2009 had lots of ups and downs … the “ups” parts were mostly good things to help rescue homeowners from foreclosure and to rescue the nation’s economy.  Here are some of my favorite posts of the year here at Shak & Jill.

Loan Modifications a Good Option

One of my friends was telling me last night how she was able to obtain a modification which has provided her family with enough relief (her next home loan payment isn’t due until February 2010) that they are getting caught up on bills and will survive Christmas.

Expanded Tax Credit for Existing Homeowners

The biggest question I get is what if someone sold their house a year or two ago.  Would they still be eligible for the $6500 tax credit?  The answer is they COULD be eligible in certain situations.  They had to have owned a house for at least five consecutive years in the past eight years.

Bizarro World Open House

Suddenly six cars pulled up together and out of each clown car came at least four people.  The people were all dressed similarly – dark pants, blue and red shirts.  They were like a swarm of locusts as they picked up every flyer, including the mortgage sheets.  Suddenly they began lining up along the staircase and one of them separated to arrange them.  He took out a camera and snapped several family photos.  They then stood in front of the great fireplace, were arranged again, and had another family portrait taken.

A Grave Concern

Sometimes developers gain permission to relocate the burial sites, but at other times the remains must remain.  When they stay put, the heirs may gain the right to visit them … even to cross your property to gain access.  Ingress is the legal right to enter the property.  Egress is the right to leave the property.  Both are real estate terms that may also apply to public works employees, electric and gas company workers, and others who may need to access something on or next to your property in order to complete a job.  Or families just visiting their gone but not fogotten family members.

Want to Sell?  Drop Your Price!

In this market, I have people beating my door down to list their homes but it’s rare that a seller will acknowledge that their home is worth a lot less now than it was just two years ago.  To be an agent today, you have to grow some thicker skin and stand by the price range you recommend.

Today’s Squatters Have a Different Face

Of course there are still homeless people who find a bridge or a tent to live in, or who depend on shelters.  But there are others who have become squatters. In their own homes – or what had been their homes.  On MSNBC.com today, I read about a family who’d been evicted.  They lived one weekend in a van, but returned to the home they’d lost.

A Word About Appraisals

Appraisers have been terribly skittish this last year or so. They’ve definitely taken a good portion of the blame for inflated home prices – especially when the housing bubble burst – so it’s no surprise that they’re being extremely careful with home purchases today.

I hope 2010 is the year we see the real estate market rebound!  Have a safe celebration to ring in the new year!

h/t: Brittney.  From Don’t Ask Me, I Just Work Here.

As soon as the paperwork goes through, I will have earned a new real estate designation called SFR – or Short Sales & Foreclosure Resource.  It’s not really a designation that I’m proud to have.  After completing many hours of seminars and classes, frankly it’s one I do not like at all.  But it is a part of the reality of real estate today.

I talked with a reporter several days ago about a subdivision in my area and found that a solid 30 percent of listings were distress sales – that is they were either foreclosed already, short sales, or HUD houses.  Short sales are a better option than foreclosure because the seller’s credit score is impacted less.  Plus banks prefer to sell when a property is occupied because it’s more likely to be kept in better shape.

There are some options a homeowner has before resorting to a short sale … here’s a list of some:

• Repayment Plan – the bank can work with homeowner to set up a repayment plan rather than an outright sale.
• Modification of Loan – Loan modification can change the term and amount of the home loan so the homeowner can afford payments. They must have an income, however, for this to be a real option because they must have the ability to pay.
• Forbearance – Lender may give homeowner several months of absent payments to allow time to get back on their feet before resuming mortgage payment.
• Refinance – Refinance the home loan with better terms which could include reducing the payment by making it a 40 year loan rather than a 30 year loan.
• Reinstatement – Pay total amount past due including any attorney fees.
• Chapter 13 Bankruptcy – Stops foreclosure proceedings and allows homeowner to catch up on home loan. The loan amount will still need to be paid, however.

Make sure if you are considering any of the above that you stay in communication with your lender.  Also, always seeks legal or tax advice on the implications these actions may have on you.

For more information about the SFR, visit the Realtor.org site here.

CNN Money.com has a feature right now of the dumbest moments in business for 2009 and included is one real estate transaction.

The 80,000-seat Silverdome was the National Football League’s biggest venue when it was built in 1975 for $55.7 million. … In an auction back in November, an unidentified Canadian real estate company had the winning bid — of $583,000, which is about 1% of its original cost.

Ouch.  Yet it reminds me that $55 million times zero (zero attendance, zero interest, zero return) is still zero. That $583,000 bird in hand is better than two birds in the bush.  Still… ouch.

Merry Christmas to everyone near and far!

My friend Chip – feeling jovial and getting ready for a week of good cheer and fa la la la’s – came home to the noise of water running.

So anyhow, I took half the day off to meet the people that came out to fix my silly leak.  Turns out the main line busted coming out of the ground.

Yes, it was my fault, I didn’t shut ALL the vents around the house.  The one the was closest to the pipe is the one that is so hidden you forget it’s there.

Lessons learned: 1) Close your crawl space vents during the winter to protect your pipes, and 2) If you see your water needle spinning, you have a leak.

Sorry, Mr. Chip. Hope you  manage to have a Merry Christmas anyway!

In what appears to be a delayed reaction to the subprime mortgage meltdown (it’s the government so of course it took some time), the HUD settlement statements have changed so buyers will have more clarity on their closing costs.

The Good Faith Estimate is the first major document affected.  The lender must have on the first page how long the locked-in interest rate is available, the loan amount, the term of the loan, the initial interest rate, and monthly mortgage amount.  Lenders must also disclose whether an interest rate can rise, if the cash loan balance can rise, whether the monthly payment can increase, if there is a prepayment penalty, and if there is a balloon payment.  Also on the first page are whether or not there will be an escrow account for insurance and taxes and how much that will be.  Finally, the lender must show the total estimated settlement charges (closing costs).

The second page of the new good faith estimate details expenses including origination fee, required services (appraisal, credit report, flood certification, etc.), cost of title services, government recording charges, transfer taxes, escrow, daily interest charges, initial escrow amount (which will be insurance and taxes), and the cost of homeowners insurance.

Finally, the back page includes a “shopping cart” section where the buyer can shop the loan.  Lenders are not crazy about this because FROM THEM the buyers get that they can look around for better loan options.  However this should keep a lender honest because it eliminates junk fees (they all must be included with the loan origination fee).

How are they kept honest?  If there is more than a 10 percent increase between the good faith estimate and the HUD settlement statement, the lender has 30 days to cure the discrepancy.  If the overage is the fault of the lender, they must refund the buyer the amount of the overage.  However, there is a caveat.  If the buyer picks someone not on the lender’s list to provide the survey, credit report, flood certification, or other items required by the lender, then the lender is not at fault if the HUD is more than 10 percent of the GFE.

I feel more protected now, how about you?

Six months to a year after homeowners have been helped out on the mortgage payment – either through loan modificiations, forebearance, or other grace periods – they are still falling behind on their mortgage payments.  According to MSNBC.com, nearly 40 percent of homeowners fall behind again.

But nearly 40 percent of homeowners who had their monthly payments cut by 20 percent or more last year were delinquent again within a year, according to a report Monday from the Office of the Comptroller of the Currency and the Office of Thrift Supervision.

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With the economy still weak and employers continuing to cut jobs, “even if you’ve gone through a modification, your situation may deteriorate,” said Fred Phillips-Patrick, director for credit policy at the thrift office.

Still, the economic recovery depends upon job growth.  Without consumer confidence in the ability to hold on to a job and without solid employment prospects, the real estate market along with the financial health of the country remains in limbo.

An interesting phenomenon has taken place in certain parts of the country.  If you find an area with numerous foreclosures and vacant properties, there are squatters.  It’s not the fact that there are squatters that is so interesting, however.  It’s the fact that the banks are aware of them and in no hurry to evict them.  Ultimately, a home is better cared for if it is occupied: the lawn is mowed, if there are plumbing or electrical issues, they’d be fixed, and occupants should alleviate the threat of vandals and thieves stealing cabinets, etc.

What’s important to note, though, is that squatters have no rights whatsoever when a home is sold.  If a bonafide renter lives in the home when it is foreclosed, the new owner must respect and honor the terms of the lease.  If it’s a squatter, zilch.

Final caveat – if you do rent, be sure you’re entering into a rent or lease agreement with the real owner or spokesperson of the property.  Don’t let a scam thief take advantage of you.

Getting your home loan may have just gotten harder thanks to some new rules by Fannie Mae and the FHA.  Make no mistake the rules are very much needed and should keep unqualified buyers out of the housing market until they CAN qualify.

FHA loans may be requiring a higher credit score.  Fannie Mae has raised its minimum credit score from 580 to 620, effective December 12, 2009.  If your score falls below 620, you would have to pony up a 20 percent down payment to qualify for the Fannie Mae guarantee.

Tucson Arizona Homes for Sale goes into some detail about additional Fannie Mae changes.

A third change concerns maximum debt-to-income ratio. Fannie Mae will no longer approve loans with debt ratios exceeding 45 percent except with very strong assets and very high credit scores.

In no case whatsoever may debt-to-income exceed 50 percent.

Today’s interest rates remain low, though we expect them to rise in 2010 (but not more than up to 6 percent).

Today’s 30 year rates with 30 day lock 12/15/09
FHA 4.875
VA 4.875
Conforming 4.875*
USDA 4.875
Jumbo 3.875* with LTV to 90%

*rates assume credit score of 660 with  no lender fee on government loans and 1 pt zero pt program available and loan amount of 150,000>,jumbo loans have limited ltv up to 2,000,000 rate is for 5/1 arm. conforming, loan amounts and credit score restrictions may apply credit income property requirements may vary. Rates and fees vary by lender.