Team Morrissey Real Estate Blog

Understanding a Short Sale – What is a Short Sale?

seanmorrissey — Mon, 26 Apr 2010 13:48:15 +0000

What is a Short Sale?

Selling Your Home for less than it is currently worth.

When you owe more on your home than it is perceived to be worth, it is likely worth your energy to try to sell your home for it’s current value in an effort to salvage your credit score and rating from foreclosure. Traditionally, a successful short sale will damage a credit score far less than having your home foreclosed upon.

Requires Mortgage Lender Approval.

Once a seller has an offer in hand (at a price that is less than what is owed upon their home) requesting the current lender’s approval is required. Traditionally, this is why short sales take so long to handle. Lenders processing!

Successful Short Sale will Negatvely Affect Credit, but, will have less impact than a Foreclosure.

Again, having a successful short sale will assist in limiting credit damage to your credit report. A hit of 50-100 points on a credit score is likely with a successful short sale. A hit of 200-300 points is far more likely with a foreclosure on your report. Furthermore, a successful short sale will likely put you in a position to purchase a home in far less time than a foreclosure.

May or may not require that a Homeowner is behind on mortgage payments.

Based upon the seller’s history with the lender, and the lender preferences, it may be likely that a seller can sell their home as a short sale and not have to be behind on mortgage payments. This will primarily come down to showing a hardship (eg: loss of job, loss of income, divorce) that can justify the need to sell.

If you have further questions, feel free to consult my website: http://www.theshortsalefix.com

Understanding a Short Sale – Steps to a Successful Short Sale

seanmorrissey — Mon, 26 Apr 2010 13:36:18 +0000

#1. Your Home Should Be “Upside Down”

Your home value should be worth less than what is owed upon the home. Can you determine the value in your community? Consult a Realtor!

#2. Speak with your Mortgage Lender!

Every mortgage lender will have options for a homeowner to consider prior to a short sale of the home. Some examples include forbearance or a loan modification.

#3. Determine a Hardship

Whether it be a job loss, loss of income, divorce, etc., understanding a “hardship” to determine why your lender should forgive the debt owed upon your home is critical!

#4. Assemble a Short Sale Packet

Before listing your home for sale, speaking to your mortgage lender about the items of paperwork to confirm your position of hardship will be necessary. Typically, this includes previous tax returns, paystubs, bank statements, and a hardship letter.

#5. List Your Home for Sale

Consulting a Realtor with an SFR designation or a preferable experience in closing short sales becomes important at this point! Listing the home and aggressively dropping the price based upon showings is critical to getting an offer.

#6. Get an Accepted Offer on Your Home

Hooray! Offer is accepted and submitted to the motgage lender with your short sale packet. Now, the waiting game begins…

#7. Lender presents Terms of Acceptance

Lender will present a letter of acceptance with terms that will need to be acceptable to the seller and buyer. Home will likely close 30-60 days after acceptance.

Please note, these are general steps to a standard Short Sale. Each lender has different requirements and these steps present a general outline. Consult your lender as to their specific requirements.

Illinois Home Sales Increase 14% in January

seanmorrissey — Tue, 02 Mar 2010 01:41:35 +0000

It’s still a buyers’ market in Illinois. According to a recent report by the Illinois Association of Realtors (IAR), January marked the fifth consecutive month of growth in year-over-year home sales, while the statewide median price logged its first move upward since September 2007.

In January 2010, Illinois home sales, which include single-family homes and condominiums, totaled 5,483 transactions, up 14 percent from total sales in January 2009. During the same period, the median price rose slightly to $145,300, inching up only 0.2 percent from the previous year.

According to the IAR report, total home sales were up in 34 of 99 Illinois counties from January 2009 to January 2010, including Jo Daviess, up 44.4 percent; Cook, up 35.8 percent; McHenry, up 28.8 percent; DuPage, up 25.3 percent; Lake, up 18.4 percent; LaSalle, up 15.6 percent; Sangamon, up 5.8 percent; and Will, up 5.4 percent.

“We are seeing an accelerated spring market despite the snow and cold in Illinois with the homebuyer tax credit the driving factor for rising home sales,” said Mike Onorato, president of the IAR. “Current conditions remain favorable for buyers with interest rates still hovering near 5 percent and just over two months remaining to take advantage of the homebuyer tax credits.”

In the Chicagoland primary metropolitan statistical area (PMSA), January represented the seventh consecutive month of increases in year-over-year home sales. With 3,922 homes sold in January 2010, sales in this area were up 29.2 percent from 12 months earlier. In addition, the median price for homes sold in the Chicagoland PMSA was $175,000, down 5.4 percent from January 2009.

In the city of Chicago itself, January home sales totaled 1,202 transactions, up 31.1 percent on a year-over-year basis. During the same period, the city’s median price fell 4.9 percent to $195,000.

“2010 has started off with an increase in the number of units sold in January over the same period in 2009,” said Genie Birch, president of the Chicago Association of Realtors. “We remain hopeful that while distressed properties are being absorbed, homebuyers on the fence will take advantage of the extended and expanded homebuyer tax credit, and consider this a great time to buy a home. While the greatest hurdle is still securing financing, the current market has tremendous opportunities for homebuyers and investors looking to expand their portfolios.”

According to Dr. Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory (REAL) of the University of Illinois, there is evidence that median price increases will moderate in Illinois over the next three months, remaining about the same as those a year earlier. In Chicago, though, he said median prices will be about 6 percent below comparable prices. On an annual basis, Hewings forecasts statewide sales to increase between 1 percent and 14 percent, and in the city of Chicago, he predicts sales will increase between 18 percent and 50 percent.

Source: DSNews.com; Brittney Dunn

Houselogic.com is Launched as Comprehensive Resource for Homeownership and Consumers

seanmorrissey — Wed, 17 Feb 2010 15:18:20 +0000

The National Association of Realtors® launched HouseLogic, a new, comprehensive consumer Web site about all aspects of homeownership. HouseLogic helps homeowners make smart decisions and take responsible actions to maintain, protect and increase the value of their homes.

“Backed by the resources and industry insights of NAR and its Realtor® members, HouseLogic will engage and involve consumers throughout the lifecycle of homeownership,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz. “It makes sense that, as the first, best source for real estate information, NAR should collaborate with today’s consumers to help them make the most out of owning a home. HouseLogic will help us do that.”

The free Web site helps homeowners plan and organize their home projects and provides timely articles and news; home improvement advice and how-to’s; and information about taxes, home finances and insurance.

“Unlike other homeownership Web sites, HouseLogic helps consumers view their home through a financial lens and make smart, informed home improvement investment decisions,” said Golder. “Families can set goals for saving money on their home or increasing its value, and easily track the progress they are making on those goals.

Registered users can save relevant information, create to-do lists and set project reminders. The Web site can also be customized for individual homeowners depending on how handy or ambitious they are regarding home projects; how much money they want to spend or save; where they live; and their priorities, such as increasing the value of their home or improving their neighborhood.

HouseLogic also empowers homeowners who want to get more actively engaged in shaping community life and advocate neighborhood and homeownership issues that matter most to them. The site provides users with the tools and know-how to effect change and address concerns, like establishing a neighborhood watch program, building a community playground, or participating in city or county planning efforts.

“For more than 100 years Realtors® have been bringing America home,” said Golder. “HouseLogic takes owning a home to the next level, partnering with consumers to truly help people build their futures through homeownership.

Visit HouseLogic at www.houselogic.com.

Source: Sara Weis of Realtor.com

Moody’s Analysts Expect 8% Home Price Drop Before We Hit Bottom

seanmorrissey — Tue, 16 Feb 2010 13:42:41 +0000

Moody’s Investors Service is forecasting another 8 percent decline in home prices over the course of 2010 before a bottom in residential property values is reached, largely because of the “underwhelming” success of the administration’s Home Affordable Modification Program (HAMP).

When all is said and done, the ratings agency predicts a peak-to-trough drop of 34 percent in national home prices. That’s actually an improvement over Moody’s estimates last month, when the agency was expecting a total peak-to-trough decline of 37 percent. However, it’s the duration of depreciation that’s the headline grabber. Previously, Moody’s analysts were predicting the price floor to be reached in the third quarter of this year. Now they say it won’t be hit until the end of the fourth quarter.

The reason for the extended freefall, Moody’s says, is the timing of foreclosure sales hitting the market. Market barometers such as the S&P/Case Shiller index and the National Association of Realtors’ existing-home median price have, in fact, shown improvements in recent months, but Moody’s says the progress is short-lived.

“We believe that the recent improvement in house prices is a temporary reprieve,” Moody’s said in its latest ResiLandscape report. “A decline in distress sales-including foreclosure, deed in lieu, and short sales-as a share of total home sales is a driving contributor to the gain in house prices.”

HAMP, as well as other servicer-initiated mortgage modification programs, have kept hundreds of thousands of distressed homes out of foreclosure and off the market – for now, the ratings agency said.

However, “Many of the loans in the [HAMP] program will fail to convert to a permanent modification and will eventually end up on the market as heavily discounted distress sales,” Moody’s wrote. “It is looking likely that foreclosures will hit the market more slowly than we had anticipated, mitigating but prolonging the price decline.”

Despite the administration’s efforts to stem the tide of foreclosures, Moody’s said in a January report that its analysis shows that only 400,000 to one million homes will be saved through HAMP. The agency’s projections fall significantly short of the federal government’s promise to keep three to four million homeowners out of foreclosure.

Source: Carrie Bay of DS News.com

4 Reasons to Sell YOUR Home Today!

seanmorrissey — Sat, 13 Feb 2010 13:58:18 +0000

Selling a property in this tough market can seem like a challenge. Here are four factors that actually make this a good time to post a For-Sale sign.

1. Sell low and buy low. Because all property values are down, the loss on the property a home owner sells is really only a paper loss because the next property he buys also will be a bargain. If he buys smartly, when prices come back up in a few years, he’ll be in better shape.

2. Down-payment help is widely available. While nothing-down loans have disappeared, it is easy to find down-payment assistance for lower-income and first-time home buyers. Programs vary all over the country, but one good way to find them is to search online for “down-payment assistance programs” and the name of your region.

3. Your uncle has money to share. Besides the $8,000 first-time home buyer tax credit and the $6,500 move-up credit, there are an array of energy tax credits that can make home improvements pay off in cash.

4. Good help is available. Really talented real estate practitioners, contractors, and designers are available and eager for business.

Source: McClatchy Tribune, Kate Forgach (02/07/2010)

Register to Learn Where Foreclosures are Happening in YOUR Neighborhood!

seanmorrissey — Fri, 05 Feb 2010 14:03:07 +0000

Through the services of First American Title, homeowners and potential buyers now have the ability to be part of an on-going email feed that updates, on a daily basis, homeowners which have gone into preforeclosure. As one might imagine, this is very important to know for any homeowner, or future homeowner, that regards their home as their investment. Having a working knowledge of how many foreclosures are within your home area and the proposed sales price for each is imperative to any homeowner looking to refinance or potentially take out a line of credit.

Interested in learning more? Feel free to e-mail me at:

seanmorrissey@kw.com

All I need is your address, purchase price, name, and e-mail address! You will be set upon an on-going email update with foreclosures in your neighborhood!

Short Sale on Your Home does NOT mean you get Taxed on Forgiven Debt!

seanmorrissey — Thu, 14 Jan 2010 15:19:03 +0000

Prior to the Mortgage Debt Relief and Emergency Stabilization Act of 2008 being put in effect, money forgiven by a lender in a short sale was considered taxable income. While many families today feel that not selling their home at a loss is not worth their time given the fact that they can be taxed for difference on the loss, the Mortgage Debt Relief and Emergency Stablization Act may very well prevent this loss as taxable income. Here are some general guidelines:

Taxpayers may exclude debt forgiven on their Principal Residence if the loan balance was less than $2 million. The limit is $1 million for a married person filing a seperate return.
The law applies to debt forgiven in 2007, 2008, 2009, and has been extended thru 2012.
The law applies to debt forgiven in connection with buying, building, or improving a PRINICPAL RESIDENCE ONLY!!!!

For more information on this subject, refer to the IRS guidelines given in the following link:

http://www.irs.gov/individuals/article/0,,id=179414,00.html

As with any tax or legal advice, consult the appropriate professional before proceeding. Feel free to contact our Team for further assistance in contacting the appropriate parties:

www.theshortsalefix.com

Behind on Your Mortgage Payment? Foreclosure? HOPE NOW May Help!

seanmorrissey — Mon, 21 Dec 2009 20:43:57 +0000

Hope Now is an alliance between housing counselors, mortgage lenders, investors, and other mortgage market participants maximizing outreach efforts to homeowners in distress by helping them staying in their homes. By doing so, the homeowners in conjunction with Hope Now, create a coordinated plan.

Options for homeowners in financial distress include :

Repayment Plan
Loan Modification
Partial Claim (for FHA Loans)
Fannie Mae Homesaver Advance
Home Affordable Modification Program
Short Sale (consult www.theshortsalefix.com)
Deed in Lieu of Foreclosure

Regardless, any homeowner in financial distress should consult Hope Now for initial assistance. By doing so, the homeowner will receive options which can assist in making an appropriate decision. For more information, consult:

www.hopenow.com

www.theshortsalefix.com

or call: 866-995-HOPE

Fannie Mae Introduces “Homepath” Financing to First Time Homebuyers and Investors!

seanmorrissey — Tue, 15 Dec 2009 14:31:38 +0000

Fannie Mae recently rolled out a new means of financing their “bank-owned” properties. Introduced as “Homepath” financing, this mortgage program is open to investors, first time homebuyers, and just homebuyers in general! Here are some of the benefits of the “Homepath” financing:

> Low down payment (as little as 3%)

> Flexible Mortgage Terms (fixed, adjustable, interest-only)

> Downpayment of at least 3% may be funded by a gift, grant, nonprofit loan.

> No MORTGAGE INSURANCE (PMI)

> No Appraisal Fees

> Renovation Financing permitted on specific homes (Funds that you receive at closing to renovate the home and payback over the 30 year term of the mortgage).

> Financing available to those without PERFECT credit!

To learn more, visit:

http://www.homepath.com

or feel free to visit our website or contact Team Morrissey regarding how you can access this financing:

http://www.getteammorrissey.com