Down Payment Assistance in Atlanta
May 13, 2008 | Leave a Comment
The Nehemiah Program
This morning I had the privilege of attending a seminar about down payment assistance and how it can benefit both buyers and sellers in the greater Atlanta market. The seminar was taught by Leslie Kane, Area Manager, of The Nehemiah Program. The Nehemiah Program is charitable organization that has helped over 40,000 families in Georgia achieve their dream of home ownership.
The Nehemiah Program began in Sacramento, California in 1994 and was designed to help a particular community become more stable. The program gets its name, Nehemiah, from a biblical figure that helped rebuild the walls of Jerusalem and since the program was being utilized to help rebuild a community it just seemed to fit.
How Down Payment Assistance Works
If a buyer is qualified to purchase a home using FHA financing then they are automatically qualified to purchase a home using the Nehemiah Program. The home being purchased must be owner occupied and can be single family, duplex, triplex, quadraplex or a FHA approved a condo. With FHA loans the buyer is required to make a minimum down payment of 3% of the loan amount. By utilizing the Nehemiah Program the seller contributes the down payment for the buyer. At the time of entering into a contract with a buyer for the purchase of the home, the seller agrees to contribute the down payment and a small processing fee to the program. This is accomplished using the Participating Home Agreement form from Nehemiah. The program in turn contributes the down payment for the buyer. The buyer completes a Gift Letter form detailing where the gift funds came from and what address they will be used for purchasing. This type program can only be performed by a charitable organization. (Sellers are only committed to pay the contribution and fee if a buyer utilizes The Nehemiah Program to purchase the home.)
Who Benefits From a Down Payment Assistance Program?
The Nehemiah Program is helping both buyers and sellers in the greater Atlanta market. Obviously buyers benefit by being able to purchase homes with little or no money out of pocket. Generally speaking this type program would be for buyers with credit that is good enough for them to be able to purchase a home but they lack having the funds for a down payment. Typically prospective buyers who are currently renting or living at home are good candidates for this type program.
Sellers are also benefiting from this program. With the recent increase in FHA loan limits to $346,250 in the metro Atlanta area and $271,000 in outlying areas, more home sellers find themselves in a position to participate in this type program.
Who Qualifies For Down Payment Assistance?
As was stated earlier, if a buyer is qualified to purchase utilizing a FHA loan then they are automatically qualified to participate in this down payment assistance program. To find out if you qualify for FHA financing and down payment assistance Contact Mack.
Insurance NOT Paid By Homebanc
May 1, 2008 | 1 Comment
Today I received this email from a gentleman seeking help because his homeowners insurance had not been paid by his mortgage company.
Your topic: "Homebanc Mortgage Escrow Accounts" came up when I searched it on google.
I have a Homebanc mortgage. I just got a call from my ins. co. stating that they haven’t received my homeowner ins. payment from my mortgage co. after 45 days. I contacted Homebanc and all their numbers and websites are disconnected.
Any news on this, or know what I should do? I’ve been sending my payments in to the same address, and never got a letter stating it was sold to another co., and the payments have been processed like normal. I’m thinking of not paying and seeing who contacts me.
Obviously he has an escrow account and has been making his payments. Unfortunately the insurance did not get paid as it should have. My advice to you would be to write a letter to the address that you are sending your payments to and ask that you be contacted to discuss your escrow account. If this is not successful then you will probably want to contact Countrywide Mortgage. My understanding is that Countrywide was assuming the servicing of Homebanc accounts. To add another twist, Bank of America is buying Countrywide so you may also contact Bank of America if Countrywide has no record of servicing your account. If none of these can provide you with the correct answer you may also contact your state department of banking and finance and ask for their guidance. You should have been notified that the servicing of your mortgage was being handled by a different provider. Unfortunately you were not.
The one thing I would recommend that you not do is avoid paying the payment to see who contacts you. Damaging your credit with a late payment is just not worth it. Sure it will take some time and phone calls to clear this up, but you need to know who is servicing your mortgage in case there is any other problem in the future.
How to Find a Good Builder
April 30, 2008 | Leave a Comment
So you have decided to build your new dream home. How do you find the right builder? Are you just going to leave it to chance? I hope not. You are preparing to make what is possibly the largest purchase you will ever make. As a buyer you owe it to yourself to practice your due diligence and find a builder who is qualified to build your dream home as well as being someone that you can communicate with about your wishes and desires in your home.
In the Atlanta Real Estate market, the most common ways for a buyer to find prospective builders are via the internet, their REALTOR, word of mouth from their family and friends or from the local Home Builders Association. Once the candidates have been identified the buyer and their buyer’s agent should begin the due diligence period by asking questions to determine the best fit. Here is a list of possible questions to ask:
- How long have you been building homes? (You are looking for 3+ years)
- Is your primary source of income derived by homebuilding?
- What insurance coverage’s do you carry? (You are looking for general liability, workman’s comp, and builder’s risk.)
- What is your primary source of information regarding changes in building codes? (You are looking for trade associations such as the home builder’s association or various continuing education classes)
- What is your written warranty on the homes you build and can I have a copy of it to review?
- What is your policy on home inspections? (You must be allowed to use a code certified inspector)
- Will you provide me with references from your homeowners?
- Due to today’s economic time and the state of the real estate market, would you be willing to share your financial information with us?
- Why should we select you to build our home?
While these may not include every question that you may need to ask, it should provide a good start. Even if the home you are looking to purchase is already started and at some stage of completion you should still ask questions of the builder. After all you are interviewing as an employer. You are hiring someone to build your home.
How does a Short Sale Effect Value
April 20, 2008 | Leave a Comment
One of the requirements of being a licensed agent is to successfully complete various continuing education classes during each year. Last fall I attended a class on “Understanding Appraisals”. The instructor for this class is an Atlanta Appraiser by the name of Scott Murphy. I found Scott to be extremely knowledgeable and he was more than helpful for the agents taking the class. Taking into account Scott’s experience and expertise, I requested his insight on the effects of a short sale on appraised values from an appraiser’s viewpoint. The following is Scott’s reply:
The effect on the market due to short sales is yet to be seen. Short sales are relatively new to the market. Many short sales will go to investors who know how to manage the complex and time consuming process. They will work the system to obtain the property significantly below market. They in turn will relist and sell the house at market value, much the same as the foreclosure process. These sales will hopefully self correct themselves. The sales that will be most damaging to the market are those which sell to owner occupants slightly below market value with full market exposure.
The true test to the validity of the sale and to determine if the sale is a true arms length sale would be its exposure to the market. Foreclosure sales are generally discarded because a lack of exposure to the market or they are significantly inferior in condition to other homes in the neighborhood. Short sales, on the other hand, are typically in similar condition to other homes in the neighborhood. If the home is multiple listed for a reasonable amount of time (IE: 30 days or more) it is then thought to have been adequately exposed to the market and may very well be an arm’s length sale. The effect these sales will have on the market will be determined by the exposure and the number of them in a given neighborhood. Most neighborhoods can support 1-2 short or distressed sales without altering values. When the number of short of distressed sales exceeds the number of arm’s length sales values will significantly decrease.
I want to thank Scott for taking the time to share his insight. His answer has brought up an even more thought provoking question, Are short sales in any way responsible for the declining markets as viewed by the various mortgage lenders? If so would they not be like a double edged sword, they cut the losses of the lender by foregoing a foreclosure but create a more difficult lending environment for purchasers because entire market areas are becoming classified as declining markets.
Short Sale in Atlanta
April 18, 2008 | 1 Comment
If you are having difficulty paying your monthly mortgage payment, you are not alone. Lenders got very creative, even greedy, while inventing mortgage programs that helped families buy their first home or refinance existing mortgages. Many of these programs were for buyers with no money for a down payment or for families with less than perfect credit. These loans were known as subprime loans. One of the most popular of these loan programs were the hybrid adjustable rate mortgage. A hybrid ARM has a low interest rate initially (a teaser rate) which is followed by significant upward adjustments during the remaining years of the loan. Other than lenders, declining or flat markets and tougher economic conditions have contributed to everyone having a more difficult time meeting our monthly obligations.
Recently a new phrase has come into the real estate market, not only in Atlanta, but throughout the nation. That phrase is a short sale.
What is a Short Sale
A short sale is when you have the ability to sell you home, but the proceeds from the sale are less than the actual payoff and expenses involved in selling the home. In a short sale, the mortgage company agrees to accept less than the payoff they are owed. A short sale is an alternative to foreclosure which may benefit both the lender and borrower. Typically a short sale is a better solution for the lender than foreclosure. If the lender had to foreclose on the property, they would be responsible for attorney fees, possible eviction costs, utilities and other various costs associated with a foreclosure. In allowing a short sale the lender may be able to reduce their losses compared to a foreclosure. One important point is that the lenders typically require documentation as to the hardship that has caused the need for a short sale.
What Hardships are Acceptable
Most mortgage companies require a hardship letter prior to discussing a short sale. The hardship letter should present the facts clearly and honestly and must provide the proof regarding the situation that caused the borrower to fall behind on their payments. The following hardships are frequently accepted by mortgage lenders:
- Job Loss or significant loss of income
- Divorce or Separation
- Excessive Medical Bills
- Death of a Spouse
- Military Service
- Adjustment in Mortgage Payment
How Does a Short Sale Affect My Credit
The late payments that lead up to the short sale will, as expected, have a negative impact on your credit. The main advantage to a short sale is avoiding foreclosure. A short sale should be less detrimental on a credit report than either a foreclosure or a deed-in-lieu of foreclosure.
The Mortgage Debt Relief Act of 2007
By signing H.R. 3648, The Mortgage Debt Relief Act of 2007, President Bush changed the tax ramification for anyone selling their home via short sale or owners who are renegotiating their mortgage. Prior to this legislation signed into law any shortage on a full payoff to a lender was considered taxable income.
Work With a Professional
If you are thinking about a short sale on you home, it is recommended that you meet with a professional and discuss you exact circumstances so that you can be given the best guidance for your situation. Working with a REALTOR® who knows how to talk with the Loss Mitigation Departments at the lender as well as being able to guide you on all the proper documentation required for a short sale will make this process easier for you. The actual documentation required by each lender can vary dramatically. To successfully complete a short sale transaction it is necessary for you to have all the elements documented and in place along with having an effective short sale strategy.
I will be happy to meet with you to evaluate your situation and discuss the options that are available to you. Feel free to contact me via email or phone.
Atlanta FHA Loan Limits Raised
March 6, 2008 | 2 Comments
So what exactly does the FHA do? The FHA provides mortgage insurance on loans made by FHA approved lenders throughout the United States. Since it inception in 1934 FHA has insured more that 34 million loans. Generally FHA loans are easier for buyers to qualify for as they do not have the more strict underwriting guidelines of conventional loans.
We have known that it was coming, we just didn’t know how high the limits would be raised. Well we got the answer today. The Federal Housing Administration, FHA, has increased the loan limits on a FHA insured home loan in Metro Atlanta to $346,250 up from $252,890, an increase of 27%.
This action by FHA should help spur the housing industry in the Atlanta market. Any home priced below $346,250 just became easier for more buyers to qualify for.
Atlanta Real Estate Conditions
February 27, 2008 | Leave a Comment
The Atlanta Real Estate Market has escaped from many of the problems that have affected other major markets. It has been pointed out that the resiliency of the Atlanta market is due to our sector being fueled by jobs and relocation rather than speculative buying as has happened in some of the condominium resort areas. Just how lucky are we? Below you can see one of the policies lenders have adopted that affect buyers in other areas of the county.
In certain areas of the country lenders have implemented what is called a “Declining Markets Policy”. In essence what this policy calls for is for buyers, purchasing property in what the lender has identified as a declining market, to increase their stake in the property. Most lenders are requiring the loan-to-value (LTV) ratio if one loan is being utilized or the combined-loan-to value (CLTV) ratio if multiple loans are being utilized to be reduced by five (5) percent. An example would be rather than being able to obtain 100% financing in a declining market, a buyer could only obtain 95% financing. The exception to this policy would apply for FHA and VA loans. For these government backed loans a second level underwriter review is called for, thus making qualifying more difficult.
Lenders are identifying the declining markets by both city and county in the various effected states. Several sources are being used to determine which areas are included. Standard and Poors Case-Schiller Home Price Indices, The Federal National Mortgage Association, The Federal Home Loan Mortgage Corporation, The Office of Federal Housing Enterprise Oversight Index along with statistics from The National Association of REALTORS are the most common sources used in identifying these areas.
Not only are there declining markets, but several of the lenders are also looking more closely at what have been identified as “Soft Markets”. While these areas are not as drastically affected, the lenders are requiring a second level underwriting review for soft market identified locations.
In the latest report I have been able to obtain, the Atlanta Market has not been identified as either a declining or soft market as defined by these lender guidelines. This doesn’t mean that the buyers market is gone. It just suggests that the Atlanta Market has not been as decimated as some of the other major metropolitan markets. Conditions remain favorable toward buyers with sellers making considerable concessions and interest rates remaining low. To find more information about Homes for Sale, just let me know what your requirements are. I am here to help.
Atlanta Real Estate Market Update
February 24, 2008 | 2 Comments
It’s A Buyers Market
If you didn’t know it before, you certainly will know it now by way of the most current stats for real estate in the Atlanta Market. Unfortunately for sellers 2008 has started much in the same fashion that 2007 ended, with a market that continues to decline. Inventory continues to increase and the average days on the market for single family homes is at it’s highest level in 10 years at over 101 days on the market.
Available Inventory Increasing
Here are some of the facts comparing months supply of available homes 1-2006 vs 1-2008:
New Single Family Homes up over 81%
Resale Single Family Homes up over 91%
New Condos and Townhomes up over 125%
Resale Condos and Townhomes up over 26%
Additional Good News for Buyers
The other factor that generally goes hand in hand with increasing days on the market and additional inventory is an overall average price decline of sold properties. The situation at this time confirms this factor. The average sale price for both single family residences and condo/townhomes declined in January.
Even More Good News
If you take the abundance of inventory to choose from and the lower average prices then add to it the notoriously low interest rates, you now have all the components of a full fledged buyers market in Atlanta. Sellers are saying bring all offers. Why don’t we get together and help them sell their home at a deep discount?
February First Time Buyer Seminar
February 9, 2008 | Leave a Comment
It’s official, the next date for the First Time Buyer Seminar has been scheduled for Saturday February 23, 2008 at 10:00AM. The class will be held at RE/MAX Around Atlanta, 2280 Satellite Blvd. in Duluth.
Some of the topics we will be covering include:
* What Are Your Rights As A Home Buyer-Brokerage Relationships
* Mortgage Prequalification-How much home can you afford
* Loan Programs-Which of the various loan programs best suits your needs
* Home Inspections-Why you need to have this done
* Home Warranties-What are they and what do they protect
* Termite Issues-What you need to know about termites in Georgia
* Lead Based Paint Concerns-How does it effect me
* What is Title Insurance and Do I Need It
* What are Closing Costs and Who Pays Them
* What is the Sellers Property Disclosure
* How do schools figure into the equation
* What does a Home Owners Association Do
* Home Buying Tips
* The Contract and Important Timeframes
Please confirm how many people will be attending with you so that I can make certain that there are ample class materials available. Also please advise if you need directions.
I look forward to seeing you on the 23rd,
Interest Rates in Atlanta
January 24, 2008 | Leave a Comment
The Atlanta Mortgage Market
The mortgage market in Atlanta, along with most other markets, has been extremely volatile over the last few days. Lenders have been publishing rate sheets then retracting them, adjusting interest rates up then down and even preventing brokers from locking loans for borrowers. Typically loan officers get rate sheets from the lenders mid morning each weekday. Since Tuesday rate sheets along with revisions have been coming several times each day. Hopefully some of the volatility has eased from the market.
Fed Cuts Short Term Rates
When the Fed announced on Tuesday that they were cutting the Federal Funds Rate by .75 percentage points the phones began ringing off the hook. What must be understood is that this rate cut is for the interest rates that banks charge to each other. This is for "Short Term" loans and a mortgage is considered a long term loan.
Is It Time To Refinance
In the mortgage business one of the most often asked questions is, Is it time for me to refinance? The short answer to this question is maybe. The better question would be, Is it time to meet with a qualified loan officer to discuss my options? The easy answer to that question is YES. Several documents that you need to have with you so that you can obtain the best advise are your most recent statement from your mortgage lender and your warranty deed.
If you are currently in an Adjustable Rate Mortgage (ARM) also provide the loan officer with the information about when you adjustment periods are along with the amount of the adjustment.
A Big Win For The Little Guys
Much of the recent news regarding foreclosures has centered around how the borrowers entered into Adjustable Rate Mortgages and when they began adjusting upwards the borrowers just could not afford them anymore. With the current rates being in the 5.375% range for a 30 year fixed rate mortgage, it makes perfect sense for any borrower in an ARM to seriously consider refinancing now.
