael Stark, a licensed real estate broker in California, is clear about the future. "The greatest transfer of wealth since the Depression is underway.". Where this will ultimately channel the private funds is yet to be seen, however, we all hope and pray that it stokes our housing market and the economy. Comments are welcomed !

Have a Great Day, and Happy Rent-to-Owning !
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com





UPDATED: Top 5 Blog post for 2010 (For more information, CLICK HERE)

Best Markets For Commercial Real Estate Investing

Commercial Real Estate Investing

Hi Folks,

   Hope everyone made it through this week a few steps ahead of where you were on Monday.

   Since we always look at Real Estate and Rent to Own from the Residential angle, today we're going to take a look at Commercial Real Estate Investing, along with some information and some forecasts that could prove quite valuable for you.

   We spoke with two individuals that are quite well-versed in the Commercial Real Estate market, and we asked them about which markets are the best right now, and what the outlook is going forward.

   Our first comments come from Shari Olefson, a Real Estate Lawyer, Author, and an expert panelist who frequently appears on CNBC, MSNBC, FOX, CNN, and CSPAN. Olefson says that the best Commercial Real Estate (CRE) markets, "mirror the best - or least worst - residential markets.", and that, "Folks perceive home wealth gains or losses as more permanent than stock markets gains or losses". Olefson says that home equity gains/losses are spread across all socio-economic groups, while only the top 1/3 of Americans hold most of the stock. "Why does this matter?"; Olefson said that, "since CRE values (occupancy and rates) depends on tenants or occupants generating income which oftentimes comes (from)  folks in or near that geographic location.", and that, "When those folks feel poor they don't spend"

   Olefson offers some tips for Investors with strong staying power, in that, "they may find the best deal in longer terms non cashing flowing asset purchases from lenders. For example defunct residential projects in Florida. And particularly where FDIC loss share agreements are involved.". She also says that, "For now acquiring banks are not selling notes on these deals as the guidelines for pricing notes from the FDIC are not clear.", and , "As a result these assets are having to go thru the entire foreclosure process. But once this kink is resolved those CRE note purchases may be good values. Knowing the terms of a banks loss share agreement is helpful as during the time immediately before those expire banks will be especially eager to try to deal."

   We also spoke with Denise Beeson, a Commercial loan officer with Bay Sierra Financial, Inc., who states that, "If you are a professional i.e. MD, dentist, podiatrist, or small business owner, etc. this is the ideal time to buy your building under the SBA 504 program (10%) down, or through a commercial loan (25-35% ) down with interest rates this low.". The reason, she says, is that, "Owner occupied buildings are very appealing to the professional or business owners who have paid rent/leased and the building owners are interested in selling."

   Beeson believes that the market will continue to be, "rather 'soft' in the next 2-3 years as buyers recoup from financial problems i.e. stock market decreases, vacancies, depressed real estate prices.", and that the economy has to stabilize before you will see any active purchasing.". Beeson does go on to say that, "the private money market is prospering since commercial investors always need money to buy or refi outside of the traditional banking avenues."

   Overall, it does truly seem a mirror image of the Residential situation, but usually lags behind the events in the Residential spectrum. If you have anything to add to this, such as promising CRE markets, or anything additional, please comment below.

Have a Great Weekend, and Happy Rent-to-Owning !
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com

Setting Goals in Real Estate Investing

Good Morning,

   I hope you've had a great week, and I hope that you have met all of your goals.

   In mentioning the word, "Goals" during our speaking appearances, we always remind audiences how important it is to set goals in anything that you do, especially in Real Estate investing. There is an entire psychological aspect behind Real Estate investing (too deep to go over in this post), and you need to assess where you stand and if you can weather the housing market "storm" before you should even list your goals and action them. Perhaps this is too abstract for this post, but always remember, we are driven by both psychology, and then by our goals. To hear me discuss this in depth, book me for your next meeting.

   Next week, we have the September numbers coming out for New Residential Construction on Tuesday (Oct 19th), and the Loan Performance Housing Price Index for August on Thursday (Oct 21st). Let's see where things are headed and let's discuss.

CONTEST TIME !

For the first 10 people who place an Ad by 11:59 PM EST Sunday Night:

We will send you a free copy of "Secrets of Rent to Own", or "Will it Work In My Town?"...it's your choice!

Where Can You place Your Ad?

Looking for a Rent to Own Home? Place Your Ad Here
Selling a Rent to Own Home? Place Your Ad Here
Selling a Rent to Own Commercial Property? Place Your Ad Here
Offering a Home Service? Place Your Ad Here

Once You Place Your Ad:

Once you place your Ad, E-mail us from the address you used to place your Ad, and let us know whether you want a copy of "Secrets of Rent to Own", or "Will it Work In My Town?".
E-mail us HERE

Have a Great Weekend, and Happy Rent-to-Owning !



#realestate #realestateinvesting #housing #residential #renttoown
 

Steps to Acquiring a Loan

Hi Everyone,
   It's October...'nuff Said ! Since I am a Halloween baby, it's my birthday month (please don't ask my age!).

   Not Long ago, we were quoted in an article on the new "Currency" site from American Express, titled, "3 Steps to Getting a Loan", and the article could serve as useful to any of our readers that are interested in procuring a loan.

   The author, Christina Couch, summarizes the 3 steps as, "Stimulate Your Score", "Steady Your Finances", and "Readjust Your Debt Ratio".

Under the "Readjust Your Debt Ratio" step, Couch writes:
"...if you still can't get a traditional loan, you're not out of options. There are other financing opportunities to investigate, like renting with the option to buy. 'Deals like that typically last for 12 to 36 months and require tenants to pay a non-refundable option fee instead of a down payment—and usually, that fee is a lot cheaper,' says Robert Eisenstein, president of HomeRun Homes, a real-estate firm in Lake Ronkonkoma, New York.'There are a lot of creative ways to buy, and a lot of very specific mortgage programs out there, if you don't qualify for traditional loan products,' Eisenstein says. 'You just have to do a little homework.'"

   Head on over to the new American Express "Currency" Site to have a look around at some really great articles (as well as the one mentioned above).

   Next Week (Monday 10/4), the Pending Home Sales Index will be released. These are key figures, so let's monitor them together.

Have a Great Weekend, and Happy Rent-to-Owning !

Dad's Day, Secrets Winner, and Big Housing Numbers...

Happy Monday to All,

A Happy Belated Father's Day to all of you Dads out there. Our son is not at the "tie-buying" age, yet, but he is still in the "make-a-present-for-daddy" stage, which is absolutely wonderful. The walls of my office are decorated with his masterpieces and it adds color to every day. I know you're too young to read this Blog, but thanks buddy !

Now, on Friday, we announced our contest question; "What city did we begin investing in when we first started our business?". To all of the people who answered correctly and won their free copy of, "Secrets of Rent to Own", Thank You! Now, for the answer to that question, the winners of the contest checked out the "About Us" section (http://www.lease2buy.com/rent-to-own-homes.php), and you found out that the answer was Orlando, Florida.

We officially opened the doors of HomeRun Homes/Lease2Buy.com on June 8, 2002, so we are now officially into our 9th Year. We will continue on with more contests and giveaways, so make sure to tune in here. Want to make life even easier for yourself? Choose one of the "Follow" options on the right-hand side of the page !

This is going to be a very big week in terms of Housing Market data. Today, the Loan Performance Housing Price Index numbers will be released. On Tuesday, some hefty data will be released: NAR Existing Home Sales and the FHFA Monthly House Price Index. As if these major factors weren't enough, New Residential Sales will be released on Wednesday. This is quite a contrast to last week, which was a lot quieter in terms of Housing.

We will check back with you on Wednesday to take a look at what these numbers were, what they mean for you and I, and to take a look at how they can or will impact the Rent to Own Homes market.


Have a Great Week, and Happy Rent-to-Owning !

Confusing Housing Market, Residential Sales, Prices, Mobile Devices...

Hi Everyone,

We have all made it through another exciting week, with traffic to our website up another 10% from last week, and Ad-responses have been gaining further momentum. This is great news for anyone who has an Ad on our website.

Well, if you've kept an eye on the news this week, you know that there have been several mixed signals from the market and the housing sector. We have heard that mortgage delinquencies were still happening at a rapid clip through the end of March, loan demands/requests from people looking to buy homes are at a 13-Year Low, and for the people who did seek Obama's Loan Modification HAMP program, an astonishing amount of them had their trial mortgages canceled...yes, you heard me right...canceled. True, there is a lot of uncertainty now, due to the expiration of the homebuyer tax credit (which expired on 4/30). This past week, an article on CNN was aptly named, "Housing market diagnosis: Bipolar".

OK, so doom and gloom. Is there a bright side? Of course there is. There are still options for homeowners who cannot find a loan the conventional way. The possibility always exists for you to negotiate a Rent to Own with a homeowner. Ask them. Inform them of how it works, and get your attorneys involved. Homeowners, please take note as well. If you're trying to sell your home, you might be going through potential buyers faster than a termite goes through wood. One after the other drops off since they cannot get a bank loan. Be creative and look into Rent to Own.

A few changes to the site this week, outside of what we mentioned earlier in the week. We have spruced up our "Top Spot" Featured Ad pages with some images of what an actual Top Spot promoted Ad will look like.

You can check out the page for upgrading a "Home Wanted" Ad here: http://www.lease2buy.com/top_homeswanted.php

You can check out the page for upgrading a "Home Available" Ad here: https://www.lease2buy.com/top_homesavailable.php

A look ahead to the economic news for next week shows us some very important numbers coming out: Existing-Home Sales. S&P/Case-Shiller Home Price Indices, FHFA Quarterly House Price Index, and New Residential Sales. These numbers should set the tone for the summer months, and they are worth watching.

Looking ahead for our website, we will be working on "mobile-enabling" our site for the most popular mobile devices now, like the IPhone, Android, etc, and we'll keep you posted on how this is going. We have seen a significant increase in traffic to our site from Mobile Devices, and we want to capitalize on every potential buyer and seller...any one of them can be "the one" who can Rent to Own your home !!


We value your feedback; Please tell us what creative options you have been considering to buy or sell a home? Let us know



Have a Great Weekend, and Happy Rent-to-Owning !

New Residential Construction, Loans, Referrals and Affiliates, Free Book...

Hi Everyone,

A Happy Friday to All.

Things have been simmering here at HomeRun Homes, with traffic to our website at all-time highs, and we are proud to say that we have received the most "Thank You" E-mails from our customers within one week since we began doing business 8 years ago.

OK, some important news coming out next week:

Tuesday the 18th brings the newest figures for New Residential Construction - Building Permits, Housing Starts, and Housing Completions

Friday the 21st brings the Loan Performance Housing Price Index


These are both very important numbers. The announcement of New Construction, coupled with Housing Prices, should paint a better picture of where things have been over the past few months, and if they are positive, they can hopefully continue throughout the summer and beyond.

Now, we usually like to throw some exciting promo on the table at least once a week, so we are letting everyone know that we offer a generous Referral and Affiliate program. If you are interested in learning more, please leave comments here, or you can send an E-mail to homebuyer@lease2buy.com with the subject line of "Referrals/Affiliates", and we'll send you more details. It's a great way to earn some extra money and some free months on your Ads.

As a final note, we are responding to a question from one of the buyers who has received a large amount of responses from sellers this past week. Our best advice is to make a document or spreadsheet with the name and contact info of each seller, along with the details (prices, etc) of their homes. Once you have it all down visually, it's much easier for you to make a decision and make further reminder notes once you have viewed their properties. Good luck, and we hope you found your new castle !

Remember, we are offering a Free Copy of "Secrets of Rent to Own", when you purchase an Ad of 3-Months or longer.

If you're Looking for a Rent to Own Home, you can get your very own "Home Wanted" Ad at http://www.lease2buy.com/prospectivetenants.php

If you're Selling a Rent to Own Home, you can get your very own "Home Available" Ad at http://www.lease2buy.com/prospectivesellers.php


Have a Great Weekend, and Happy Rent-to-Owning !!