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.
Wellington Foreclosures | REO | Bank Owned | Market Report
If you are looking for a foreclosed property to buy in Wellington Florida you will be hard pressed to find one. There are very few bank owned properties for sale in Wellington.
REO is a real estate term that means, Real Estate Owned. This term is used by banks with regards to the assets they own, the properties they have taken title to through the act of foreclosure.
Currently there are only 4 properties listed for sale in Wellington as bank owned properties REOs.
12305 Equine Lane is listed at $510,000. This home has 5 bedrooms and 4 bathrooms with 6,287 square feet.
15721 Athens Ter is listed at $333,382. This home has 5 bedrooms and 3 bathrooms with 4324 square feet.
12632 Buckland St is listed at $239,000. This home has 3 bedrooms and 2 bathrooms with 2586 square feet.
and a multi-family zoned lot is listed for sale at $41,000.
Contact Nestor Gasset and Katerina Gasset at 561-753-0135 to get started on your home search.
Wellington Short Sale Market Report- October 2012
Currently there are 41 short sales for sale in Wellington.
The highest priced short sale is a single family home with a 6 stall barn listed at $1,649,000 with 3258 approx. living square feet under air. This home is in a gated equestrian community.
The lowest priced single family home short sale in Wellington is currently listed at $ 158,773 with 1641 square feet and this home backs up the preserve.
Most of the homes for sale in Wellington as short sales are priced in the high $200,000’s to the mid $300,000’s.
There are not many short sales for sale in Wellington and that has been the case for almost a year now. We are anticipating more short sales to come on the market in 2013 as the layoffs and unemployed numbers rise. We will also start to see some short sales coming on the market because of time is coming up for many homeowners who have not made their mortgage payments for a long time. The banks are starting to foreclose again and the courts are processing foreclosure judgments.
If you are looking at options to foreclosure, a short sale may be your best option. It is most often a better option for you than to leave your keys on the table and just leave when the sheriff arrives at your day with a notice to vacate. Many times homeowners qualify for cash incentives to do a short sale by their lenders.
Call Nestor Gasset and Katerina Gasset today at 561-753-0135 to go over your foreclosure options. This call is confidential. Don’t lose your home to foreclosure. Call us today.
Wellington Short Sale Market Report – September 2012
Currently there are only 38 short sales for sale in Wellington.
The highest priced short sale is a single family home with a 6 stall barn listed at $1,649,000.
There is one short sale for sale in the Aero Club of Wellington listed at $975,000 located right on the taxi-way.
There is one home for sale in Paddock Park listed at $742,100 but his property is getting put on an auction and requires a 5% buyer premium.
The next home for sale in Wellington as a short sale is in the Olympia community in the luxury section and is the sought after Casa Della Scala model listed at $665,000.
The lowest priced short sale for sale in Wellington is a small condo on Shaker Circle listed at $60,000.
If you want to make an offer on a Wellington short sale or sell your Wellington home as a short sale contact Nestor Gasset and Katerina Gasset at 561-753-0135. We have over 20 years of short sale experience to help you manuever the tedious and often frustrating journey of completing a successful short sale.
If you pretty much dislike reading or have a hard time keeping your attention on text-only content, then you will probably enjoy learning more about short sales with a short sale video. If you are facing foreclosure, one of the best options for you would be a short sale. Although it’s a hot buzz term nowadays, many people still don’t understand what it includes and excludes. All your questions will be answered, however, readily enough by the right short sale video.
Where Can You Find Short Sale Videos?
Here are a number of places that you can search for videos about short sales.
A lot of videos are shared on YouTube and not all of them are for recreational purposes. In recent times, many marketers and professionals, such as Wellington short sale agents, have started to increasingly use YouTube as their marketing platform and as a way of reaching out to more target consumers or clients.
You can definitely find a lot of short sale videos here, but the question would be more on quality than quantity. There is so much erroneous information about short sales in the Internet that you have to be careful about which sources you trust. If you rely on an erroneous source and follow with it, then that could harm your chances of having your short sale application approved.
When looking for a short sale video in YouTube, consider the following tips.
This is one of the best real estate networks out there, but it’s also one of the Internet’s hidden gems. This is where all the best real estate articles and discussions can be found, and you can definitely watch a lot of short sale videos here.
Contributors in this site are all real estate agents, but not all of them may be suitable for your needs. Ultimately, you should make sure that the videos you’re watching are from those who are working in your area – such as Wellington Florida short sales agents for instance – and have proven specialization in short sales.