Real Estate and Beyond Blog

NEW LOAN DISCLOSURES WILL CAUSE A DISRUPTION IN THE REAL ESTATE MARKET

The real estate market continues to grab national attention as bank continue to foreclose on homes, unemployment is high along with uncertainty in the American economy. Many people are starting to cutback on expenses and looking at the bottom line. Hey, I think this a great trend in our country. I had seen for years people refinancing their home two times to take cash out just to blow it on toys. Change continues to happen in the mortgage world as we will have to follow new mortgage disclosure laws starting January 1st, 2010.

Housing of Urban Development (HUD) has been working for years on developing a system to show the true costs of doing a loan including broker fees, banking fees and the true payment with no surprise in payments like we experienced a few years back. Many people are against this change because they believe it will only confuse the consumer by going from one page to a three page document with full disclosure. How is this to be interpreted? Regardless, the changes have been made by the Federal Government. Now, we must implement the change. One can either buck the system or embrace it.

TOP 5 REAONS PEOPLE RESIST CHANGE

1. NEGATIVE ATTITUDE ON ALL NEW CHANGES
2. MUST PUT FORTH EFFORT TO LEARN NEW SYSTEM
3. OTHER INTENTIONS ON THE PLATE
4. POWER STRUGGLE BEGINS BETWEEN OLD AND NEW INFORMATION INSIDE COMPANY
5. TOTALLY DOES NOT AGREE WITH THE CHANGE

The large banking institutions have an advantage over smaller firms to be better equipped with the new changes by have the financial and human resources to make this change happen quickly in order to gain market share in the banking industry. People are still buying homes with mortgage rates low with some great deals on the market.

HUDs overall efforts is to stop the guess work when it come to obtaining a mortgage. Also, they want to avoid the bait and switch at the closing table for the consumer. They have put these new guidelines in to protect the consumer and to build confidence back into the financial industry. RESPA reform is to create a better mortgage regulation. All mortgage loan originators must be tested and registered in 2010 under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008.

Change is constant! We either embrace the change or be left behind.

NO LAUGHING MATTER WITH THE IRS

The economy touches all classes during this time. I was reading my morning business news on Fox. I came across this article on Sinbad the comedian. I have not heard anything from the famous comedian in years. Voila, the IRS is after Sinbad for owing back taxes. I believe the IRS is trying to collect every dollar they can in order to support the current spending habits in Government during this time. I know one thing. You do not want to owe the IRS back taxes because they have their ways. One can end up in jail for not paying back taxes.

It is estimated that Sinbad owes over $8 million in back taxes. He has been trying to settle with them for the past five years. However, the IRS does not wish to settle this matter. They want to be paid in full including interest and penalties. How much blood can you get from a stone? So, Sinbad file Chapter 7  bankruptcy in the beautiful state of California. Furthermore, they are going after his house. However, it shows that his brother is the current owner. Blood is thicker than water-so they say. It stated that he has well over $60 million in liabilities with only $50,000 in assets. I BELIEVE THIS SCALE IS OVER THE TOP.

Why am I blogging about Sinbad owing back taxes? Am I laughing at Sinbad? The answer to both these questions is NO. He is a perfect example of a person who has made tons of money. However, he did not have a financial plan to long term wealth. Furthermore, paying your taxes is part of that financial plan. Who needs the weight of the IRS on them? Who has the money to hire lawyerss to fight the IRS? They would simply print their own money to pay for their lawyers.

TAX TIPS FOR 2010 READ IT TODAY

Folks, the end of 2009 is upon us all. Will you be doing the same thing in 2009 going into 2010? Do you have a financial plan in place for 2010 and beyond? Are you tired in being in the same place year after year? Are you tired of being broke all the time? We are here to assist you to change your ways. Please visit www.deliateam.com

MAKE THE CALL, SET THE PLAN, DO THE DEAL$

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HOW TO OBTAIN A FHA 203K LOAN WHEN PURCHASING DISTRESSED PROPERTY, BANK OWNED, REO IN PHOENIX, ARIZONA

Banks continue to foreclose on properties on a daily basis. It has been reported that over 50,000 homes in Maricopa County were in the foreclosure process. Home owners are stripping homes before they leave the home. They are selling the contents of the home on Craigslist. The number one problem in the Phoenix market has been abandoned homes. People come in and strip the home of its contents. So, there is plenty of opportunity for first time home buyers to obtain a great deal while using the FHA 203K loan to have the money to repair the distressed property, bank owned, REO property.

Home buyers are allowed up to $35,000 of repairs into their mortgage for the purchase of the home. This is an awesome deal for Phoenix home buyers. This can also happen on a refinance of a FHA loan to include $35,000 in repairs to a home. This is a great deal when first time home buyers do not have a great deal of money for repairs. This loan program is good for single family residences up to a four-plex unit as a primary purchase. The borrower must by able to prove their income and credit worthiness to obtain such a loan.

Here are some examples of the work that can be performed on a Distressed Property, Bank Owned, REO home in Phoenix, Arizona Maricopa County.

• Upgrade or replace A/C unit
• Repair or replace flooring, decks, patios or porches in some areas
• Painting interior and exterior
• Purchase and installing of new appliances
• Pool repairs if needed
• Connect public utilities such as water, electric or heat
• Window/Door replacements
• Disability accessibility improvements
• Landscaping

FHA 203K LOAN PROCESS IN THIS LINK FOR FURTHER REVIEW

One myth out there that people could not purchase a bank owned property with a broken window along with other minor repairs. Yes, that has some truth to it. However, it can be purchased with a FHA 203K loan as long as those are part of the repairs included to be fixed during the renovation of the home. It is better to be with real estate experts such as the Real Estate and Beyond Team in Phoenix, Arizona. We get the Deal Done with D'Elia.

There is plenty of opportunities for all buyers in this market to obtain a great deal on a home. I would prefer to purchase a bank owned property with the FHA 203k streamline loan to finance the repairs. Then, I can fix the house up to meet my crieria. One tends to be happeier in an environment that they most enjoy. We spend a great deal of time in our our home so we might as well make it comfortable for family and friends.

SEARCH FOR BANK OWNED PROPERTIES PHOENIX, ARIZONA

PREQUALIFY FOR FHA 203K LOAN RIGHT NOW

FHA 203K LOAN PROCESS TO PURCHASE DISTRESSED HOME, BANK OWNED, REO HOME IN ARIZONA

There are over 50,000 homes here in Phoenix, Arizona in the foreclosure process. I can guarantee you that these homes will need work before being purchased. Banks are not pumping monies into these properties. They are selling bank owned homes in 'AS-IS" conditions which means buyer will be responsible for all repairs. Wow, that is a lot of responsibility for first time home buyers. Buying their first home can be overwhelming plus repairs can send some of them over the top. However, we have the FHA 203K loan to finance the repairs to the home.

PREQUALIFY FOR FHA 203K LOAN RIGHT NOW

The majority of loan officers do not touch this loan product because it can be very complicated and intimidating to some of them. However, we must follow the money and service the clients. So, the Real Estate and Beyond Team has partnered with The Lending Company to service the FHA 203K loan to service our clients. Let me explain the process of the FHA 203K loan to purchase distressed home, bank owned, reo home in Phoenix, Arizona:

1. Borrower fills out loan application and supplies loan officer with all necessary document to obtain loan approval
2. Borrower is approved for the loan
3. Realtor instructed to put FHA 203K Streamline loan as loan type on the purchase product
4. General Contractors must be approved by HUD to make repairs to home
5. List of repairs along with cost is prepared by General Contractor and submitted to loan officer for review
6. Borrowers can do the work if they show they are licensed and bonded. Borrower will only be reimbursed for materials not labor.
7. Appraisal ordered to determine value of home after repairs
8. Loan is funded including repair costs
9. Only two draws will be conducted for the repair costs. No inspections are needed for work under $15,000. Money must be requested to the bank. We heavily advise to snap pictures and/or video during the process to have a record on hand if ever challenged by the bank.
10. 10% contingency fund was added to the repair costs for emergency purposes. If this portion is not needed, then it goes back to the bank and the loan is reduced to that amount of money-principal reduction.
11. Job completed and all bills submitted to bank for final payment to General Contractor
12. Home buyers move into their newly renovated home

The Real Estate and Beyond Team headed by Harry F. D'Elia is ready to assist all homebuyers in purchasing real estate. Please feel free to visit our main web site at www.DeliaTeam.com

SEARCH FOR BANK OWNED PROPERTIES PHOENIX, ARIZONA

PREQUALIFY FOR FHA 203K LOAN RIGHT NOW

5 STEPS ON HOW TO SHOP FOR A MORTGAGE

1)    Always get 2-3 names of Mortgage Brokers from which to obtain quotes.  Make sure to obtain these referrals from a trusted friend, associate or Real Estate Professional and set time aside to call them on the same day.

2)    Be prepared to tell the Mortgage Broker about your plan/intentions to purchase or refinance.  Have Social Security Numbers, income figures and down payment information handy.

3)    Have a general idea of where your FICO (credit scores) are and/or be open to having a new credit report obtained.  NOTE:  Minimum FHA purchase or refinance FICO is a 620...Minimum Conventional purchase or refinance FICO is a 680.

4)    Once you've provided the basic qualifying information to each Mortgage Broker, be sure to ask for a Good Faith Estimate with each Broker's PAR interest rate.  This will allow you to compare the interest rate with fees to ensure you are comparing apples to apples.

5)    Once you've made your decision based on the lowest rate and the person you trust the most, call them to secure or LOCK IN the interest rate.

With what seems like nothing but pessimistic financial news taking over the airwaves lately, you can be certain 2009 remains the best year in history to purchase or refinance with rates at historic lows!

SEARCH FOR PHOENIX, ARIZONA FORECLOSURES

APPLY FOR A MORTGAGE NOW

HERE IS A LINK TO PART 1 FOR REFERENCE

HERE IS A LINK TO PART 2 FOR REFERENCE

HERE IS A LINK TO PART 3 FOR REFERENCE

MYTH #4: CREDIT COUNSELING WILL DECREASE ONES SCORE JUST AS BAD AS A BANKRUPTCY

Millions of people are behind in their mortgage payments or have been foreclosed on over the last two years. People have over extended themselves when it comes to credit card balances. Bankruptcies continue to increase as people continue to lose jobs since unemployment rate is at 10% at a national level. People need assistance during these tragic times. I am sure we see adds for credit counseling services on the television, newspaper, Internet and so on.

The current FICO score system does not penalize ones credit report who seek credit counseling. The FICO company conducted a long study to find that people who seek credit counseing do not default on their loans anymore than a regular individual. That is the real scoop.

Ones credit score can still decrease if the credit counselor is not sending in payments on time or not paying what was originally agreed upon. If one is late, then they must report the late to the credit agencies since they have to report the facts. Late payments do hurt ones credit score.

It is a hit or miss when it comes to views from the banks on credit counseling. Some banks view credit counseling as a bad thing while others see it as a great thing. It shows that people are concerned and they are willing to take action to improve their current situation. The mortgage lenders that dislike it will treat the borrower as if they have filed Chapter 13 bankruptcy. There is a possibility that one can still obtain a mortgage with a very high interest rate due to the risk that the bank takes on. One better have great savings and a great salary to minimize the bank risk.

The bottom line is that if one is in credit trouble, then seeking immediate professional credit counseling assistance is a must to get through life. Everyone gets off track here and there. The credit counselor will get one back on track as long as the person follows advice and not open new credit and pay bills on time.

If you need further assistance when it comes to financing, please CLICK HERE.

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HERE IS A LINK TO PART 1 FOR REFERENCE

HERE IS A LINK TO PART 2 FOR REFERENCE

MTHY #3: ONE WILL LOWER THEIR SCORE IF THEY CHECK THEIR FICO SCORE

There are people in the mortgage industry that will inform their consumer that checking ones credit score will decrease their credit score. Obviously, this person was confused about which inquiries hurt ones credit or the ones that do not hit the credit score.

The only time it hurts ones credit is when applying for new credit. I am sure many of you receive credit card solicitation in the mail. This will not hurt ones credit score unless you take them up on their offer and sign up for the credit card. Again, it is fine to review ones credit every six months to check for errors in order to keep the credit report up to date.

I have seen people's credit report go down when shopping for automobiles. The car dealerships pull the credit each time in which this case will lower the credit score. The credit card agencies treats multiple inquiries in a fourteen day window as one inquiry and does not notice all inquiries made within thirty days for which the score is calculated. Normally, each inquiry will reduce ones credit score by five points. So, that is not a big deal in most cases when it comes to obtaining conventional financing.

If you need further assistance when it comes to financing, please CLICK HERE.

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4 MYTHS ON FICO SCORES REVEALED PART 2

HERE IS A LINK TO PART 1 FOR REFERENCE

MYTH #2: YOU ONLY NEED TO CHECK ONE FICO SCORE

Many people think that there is only one credit score to check. The most popular to check is Equifax. All three credit burrows include the following:

TRANS UNION, Customer Disclosure Center, P.O. Box 390, Springfield, PA 19064-0390
http://www.transunion.com/1-800-888-4213 known as Empirica credit score

EQUIFAX, P.O. Box 740241, Atlanta, GA 30374-0241
http://www.equifax.com/ 1-800-685-1111 known as Beacon credit score

EXPERIAN, P.O. Box 2104, Allen, TX 75013-2104
http://www.experian.com/ 1-888-397-3742 known as Fair, Isaac Risk Model

A consumer will have three different credit scores from three different agencies listed above. Why? Each company is differently owned and operated. The bureaus do not share information with one another. One bureau may list more accounts than another one on the credit report.

One must pull their credit from all three agencies to make sure that everything is correct on the credit report. This is called a "TriMerge Credit Report." This will show your credit history with all three major agencies listed above. A mortgage professional will take your mid-score when doing a mortgage. It is vital that one fixes any errors on the report to increase ones credit score to obtain a better interest rate on a loan. It is my personal opinion that it is better to pay a mortgage professional to pull your credit report since it is most accurate. Otherwise, you will not receive the correct information needed to get ones financial house in order.

Here are 4 TIPS TO KEEP A HIGH CREDIT SCORE AT ALL TIMES

1. FIX ANY ERRORS IMMEDIATELY
2. PAY BILLS ON TIME EACH MONTH
3. PAY DOWN DEBT TO ZERO
4. ONLY APPLY FOR NEW CREDIT IF NEEDED

 SEARCH FOR RENT TO OWN HOMES IN PHOENIX, ARIZONA AND BEYOND

The American economy continues to be not stable as banks continue to foreclose on homes, people lose their jobs and uncertainty in the Middle East. People do not know who to believe. The days of using ones house as an ATM machine has vanished. Today, people are going back to basics by tracking their money and paying down debt? Personally, I think that is awesome. We need to get back to basics as our grandparents did in their time.

I would like to discuss 4 Myths on FICO Scores over a four part series. I am sure many people are making decisions without knowing the proper information before it hits their credit report.

Myth 1: CLOSING ACCOUNTS WILL IMPROVE MY CREDIT SCORE.

I host a weekly radio show here in Phoenix, Arizona, on Saturdays from 12-2PM on KKNT 960 AM. I have live call-ins per week. Many people inform me that their own bank told them to close their credit carcs because too many open accounts can hurt one's credit score. That is true and not true.

The FICO magic score system looks at available on each card and what one is using. Shutting down accounts will shrink the availability in which will make your balances increase and will typically hurt your score.

Shutting down old accounts in good standing will also hurt your score. Mortgage companies want three postiive trade lines that have been open for one year or more. Shutting down old accounts will make the other accounts look new and hinders ones credit score.

BOTTOM LINE: PAYOFF OFF YOUR CREDIT CARD DEBT AND LEAVE THE CARDS OPEN. THIS WILL DEFINITELY INCREASE ONE'S CREDIT SCORE.

Please feel free to visit www.960RealEstate.com for further information on investing in real estate. The Real Estate and Beyond Team is here to serve the needs of the public.

MAKE THE CALL

SET THE PLAN

DO THE DEALS

ELDERLY PERSON UPSIDE DOWN IN HOME. DECISIONS HAVE TO BE MADE

 I host a weekly radio show here in Phoenix, Arizona. I receive live call ins and calls outside the show. There are many people who are in trouble and they do not know who to call. So, I receive calls from people who need assistance because they are going into foreclosure, cannot afford the payments, upside down in their home, need a loan modification, going through divorce or just need some guidance when it comes to real estate investing. I have developed a group of wise professionals to assist me in all matters of real estate.

Well, I had a 71 year old female call me on Saturday and wanted me to call her back. I called her back Monday morning to see how I can help her. The informed me that she was on a fixed income only receiving $2213.34 per month. Her current mortgage was $1,323.65. Her daughter lost her job and moved back East to find work as a teacher. It left her paying the montly mortgage. This does not leave her enough money to take care of her basic needs after paying the mortgage. This woman called me because she hit her breaking point.

I explained the four options listed below to her:

1. Call your lender: It is your duty as a consumer to alert the bank of your current situation. The best thing that they can do is work out a loan modification in order to keep you in the house. This will involve lowering your payments and at times eliminating some of the principal. Each case is handled on a case by case scenario.
2. Short Sale-This is when the bank allows you to sell your house for less than what is owed on the mortgage. More lenders are starting to accept short sales to avoid foreclosing on the house. Banks are spending millions of dollars on foreclosing on the house. Plus, the house is vandalized when it is empty. It is better to do a short sale for all parties.
3. Deed-in-lieu-This is where the bank takes over the deed in exchange for the payment. The homeowner voluntarily gives the deed back to the bank.
4. Foreclosure-This is the last case scenario when steps 1-3 do not work for either party. The bank forecloses on the property to take back the house. The homeowner is asked to leave. Life moves on.

She informed me that her bank was unwilling to perform a loan modification because her income did not change. She told me that her husband had died which lowered her income. However, the performed a cash out refinance after her husband died to pay off $30,000 of debt. This put the mortgage in her name only. Her income has not changed and the bank is unwilling to modify her loan for that reason. I am having a loan modification expert look into her scenario.

I just wanted to give you an example that this real estate disaster hits all generations. It does not discriminate. If you are an older person, please feel free to contact us at Real Estate and Beyond to go over your options when you need assistance. We have a team of experts ready to assist you in real estate and mortgage situations.

Make the Call, Set the Plan, Do the Deal$