SHORT SALE SPECIALIST AGENTS FOR BANK OF AMERICA, WELLS FARGO, CHASE - The Gusman Group Market News
Foreclosure Starts Rise for the First Time in Months
Mortgage Collectors Silence Homeowners with ‘Gag Orders’
Is Your Loan Modification Going Nowhere?
With the recent passing of the California Homeowners Bill Of Rights, mortgage lenders in California were mandated to offer distressed homeowners an alternative to foreclosure as part of the banks restitution in the lawsuit by the state.
Many distressed homeowners were given loan modifications in lieu of foreclosure even if they did not qualify previously. These homeowners had already applied for a loan mod and were declined by the same litigators. So why would they allow the loan mod again? The answer is because the state mandated they do. If a homeowner could not afford to pay a loan modification prior, how would they be able to now? Well, they can’t. And that’s why over 56% of these loan mods and homeowners have already re defaulted on their mortgage again.
In trying to help these distressed homeowners, the state has actually just prolonged the agony and inevitable of foreclosure for these families. Now these families will have to again seek alternatives to foreclosure. After exercising a loan mod, there are not many options left and should elect to short sale their home. An alternative that should have been done much sooner but wasn’t due to this mandate.
A short sale should be used in lieu of foreclosure all the time. The short sale option will salvage your credit and give you a much quicker recovery from your misfortune. In most cases if you short sale your home and continue to pay on time your other creditors, in 18-24 months you should be able to buy another home. With foreclosure a family is looking at 5 years to recover and the foreclosure can haunt them and remain on their credit report for up to 10 years.
If you are a distressed homeowner and have been considering a short sale or are in the middle of the process and your bank offers you a chance to get a loan mod even when they turned you down in the past. Make sure you weigh all the possibilities. If you know you will not be able to make the payments you may not want to prolong the inevitable. Your recovery starts as soon as you take the steps towards a recovery option such as a short sale.
There are many benefits to a short sale; especially tax wise, such as the debt relief act extended to 2014 insures you will not have to pay taxes on the amount forgiven. There are qualifications for this, but most will take advantage of this. Always discuss all the aspects of a short sale with your agent before you agree to enter into the agreement.
Make the right choice for your future. Too many distressed homeowners have blinders on and only look at the short term. Loan mods last 3-7 years, you must look at your future past 7 years and base your decision on where you want to be in 3-7 years. That is the real deciding factor!
Orange County, Los Angeles, and Inland Empire Housing Prices Jump!
Huge price increase from 2013 in Orange, Los Angeles, and Inland Empire Counties!
Prices have risen by 11.7% in Orange County, 12.2% in Long Beach/Los Angeles County, and 12.1% in the Inland Empire. Southern California had 3 of the top 4 regional price increases Orange County, Los Angeles County, and the Inland Empire!
Today's Residential Real Estate market is challenging. While values have risen dramatically in 2013, most would be sellers are sitting on that bubble of equity. Their values have gone up but not quite enough to allow sellers to cash out as much as they hoped or would like. Therefore, many would be sellers are contemplating selling their homes themselves.
Selling your home yourself sounds beneficial if you are one of the sellers sitting on that bubble mentioned. Saving the 6% commission that agents normally charge to sell a property sounds like a good deal and makes the sellers feel they are closer to their magic number they wanted to net in the sale. But today the market has changed and is moving back towards a buyers market. Meaning there are more properties available due to the interest rates rising close to the 5% mark from 3.5% a couple months ago. This change in the interest rates took many of the potential buyers out of the market due to now payments are not as affordable as before. Thus, turning the market around and back towards a buyers market, meaaning there are not as many buyers so sellers are having to make more concessions and are no longer experiencing multiple above asking price offers as they did a few months ago.
When the market is hot for sellers with lots of buyers drooling over the chance to buy, selling your home yourself is much easier. But when buyers are fewer, sellers need as much exposure as possible to their property. This is true in any market but more so in this one. Your home is only worth what someone is willing to pay for it! And, if you are trying to get top dollar for your home you need to expose and market your home to as many potential buyers as possible to find that one buyer that just falls in love with your property and is willing to pay your price. You cannot get this kind of exposure yourself posting on free websites.
Especially in this market, you should utilize a licensed agent. By using an agent, if the agent is good they will give your home 10 times the exposure you can. For example, when we market a property. At The Gusman Group we send your property to over 250 real estate websites nationally and internationally. We send property information to our over 300 investors. And if you pick the right agent that specializes in listing and marketing homes most likely like we have many buyers waiting to purchase that came from the other properties we had listed that they did not get. You also cannot overlook the power of the MLS Multiple Listing Service that agents are part of and utilize. Listing your property on the MLS exposes your home to tens of thousands of other agents that have qualified buyers also ready to purchase. With all this exposure you are more certain to secure a buyer than if you undertake the sale yourself.
Also consider this. A good agent will make the sale as easy and effortless as possible. They are there to protect your interests. They make sure the buyer is fully qualified so that your time is not wasted or your property is not tied up with a bogus buyer. This agent will make sure your home is properly priced for your market to insure you attract many buyers. Remember that commissions are negotiable. We recognize that sellers are sitting on that bubble of equity and we are making adjustments to lower commissions in this market to allow the sellers to be able to sell. This is something no agent wants to do ever! But the market is demanding an adjustment.
So is it worth it for you to sell your home yourself? NO, not in this market. Not if you really want to sell your home. I see the same ads on sites of the same homes for months still trying to attract a buyer. Contact an agent discuss your needs and make a deal that fits and is fair to both parties, and sell your property for REAL.
Remember this also....."There is no bad time to sell your home, only a bad marketing plan!"
For more information Contact:
The Gusman Group
First-Time Buyers Show Interest; Face Tough Market
Total Foreclosures Fall; ‘Zombie Foreclosures’ Pose Challenges
Foreclosure Inventory Down 31% in 2013, Slow Progress Expected in 2014
Expired Mortgage Tax Relief Could Increase Pressure on Troubled Borrowers
Despite Fewer Foreclosure Starts, Distressed Sales Rose in 2013
Which Hidden Gems Make Cut as Year's Hottest Neighborhoods?
Redfin on Tuesday came out with its annual list of the country’s “hottest” neighborhoods. The company ranked 105 neighborhoods across 21 major markets that have grown the most in popularity during the four months leading into 2014.
Following are 2014’s 10 hottest neighborhoods, according to Redfin, along with their median sale price in 2013:
#1 Bernal Heights North Slope–San Francisco, CA | $982,500
#2 Eagle Rock–Los Angeles, CA | $539,000
#3 Morningside-Lenox Park–Atlanta, GA | $540,375
#4 Upper Chevy Chase–Washington, D.C. | $873,000
#5 Desert Shores–Las Vegas, NV | $179,525
#6 Barrington Oaks–Austin, TX | $303,750
#7 Phinney Ridge–Seattle, WA | $502,625
#8 Concordia–Portland, OR | $355,000
#9 City Park–Denver, CO | $394,500
#10 Humboldt Park–Chicago, IL | $189,450
The company says at first glance, it appears the common threads among the top neighborhoods are highly ranked schools and scenic community parks. However, Redfin agents have found that the real trend driving neighborhood popularity in 2014 is a short commute at an affordable price. People’s top neighborhood choices offer a short drive to or easy access to a commuter rail line at prices that are not the most expensive in the city, the company explained. “After a year in which prices popped 13 percent, Americans are checking out still-close-in but often-overlooked neighborhoods in search of affordability, even if means less-fashionable restaurants or a home that needs a little more work,” said Redfin CEO Glenn Kelman.
He likened this year’s hottest markets to “the Susan Luccis of neighborhoods” that are “finally getting their due.” Kelman continued, “The buyers who have made these alternative spots so hot aren’t like the ones we saw in the last boom, who just borrowed more and paid up. Our clients in 2014 have settled on a price range, and they’re sticking to it.”
To arrive at its 2014 “hot” list, the Seattle-based, technology-centric brokerage says it turned to its website users, analyzing hundreds of millions of pages they visited and homes they added as “favorites” to monitor for price changes or sales. Redfin’s evaluation also takes into account insights about which neighborhoods are “buzzing” from hundreds of real estate agents within the 21 major U.S. cities included in the company’s coverage area.
Recognizing that most homebuyers aren’t scouring the United States from coast-to-coast to find their next home but instead focus their efforts on finding the right neighborhood within the confines of an individual city and its immediate vicinity, Redfin also compiled separate listings of what it calls “the top five rising stars” within each of the 21 markets covered in its study. The company’s analysis of 2014’s hottest neighborhoods by metro is available on its website.
For more information contact
Jerry Gusman, The Gusman Group
Bill Seeks to Extend Federal Tax Exemption for Forgiven Mortgage Debt
Congressman Bill Foster (D-Illinois) introduced the Homeowners Debt Relief Extension Act (H.R. 3856) on Tuesday. The bill would extend the mortgage debt tax exemption that’s been in place since 2007 for another two years.
The Mortgage Debt Relief Act of 2007 makes debt that is reduced or cancelled through a loan modification or debt forgiven through a foreclosure or short sale tax-exempt. Other criteria also apply, such as the indebtedness must be on a principal residence and the maximum amount that can be claimed for the tax break is $2 million.
Since 2007, Congress has extended this tax relief to homeowners so that they are not liable for taxes on the difference between the house’s value and the loan modification or between the house’s value and the amount of a foreclosure sale or short sale. This tax relief expired on December 31, 2013, however, and so far, no extension has been passed by lawmakers, though homeowner advocates are lobbying heavily to reinstate the mortgage debt tax exemption.
Foster’s bill would ensure any qualifying reduction or cancellation of mortgage debt is not considered taxable income by extending this tax relief through January 1, 2016, for debt forgiven after December 31, 2013.
Foster’s proposal calls for the costs of such an extension to be offset by repealing a tax break in the Internal Revenue Code’s Section 199 for oil and gas companies. Foster says the Section 199 deductions are no longer necessary since oil and gas companies are making billions in profits each year.
“With millions of struggling homeowners still underwater on their mortgages, now is not the time to cut off this tax credit,” Rep. Foster said. “We shouldn’t be offering up millions in tax breaks to oil and gas companies, while leaving working families, still struggling to recover from the recession, with a bigger tax bill.”
For more information contact
Jerry Gusman, The Gusman Group
Freddie Mac: Short Sales More Attainable Than Homeowners Think
When a homeowner is unable to make their mortgage payments or owes more on the home than it’s worth, a short sale can be a viable option that avoids the negative implications of a foreclosure for both the homeowner and the mortgage-holder.
However, common perceptions of short sales as difficult, lengthy, restricted to specific circumstances, and harmful to personal credit cause many to shy away from the option.
While short sales have been known to drag on in the past, Freddie Mac’s Standard Short Sale requires servicers to approve or deny a homeowner’s application within 30 days. After approval, the short sale should close within 60 days, according to Mooney.
Misperceptions regarding eligibility requirements are also a barrier, Mooney says. She clarified that short sales can be an option for owners of investment properties or second homes, those with second mortgages, and homeowners who are current on their loans.
Those who are current on their loans must meet general eligibility requirements, “the property must also be your primary residence and your debt-to-income ratio must be greater than 55 percent,” Mooney said.
For those who have second mortgages, Mooney said Freddie Mac is “offering up to $6,000 to subordinate lien holders—who are like second mortgage companies—in exchange for releasing the subordinate lien, extinguishing the underlying indebtedness, and waiving the right to pursue deficiency.”
Another major source of concern for homeowners is the impact a short sale will have on their credit scores and their ability to obtain another mortgage in the future.
“While only the credit reporting agencies that calculate your credit score will know for sure, it’s possible that a short sale might be better for your score than a foreclosure,” Mooney said.
“Even if it isn’t, a short sale gives you time to find a more affordable place to live and exit gracefully from your obligation,” she added.
Mooney also assured homeowners that in most cases, they will not be on the hook for the full mortgage loan amount, though they may be required to pay a portion of the unpaid balance after the short sale closes.
When a borrower enters into a short sale, the impact on his or her ability to obtain a new mortgage depends on the circumstances, according to Mooney.
Those who enter into a short sale after a financial hardship such as a medical emergency or loss of income must wait 24 months to re-establish credit and apply for a new mortgage loan, while those who opt for a short sale due to “personal financial mismanagement” must wait at least 48 months before applying for another mortgage, according to Mooney.
Mooney recommends homeowners consider a short sale if they do not qualify for other loss mitigation options, need to move to obtain or maintain their jobs, or are underwater.
For more information contact
Jerry Gusman, The Gusman Group
Even in Buyer's Market, Homeownership Expected to Decline
12/27/2013BY: TORY BARRINGER
Zillow expects conditions next year to be a bit friendlier to homebuyers—but that doesn’t mean we’ll necessarily see more owner-occupied housing, experts at the real estate marketplace say.
Looking at ongoing trends, Zillow made four major predictions about the course of housing over 2014.
First, home values are forecast to rise by 3 percent at the national level over the year. The prediction projects a retreat from 2012 and 2013 levels, which Zillow says were “unsustainable and well above historic norms for healthy, balanced markets.”
“This year, home value gains will slow down significantly because of higher mortgage rates, more expensive home prices, and more supply created by fewer underwater homeowners and more new construction,” said Dr. Stan Humphries, Zillow’s chief economist. “For buyers, this is welcome news, especially for those in markets where bidding wars were becoming the norm and bubble-like conditions were starting to emerge.”
Second, the company predicts mortgage rates will reach 5 percent by the end of the year—a level not seen since early 2010—as the economy improves and the Federal Reserve adapts its policies. That news may not be as bright for buyers, but Erin Lantz, director of mortgages for Zillow, says it’s important to keep perspective.
“While this will make homes more expensive to finance—the monthly payment on a $200,000 loan will rise by roughly $160—it’s important to remember that mortgage rates in the 5 percent range are still very low,” Lantz said. “Because affordability is still high in most areas relative to historic norms, rising rates won’t derail the housing recovery.”
However, Lantz noted affordability has already turned into an issue for some markets, particularly those in California.
For its third prediction, Zillow again turned to the positive, forecasting a clearer road to mortgage credit.
“The silver lining to rising interest rates is that getting a loan will be easier. Rising rates means lenders’ refinance business will dwindle, forcing them to compete for buyers by potentially loosening their lending standards,” Lantz said.
And finally, the last prediction: Homeownership rates will fall to their lowest level in nearly two decades, dipping below 65 percent for the first time since 1995.
“The housing bubble was fueled by easy lending standards and irrational expectations of home value appreciation, but it put a historically high number of American households—seven out of 10—in a home, if only temporarily,” Humphries said. “That homeownership level proved unsustainable and during the housing recession and recovery the homeownership rate has floated back down to a more normal level, and we expect it to break 65 percent for the first time since the mid-1990s.”
Zillow also combined data on unemployment, population growth, and its own Home Value Forecast to glimpse into what it believes will be the hottest markets in 2014.
The list includes a diverse set of metros spread across all regions of the United States, including: Salt Lake City, Utah; Seattle, Washington; Austin, Texas; San Jose, California; Miami, Florida; Raleigh, North Carolina; Jacksonville, Florida; San Diego, California; Portland, Oregon; and Boston, Massachusetts.
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The Gusman Group