FHA "Back to Work" Program - Qualify now instead of 2 years from now!

 

FHA is making it easier to get back into Home-Ownership!!!

    Are you driving by real estate signs like this one, watching prices go up and thinking "only 2 more years and I can buy a home again?" Are you leasing a home because you were told you would have to wait at least 3 years before you could get a mortgage again? Do you have a friend, relative or co-worker who had circumstances beyond their control and wound up losing a home in foreclosure, bankruptcy or a short sale? Do you think it is about time someone figured out how to get people who got caught-up in that crazy out-of-control mortgage madness back into homes? If you answered "yes" to any of these questions, than you need to keep reading.

    FHA just announced the "Back to Work" program. With these new guidelines, borrowers who have had what FHA terms an 'Economic Event' in the past will now be able to qualify for a new mortgage 1 year out instead of the traditional 3 years. FHA recognizes that many good borrowers got put into bad situations and they have decided to try an help.

    The qualifications for this loan are the same as a traditional FHA loan with a few additional terms. The borrower has to be able to document the 'Economic Event'. An economic event is a change in either income or expenses that led to the loss of the original home. This could have been due to unemployment, divorce, change in family size, medical illness, mortgage payments adjusting or other reasons that made the original mortgage unsustainable. The outcome would have resulted in Foreclosure, Bankruptcy or a Short-Sale.  The event also must have occurred at least 12 months ago. The borrow also must have recovered from the event - that is to say their income and expense ratio must show that they can afford the new mortgage payments.

     Along with the above criteria, the borrow will also have to attend a HUD approved home ownership counseling class. The only catch hear is that out of 789 or so FHA approved lenders in the United States, only 60 or so will even be able to offer this program (and currently there are 2 or 3 in the entire country who have actually began to offer the program). The good news here though is that one of my loan partners can and is offering this program right now!

     So, to sum it up - if you have had a foreclosure, short-sale, deed-in-lieu, or bankruptcy over 12 months ago AND you want to become a home owner again right now then you need to call me - Jason Gault @ 248-236-5335

     If you have any additional suggestions or checks, leave me a comment below. You can always find me at my website JasonGault.com

Annual Spring Home Maintenance Checks (more than just checking the smoke detectors)

March is upon us and that means spring is rapidly approaching. Cabin fever has certainly set in around my house, so we are all looking forward the seasons changing. If you enjoy spring like I do then your thoughts are already probably starting to drift to those upcoming outdoor projects you have been planning over the winter. In order to save any sudden surprises, I like to take a few hours and go over my “Spring Home Checklist” to make sure my home is fit and ready for summer enjoyment.

The change to daylight savings time is a pretty good way to judge when to start looking at these things. Some of them, like a full inspection of the Air Conditioning system, are not necessarily a good idea to do until after the weather gets a bit warmer than it is now, but there is plenty to do between now and then.

Here are a few highlights from my annual checks:

Outside

·         Uncover A/C unit and test operation (wait until temperature has been above 50 degrees for 24 hours). Check that fins are clean and clear of debris.

·         Make sure gutters are clean, free of leaks and downspouts /drain extensions keep water draining away from house.

·         Check roof for leaks, missing shingles, condition of chimney and leaking flashing around vent stacks.

·         Windows and Doors - Check screens for holes. Check flashing and caulking for leaks.

·         Ensure dryer vent opens and closes with dryer operation. Clear the opening of lint and build-up.

·         Inspect driveway and walkways for loose bricks/blocks or heaved concrete and other trip hazards.

·         Inspect children’s play equipment for damaged or unsafe fixtures and conditions.

Inside

·         Clean stove hood, vent fan and filter.

·         Check / test / replace batteries in smoke detectors and Carbon Monoxide alarms. Make sure both are clean and free of dust.

·         Windows and doors open and close easily. Clean / lubricate locks and latches as required.

·         Check / Replace the furnace filter. Set the humidifier control to it’s “Summer” setting.

·         Check water heater for rust, signs of leaking and proper operation.

·         Manually cycle (trip) circuit breakers in breaker panel, testing for proper operation and reset.

·         Test and reset all GFCI outlets (generally in kitchen, bathrooms and exterior outlets).

·         Review family fire escape plan.

This is certainly not a comprehensive list; you may have additional things like a swimming pool or a hot-water heating system that has unique maintenance requirements. The best way to be sure you don’t miss anything is to have a professional home inspector look your property over every 2-3 years. They are trained to spot issues and will view your home objectively. I always recommend a client has this done prior to a purchase, and it can be a big money saver of the course of living in the home. Most home repairs are much less expensive to fix early on.

I hope this helps keep your home safe, healthy and efficient. If you have any additional suggestions or checks, leave me a comment below. You can always find me at my website JasonGault.com

Short Sales, Fraud, and the FBI

Short Sales and Fraud

    Yesterday was quite a news day in our local area for Real Estate and short sales. Unfortunately, the news was not necessarily great. A somewhat well known broker/lender/accountant was the target of a search warrant and raid by the FBI and HUD. The warrant was sealed, and at this point the allegations are only allegations, so that story will have to play itself out. Many of you will remember though that just recently, former Michigan Supreme Court Judge Diane Hathaway plead guilty to bank fraud and concealing assets in connection with a previous short sale.

    I did get some calls from past clients with questions about the breaking news. Some of them had gone through a short sale; some of them are right now in the midst of trying to undergo a workout with their lender. One thing they all had in common was an uneasy feeling. When stories such as these steal the headlines, they cast a long, grey shadow over the entire process. This shadow brings additional uncertainty to those homeowners already facing an uncertain future.

    I decided to write this today to hopefully restore a little certainty to both my clients and anyone else may have questions. As a licensed Real Estate Agent and a Realtor, I always strive to be part of the solution and not part of the problem.

    This is a quick and dirty guide to what a short sale is and what it is not. The Department of Housing and Urban Development uses the term ‘Pre-Foreclosure Sale’ (HUD – PFS Faq’s). A pre-foreclosure sale is a mechanism through which a lender will agree to allow a borrower to sell the home for less than the amount owed. The lender will participate in this process when the borrower demonstrates they have a qualified hardship. A ‘qualified hardship’ is generally defined as a hardship that will result in an eventual foreclosure and was not intentionally orchestrated by the borrower.

    A short sale is not a method for someone to buy a bigger and nicer home and then ‘dump’ their current home just because they want too – referred to as a “buy and bail” by Fannie Mae. A short sale is also not a process for someone to sell a home because it is not worth what it once was, unless they have a qualified hardship. A short sale is also not a method for someone to sell their house to a third-party and then buy it back or rent it cheaper than their current mortgage payment (unless this is disclosed in writing to the lender and the lender agrees in writing).

    During the course of a short sale, the seller will be asked to disclose a number of things. These will generally include: bank statements (all accounts that all mortgagees have an interest in or access too), pay stubs, w2’s, tax returns, IRS form 1056-T, a detailed list of monthly household expenses, a narrative explaining the hardship, and other information as requested by the lender. The seller will also be instructed to list the home for sale with a real estate broker who will provide listing documentation, assist the seller in communicating with the lender, and market the home according to highest and best practices, including listing the home at market value to attract a market value offer.

    Short sales can be a difficult process to maneuver; sometimes there are three or four stakeholders that all must agree on the terms before a final approval can be issued. The negotiation process is not overly complicated, but it is tedious and protracted. There are no shortcuts, magic bullets or ‘secret’ telephone numbers. The keys to short sale success are patience, persistence and perseverance.

    The short sale process does have a negative effect on the seller’s credit. This is the result of the missed or late payments that led up to the short sale and the manner in which the short sale is reported to the credit rating agencies. These factors can result in a reduction in not only in a FICO score reduction, but limit the seller’s ability to secure other loans, have an effect on security clearance ratings, cause an increase in insurance premiums and have other collateral effects. A short sale has less impact overall than a foreclosure, but the seller does not walk away unscathed.

    The important points to remember from this brief update are:

"Trust Me"

1. 1.      Short sales are a voluntary resolution agreed to by the seller and their lender based on the mitigating circumstances.
2. 2.      A qualified hardship is a necessary component of a short sale.
3. 3.      You will be signing disclosures and affidavits stating that all representations made are true and accurate and the sale is an Arms-Length transaction.
4. 4.      Any professional (be they a Realtor, accountant, lawyer, title company, or otherwise) who advertises an easier, softer, quicker or cheaper process without disclosing all the options and ramifications upfront is obscuring the truth by omitting facts. 
5. 5. You should always consult an independent attorney and CPA for legal and tax related questions when undergoing a short sale.

    For more information on Short Sale acceptable practices and fraud, be sure and check out these short sale related web pages from Fannie Mae, Freddie Mac, HUD and FHA.

    For any additional questions, you can find my website "here"