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My client just bought a new home two years after we did a successful short sale on his previous home. He now has a mortgage at half the interest rate he was paying previously.  His new home is  approximately half the purchase price of his old home that he purchased in 2004, and his new payments are a third of the old payments. Icing on the cake is that the new home is larger, move in ready, with a two year warranty. More icing? His new payments are $315 a month lower that his small rental.  Yes, it really is less expensive to buy than rent.

How did we do this?  Of course timing is everything.  Prices in this area are 50-60% lower than they were in 2004. There is a good inventory of homes that are reduced accordingly.  When we completed the short sale on his first home, I told him to keep the rest of his credit clean, pay the rent on time, and he would be able to buy again.  It didn't hurt that he was a V.A. buyer.  V.A. buyers can buy a home again two years after a short sale. 

Unfortunately, many figure their credit is shot anyway, so they drown their sorrow in their credit card debt.  After going through the trauma of losing their home, they may think they will never buy again.  But after living in a rental house or worse yet - an apartment, they change their mind.  The desire for home ownership is very strong and everyday I am amazed at the lengths buyers will go to in order to have their very own home.

Every situation is different.  Did you sale your home or walk away?  What is your credit and employment like? What kind of loan are you looking for FHA, VA, or conventional?  See a good loan officer who can assess your situation and give you advise on how to find your way back to home ownership again. Don't wait too long; it may take time and who knows where interest rates will be this time next year.

Obama's 9th Mandate, Directive, Initiative, i.e. suggestion to save the Real Estate Collapse

The Refinance Program

Didn't I blog about this one year ago?  Yes, check out my link:

http://www.trulia.com/blog/JanBaron/2010/08/fha_short_re-finance_program

I suppose being a realtor, I am bias to some extent but I believe the collaspe of this economy began with the collaspe of the real estate market.  So when I heard the president's speach and his only comment regarding the real estate market - making re-finances available at 4%, I thought "Here we go again."

Obama first presented this solution to the housing crisis during his campaign - Get your mortgage refinanced to 4% fixed.  Remember that?  I remember the outcry  "What about me?  I pay my mortgage, live within my means, and I'm going to be punished while those who over extend themselves with be rewarded?"

After six other housing proposals, the FHA Short Re-Fi was introduced with little fanfare.  With up-side down mortgages of 50%+ almost no one fit into the restricted guidelines.  With only 15 re-finances completed in the entire country, the House Financial Service Committee voted to kill it in March. 

This latest re-fi proposal too will fail.  Why?  It is unclear, for example, whether people who are delinquent on their mortgages would be eligible or whether lenders would administer it. Remember, the banks don't have to do anything they don't want to.  Investors in government backed mortgage bonds could oppose it along with Fannie and Freddie regulators.

To spur more refinancing, the government would have to  encourage Fannie and Freddie to lift restrictions. Encourage?  is that kind of like mandate, directive, initiative, or suggestion?

Then there is this problem, same problem,  does anyone in Washington ever get this?

Many homeowners have been unable to refinance their loans because they owe more than their houses are worth, they have no income, or their credit is tarnished. Why would the banks give these people more money?  They are not in the business of losing money.

 Ok, so here is the growing list of plans to save the housing collapse:

Forebearance Program

Home Affordable Mortgage Plan (HAMP)

Second Lien Modification Program  (2MP)

Home Affordable Modification Program (HAMP)

Principal Reduction Alternative (PRA)

Home Affordable Unemployment Program (HAUP)

FHA SHORT RE-FI

Extended Forebearance Plan

But wait!  There's more.  We are going to hear about a Rental Program that the Obama administration is seeking advice on from the private sector.  But that's another blog.

Reconveyance Deed & why it might be important to make sure it happened!!!

I should explain what a reconveyance deed is to help make some more sense of this.  Anytime there is a loan on a property (at least in California), there is a deed recorded on the property.  Then when a loan is paid off against a property, another deed gets filed (reconveyance deed).  That type of deed shows that that lender no longer has interest in the property.
 
In my real estate world, I normally don't watch for that type of activity.  It's a behind the scenes thing that gets done after we close escrow, which makes sense because I am making sure my seller gets their home sold or that my buyer gets in the property they purchased. 

The loan against a property is what the title company handles, they send money (full payoff or agreed short payoff in a short sale) to those lenders & then either that lender will file a reconveyance deed with their own "prefered" title connection (which will then end up at the county) or they will send that reconveyance deed to the title company that closed the escrow & have them file it thru the county.  Either way, I don't follow up with these lenders to make sure they did their reconveyance deed. 

It seems like realtors might want to start doing that or maybe at least following up with the title company to make sure it's done.  It sure can cause a lot of issues down the road if it wasn't done properly.
 
I recently had a buyer (15 months ago) purchase a short sale in Tracy CA & the bank forgot to do their "reconveyance deed".  Not sure how you forget, but I guess there are humans at Chase Bank that didn't get it done.  About 6 months ago, my buyers started getting foreclosure notices addressed to the prior owner.  Of course she didn't live there & my client kept sending the mail back as "return to sender". 

Mr & Mrs Buyer got concerned a month ago because Fed Ex packages started being dropped off on their door step in Tracy.  A process server came to their door & wanted to speak to the old owner.  Now that's when it got serious.  Thankfully my buyer went to the local Chase bank, title company, county recorder's office & started pokeing around to get to the bottom of it.  They received an "investigation" fax number to Chase to send their documentation to show they owned it & to leave them alone.  

It must have worked because a week after they faxed to this "investigation" number, a RECONVEYANCE DEED was miraculously filed with the county recorder's office & the phone calls have stopped.  Now I think I should probably follow up on all my closed escrows to make sure this happens to alleviate any of my future buyers dealing with this sort of shenanigans.