New HARP guidelines will help

I love hearing good news for homeowners having trouble paying their mortgage.  I keep having to remind my friends and clients that “You’re not the only one dealing with this.”  For those of you who don’t know, HARP (Homeowner Affordability Refinance Program) is a government program that was designed to help homeowners refinance.  Great news just announced last week:  Even if you’re underwater on your mortgage, you can still refinance!

Here’s the status on what you need to know.  Below is a list of those eligible to possibly refinance with HARP funds under this program:

1. Your loan must be owned by Freddie Mac or Fannie Mae.  You can contact your lender to find out.  Or you can look this up online by clicking here for Freddie Mac and here for Fannie Mae.

2. You currently owe more than the house is worth.  For those of you that this doesn’t apply to, you’ll be able to regularly refinance by contacting a mortgage lender.

3. Currently have an interest rate higher than prevailing rates.  However, if your interest rate is 4.5% right now, you wouldn’t qualify because rates aren’t that low.  Be thankful that your rate is so low. 🙂

4. Would have to pay mortgage insurance by refinancing.  There is no PMI or mortgage insurance through the HARP program.

5. Have a decreased monthly income due to job loss or job change and couldn’t refinance.  You will still need to show that you can afford the new monthly payments.

As a reminder, you do not need to meet all five of the above criteria.  Just one is acceptable.  The only thing  that is required is that the loan is currently owned by Freddie Mac or Fannie Mae.  Lenders through HARP are currently refinancing for up to 105% of the home’s current value.  

Aside from having no mortgage insurance with these HARP loans, oftentimes it’s not required that an appraisal be done on the home.  Plus closing costs are generally lower with more lenient underwriting.

If you want to find out if you qualify to take advantage of this program and need the name of a great lender, please e-mail me at noah.seidenberg@cbexchange.com or visit me online.

Vacant property ordinance considered in Chicago

Chicago City Council is proposing an ordinance that would help clean up those vacant properties affected by foreclosure in the city.  We’ve all driven through neighborhoods only to see boarded up homes, graffiti, broken windows, and unkept lawns.  Bank of America, Wells Fargo, PNC and JP Morgan Chase helped develop the ordinance along with the city.

What is proposed is to have the banks better maintain these properties that are awaiting foreclosure or were left vacant because the bank took ownership after a foreclosure.  They would have to take responsibility for winterizing properties, putting up metal if the plywood was removed twice, and keeping stairs to the entry secure.  If it was found that they weren’t maintaining the properties correctly according to the ordinance, they could be fined each time.

They’re hoping to make this ordinance take effect statewide by proposing it before the State legislature.  For both the State and the banks, they’re also hoping to lower the amount of time it takes a property to go through foreclosure.  Cook County is averaging about two years currently, and they’re hoping to get that down to six months tops.

According to this Chicago Tribune article, “The mayor wanted to be sure we were able to uphold the important maintenance requirements in Ald. Dowell’s ordinance, so we brought the banks to the table to work toward a solution,” said David Spielfogel, chief of policy and strategic planning for the mayor’s office. “In addition to the compromise ordinance, we are working toward a solution in Springfield that will ensure regulatory certainty for municipalities and banks.”

And if everything passes as everyone hopes, the ordinance should take effect by the end of this year.

What are your thoughts?  Good or bad?  I actually like that the banks helped to develop it, especially considering they’re the ones that would be fined if they don’t follow through.  It really holds them responsible and keeps the city from looking like an awful mess.  Leave me a comment or visit me online.

Get those buyers in before winter

As the cooler and colder weather is starting to breeze through the midwest, we’ve reached the part of the season that might be the end of regular home showings through the holidays.  If you have your home on the market to sell, here are some tips to get it shown and sold prior to wintertime, according to this AOL article.

First of all, the number one tip this article stresses is that, if you don’t have to sell over the winter, don’t.  If you’ve ever sold a home before, you know that you’ll get a lot less showings in the winter because of the weather and the holidays.  People don’t want to go out traipsing through snow and sleet to look at homes unless they have to.  So if you don’t have an urgent need to sell, you might consider taking it off the market until after the holidays or early spring.  We always say after the Super Bowl is a good time to get it relisted.

 1. Keep your photos updated.  Just like it’s important when your home is for sale during June to remove the pictures of the snow-covered driveway, it’s equally important to do the opposite.  If you’ve been listed since April with a green lawn and trees in full bloom, you’ll want to switch photos to that showing some snow and the way the interior looks with the light on.  You don’t need to make it obvious through your photos how long your home has been on the market.  You might also want to consider updating your remarks to reflect upon the new season and the holidays, such as, “You’ll love winter mornings nestled in front of your gas fireplace.”

2. Target your specific buyer.  Is your house just a few-minute walk to the local elementary school?  Consider advertising in a PTO or PTA bulletin.  Located 3 minutes from the commuter train station?  Post a flyer there.  If you have farmland with horse stables, you might want to advertise in an equestrian magazine.  Built a home gym in your basement with a steam shower?  Post a flyer at the local gym.  You get the idea.  Think outside the box.

3. Make your home accessible.  Keep driveways and walkways clear of snow, ice, and leaves so that buyers can easily reach the front door.  Keep the heat on and turn the lights on.  And as I always stress, try not to turn away any showings for any reason.  You never know if that buyer will get a chance to come back at another time.  And they could be the future buyer of your home!

If you have any more tips, I’d love to hear them.  Please leave me a comment or visit me online.

Home values not going up anytime soon

Unfortunately, the news I have isn’t good.  I mean, we all know the real estate market isn’t going to magically improve overnight.  But for those of you that thought the good news is right around the corner and that home values would start to steadily increase, I’m sorry to do this to you.

According to this USA Today article, “Already, more houses are for sale in America than people want to buy, and the roughly 1.6 million homes in the nation’s shadow inventory promise to drag down home prices for years, experts say. States like California, Florida, Illinois, Georgia, and Ohio have the largest shadow inventories, according to RealtyTrac, a firm that tracks foreclosures and delinquent properties nationwide.

“Sale prices are down across the state with none of the area being able to maintain more than a one month growth in sales prices, ” said Bob Niemi, director of the Ohio Mortgage Bankers Association.”

So this shadow inventory is going to keep home prices down for a while.  As I was flipping through TV channels yesterday morning, I caught wind of CNBC reporting the same news.  Banks had previously been taking extra long to process foreclosures because of problems they had with paperwork and their hope to keep as many homeowners in their homes as possible.  Because of that, it had held up a lot of new foreclosures from going on the market.  But that influx is what USA Today is dubbing “shadow inventory.”  And that’s going to keep prices down.

The market can’t handle all of the foreclosures and short sales on top of the current inventory.  It for sure doesn’t help sellers get the value they need/want out of the homes they’re trying to sell.  And even for buyers trying to score a great deal, it’s not clearing the inventory fast enough.  

So as I’ve stressed in the past, if you don’t need to sell, don’t.  It’s not worth it watching your home sit on the market just to try to buy something.  However, if you are looking to purchase an investment property or two, I cannot recommend a better time to buy!  I can be reached online.

Your online activity could cost you a home deal

With the influx of people using social networks today, such as Facebook and Twitter, it’s very common to know all the going-on of your friends and family.  It’s great to find out where everyone is when, and share important news stories and photos.  However, when it comes to real estate, it’s best to be cautious with what you post.  Here’s why:

In a recent MSN article, a real estate agent mentioned how her client lost a house.  She was looking in a particular neighborhood and went online and posted something like “We found out dream house in XYZ neighborhood!”  Well, one of her friends saw the post and shared it with another friend who was looking in that same neighborhood at the one house for sale.  That person went and offered more money and ended up buying the home.

I’ve always told my clients never to give out information until a deal is closed, especially the price paid, because if something happens before you get to closing, now someone has information on what the seller was willing to take and could offer a better price.  This is also why real estate agents never share what a home goes under contract for until it sold.

You also have to be careful when posting pictures because other people may be able to recognize the home.  But not all social network activity surrounding buying or selling a house is bad.  Here is when it’s okay to post.

1. You’re the seller and want people to know your house is available.  The more people that know about it, the more potential buyers you’ll see.

2. Asking what people know about a certain town in terms of schools, activities, etc., especially if you’re new to the area

Otherwise, you can figuratively stick your foot in your mouth by posting something that other people shouldn’t know.  And for security reasons, never post that you’re going to be viewing open houses or out looking at houses because then people know you’re not at your home!

I’d love to hear more thoughts on this subject.  Please leave me a comment or visit me online.