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.
Wellington Short Sales are Far and Few Between These Days
Over the past year or so the number of short sales available for sale has dwindled to just a very small amount.
Foreclosures in Wellington? Very few! And if you do find one most of the time they will have multiple offers from all cash buyers.
There are still a lot of homes in the process of foreclosure that have not actually gone back into the possession of the banks.
If your home is in foreclosure your time is almost up. Call Nestor Gasset on his mobile at 561-541-9936 for a confidential discussion about your situation and what your options are. You may find that doing a short sale now may be the right thing to do.
Home Equity Line RESETS Are Coming Due!!! Homeowners with HELOCS may get a BIG surprise in the coming months as their loan payment skyrocket when the payments reset.
The Housing bubble and bust- we are not out of the woods yet. Residual effects are still in the making.
Home Equity Lines of Credit- HELOCS are when you take a loan out for things like college, vacations, buying another property, remodeling, etc.
During the boom years these HELOCS were very popular because the prices of the houses kept going up.
The states of Florida, California, Nevada and Arizona had the BIGGEST surges in home prices.
These are also the same states that saw the biggest number of defaults, foreclosures and short sales.
The HELOCS were offered with payments of interest only for 10 years. Guess what, 10 years is coming up and for those who took out HELOCS in 2004 are already getting their new payments and surprise, surprise, they are MUCH higher than the interest only payments were.
For instance, if you took out a HELOC on your house of $100,000 at 3.5% interest rate your payment is $292 per month but once it resets it will jump to a whopping $715!!!!
Are you ready for your new payments?
I must say, I am SOOO happy we did not get one of those HELOCS as tempting as it was.
There is an estimated 817,000 people this year alone who will be faced paying the piper to the tune of $23 BILLION in HELOCS– this is more than double of what it was last year.
Then during the next 5 years another $50 BILLION in HELOCS will be reset.
All of this is going to contribute to a more sluggish U.S. economic recovery because that $500 per month is not going to be going to buy new cars, spend on vacations, etc. It is going to be used to pay back these HELOCS from things you already spent the money on. This is money not going into the economy in goods and services. This money is being sucked out of consumer spending and that sound is not attractive to say the least.
Most people who have HELOCS can not refinance because they don’t qualify or they were behind on their upside mortgages and the like.
Another problem that all this creates it that the banks know that most of these kinds of HELOCS are uncollectable as there is not enough equity to foreclose on the second to any benefit to the HELOC bank since the first note holder needs to get paid first.
The other issue is that the banks will tighten up extending mortgage loans to all but the most credit worthy buyers because of the losses they will have to suck up due to people who won’t be able to make that reset payment.
Some banks are being proactive and reaching out to their customers two years before the resets come due to warn the borrowers as well as trying to work with them on getting these HELOCS paid off or refinanced.
Look at your paperwork from when you took out your HELOC. Make sure you know your interest rate and when your payments are going to reset. Then make sure you plan to meet those payments or call us to see if there is enough equity in your house. If you have enough equity in your house, we may be able to list your house for sale and you can move on.
Contact Broker Nestor Gasset at 561-541-9936 to discuss your options confidentially now.
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.
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.