Which is Better, A Longer or Shorter Turnaround Time For the Distressed Owner? Or, Buying. After a Short. Sale

Do you picture yourself here someday? or someplace like this?

I can't guarantee anything, but the likelihood that your life will turn better faster might be greater if you consider how quickly you (or someone you know) can shorten the time it takes to obtain a loan in the future.

Many people have friends and family members struggling with their situation, and all too often, they think foreclosure and/or bankruptcy are their best avenues--when they haven't really gotten all the information they could yet.  If you know someone like this, please share these guidelines with them because they can make a big difference for them in the future for the next several years:

• FHA loan -- After a foreclosure, pre-foreclosure, short sale, or a deed-in-lieu, a homebuyer may obtain an FHA loan 3 years after the date of the event. The FICO score requirement today is about 620-640. (There may be exceptions to this time period, if you can prove the default was beyond your control.)
• VA loan--After a bankruptcy, foreclosure, deed-in-lieu or short sale, a homebuyer may be able to obtain a VA loan 2 years later, with re-established credit.
• FHA loan & Bankruptcy--After a Chapter 7 bankruptcy, a buyer may be able to obtain an FHA loan 2 years later, with re-established credit. Chapter 13 requires 1 year of payout and court approval for a mortgage.
• Conventional loan -- After a pre-foreclosure sale/short sale or deed in lieu, a conventional loan requires 2 years from the completion date to get a 20% down loan, 4 years from completion to get a 10% down loan, and 7 years to obtain maximum financing loans. 
• Conventional loan and foreclosure--It takes 7 years to obtain a conventional loan, and re-established credit.
• Conventional loan & Bankruptcy--Chapter 7 requires 4 years, and re-established credit; Chapter 13 requires 2 years with a discharged BK, and 4 years with a dismissed BK. There can be no 30-day lates in previous 12 months.

Finally, a foreclosure stays on the credit report for 10 years, for all employers, insurance companies and others investigating your credit worthiness to see, regardless of how you've moved on.  A short sale's impact on your credit rating may be considerably less severe over a shorter period of time due to type of entry made, short sale negotation with the bank and depending on the policy of the servicer/investor.

Not all short sale situations succeed, unfortunately, and there are many reasons for this. However, banks would still prefer to do a short sale than a foreclosure: they don't want REO inventory, and they almost always recoup more money doing a short sale.

The banks come out ahead, and so do you, if you can do a short sale.  Doesn't it make sense to choose the option that would allow you to become a homeowner faster in the future, as well as the option that would have less impact on your long-term credit? And then someday you could be back here again--sooner.

Staying on Top of HAMP, HAFA and HARP Homeowner Programs

Staying on top of the string of programs created to help owners caught up in the perfect storm of a high unemployment, rampant underemployment and declining home values, can be confusing to say the least. Here’s a brief overview of the acronyms spawned by the foreclosure crisis:

• HAFA—The Home Affordable Foreclosure Alternatives program was designed to help homeowners to avoid the negative effects of foreclosure by establishing incentives for completing a short sale or a deed-in-lieu of foreclosure. In a short sale, the loan servicer accepts a loan payoff amount from an underwater borrower that is less than the amount actually owed on the first mortgage. With a deed-in-lieu of foreclosure, the borrower transfers ownership of the property to the loan servicer. HAFA provides for $3,000 in relocation assistance after a successful short sale or deed-in-lieu. Which  route you go depends very much on your immediate and longterm situation--before you act, you should consult with a professional for your options.
• HAMP—The Home Affordable Modification Program was designed to help homeowners who are no longer able to make mortgage payments on time due to decreased income or an increase in the monthly payment amount. HAMP reduces a homeowner’s monthly mortgage payment to 31 percent of gross income following a series of steps on the part of the mortgage servicer that can include a rate reduction, a term extension of up to 40 years, deferred principal payments, and (possibly) a lowering of principle. Here is the link to the list of servicers or banks agreeing to participate in this program. On the Loan Lookup tool, you may be able to find out if Fannie or Freddie own your loan.
• HARP—The Home Affordable Refinance Program enables homeowners whose mortgages are backed by Fannie Mae or Freddie Mac and who owe more than their home it’s worth, to refinance and take advantage of today’s historically low interest rates. Originally, HARP was only available to homeowners whose first mortgage did not exceed 125 percent of the current market value of their home.
• HARP 2.0—Starting Dec. 1, 2011, the 125 percent loan-to-value ratio will be eliminated, enabling eligible borrowers to refinance under HARP regardless of how far underwater they are on their mortgage.

Making your way through the maze of programs can take time -- and the situation is often more complicated than it looks at first. Take this survey or contact me for additional help contacting or concerning your servicer, and finding out if your loan is owned by Fannie or Freddie.

And, homeowners looking for information on the national mortgage servicing settlement announcement by the Department of Justice should visit NationalMortgageSettlement.com. Click on the logo below for more information:

Distressed vs. Equity Market in the Long Beach Area

There seems to be a perception (among some people) that high end or "luxury" areas are somehow immune to short sales and foreclosures--but that's not true. The subprime loans, originally targeted for "B" and "C" borrowers, eventually made their way into the "A" borrower range, the borrowers most often buying in the high end price range, because of the tempting terms offered by lenders at the time.  Other factors for distressed sales in those areas are that the accumulated market conditions caused job layoffs or other income reduction, and/or the market value drop caused a short sale or foreclosure in a forced relocation for a borrower otherwise current on mortgage payment. In the high end market areas, many sellers with equity who could not sell simply delayed their plans and took the home off the market if it didn't sell.  But others who needed to sell proceeded with a short sale listing, hoping to find a buyer.

• For all of 2011, in the 90803 zip code (Naples, Belmont Shore, Bluff Park, Belmont Park, Belmont Heights), approximately 28% of single family homes in the $440,000 to $1.4 million market sold under distressed property conditions. Out of 172 single family home sales listed in the MLS, 47 were designated as a distressed property sale, most of those being short sales.   Condos distressed sales for 2011 were 37 out of 122, or 30% of the condo market in 90803.
• In the 90814 zip code (Alamitos Heights, and adjacent areas), 34% of single family homes in the $400,000-$900,000 range sold as distressed properties in 2011.

These figures are lower than Long Beach as a whole for 2011, where according to the MLS, 46% of all single family homes sold in Long Beach sold under distressed property conditions.  (These figures for all areas may be lower than the true picture, because some properties are listed as "standard sale" when in fact they are recently foreclosed properties being re-sold by banks which impose their own contract conditions upon the buyer--so they really aren't a standard sales according to standard Realtor contract terms.)

• In Cerritos, approximately 33% of single family homes listed in the MLS, or 77 out of a total of 231, sold as distressed properties in 2011.
• Lakewood's distressed single family home sales in 2011 constituted 47% of all single family home sales, comparable to the entire city of Long Beach for distressed home sales.

There really isn't any place that is immune to this category of transaction, certainly not in Southern California. For a consultation about your residential property value, and what you may be able to do, please contact me, or visit my website at www.juliahuntsman.com at "Help for Homeowners".  Don't be one of the potential sellers who does not investigate all options, the bank would really rather have a sold property, a modified loan, a re-finance, rather than a foreclosed property--it helps their values as well.

Just Sold: 5319 E. Brittain Long Beach CA 90808

5319 E. Brittain St., Long Beach

What a charming house -- beautiful 1945 home sold as a standard sale for $325,000 to the happy buyer represented by me as the selling agent in this sale.

• 2 bedrooms
• 1 bath
• 2-car garage
• lots of driveway parking space
• located on cul-de-sac
• established landscaping front and back
• lots of rear yard space

If you are interested in an evaluation of your current property and want a comparable market analysis, or you just want to find out about your area market, please contact me right away! 
Whether you are a buyer or a seller, for more information about properties on the market, contact me by phone, or view properties at www.juliahuntsman.com "Property Search".
Lic 01188996

Just Sold - in Lakewood City, Lakewood--4246 Ocana Ave.

 This 1942, 3 bedroom, 2 bath, home with original hardwood floors in the living room, added master bedroom and added family room, just closed escrow on February 1, 2012. The happy buyer willingly entered into a short sale transaction with the seller for this "opportunity" in Old Lakewood City section of Lakewood, which closed at $315,000. 

As is the case with many short sales, it was a rather lengthy affair, with the seller having obtained numerous offers--but waiting a long time for the right buyer to close escrow! Thanks to everyone who made this sale a success!

Huntsman Properties, Lic 01188996

Some Increased Loan Costs Starting in 2012

There was a time just a few years ago when PMI (mortgage insurance premium), that cost for putting less than 20% down towards a mortgage, was not tax deductible. Then, with the upswing in the housing market, came the good news in 2006 that it was deductible, so there seemed at least some return on what seemed like an extra cost because you couldn't afford the higher cost (the 20% down payment). 

But, unfortunately for people who need every break possible now, that deduction has expired at the end of December. This will affect potentially millions of homeowners, who probably don't even realize its disappearance at this point. It could mean a difference of several hundred dollars a year, at a minimum, for the first-time and mid-income buyer. Congress failed to renew this, as well as many other benefits in the Tax Code.

In addition, there are new mortgage fee hikes for Fannie and Freddie Mac loans, fees which will undoubtedly get passed along to the consumer, and may mean about 1/8% of a 1 point increase in interest rates. Why?

"Unlike standard guarantee fees, which are used by Fannie and Freddie to defray loan-default expenses, the new funds will be sent directly to the Treasury to help pay for the $36-billion cost of the temporary payroll tax cut. FHA loans also will be hit with a fee increase by the payroll bill, raising the annual premiums the FHA charges new borrowers by one-tenth of a point."

More information on these costs from Ken Harney.

Residential Sales in Long Beach CA -- Very Busy in 2011!

Just a quick look at this chart for pending sales of single family homes in Long Beach shows the trend:
more properties in escrow with almost every passing month in 2011--December was the highest month of pendings since June of 2010. (This data includes both standard equity sales and all types of distressed and special condition properties, at all price ranges.)

One of the busiest months was June, when the average days on market time was under 60 days, the highest number of new listings came on the market, the number of houses sold was second highest for the year, and the median price was the highest for the year, at over $370,000. August and December, however, were the two highest months in number of houses sold (202 each) for the year.  The median sold price for 2011 did not reach the median high of $380,000 of 2010.

Overall, the number of houses sold from December 2010 is 9% higher in December 2011, while the number of properties for sale is down 24%. In fact, the months' supply of inventory (how much time it would take to sell all the existing inventory at the current rate of sale) shows a definite downward trend for single family homes for the entire year and is at the lowest level since December 2009.

Interest rates are projected to stay lower throughout 2012, making a great time to take advantage of Long Beach market activity, especially in the under-$400,000 market, where standard sales are moving quickly.

NOVEMBER - 2011 Newsletter by Julia Huntsman

Welcome to the most current Housing Trends eNewsletter. This eNewsletter is specially designed for you, with national and local housing information that you may find useful whether you’re in the market for a home, thinking about selling your home, or just interested in homeowner issues in general.


Please click on this link to view the Housing Trends NOVEMBER - 2011 Newsletter http://yoursocal.housingtrendsenewsletter.com/

The Housing Trends eNewsletter contains the latest information from the National Association of REALTORS®, the U.S. Census Bureau, Realtor.org reports and other sources.

Housing Trends eNewsletter is filled with local and national real estate sales and price activity provided by MLSs and the National Association of Realtors, U.S. Census Bureau key market indicators, consumer videos, blogs, real estate glossary, mortgage rates and calculators, consumer articles, and REALTOR.com local community reports.



If you are interested in determining the value of your home, click the “Home Evaluator” link for a free evaluation report:
http://www.juliahuntsman.com/Home-worth.html

Sound decisions can only be made with accurate and reliable information, and I am happy to be a trusted resource for you. Thank you for the opportunity to provide you with this monthly eNewsletter, and I look forward to answering any questions you may have and to the opportunity to be your REALTOR® in the future.


Sincerely yours,



Julia Huntsman

Huntsman Properties

Area REALTOR Long Beach CA 90803
562-896-2609
 julia@juliahuntsman.com

You are receiving this email because you have signed up for and activated your personalized Housing Trends eNewsletter. If you no longer wish to receive emails about the latest issues of your newsletter, Email at julia@juliahuntsman.com to unsubscribe.

Keeping Up With Capital Gains for 2012

It's that time of year when not only are the seasonal holidays of Thanksgiving and Christmas are on people's minds, but so are certain real estate issues, such as capital gains taxes.

The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 extends the Bush era tax cuts until the end of 2012. In 2013, the capital gain rates are set to return to the old 20% and 10%, per Asset Preservation, a 1031 exchange company.

1031 exchanges may not be conducted with an owner occupied principal residences, but they do apply to a taxpayer's investment property which he/she wishes to exchange, rather than sell outright. If your tax bracket is over 25%, you will be paying at the 2003 15% capital gains rate.  Beginning in 2013, this rate will increase to 20%.

So for now, you have another year to accomplish an exchange, but time moves on quickly. Depending on the market value and the time it takes to find the qualified buyer for your current property, find the new property including its selling conditions, the year can melt away. 

To find a comparison for your selling situation, see this exchange vs. sale scenario or see general 1031 exchange information.

Long Beach--and Nearby Cities-- Residential Market Prices and Sales October 2011

Long Beach Harbor view

While prices are dropping overall in the area based on annual figures, condos in zip code 90802 showed a price increase from the prior year of 32.5%; 90803, an increase of 57.9%--and dropped in other reported zip codes (from prior year), per the Los Angeles Times zip code chart for October, 2011. 

Single family home prices in Long Beach dropped by varying percentages from 2.1% (90806) to 24.6% (90804), and based on one house sale in 90802, an increase of over 40% in price from last year.  These prices also vary according to the number of short sales and bank-owned properties in the mix.
Even though decreases are reported here, these are year-to-year, and 2011 month-to-month comparisons may actually show some increases.

October 2011 sales volume in Long Beach:

Single family homes - 181 properties
Condos/townhomes, Co-ops, OYOs, Lofts -  79 properties
Units (2-4) -28  properties

September 2011 sales volume in Long Beach:

Single family homes - 188 properties
Condos/townhomes, Co-ops, OYOs, Lofts - 75 properties
Units (2-4) - 36 properties

August 2011 sales volume in Long Beach -

Single family homes - 207 properties
Condos/townhomes, Co-ops, OYOs, Lofts - 97 properties
Units (2-4) - 40 properties

Buyers should understand that there's a lot of opportunity in the area right now--take a look at the MLS inventory vs. the number that have sold:
Currently, there are 141 active listings in the MLS for 2-4 unit properties in Long Beach, ranging from $159,900 in North Long Beach, to $1,499,000 for 4 units in Alamitos Beach (90802).

There are 668 single family homes actively listed in Long Beach from just under $100,000 in North Long Beach to over $9 million in 90803 on Sea Isle in Naples (90803).

There are 444 condos/townhomes, OYOs, Co-ops and Lofts actively listed, the vast majority of which are condominiums, ranging from $47,000 in downtown Long Beach to $1,095,000 in Spinnaker Cove.

Take a look at the properties attached to the links--it's an easy to sift through the market!

Market Prices in Other Cities:

Cerritos has had only a 6.9% drop in single family prices from October, 2010; Diamond Bar has a 25% increase; two zip codes in Downey have an increase;  Duarte, a 40% increase; San Gabriel, a 22% increase; Torrance, 3 zip codes show an increase; all zip codes in Whittier increased up to 26%; Los Alamitos, .8% increase; Garden Grove, two zip codes show increases of 2-3% range.  (See the Los Angeles Times chart for more information.)

With interest rates not seen since the 1940s, it's a great time for low monthly payments!