Don’t Lie About Your HOA Fees- Your Agent, Bank and Title Company Will Find Out
When you are selling your home in Florida as a short sale you still have to pass clear title to your new buyer.
The title company is going to do a search for any defects on your title such as liens from your HOA ( Homeowners Association) or Condo Association.
The title company also has to order an “estoppel letter” from your HOA. This is a document that contains the verified information from your HOA about what you owe and whether you are current or not. It will contain the amount of money that is going to have to paid to the HOA before they will issue a clearance.
When you list your property with a Wellington short sale agent come clean with us on what you owe and to whom you owe it to. If you say that you are current on all of your HOA fees we are passing that information along to the title company who is then going to need to verify if this is true. So why lie? It won’t help you- in fact, in many instances it can come back to hurt you.
In the state of Florida your mortgage servicers are only required to pay up to a certain amount of your delinquent HOA fees. So that leaves the rest on who?
Telling the buyers at the last minute that they are going to have to pay your HOA fees is a great way to kill your short sale.
You are the one that is responsible for your HOA fees. Make sure that you are at least being honest in what you owe and for how long you have not been making your HOA fees.
Remember also, that in the state of Florida, the HOA can foreclose on your house WAY before the bank does!
Contact Nestor Gasset and Katerina Gasset at 561-753-0135 for a confidential phone interview about your option to do a Florida short sale.
If you are planning on buying a Florida short sale, take note of these new loan requirements for getting a mortgage. With the start of the new year, lenders have set in place new requirements for getting a mortgage loan.
Since the housing crisis was brought about by borrowing catastrophes, these new lender guidelines being implemented under The Consumer Financial Protection Bureau’s Qualified Mortgage (QM) are being put in place to avoid the housing meltdown from happening again.
Some of these requirements are as follows:
A maximum debt-to-income ratio of 43. This new rule will not allow for any circumstances to offset the DT like a big down payment or huge cash reserves. A borrower with a DTI over 43% will not qualify for a loan.
Ability to repay. Self-employed borrowers must prove they have sufficient cash flow to pay their loan. This can be challenging since most self-employed people’s income tend to fluctuate. These borrowers usually have cash reserves set aside to compensate for months where their income is low. Even with a huge cash reserve, self-employed individuals may still have a difficult time in getting a loan approved.
No-doc or low-doc loans not allowed. Lenders are required to submit and verify borrowers’ complete financial information
Lower fees. Origination fees should not go beyond 3% for a loan of more than $100,000.
No risky loans. No interest-only payments, no negative amortization payments where principal increases, and terms should not exceed 30 years.
Contact within 36 days of missed payments. Lenders should contact borrowers within 36 days of a missed payment. Lenders must also provide available payment options not later than 45 days after the due date.
Clearer monthly billing statements. Lenders must provide clear monthly statements indicating the amount of your payment that went to escrow and principal, balance owed, and service or transactional fees.
Early warning for ARM: Lenders must notify borrowers of increased rates 210-240 days before the next payment and follow up with an additional notice 60-120 days before the new payment is due.
The lender’s incentives in following these guidelines are huge. If mortgage loans fail to meet the QM, the lender can hold the loan instead of selling it to Fannie Mae or Freddie Mac.
The QM requirements may have lower loan limits for conventional conforming loans. The Federal Housing Finance Agency (which regulated Fannie Mae and Freddie Mac) will delay its normal adjustment of loan limits from 1 January 2013 to sometime later this year, after seeing what kind of impact the new QM guidelines will have on the housing industry. The current limits for most housing markets are $417,000 or as much as $625,000 in high-cost areas. These figures will change later this year.
Getting a smaller loan will be more difficult under the new QM requirements since origination fees will be limited to no more than 3% of the loan amount. This means lenders are less likely to offer smaller loans since they may not be able to recover their costs and make a profit with the smaller origination fees.
Florida short sale home buyers could expect to see these changes in the mortgage loan approval process this year and more changes later in the year.
Wellington Short Sale Market Report for September 2013
The inventory of short sales for sale in Wellington had dwindled down into the teens this past 9 months. However, this month, there was an increase of short sale listings on the market.
While for many months the number of active short sale listings for sale in Wellington hovered around 14 that number changed suddenly to a total of 22 properties listed for sale as short sales in Wellington.
While some of the properties are newer on the market the real reason the number of listings increased is mostly from Fannie Mae owned mortgages going through the short sale process being kicked back into the market due to over the market value counter offers regarding what Fannie Mae is willing to accept as a short fall on a short sale.
We have a listing where the market value is only $175,000 but Fannie Mae kicked the full price offer back with a counter of $279,000. There is no way the house will appraise for that outragious amount of money.
This is the kind of issue that short sales are having if Fannie Mae is the investor on the file. So if homes that were under contract are countered at values that buyers in their right minds will not pay- those properties have to go back on the market. They will then sit there on the market. As they sit on the market other short sale properties get put on the market and this increases the number of Wellington short sales currently active on the market.
If you own a home in Wellington or Palm Beach county areas, Broward and Dade county areas, Martin and St Lucie county areas- contact Nestor Gasset at 561-753-0135 today to schedule a phone conference call to go over your short sale and foreclosure options.
An ex-Bank of America employee in court documents has alleging that Bank of America gave bonuses out to their employees for foreclosing on homeowners.
It is alleged that employees were rewarded with gift cards and cash incentives to meet specified quotas of foreclosures.
Well, what do you know, this statement says that they were told to postpone and drag out the home modification requests. Hmmm, I wonder if all those homeowners that called us to do a short sale for them here in Wellington, Royal Palm Beach, Lake Worth, Port St Lucie, Miami and Cooper City and West Palm Beach after they were served with those home modification decline notices and on the same day being served with their foreclosure lis pendens papers.
We always did find that too much of a coincidance.
One of the loss mitigation specialists said that they were drilled on knowing that it was their job to maximize the banks’ fees by pushing out the modification process by “any means we could”. While I totally get that the bank is to look after their investors and shareholders it is not ethical to lie about it. Just say you are not doing loan modifications! Don’t pull people along in false hopes.
They were instructed to tell the homeowners when they called in to check the status of their modification request that their modification was under review when in fact it was not under review.
Homeowners who were turned down for permanent loan modifications have hired attorneys to take their claims to court. The attorneys representing the homeowners say that they have more than one witness. That they have at least 7 former employees that are verfifying the allegations.
Bank of America has denied the allegations.
Wellington Short Sale Market Updates
The Wellington short sale inventory- homes listed for sale that are short sales has dwindled to a very few. There are currently only 18 short sales listed for sale in Wellington Florida.
The highest priced short sale is listed at $875,000 in the Equestrian Club on World Cup drive.
The lowest priced is an investor special on White Pine listed at $135,000. If the bank wants that much for that section of the rental area in Wellington- they should not hold their breath. Most of the townhomes located on this street are not even close to that so I don’t know what comps they are using.
The second to lowest priced short sale is a lot located in the Binks commercial area that is listed and short sale approved for $150,000.
There is a gorgeous former model home listed as a short sale in Buena Vida – a very popular 55+ community in Wellington. This home is listed at $280,000.
The majority of the short sales for sale in Wellington are in our median price ranges of $350,000 to $500,000. For a complete list of short sales for sale in Wellington Florida click here.
Fannie Mae Artificially Inflating Home Values???? Could it Possibly Be????
Does anyone learn from past mistakes? Does this sound at all familiar to any of us who here in the real estate boom and then the bust???
It appears that Fannie Mae is creating their own values through their Homepath program and through their outrageously laughable counter offers to short sales!
This is market manipulation. This is one of the reasons the real estate market crashed. So is anyone going to learn from the mistakes of the past? Or are they bound to repeat them?
When we list a short sale we make sure to market the property at the fair market value according to comps. All agents should know how to do this.
But Fannie Mae took away delegation authority of appraisals from the servicers and orders their own values. Let’s say we have a short sale that is listed at $189,000. How did we come up with that price?
Well, we take into consideration the solds in that neighborhood of similar properties and we make adjustments to those sold properties based on condition of the property, pool or no pool, lake view or no lake view, etc. That determines the price.
Once a buyer puts in their offer which will most likely in our market be full price at $189,000 we begin the negotiations on the short sale. If the investor on the property is Fannie Mae, they order a BPO on the property.
But the Fannie Mae counter offer comes back at $263,542!!!!!! How did that happen???? Well, ordinarily we would blame the BPO agent whom Fannie Mae ordered the BPO from.
Well, don’t attack the BPO agent so fast!!!
Agents that we know have found out from some of these BPO agents that they were TOLD by Fannie Mae what price to come back with!!!! WTH!!!!!???!!!!
Does this sound familiar to any of you who were in the real estate market back in 2005 and 2006????
Remember the mortgage brokers, lenders and banks were ordering appraisals from their buddies who would come back with appraisals of inflated values? That is why the government decided they needed to make more appraisal regulations. Those regulations included keeping the agents and mortgage brokers away from the appraisers ears. But we know that regulations always have unintended consequences because they are mostly made in haste without much though or sense.
Fannie Mae, according to agents around the country, are telling the appraisers and BPO agents to NOT take ANY short sales or REOs into consideration in their values. So let us get this straight… you have a short sale listing and Fannie Mae does not want that short sale listing to be compared to any closed short sales???? A short sale is a short sale is a short sale…
The average out of whack counter values are about $60,000 difference between list price and appraisal price by Fannie Mae. Fannie Mae is apparently dictating the market values. There just are not that many listing agents and brokers around the country that are 60K off all the time!
Fannie Mae does not want to do short sales and they have made this very clear through purposely inflating the values of the homes. They know darn well that even if the buyer accepts their outrageous counter offers the buyer’s lender is going to order an appraisal and that appraisal will reflect the real market value and the buyer will not be able to get the loan unless they are paying cash for the property.
So when the deals fall apart…. Fannie Mae gets to take the property back into their asset column, cook their books some more and then offer the property up for sale through their Homepath program which guess what!!!! DOES NOT REQUIRE AN APPRAISAL!!!!!!
Now, our next question becomes…. once that inflated market value loan is closed, do the appraisals moving forward on traditional sales and non Fannie Mae short sales reflect those inflated values? Most of the time the appraisers call us and ask us the details on our closed sales when they are evaluating the market value of a property.
Fannie Mae gets to make up its own rules.
Here we go…. again….
Wellington Short Sale Market Report – An Overview from 2007 to 2013.
Wellington Florida is a great place to live and is the first choice of many people moving to Palm Beach County Florida. When the South Florida market took a hit in the beginning of 2007 it affected every town in the tri-county southern part of our state.
We started to list short sale properties at an increased pace starting in September of 2007. There were a lot of short sales in 2008 through 2010. In 2011 Wellington was getting back up and prices started to stabilize. But of course, there were still many homeowners over 50% under water. You could easily find 200 short sale listings back in 2008 and 2009. In 2012 the market turned around and the prices started to go up again but not at the toxic pace from before the bust.
Today we are down to only 19 short sale listings for sale in Wellington. That is a huge drop.
There are three reasons for this:
1. The market has turned and so people are deciding to keep their homes and not selling them even though they are upside down. After all, a home is a home. It is not just an investment to many families and retirees.
2. Many homeowners have not paid their mortgage payments in several years, some upwards of 4 years and still get to live in their homes. This is going to stop soon because of new legislation to help speed along the courts processing the foreclosures. But of course, when there is no incentive to list a home as a short sale when you can wait it out as long as possible and save up your money to move.
3. The banks are not foreclosing on homes as fast. Wellington has a tough code enforcement division and the banks don’t want to pay the city for all the fines and code violations that REO properties are known for.
The highest priced short sale is listed at $1,499,000 on Sea Mist located in Palm Beach Point- an awesome equestrian gated community with homes on 5 acre lots.
The lowest priced short sale is listed at $179,900 and is an approved short sale that was just put back on the market in an older area of Wellington.
There are two short sales available in Buena Vida a 55+ community in Wellington. This is very unusual to have a short sale in Buena Vida. One home is listed at $350,000 and the one is listed at $280,000.
The Isles of Wellington is another nice gated community. There is one short sale available and it is an approved short sale. This home is listed at $325,000.
There are only three short sales now listed in Olympia of Wellington. Now that is the lowest number of short sales in Olympia in years! Olympia was the short sale factory as well as heavily dominated with REOs. This is because so many people bought on speculation in Olympia. Many people including agents bought 6 to 7 homes pre-construction and flipped the properties before they were built. But many people got caught holding the bag. They could not sell those properties when the bust happened. It appears that Olympia has come out of that phase and is now doing well.
Should I Short Sale My Wellington Home?
This is one of the most frequently asked questions and also one that receives the most judgmental responses. There are many reasons why a homeowner would choose or should choose to short sale their Wellington home. Some may be laid off from work and can no longer afford their payments while others are looking at their savings- having watched it all get depleted through loss of equity in their Wellington FL home. These homeowners can no longer accept throwing their money down the drain so to speak. These are all considered in the decision of short selling your Wellington home.
The first thing you need to ask yourself and go over in your family meeting is your budget. Are you laid off from your work? Are you unemployed? If so, what are your job options and how realistic is it that you will get a job or start a business where you will be able to keep making your mortgage payments or where you can catch up if you are late.
How far behind are you on your mortgage payments if you are behind? Have you been turned down for a loan modification with your lender? If you do short sale your home, where are you going to move? Sometimes we have helped a homeowner discover that paying rent to a landlord will cost them more and get less space then trying to figure out a way to keep their home. In that situation it is not in the homeowner’s best interest to sell their home as short sales.
Do you own properties that are your investment properties but the rents are not making the mortgage payments because of the real estate market crash?
Are you thinking about just walking away from your home or property and leaving the keys on the table?
These are many of the questions that are constantly being tossed around in a homeowner’s mind here in Wellington Florida and other places in Palm Beach County.
Most of the time doing a Wellington short sale is better than having a foreclosure against you and the judgment that the banks are entitled to after the foreclosure.
Did you know that there are some programs that you may qualify for where your lender will give you up to $20,000 in some cases and in many cases at least $3000 to help you relocate?
We can not promise that you will qualify for one of these incentive programs but the call to us is totally confidential. We will have a short sale intake evaluation with you over the phone and go over your foreclosure options with you. Call Nestor Gasset or Katerina Gasset at 561-753-0135 today to get your short sales questions answered.
Short Sale update- mortgage cancellation relief is extended for one year to January 1, 2014.
On January 1- the Senate and the House passed H.R.8 which is the bill to deal with the fiscal cliff.
So we have another year to be doing short sales with the mortgage balance being forgiven for tax purposes. In reality the debt relief act did not apply for IRS purposes to investors and second home owners. Most homeowners who are losing their homes are insolvent anyways so the IRS debt relief is not a huge benefit to them. It is used more as a political angle for special interest groups.
In other real estate related taxes as part of the new legislation there were a few changes:
There is a deduction for mortgage insurance premiums for income tax filers who make below $110,000. The deduction for mortgage insurance premiums is extended through the end of the year of 2013 and it’s also retroactive to cover 2012. New
Leasehold improvements for qualified leaseholds on commercial properties – 15 year straight-line cost recovery has been extended to the end of 2013 and made retroactive to cover 2012.
The energy efficiency tax credits for homeowners who make energy improvements on their existing homes is extended to the end of 2013 and made retroactive for the year 2012 with a tax credit of 10% up to $500.
Now here come my liberty busters and you will get some of my commentary here to:
There’s a permanent repeal of the “Pease Limitation”. Under the new H.R 8 legislation the agreement permanent repeals the limitations that reduce the value of itemized deductions except for it has been reinstituted for high income filers.
The high-income filers are those who make more than $250,000 and joint income tax filers who earn over $300,000. These are also going to be indexed for inflation and they will rise over time. The amount of your adjusted gross income above the threshold is multiplied by 3%. This amount is then used to reduce your total itemized deductions.
My biggest question always comes about taxation – is it fair to charge some people more taxes than other people? And why? What is there in our constitution that states that people can be treated differently based on their production? The biggest problem with this provision is that married couples are basically punished because if they were instead single people living together filing separately they could each get a $250,000 threshold for a total of $500,000 instead of $300,000. Again, I am married and would like to have equal benefit as two roommates living together but I don’t want special treatment. Just treat everyone equally.
Now in a lot of places in the country a couple would be living very well with the family of four at $300,000 annual income but they certainly would not be considered rich in most of the urban cities of this country. In fact, after they pay their state taxes (which we do not have in Florida) they are already being taxed at 60%. Do the math. Living in Manhattan with a family of 4 is not going to get very far on $120,000 annually to live on. I have not even gone into running a small business. That is a whole other topic of which I can discuss from experience on.
The only fair tax is a fair tax and that’s certainly not going to be implemented anytime soon.
Capital gains. Capital gains rate is going to be staying the same at 15% for those individuals up to $400,000 and $450,000 for joint filers. After that amount the gains will be taxed at 20%. For real estate capital gains the 250/500K exclusion for sale the process principal residence remains in place.
My opinion is that the money you invested is money you already paid tax on, so in essence, you are getting double taxation on your investments. I think this is cooked up by the banksters, wall streeters and the politicians to try to force you to keep your money in your investments because before you take it out, you are going to think twice. But for retired people they don’t have a choice. This is a huge disservice to retired people. Again, this is not treating everyone fairly in our tax structure.
Again we’re treating different people differently which is very unfair and is punishing people who want to take proactive measures for their own retirements and their own wealth.
The ever popular and unpopular estate taxes you are taxed when you die. Your family has to pay taxes when you die on whatever you left behind under these circumstances.
The first $5 million in individual estates and $10 million for family estates are now exempted from the estate tax. So we made a little bit of progress there but again we are not treating people fairly across the board and equally as Americans.
Anything over $10 million will be taxed at the rate of 40% up from 35% and those exemptions are going to also be indexed for inflation.
Needless to say I am not happy at all about the H.R.8 legislation. I believe there are too many special interests involved and too many people wanting to get back scratched along with government not making sound spending cuts and not working on the deficit. There is a total lack of responsibility on the part of our leaders. For every $42 in spending they are getting they are only cutting $1 of spending! DO THE MATH!!! How does that equate to financial responsibility. I would be out of business if I ran my business like that.
I am sure that NAR is happy with the outcome because they are a special interest group that lobbies for real estate interests. But whenever you get into I want this, the other side says, but I want this. As long as government makes deals with special interest groups and their cozy pals in big companies nothing will be fair. But if NAR really stands for “under all is land” and we must protect private property then NAR needs to stand to protect ALL private property. Taxation on private property especially real property violates the very principles of private property rights.
authored by Katerina Gasset
Do I Have to Put a Deposit in With my Offer to Buy a Property?
There is no law that says you have to put deposit money down with your offer to purchase a property. But there is a law in Florida called the Statutes of Fraud. Part of that law says that in order to enforce a contract there has to be some time of consideration. That can be in the form of cash, check, money order or bank check. It could also be gold, silver or whatever else of value.
Now, with saying all that…. you know the answer to so many questions, it all depends:)
Why are you buying a home? The reasons you are buying a home should become part of your reasoning as to what type of deposit to attach to your offer.
If you fall in love with your dream home it is highly likely other buyers may also be of the same opinion as you. That creates competition. Here in Wellington many listings get multiple offers. The stronger you make your offer, the better your chances are that the seller will accept your offer and not someone else’s.
Many buyers don’t learn this lesson until after they have lost the chance at buying a home they fell in love with.
The bigger deposit you put with your offer, the more serious you appear to be in going through with the sale of the property.
A seller has to take their home off of the active market once they accept an offer. So they are looking at what is going to be the offer that is most likely going to close. The highest and best offer and terms is usually the one a seller will accept.
The seller has to take his/her house off the market they in turn want you, the buyer, to not be actively searching for another home. Some buyers want to place offers on multiple properties.
Many buyers’s agents don’t want to have the buyer’s money at risk. What if you decide you don’t want the property next week?
There are contingencies you can add to your offer, such as your offer is subject to you accepting the home inspection report on the property. If you don’t like the inspection report you can cancel your contract. If you cancel your contract within the terms of the contract, you get your deposit money back within the time specified.
If you don’t show the seller you are a serious buyer the seller will likely accept another offer.
No matter what the opinion of anyone else is, you must always ask yourself, do you really want this house? Are you willing to show that you are a serious buyer?