Keep in mind that in the Bennington VT real estate market, not all of these comments may be applicable. It is important to consult with your bank or real estate professional to determine the best course of action for you. Remember, all real estate is local, and this commentary is more geared towards a national audience.

Myth #1: Foreclosure happens fast. Even though the legal process of foreclosure can happen in as few as 6 months in most states, it is currently taking much longer for the average foreclosure to get to completion. Recently, JP Morgan Chase revealed that their average borrower who loses a home to foreclosure has not made any payments in 14 months nationwide; 22 months in Florida and 26 months in New York.

The fact that foreclosure does not happen nearly as fast, in many cases, as expected does give families who are temporarily down on their luck some extra time to try to get back on their feet and save their homes.

Myth #2: Buyers can’t get clear title or title insurance on foreclosed homes. Buyers of bank-owned properties in nearly every jurisdiction are protected from later title attacks by foreclosed homeowners by the bona fide purchaser rule, under which courts would prefer to simply award cash damages to be paid by the culpable bank to a wrongfully foreclosed-on homeowner, rather than reversing the sale or ownership to the new, innocent buyer.

Myth #3: Buyers should wait for the shadow inventory to be released. Many a buyer, discouraged with the homes they see on the the form in their price range, has decided to sit still and wait for the banks to release for sale what is called their “shadow inventory” – rumored to be anywhere from 4 to nearly 6 million homes that have already been foreclosed, but not listed for sale, or will be foreclosed in the near future. The fact is, to the extent that the banks have acknowledged the existence of a pool of homes they own but are not selling, they have expressed that their reasoning for holding the homes off the market is to avoid flooding the market and driving home values down any further. For that reason, buyers should not expect to see a massive influx of these shadow homes onto the market anytime soon – if ever.

The banks’ current modus operandi is that as they sell a home, the replace it with another home in that market – if they sell 50 homes in a town that month, they’ll put another 50 on the next. So, don’t hold your breath waiting for a fabulous new flood of homes. Instead, set up a Trulia alert to notify you when homes that fit your search criteria come on the market, and be ready to call your agent and go visit any and every one that looks like it might be a good fit.

Myth #4: If you’re looking for a deal, you’re looking for a foreclosure. Despite what they may say, no buyer’s heart’s fondest desire is to buy a foreclosure. But almost every buyer dreams of buying a great home – and getting a great deal on it. Many people think that to get a great value on their home on today’s market, it means they must buy a foreclosure. As a result, the value and other advantages of buying an individually-owned home on today’s market are frequently overlooked. Individual sellers with homes on the market right now are generally quite motivated, and understand that their homes are competing with discounted short sales and foreclosed homes.

Further, individual owners are often much more negotiable on a wide range of contract terms than a bank which owns a foreclosed home. You can work with non-bank owners on things like repairs, closing dates, choice of escrow provider, closing costs and even included personal property much more flexibly than you can when the bank is on the other side of the bargaining table. On top of that, many individually-owned homes are in pristine, move-in condition; that is much rarer with foreclosures.

Myth #5: Having a foreclosure on your credit history means it’ll take years and years before you can buy again. Until recently, the standard wisdom was that 5 years, minimum, would have to have elapsed between the foreclosure and the new home purchase. Now, though, borrowers can obtain an FHA loan with the low, 3.5 minimum down payment requirement as soon as 3 years following a foreclosure. To do so, though, all your other ducks must be in a row.

Excerpted from Trulia.

In the study’s geographical breakdown, with New York leading the nation Texas, Utah, San Francisco, and Los Angeles roundg out the top five. Arkansas is the least expensive area with an average fee of $3,007, replacing Nevada, now number 34, at the bottom of the list.

One of the reasons for such a dramatic rise in the average estimated closing costs across the nation has to do with new regulations implemented in January of this year. When providing a potential borrower a Good Faith Estimate (GFE) of costs, regulations now require lenders to provide a Title and Closing Fee estimate within 10 percent of what the final cost will be; in previous years, estimates could fall lower on the spectrum without penalty for the lender.

“The big rise in average closing costs may scare some homebuyers, but it’s important to keep things in perspective,” said Greg McBride, CFA, senior financial analyst for Bankrate.com. “Increased regulation on lenders’ GFEs means more accurate estimates and less expenses popping up for consumers on the back end.”

For this study, Bankrate surveyed one area in 49 states, two areas in California (Los Angeles and San Francisco) and theDistrict of Columbia. Researchers picked a ZIP code in some of the largest cities in each state and requested information on the closing costs for at $200,000 loan. They requested fees on a 30-year, fixed-rate mortgage for a borrower with a 20 percent down payment and good credit to buy a single-family house. Bankrate’s survey includes lenders’ origination fees and title and settlement fees, and not taxes or prepaid items.

NEW YORK, Aug. 16 /PRNewswire-FirstCall/ — The full results of the study can be seen here at www.bankrate.com/finance/mortgages/2010-closing-costs/.

Source:
http://www.vermontbiz.com/news/august/new-york-most-expensive-state-close-home-vermont-40th

In the Bennington VT real estate market, we encourage Buyers to visit local lenders who often have lower fees than internet or online sources.

A home equity loan is a line of credit based on that amount, using the equity as collateral (or tangible property to guarantee a loan).

Are you considering using a home equity loan to buy a second home? Contact Troy Richardson to help you find the right home and offer lists of local lenders or mortgage companies.

 Although not offered across the board, some real estate companies incorporate a “Worry Free Mortgage Protection,” that can be offered by home sellers. Genworth offers a similar protection package at no charge to buyers who purchase their mortgage insurance. Other organizations provide grants; for example, The Rainy Day Foundation assists home owners during their first 24 months after purchase if their lender or real estate agent has partnered with them. They can also offer tips for financial survival should a crisis occur. 

Not everyone qualifies for these protection packages – and make sure you understand all terms and conditions of these policies. To learn more about these options, and to find the Bennington, Vermont home of your dreams, contact Troy Richardson at RE/MAX Maple Leaf Realty!

Troy

 Foreclosures declined 8 percent in November compared with October, but were still up 18 percent from November 2008.

This was the fourth-straight month that U.S. foreclosures have declined since hitting an all-time high in July, according to online foreclosure marketer RealtyTrac.

Default notices, an indicator of coming foreclosures, also were down 8 percent from October, but up 22 percent from November 2008. Bank repossessions were flat from the previous month and down 2 percent from November 2008.

“We don’t really believe the underlying problems have been resolved,” said Rick Sharga, senior vice president for RealtyTrac. Many borrowers, he told the Associated Press, “simply aren’t going to qualify” for government and mortgage servicer help.

States with the highest foreclosure rates are:

• Nevada
• Florida
• California
• Arizona
• Idaho
• Michigan
• Illinois
• Utah
• Maryland
• New Jersey

Four states account for more than 50 percent of actual foreclosures: California, Florida, Illinois, and Michigan.

Source: RealtyTrac, (12/10/2009)

Jack Schakett, Bank of America’s credit loss mitigation strategies executive, cited “ineffective communications with customers, shortcomings in document maintenance, misunderstandings about program requirements, and the inability to comply by some borrowers.”

Likewise, JPMorgan Chase said only 4,300 home owners have completed the paperwork, although 16,000 have been approved.

“We are facing challenges with borrowers completing documentation or making trial plan payments as agreed,” Molly Sheehan, JPMorgan Chase’s executive in charge of housing policy, said in written testimony.

Source: Associated Press, Alan Zibel (12/07/2009)

 To qualify under these new guidelines:

• The property must be the home owner’s principal residence.
• The home owner must be delinquent on the mortgage or close to defaulting.
• The loan must have been made before Jan. 1, 2009, and be for less than $729,750.
• The borrowers’ total monthly mortgage payment must exceed 31 percent of their before-tax income.

Under the plan, borrowers will receive $1,500 from the government for selling homes for less than the amount of their mortgages.   Mortgage-servicing companies will get $1,000 for each completed short sale.

Second-mortgage holders can receive up to $3,000 of the sales proceeds in exchange for releasing their liens.

Investors who hold the first mortgage can collect up to $1,000 from the government for allowing the payments.

Borrowers who complete a short sale under the program must be “fully released” from future liability for the debt, according to the guidelines.

Source: Associated Press, J.W. Elphinstone (11/01/2009) and The Wall Street Journal, Ruth Simon (11/01/2009)

The Section 203(k) program is the Department’s primary program for the rehabilitation and repair of single family properties. As such, it is an important tool for community and neighborhood revitalization and for expanding homeownership opportunities. Since these are the primary goals of HUD, the Department believes that Section 203(k) is an important program and we intend to continue to strongly support the program and the lenders that participate in it.

Many lenders have successfully used the Section 203(k) program in partnership with state and local housing agencies and nonprofit organizations to rehabilitate properties. These lenders, along with state and local government agencies, have found ways to combine Section 203(k) with other financial resources, such as HUD’s HOME, HOPE, and Community Development Block Grant Programs, to assist borrowers. Several state housing finance agencies have designed programs, specifically for use with Section 203(k) and some lenders have also used the expertise of local housing agencies and nonprofit organizations to help manage the rehabilitation processing.

The Department also believes that the Section 203(k) program is an excellent means for lenders to demonstrate their commitment to lending in lower income communities and to help meet their responsibilities under the Community Reinvestment Act (CRA). HUD is committed to increasing homeownership opportunities for families in these communities and Section 203(k) is an excellent product for use with CRA-type lending programs.

If you have questions about the 203(k) program or are interested in getting a 203(k) insured mortgage loan, we suggest that you get in touch with an FHA-approved lender in your area or the Homeownership Center in your area.

For complete information on this loan program, visit the HUD Website 203(k) Pages.

1. Contact your lender. Explain the issues behind your late payments and let them know you are trying to rectify the problem. Your lender may be able to modify loan terms or help you come up with a plan for repayment.

2. Ask for help before depleting your savings. You may qualify for more options by having some resources still available.

3. Look for free counseling services. Many HUD-approved agencies can help those who are facing foreclosure and could suggest alternatives, or offer suggestions on qualifying for loan modifications.

When their situations were really tough, most banks preferred short sales because they were their best opportunity to get the most money back. But with an improving economy, and because the losses on many of these properties have already been written off the books, banks are increasingly reluctant to negotiate a short sale.

Today, banks demand 9.5 weeks to respond to a short-sale request, compared to 4.5 weeks a year ago, according to research firm Campbell Communications. Their reluctance is frequently stymieing sales and frustrating real estate practitioners.

“It drives me up a wall,” says Robert G. Hertzog of Summit Home Consultants in Phoenix. “[The bank is] holding my client hostage.”

The above is from: Source: BusinessWeek, Christopher Palmeri (10/09/2009)

If you think that you might have to enter into a short sale situation in the Bennington VT real estate market, call Bonnie Cutler at RE/MAX Maple Leaf Realty in order to discuss your options. Bonnie is the most experienced in short sales in our office.