My New Blog

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.

Q & A

“Protecting Tenants at Foreclosure Act”

On May 20, 2009 President Obama signed the “Helping Families Save Their Homes Act of 2009”, a comprehensive federal law addressing numerous issues affecting the housing industry. Title VII of that legislation is entitled the “Protecting Tenants at Foreclosure Act of 2009” (the “Act”). The Act remains in effect through December 31, 2012.

The Act may significantly impact certain REO listings and REO buyers.

Who does the Act apply to?

The Act only applies to:

• Residential foreclosures where title vests on or after May 20, 2009 and through December 12, 2012.

• The immediate “successor in interest” -- this will most often be the lender taking title at a foreclosure sale but it can be any other buyer who directly acquires title to the foreclosed property (the “Foreclosure Owner”).

• Tenants who entered into a “bona fide lease” prior to the title vesting in the Foreclosure Owner.

What is a bona fide lease?

A “bona fide lease” is defined as one where: (a) the tenant is not the mortgagor (i.e., the owner who was foreclosed); (b) the lease was an “arm’s length transaction”; and, (c) the rent is not substantially less than fair market value.

What if the Act does not apply because the criteria above are not met?

The Foreclosure Owner may proceed with the foreclosure and eviction without regard to the Act.

How does the Act protect tenants?

• If the tenant has a written lease, the Foreclosure Owner takes title subject to the lease, and the tenant must be allowed to stay in the property until the end of the lease term (in accordance with the lease terms). However, if the Foreclosure Owner sells the property to a buyer who will “occupy the unit as a primary residence”, the Foreclosure Owner may terminate the lease effective on the date of sale (i.e., closing) provided the tenant is given 90 days notice to vacate. This 90 day notice to vacate can not be given until there is a fully executed contract with a buyer who will occupy the Property as a primary residence. If the contract is scheduled to close before the 90 day notice period expires, the contract may close but the buyer becomes the landlord and can not take possession until the 90 day period has expired.

• If the tenant does not have a lease or the lease is terminable at will under State law (i.e., a tenancy at will), the tenant must be given 90 days notice to vacate (note that this may require the Foreclosure Owner to give more notice than would otherwise be required under other laws).

How does the Foreclosure Owner know if a buyer “will occupy the unit as a primary residence?”

The contract may require the buyer to indicate whether the property will be occupied as a primary residence. However, even if it does all buyers should be required to sign the new “Buyer Acknowledgment of Occupancy” form.

How does the Act affect State or local laws relating to residential leases?

The Act overrides all state and local laws that provide shorter notice or less protection than that which is provided for in the Act. However, if State law provides longer notice or additional protections then the greater protection afforded under State law will govern. In other words, whichever laws provide the tenant the greatest protection will apply. State and local laws will continue to govern all other aspects of a residential tenancy.

Does the 90 day notice to vacate have to be in writing?

The Act does not specify the method of notice. However, it does state that the tenant must be in “receipt” of the notice so it should always be given in writing to avoid any misunderstandings or disputes.

Does the 90 day notice to vacate have to be sent Certified Mail?

Here again, the Act does not require any specific means of delivery but it does require the notice to be received by the tenant. Therefore, notice should be given in a manner where proof of delivery can be obtained (e.g., Certified Mail, UPS, etc.). It should also be sent regular mail to the property as a secondary means of providing notice in case the tenant does not accept delivery. The letter should indicate that it was sent via both means.

Who will provide the tenant with the 90 day notice to vacate?

Preferably the Foreclosure Owner will handle this directly.

Can the listing broker market the property for sale while the tenant is in possession?

Yes. While the Act does not expressly permit the property to be marketed, it does implicitly permit it by allowing the earlier termination if the property is sold to a purchaser who intends to occupy.

As the listing broker/associate, should any disclosure be included in the MLS?

If you know that a bona fide tenant occupies the property, the Broker Remarks should state:

Bona fide tenant may occupy Property which may affect Buyer’s rights/obligations.

Must the tenant allow the listing broker to install a For Sale sign, show the property, etc?

It depends on what the lease states. If it is expressly addressed in the lease, then the lease provision governs. If the lease is silent, the tenant will not be obligated to allow showings. It is probably OK to install a For Sale sign, although if the tenant objects it should be removed. A tenant may have a valid concern that it will attract people to the property and interfere with the use of quiet enjoyment or raise other security concerns. It may also constitute a trespass.

Is the tenant required to provide the owner or listing broker with a copy of the lease?

There is nothing in the Act that obligates the tenant to do so. However, as a practical matter if the tenant wishes to be considered a “bona fide” tenant he or she should do so to demonstrate that (a) the tenant is not the foreclosed owner; (b) the lease was an “arm’s length transaction”; and, (c) the rent is not substantially less than fair market value.

Who does the tenant pay rent to?

Here again the Act is silent. However, the only logical assumption is that the Foreclosure Owner now assumes the role of Landlord under the lease and applicable law and is now entitled to the remaining rent payments. The Foreclosure Owner will also assume the obligations of the Landlord.

How will the tenant be informed of where to send their rent payments?

The Foreclosure Owner should provide notice directly to the tenant. If you, as the listing associate, are asked to do so you may only do so by using the new “Tenant Notice to Pay Rents” form which must be completed and signed by the Foreclosure Owner, not the listing associate.

What happens to the security deposits and advance rents, if any, that were paid by the tenant?

The Foreclosure Owner (or in some cases a subsequent buyer who assumes the role of landlord after closing) will be accountable for those funds in accordance with the lease and applicable law. This is probably the case even if the Foreclosure Owner did not receive a transfer of those funds form the owner who was foreclosed upon.

If I am representing a buyer who is purchasing a property that is subject to the Act, what should I inform them?

The Act can have a significant impact on a buyer who is purchasing a home from a Foreclosure Owner if a bona fide tenant is occupying the property. As noted above, the buyer may not be entitled to immediate possession and may become the landlord with all of its attendant duties and liabilities. All such buyers must sign the new Foreclosure Property - Buyer’s Disclosure form prior to entering into a contract to purchase the property.

What if a bona fide tenant, who is entitled to occupy the property until the remaining term of their lease, has an automatic renewal provision in the lease that requires the landlord to give notice to terminate prior to the renewal period?

The landlord must follow the lease provisions that apply and give notice of termination. Failure to do so may result in the automatic renewal of the lease.

COLDWELL BANKER

SELLER'S SHORT SALE INFORMATION FORM

This Sellers Information Form has been developed by Coldwell Banker Residential Real Estate to provide general information regarding the typical "Short Sale."

WHAT IS A SHORT SALE?
A short sale occurs when a property sells for a price that is insufficient to pay back the loan(s) secured against it (or any other liens against the property, such as delinquent property taxes, Homeowners/Condominium Association fees, etc.) as well as standard sales closing costs. In such a case, in order to complete the safe, you, as a Seller, must either (1) come to the closing with sufficient cash from other sources to cover these shortfalls or (2) your lender(s) must agree to forgive all or a portion of the amounts you are "short" or make other arrangements for repayment (such as execution of a promissory note). This second alternative is commonly known as a Short Sale.
Your lender will generally not allow you to receive any proceeds or otherwise obtain any monetary benefit as part of a Short Sale.

WHAT OTHER OPTIONS MAY BE AVAILABLE OTHER THAN A SHORT SALE?
Depending upon your financial condition and other factors such as other liens against the property and available interest rates, you may be able to negotiate a modification of your loan(s), refinance, deed the property back to the lender(s) in lieu of foreclosure, or declare bankruptcy in lieu of attempting a Short Sale. You may also be eligible for government assisted refinancing options such as FHASecure (for more information call 1-800-225-5342). Other options may also be available depending upon your individual circumstances and you should consult with legal, tax, credit or financial advisors to help you evaluate these options and determ The whether any others may exist and be more appropriate for your circumstances.

WHAT IS THE PROCESS FOR GETTING A SHORT SALE APPROVED?
There is no universal set of rules or regulations that determine whether you are eligible for a Short Sale or whether your lender(s) will approve a Short Sale. Each lender is different and each has established their own criteria, which may or may not be favorable to you. SQme lenders will not communicate with anyone but you regarding a possible Short Sale, and others may not discuss the possibility of a Short Sale unless you are in default, or until a contract offer is presented. The basic general steps in the Short Sale process after listing the property for sale are:
* Proving Financial Hardship: You must typically prove to your lender(s) that you are experiencing financial hardship and will be unable to continue making loan payments. In some, but not all cases, you may already be in default of your payment obligations. Most lenders will require you to provide specific
in formation such as a financial affidavit, tax returns, bank statements, and pay stubs in order to prove financial hardship.
* Determining Property Value: Once you have proven a financial hardship, you must be able to demonstrate that the property is worth less than the total amount owed to your lender and any other lien holders. Frequently, your lender will require a Broker's Price Opinion (EPO) or Comparative Market
Analysis (CMA) from a Realtor, and it may also order an appraisal of the property frQm a licensed appraiser of their choosing. In some cases, you may be responsible for this expense.
* Finding a Buyer: A qualified buyer must submit an offer to purchase the property which is then submitted to the lender for approval. Each lender with a mortgage or lien against the property must approve of the potential purchase to the extent that their loans will not be paid in full at closing. Many lenders will not even consider a Short Sale, review the property's value, or evaluate your financial hardship until a bona fide offer
to purchase is received.

* Final Approval: Once your lender acknowledges your inability to continue satisfying your payment obligations and the fact that the property is not worth as much as the loan(s) secured by the property, you or your representative must convince the appropriate decision makers at each lender that it is in their best interest to approve the Short Sale Most lenders have a specific department that handles these requests which is commonly referred to as either the Loss Mitigation, Pre-foreclosure, or Loan Workout department.

@2006 Coldwell Banker Real Estate LLC. Coldwell Banker is a registered trademark licensed to Coldwell Banker Real Estate LLc.
An Equal Opportunity company. Equal Housing Opportunity. Owned and Operated by NRT LLC. (REV .7.06)

HOW WILL I KNOW IF MY LENDER HAS APPROVED A SHORT SALE?
In all likelihood your request for a Short Sale will be subject to different levels of approval by your lender. At various times throughout the process, you (or your representative who is communicating with your lender) may be told or
otherwise get the impression that your lender views your request favorably or believes that it will be approved.
However, you should not assume that a Short Sale has received Final Approval unless and until you have written confirmation from the lender setting forth its approval and all of the specific terms of the compromise. Your lender will in all likelihood have the ability to withdraw its approval up until that time or perhaps later. If your Short Sale is approved, you should inform your Realtor immediately and the approval should be provided to the settlement agent so that they can prepare the appropriate documents needed for the closing of the transaction.

HOW LONG WILL IT TAKE TO GET A SHORT SALE APPROVED?
Every Short Sale situat ion is different, depending on your individual circumstances, the nature of the loan(s) and other liens against your property, and your lenders criteria and staffing. If your lender will consider a Short Sale prior to the submission of an offer to purchase, the process may take less time because you should be abe to provide your lender with all of The required documentation in advance and the lender may order an appraisal of the property sooner. Even if your lender will not consider a Short Sale prior to submission of an offer, you should have all of your financial
information (mortgage documents, bank statements, pay stubs, tax returns, etc.) organized and immediately available to avoid unnecessary delays (do not provide these documents to your Coldwell Banker Realtor). In the current market environment where Short Sale requests are occurring with much greater frequency, your lender may not be able to respond to your inquiry or evaluate your request as quickly as you would like. While some lenders are able to review and approve Short Sale requests quicker than others, many lenders take at least 3-4 weeks, if not longer In addition, it is important to understand that there is no assurance that your lender will approve of your Short Sale request. You should begin to consider any and all other options available to you now in the event your request is denied.

WHAT SHOULD BE DISCLOSED TO PROSPECTIVE BUYERS AND BROKERS?
Because only your lender will have the ability to approve a Short Sale, depending on MLS Rules, your Realtor may be permitted to disclose in the Multiple Listing Service (ML S) and other advertising the fact that the sale of the Property and payment of The offered brokerage commissions is subject to lender approval If your Lender requires a reduction in the brokerage commissions as a condition of accepting a particular Short Sale contract and the cooperating broker is unwilling to agree to a reduction in their commission, you and your Lender will be notified of the cooperating broker's decision and that the amount the Lender is willing to approve is unacceptable.

Any contract that you accept should be an "As Is" contract as it will likely be considered more favorably by your lender. It should also have a provision making the contract contingent on lender approval. If the lender approval
provision is not included in the contract, you may be obligated to close the transaction and pay off your loans in full from other sources of funds if you do not obtain Short Sale approval.

WHAT ARE SOME NEGATIVES THAT MAY BE ASSOCIAtED WITH A SHORT SALE?
Even if you are not in foreclosure, a Short Sale may adversely affect your credit rating as it is a reflection of your inability to satisfy this financial obligation. Coldweli Banker recommends that you consult with an attorney and/or tax or financial advisor regarding these issues prior to pursuing a Short Sale.

HOW DO I GET STARTED?
The following forms for Short Sale Listings are available from us as your Coldwell Banker sales professionals:
* Short Sale Addendum - Exclusive Right of Sale Agreement - includes important terms and conditions regarding the listing of your home and other information concerning the Short Sale process.
* Seller Short Sale Information and Documentation Checklist - A list of documents you should gather to begin
The Short Sale process.
* Authorization to Release Information (Optional) - Your authorization for Coldwell Banker to communicate on your behalf directly with your lender(s).

2OO8 Coldwell Banker  Real Estate LW. Coldwell Banker is a registered trademark licensed to Coldwell Banker Real Estate.
An Equal Opportunity company. Equal Housing Opportunity. Owned and Operated by NRT LLC. (REV 7.08)

We've worked on numerous short sales and closed them in this market.  It's important that when you think you are a possible candidate to sell your home as a short sale that you interview agents for the job and make sure that they have experience selling houses as short sales.

We have found that a lot of agents rely on loss mitigation companies to do the short sales for them and don't do the short sales themselves.  When we take a short sale listing, we make sure that we handle the short sale from beginning to end without the use of a third party who is just going to cost our sellers more.   In today's market and economy, it's important to make sure that everyone conserves their resources.  If you don't have to pay for a loss mitigation company, why would you?

The Bryant Team is ready and willing to help you evaluate your property and see if you qualify to list and sell your home as a short sale.  We are a unique real estate team with a salesman and an attorney on board to offer logical, innovative, and smart solutions to your real estate questions.

Call us today for your free short sale evaluation at 239-293-0246 and speak with the short sale specialists today.

Congress Enacts Bigger and Better Home Buyer Tax Credit

A tax credit of up to $8,000 is now available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. Unlike the tax credit enacted in 2008, the new credit does not have to be repaid.

$8,000 Home Buyer Tax Credit at a Glance

• The tax credit is for first-time home buyers only.
• The tax credit does not have to be repaid.
• The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
• The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

Frequently Asked Questions on the First Home Buyers Tax Credit
The following questions and answers provide basic information about the tax credit. If you have more specific questions, we strongly encourage you to consult a qualified tax advisor or legal professional about your unique situation.

1. Who is eligible to claim the tax credit?
   First-time home buyers purchasing any kind of home—new or resale—are eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009. For the purposes of the tax credit, the purchase date is the date when closing occurs and the title to the property transfers to the home owner.
2. What is the definition of a first-time home buyer?
   The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.
   For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit. However, unmarried joint purchasers may allocate the credit amount to any buyer who qualifies as a first-time buyer, such as may occur if a parent jointly purchases a home with a son or daughter. Ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time home buyer.
3. How is the amount of the tax credit determined?
   The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.
4. Are there any income limits for claiming the tax credit?
   Yes. The income limit for single taxpayers is $75,000; the limit is $150,000 for married taxpayers filing a joint return. The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. The phaseout range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $95,000 (single) or $170,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts.
5. What is "modified adjusted gross income"?
   Modified adjusted gross income or MAGI is defined by the IRS. To find it, a taxpayer must first determine "adjusted gross income" or AGI. AGI is total income for a year minus certain deductions (known as "adjustments" or "above-the-line deductions"), but before itemized deductions from Schedule A or personal exemptions are subtracted. On Forms 1040 and 1040A, AGI is the last number on page 1 and first number on page 2 of the form. For Form 1040-EZ, AGI appears on line 4 (as of 2007). Note that AGI includes all forms of income including wages, salaries, interest income, dividends and capital gains. To determine modified adjusted gross income (MAGI), add to AGI certain amounts such as foreign income, foreign-housing deductions, student-loan deductions, IRA-contribution deductions and deductions for higher-education costs.
6. If my modified adjusted gross income (MAGI) is above the limit, do I qualify for any tax credit?
   Possibly. It depends on your income. Partial credits of less than $8,000 are available for some taxpayers whose MAGI exceeds the phaseout limits.
7. Can you give me an example of how the partial tax credit is determined?
   Just as an example, assume that a married couple has a modified adjusted gross income of $160,000. The applicable phaseout to qualify for the tax credit is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by the phaseout range of $20,000 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time home buyer tax credit that is available to this couple, multiply $8,000 by 0.5. The result is $4,000.
   Here’s another example: assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer’s income exceeds $75,000 by $13,000. Dividing $13,000 by the phaseout range of $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible for a partial tax credit of $2,800.
   Please remember that these examples are intended to provide a general idea of how the tax credit might be applied in different circumstances. You should always consult your tax advisor for information relating to your specific circumstances.
8. How is this home buyer tax credit different from the tax credit that Congress enacted in July of 2008?
   The most significant difference is that this tax credit does not have to be repaid. Because it had to be repaid, the previous "credit" was essentially an interest-free loan. This tax incentive is a true tax credit. However, home buyers must use the residence as a principal residence for at least three years or face recapture of the tax credit amount. Certain exceptions apply.
9. How do I claim the tax credit? Do I need to complete a form or application?
   Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Specifically, home buyers should complete IRS Form 5405 to determine their tax credit amount, and then claim this amount on Line 69 of their 1040 income tax return. No other applications or forms are required, and no pre-approval is necessary. However, you will want to be sure that you qualify for the credit under the income limits and first-time home buyer tests.
10. I read that the tax credit is "refundable." What does that mean?
    The fact that the credit is refundable means that the home buyer credit can be claimed even if the taxpayer has little or no federal income tax liability to offset. Typically this involves the government sending the taxpayer a check for a portion or even all of the amount of the refundable tax credit.
    For example, if a qualified home buyer expected, notwithstanding the tax credit, federal income tax liability of $5,000 and had tax withholding of $4,000 for the year, then without the tax credit the taxpayer would owe the IRS $1,000 on April 15th. Suppose now that the taxpayer qualified for the $8,000 home buyer tax credit. As a result, the taxpayer would receive a check for $7,000 ($8,000 minus the $1,000 owed).
11. I purchased a home in early 2009 and have already filed to receive the $7,500 tax credit on my 2008 tax returns. How can I claim the new $8,000 tax credit instead?
    Home buyers in this situation may file an amended 2008 tax return with a 1040X form. You should consult with a tax advisor to ensure you file this return properly.
12. Instead of buying a new home from a home builder, I hired a contractor to construct a home on a lot that I already own. Do I still qualify for the tax credit?
    Yes. For the purposes of the home buyer tax credit, a principal residence that is constructed by the home owner is treated by the tax code as having been "purchased" on the date the owner first occupies the house. In this situation, the date of first occupancy must be on or after January 1, 2009 and before December 1, 2009.
    In contrast, for newly-constructed homes bought from a home builder, eligibility for the tax credit is determined by the settlement date.
13. Can I claim the tax credit if I finance the purchase of my home under a mortgage revenue bond (MRB) program?
    Yes. The tax credit can be combined with the MRB home buyer program. Note that first-time home buyers who purchased a home in 2008 may not claim the tax credit if they are participating in an MRB program.
14. I am not a U.S. citizen. Can I claim the tax credit?
    Maybe. Anyone who is not a nonresident alien (as defined by the IRS), who has not owned a principal residence in the previous three years and who meets the income limits test may claim the tax credit for a qualified home purchase. The IRS provides a definition of "nonresident alien" in IRS Publication 519.
15. Is a tax credit the same as a tax deduction?
    No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a taxpayer who owes $8,000 in income taxes and who receives an $8,000 tax credit would owe nothing to the IRS.
    A tax deduction is subtracted from the amount of income that is taxed. Using the same example, assume the taxpayer is in the 15 percent tax bracket and owes $8,000 in income taxes. If the taxpayer receives an $8,000 deduction, the taxpayer’s tax liability would be reduced by $1,200 (15 percent of $8,000), or lowered from $8,000 to $6,800.
16. Is there any way for a home buyer to access the money allocable to the credit sooner than waiting to file their 2009 tax return?
    Yes. Prospective home buyers who believe they qualify for the tax credit are permitted to reduce their income tax withholding. Reducing tax withholding (up to the amount of the credit) will enable the buyer to accumulate cash by raising his/her take home pay. This money can then be applied to the downpayment.
    Buyers should adjust their withholding amount on their W-4 via their employer or through their quarterly estimated tax payment. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.
    Further, rule changes made as part of the economic stimulus legislation allow home buyers to claim the tax credit and participate in a program financed by tax-exempt bonds. Some state housing finance agencies, such as the Missouri Housing Development Commission, have introduced programs that provide short-term credit acceleration loans that may be used to fund a downpayment. Prospective home buyers should inquire with their state housing finance agency to determine the availability of such a program in their community.
17. If I’m qualified for the tax credit and buy a home in 2009, can I apply the tax credit against my 2008 tax return?
    Yes. The law allows taxpayers to choose ("elect") to treat qualified home purchases in 2009 as if the purchase occurred on December 31, 2008. This means that the 2008 income limit (MAGI) applies and the election accelerates when the credit can be claimed (tax filing for 2008 returns instead of for 2009 returns). A benefit of this election is that a home buyer in 2009 will know their 2008 MAGI with certainty, thereby helping the buyer know whether the income limit will reduce their credit amount. Taxpayers buying a home who wish to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.
18. For a home purchase in 2009, can I choose whether to treat the purchase as occurring in 2008 or 2009, depending on in which year my credit amount is the largest?
    Yes. If the applicable income phaseout would reduce your home buyer tax credit amount in 2009 and a larger credit would be available using the 2008 MAGI amounts, then you can choose the year that yields the largest credit amount.