My New Blog

We just sold two short sales in two weeks, one of which was with Bank of America and the other had two mortgages, and Bank of America was in second position.  Short sales can be a great source for buyers but they can also be really tricky and require agents to monitor them closely to keep up to date with what the banks are asking for from the sellers and the buyers.  More banks are requiring proof of funds or a prequalification letter from buyers and that is not a negotiable issue.  If they're going to take the time and effort to negotiate a short sale for the seller, the bank needs to know that the buyer intends to go through with the purchase. 

If you're thinking of buying in the Naples, Bonita, or Marco Island area and would like some honest and intelligent assistance/information about short sales and the real estate market, give us a call.

Mike & Anna Bryant

239-293-0246 or 877-LIVE-FLA

Short sales and foreclosures are the new wave of listings found in the current marketplace.  Make sure that you are working with a realtor who is knowledgeable about short sales from both the listing and selling sides of a transaction.  We've closed a number of short sales and foreclosures this year and know the ins and outs of those transactions; we're able to confidently assist our clients (sellers and buyers) with the short sale and foreclosure process to close deals.

There are some properties that are listed as short sales that are listed at anywhere from 10-30% of what is actually owed on the property.  These do not appear to be realistic short sales and will probably not get approved by the lender.  In fact, often some of these just result in bidding wars on properties that do a disservice to the buyers and sellers.  We make sure that the short sales we list are appropriately and reasonably priced to assist the seller with moving on and the buyer with moving in.  If you'd like more information from us regarding how we can help you find short sale properties or list your property as a short sale, please call us at 239-293-0246 and we'd be happy to discuss this with you.

For sellers, one of the most important parts of getting a short sale approved is having a hardship letter from the seller detailing why they fell behind on their mortgage and why the bank should approve the short sale.  It's like a detailed storyline of your issues, hardships, debts, and misfortunes to inform the bank of your difficulties.  Banks consider issues like adjustable rate mortgages that have reset, loss of income, failed businesses, relocations, divorce, illness, deaths, separations, damaged properties due to disasters.

It's best to keep these letters to one to two pages maximum.  Any longer than that and you'll lose the attention of the processor who is working on the file and it won't matter what you've rambled about in the letter.  Stick to the point, convey your situation but make sure it's clear what your circumstances are.

Short sales and foreclosures are not for the impatient.  If you can wait, you will get a great deal.  If you can't, someone else will.  Any questions, please call us at 239-293-0246.

For the first quarter of 2010, sales of homes listed for over one million doubled over the same period in 2009.  146 contracts were accepted in that price range.

There were 1679 contracts on condos in Naples which is an increase of 75% over the same period in 2009.

We've recently been sampling different restaurants in the Naples area and we've found a jewel!  China Tokyo at the corner of Pine Ridge road and Airport Pulling by Bealls and Target is a great restaurant.  Full sushi bar, any and every kind of Chinese food, and dim sum.  They even prepare a low sodium version of your meal if you'd like.  Never any MSG.  We've gone back three times since we found it a month ago!!!  Prices are reasonable too & great service.

Check it out while you're in Naples buying a home... you won't be sorry.

We were contacted by Good Morning America and asked if we had a client who would be willing to appear and discuss a recent home purchase.  We immediately thought of two wonderful women we had just sold a home to, Helena Sturnick & Gail Murphy, who just relocated from Boston, MA.  Good Morning America called them and the next day, appeared at their home with camera crews and Helena did a magnificent job of showing them around the home and answering their questions.  Unfortunately, when the clip played, any mention of us had been deleted (can't win them all!) but it was great to hear that Naples is one of the top places to buy!  We've lived in Naples for 15 years and there are some phenomenal deals out there to be had.  If you're interested in buying a home in Naples, it's the time for you to get in at the bottom. 

Here's a link to Zillow and the interview.

Thanks,

Mike & Anna Bryant

239-293-0246

http://www.zillow.com/blog/top-10-cities-to-bargain-for-a-house/2010/02/16/

Increased Lending Restrictions

I. New Maximum Debt-to-Income Ratio Limits

If Loan-to-Value is > 80% then max DTI ratio is 41%.

If Loan-to-Value ratio is < 80% then max DTI ratio is 45% with exceptions to 50%

II. Big Changes to FHA to affect us soon

- Initial up-front MIP increase will be raised by .50 to 2.25% - will go into effect in the spring

- Borrower will be required to have a min credit score of 620 to qualify for 3.5% down

- Seller concessions will be reduced from 6% to 3%, will be posted in February will go into effect in the early summer – this will be what will affect us the most! This will not cover all the closing costs and pre-paids on lower sales prices.

III. New Credit Score Requirements if LTV is >80% Conventional is 720

Maximum conventional financing is 90% on SFD or PUD, but LTVs over 80% require 720.

IV. When the Borrower is Converting Their Existing Primary Residence to an Investment Property

For borrowers who are purchasing a new primary residence, and intend to convert their existing primary residence to an investment property, rental income may be utilized to offset the existing mortgage payment provided the following requirements are met:

· Rental income may only be used to qualify when mortgage insurance is not required

· Net Rental Income is calculated utilizing 75% of the projected rental income, less the proposed PITIA

· The borrower(s) must have at least 30% equity in the existing primary residence as documented via a full Uniform Residential Appraisal Report (URAR) with interior/exterior inspections; minus any outstanding liens.

· The rental income must be documented via:

o a fully executed lease agreement, and

o the receipt of a security deposit from the tenant and deposit into the borrower’s account

If the 30% equity in the property cannot be documented, rental income may not be used to offset the mortgage payment and the following requirements apply:

· Both the current and the proposed mortgage payments must be used to qualify the borrower for the new transaction, and

· 6 months of PITIA reserves for both properties is required, unless the AUS scoring engine determines a different reserve requirement

When mortgage insurance is required:

· Rental income is not permitted

· Reserves equal to 6 months PITIA for both properties is required. Exceptions can be made to consider reduced reserves of 2 months PITIA for both properties if the borrower has at least 30% equity in the existing primary residence as documented via a full Uniform Residential Appraisal Report (URAR) with interior/exterior inspections; minus any outstanding liens.

WHAT TO EXPECT AS A BUYER

801 - Points

1% of the loan amount per point Often referred to as "points" or "discount points," this is a one-time charge from the lender that you pay to buy down the interest rate on your loan. You can normally secure a lower interest rate by paying more points, however, getting the lowest interest rate does not necessarily translate into getting the best deal. Points are fees that must be included in the calculation of "what is the best deal." Generally, the higher the charge, the lower the interest rate, and vice versa. Each point equals 1% of the loan amount.

803 - Appraisal Fee $275-$800

The appraisal fee covers the cost of a professional appraiser evaluating your home to estimate its fair market value. The appraisal is used to calculate the loan amount as a percent of the property value. This loan-to value (LTV) ratio is one of the factors that dictates whether a lender is willing to approve the mortgage application and whether additional fees may be required (e.g., Private Mortgage Insurance). The cost of the appraisal will depend on the location of your property (rural vs. urban), the complexity of the appraisal and the going rates for appraisers in that area.

804 - Credit Report $20-$60

This fee covers the cost of a credit report that will be used by the lender to review your credit history and help determine whether to approve your application. Although the fee is collected by your lender, that payment goes to the credit service agency. Because lenders require an independent credit report, we cannot reuse any prior credit reports you may have. One report is required per borrower, unless the borrowers are married to each other.

810 - Tax Service Fee $70-$100

The lender needs to know that the property taxes are being paid in full and on time because a tax lien would take priority over their lien as a lender. This fee covers the cost of a tax service agency hired to monitor your account. If your taxes are impounded, the agency provides the lender with your tax bills so that the lender can pay your taxes on time. If you pay the taxes yourself, the agency monitors the tax rolls for the life of the loan, and informs the lender if they ever become delinquent so that they can take action to protect their lien position. This one-time fee is set by the lender.

814 - Processing Fee $395-$695

This fee is a payment to the lender or mortgage company to cover its loan processing costs.

815 - Underwriting Fee $250-$600

Underwriting is the name of the analysis lenders perform to determine if they are willing to lend you money and under what conditions. Lenders will review a number of factors including your financial situation, your credit history and the property appraisal. This fee covers the cost of reviewing your loan application and is lender-specific.

816 - Document Preparation Fee $150-$350

This charge covers the cost of drafting the loan closing documents.

819 - Courier Fee $25-$50

Companies will often charge for the costs of sending documents to various parties using counters or express mail services. These costs are generally based on actual usage and will generally be higher when the process is rushed, but some lenders may use a fixed charge.

820 - Wire Transfer Fee $10-$50

When your loan funds, it is a common practice for the lender to wire the funds to the settlement provider (escrow holder, title company, or attorney). This is a fast and efficient way to transfer funds in a transaction where time is crucial. The receiving account charges a nominal fee for the wire transfer.

822 - Flood Certification Report Fee $10-$30

Lenders want to ensure your property (their collateral) is well protected from likely hazards. In addition to requiring hazard insurance to cover events like a fire, they want to know if know if floods are of concern in your area. This fee covers the cost of a report to determine if the property is in a flood-risk area. The Federal Emergency Management Agency (FEMA) designates flood zones to indicate that certain areas have a high risk of flood damage. If your home is located in one of these flood zones, you will be required to secure flood insurance. Most homeowner's policies do not cover flood damage, so a separate policy will be required. This fee only covers the cost of the report.

Settlement Agent/ Title Company Fees

These fees are not controlled by the lender. They are actually performed by a separate company that you the consumer have the right to choose. If you are refinancing, you can be entitled to reduced title fees by providing a copy of your current title insurance policy and also a copy of the survey of your property. The fees paid to the Settlement/ Title Company often include the following items and vary by state and company.

1101 - Settlement or Closing Fee $150-$600

This fee pays for the services of the escrow or settlement agent that handles all the financial transfers and payments associated with the transaction. These fees are set by the title company and depend on several factors including the property value and complexity of the transaction.

1102 - Abstract or Title Search $125-$250

1103 - Title Examination $75-$150

1104 - Title Update $75-$150

1108 - Title Insurance: Lender's Coverage

Title insurance guarantees that your home has no other liens on the property. The title company will check that no other entity has a lien, unpaid claim or other restriction on your ownership of the property. The insurance protects the lender in case a lien does exist that the search did not uncover. The premiums depend on the loan amount being insured. The buzz word in the State of Florida for title insurance is "Promulgated Rate." Securing title insurance at "promulgated rate" ensures you are getting the lowest possible rate for title insurance.

1109 - Title Insurance: Owner's Coverage $25-$100

Owner's coverage also insures against the possibility that there is an unknown lien on your property and ensures your undisputed ownership. The difference is that is protects the owner and insures the entire value of the property (not just the loan amount). The premiums depend on the property value but if issued at closing with the Lenders Coverage a nominal fee will be charged. This is sometimes called a "Simultaneous Issue." The owner's policy is not necessary in a refinance situation as that policy remains in full force and effect for as long as the owner owns the property.

Unlike other types of insurance which protect a policyholder against loss from some future occurrence (i.e. a car accident, fire etc.), owner's title insurance protects you against some occurrence that has already possibly happened, such as a forged deed somewhere in the title.

The title policy remains in effect for as long as the property is owned by the insured, and only requires a one-time payment to set it up.

What risks does it protect you against?

Forged Documents Fraud

Invalid divorces
Confusion from similarity of names
Mistakes in recording legal documents
Wills not probated
Unpaid taxes
Misrepresentation of marital status
Undisclosed or missing heirs
Clerical errors in public records
Signatures of minors or mentally incompetent persons

1110 - Title Endorsements

These are separate endorsements that attach and are made part of the Title Insurance policy. In the State of Florida, it is 10% of "Promulgated Rate" for the first endorsement plus $25 for each endorsement thereafter.

1301-Survey $225-$350

This is an architectural sketch to the property which shows things such as house and improvement locations, fence and driveway locations, power line and utility easements, overlapping boundaries, flood hazard information, encroachments, and the physical size of the property. Basically, the lender is looking to see that your property (structure and improvements) does not encroach onto an adjacent property and vice versa. The costs for a survey vary with the size and complexity of the property.

1305 - Delivery/ Courier Fee $30-$50

This fee is similar to the courier fee charged by the lender, but covers the title company's costs.

Government Fees 1201 - Recording Fees $55-$75

These fees are required to record the important documents for your transaction (deed, mortgage and release of liens) in the public records. The recordings are done at the county courthouse where the property is located.

1203 - State Tax/ Documentary Stamps $3.50 per thousand

A state tax, in the form of stamps, required on all new mortgages (purchase or refinance). The amount of stamps required varies with each state. In the State of Florida, the tax is 35 cents per hundred ($3.50 per thousand) based on the mortgage amount. (Ex: on a $100,000 mortgage the State Tax/ Stamps would be $350.)

1204 - Intangible Tax $2.00 per thousand

This tax must be paid before the Clerk of the County Court can accept any mortgage for record. In the State of Florida, the tax is 22 cents per hundred ($2.00 per thousand) based on the mortgage amount (Ex: on a $100,000 mortgage the intangible tax would be $200.)

Prepaid Items

Borrowers are required to prepay the following and put taxes and insurance in escrow. These fees are industry standard practices and do not vary greatly between lenders.

901 - Pre-Paid Interest (also called Interim Interest)

Lenders require that you pay the interest due on the new loan from the date of funding to the end of that same month. The interest due is calculated using the loan's interest rate and the appropriate number of days remaining in the month of closing. On an estimate of closing costs a conservative approach would be to estimate 30 days of interest, but on average the borrowers pay 15 days of interest.

903 - Hazard Insurance Premium (Homeowners Insurance)

Lenders will require that you insure the property you are buying, since the property is collateral for the loan. At the time of closing you must pay the entire first year's premium or prove that you already have coverage (i.e., in the case of refinancing). If you are purchasing a condominium, your association policy will already cover your unit and you will not need to purchase a policy. The cost of hazard or homeowners' insurance depends on many factors, including location, property value, types of coverage and deductibles. Although lenders try to make realistic estimates as to what it will cost you for property insurance, you should consult with an insurance company for a more accurate quote.

904 - Flood Insurance Premium

If your property is located in a Flood Hazard Zone, you will also be required to carry flood insurance. The same details that apply to hazard insurance also apply for your flood insurance policy.

Escrow Accounts

An escrow (or impound) account is an account used when the lender will be paying your hazard (homeowner's) insurance, flood insurance and property taxes on your behalf. You prepay the amounts due into the account at the time of closing and the lender pays the costs as they come due. Typically, 1/12 of the annual premium or installment is collected with your monthly payment. The amounts that are normally required are: (1) two months of hazard insurance, and (2) two to three months Real Estate Property Tax Escrow (depends on the date of closing).

1001 - Hazard Insurance Escrow (and Flood Insurance…if applicable)
This impound represents the amount the lender withholds to ensure your hazard insurance and flood insurance policies are paid on time. Typically, the lender will escrow two months of premiums at closing, and then collect 1/12th of the annual premium with each monthly mortgage payment. Although we will estimate your insurance premiums and escrow on the "Good Faith Estimate of Closing Costs," the actual figures will be established by the insurance company you choose to write your policy.

1004 - Property Tax Escrow Similar in rationale to the insurance escrow, this impound account represents the amount the lender withholds to ensure your property taxes are paid on time. The lender will escrow two to three months of taxes at closing, and then collects 1/12th of the annual premium with each monthly mortgage payment. Both the setup of escrow account and the monthly escrow payment will be based on the actual property taxes which will be verified with the county tax assessor's office.

Special Note on Escrows: Borrowers who desire to maintain their own escrow accounts can do so by adding .25 points to the total points or 1/8%to their interest rate with no additional charge (20% equity requirement).

For people refinancing: Your Property Tax and Insurance escrow accounts need to be set up in such a way that there will be enough in those accounts to pay the full amounts when they come due. That being said, your insurance escrow account will be setup with between 2 and 12 months. How many months will be determined by the anniversary date of your insurance policy(s) and the month you close in. Your tax escrow account will also be setup with between 2 and 12 months. This will be determined by which month you close in. Because you probably have escrow accounts set up with your current mortgage lender, the setup of the new escrow accounts will be a near duplication of your current ones.

We've been involved in numerous short sales in the Naples market and have developed quite an expertise in handling those.  Something that distinguishes us from other realtors is that we have an attorney-realtor on board who personally handles all short sales.  That's why we have the closing statistics that we do for our short sales.

Often agents who "work" short sales fob off the daily grind of the short sale on attorneys or loss mitigation companies that charge extra for those services, either from the seller or the buyer.  We don't do that.  We work only for the real estate commission that we get from the short sales, even if it is reduced by the mortgage company.

Short sales are when a homeowner is attempting to sell their home for less than what they owe to the bank.  There are three parties to the transaction, the buyer, seller, and the mortgage company.  All contracts are contingent upon the mortgage company agreeing to the sale of the property.  If it is a primary residence, the seller will not receive a 1099 for the difference between the sales price and what is owed on the home.  If it is a secondary or investment property, the seller may receive a 1099 for the difference.

There are other technical issues that go into successfully completing a short sale.  We're the Naples, Marco Island, & Bonita Springs experts in short sales and welcome your questions about whether or not a short sale is the right move for you at this time.  Call us and we'd be happy to meet with you...

The Bryant Team - 239-293-0246

When Excellence is the only Option

The Worker, Homeownership, and Business Assistance Act of 2009 acts to extend the deadline for qualifying home purchases from November 30, 2009 to April 30, 2010. Furthermore, if a buyer enters into a binding contract by April 30, 2010, the buyer has until June 30, 2010 to close on the purchase and receive the credit.

The maximum credit amount will stay at $8,000 for first-time homebuyers defined as buyers who have not owned a primary residence in the past three years up to the date of purchase.

However the new law also provides for a “long-time resident” credit of up to $6,500 to others who would not qualify as “first-time homebuyers.” The terms of qualifying for this credit are as follows: the buyer must have owned and used the same home as a principal or primary residence for at least five consecutive years of the eight-year period ending on the date of purchase of their new home as a primary residence.

Regarding any qualifying real estate purchases in 2010, taxpayers will then have the option to claim that credit on either their 2009 or 2010 tax returns.

If you're in the market to buy or sell a home, we're the realtors for you.  Attorney-realtor on board to assist with all purchases and sales for no additional cost to you. 

Call the Bryant team today at 239-293-0246 and make your real estate transaction one of the best experiences of your life.  Don't settle for less when the best is just a phone call away.

FHA LOAN GUIDELINES HAVE BEEN REVISED...

SEE BELOW...

• Mortgage insurance premium (MIP) will be increased to 2.25% to build up capital reserves and bring back private lending
  

• New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%
  
  

• The allowable seller concessions will be Reduced from 6% to 3%
  

THIS IS BIG NEWS: FHA Has Waived the 90 Day No Flip Rule for 1 Year (with some restrictions and qualifications).

Short Sale and REO quick-turn sales, aka flips, are becoming more and more accepted by the government and major lending institutions.  

For right now, the FHA has rescinded its 90 anti-flipping rule and will, for a period of 1 year, allow FHA buyers to obtain loans on properties that have been recently purchased by investors.

This is a boon to the real estate industry as with so many distressed properties that were not eligible for financing, often cash investors were the only ones who could purchase these homes, fix them up and resell them to owner-occupants obtaining a mortgage.

The FHA has qualified the terms under which these "flip" properties can be financed.  Follow this link to find out more.

http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf

Congress today approved legislation that will extend the first-time home buyer tax credit beyond its Nov. 30 deadline and expand it to a wider group of home buyers. The bill also provides relief to cash-strapped home builders by providing broader tax benefits for businesses with net operating losses.

The legislation, which will be signed into law shortly by President Obama, extends the $8,000 credit for first-time home buyers for sales contracts entered into by April 30, 2010 and closed by June 30. Also, it has been expanded to include a new $6,500 credit for owners of existing homes who are purchasing a new primary residence. An existing home owner can claim the $6,500 tax credit if they have been residing in their primary residence for five consecutive years out of the last eight.

The income eligibility limits to claim the full credit amount for both groups of home buyers have been raised from $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return to $125,000 for individuals and $225,000 for married couples.

For businesses with net operating losses, the new law will allow all businesses -- regardless of size -- with operating losses in 2008 or 2009, not both, to claim refunds on taxes paid up to five years ago. Businesses can offset 100% of taxable income with losses carried back in years one through four and offset 50% of income in year five. Small businesses with less than $15 million in gross receipts would be able to claim a five-year carryback for 2008 losses under the American Recovery and Reinvestment Act and for 2009 losses under the new law. The new net operating loss provisions will throw a lifeline to struggling businesses, allowing them to continue making payrolls, paying business loans and otherwise keep their doors open until the economic recovery takes hold.