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Real estate tidbits

By Jocelyn P. PorteriaBy Jocelyn P. Porteria

REO-TO-RENTAL- not for every market. REO or Real Estate Owned also known as bank owned properties are those foreclosed homes but was not sold in courthouse auctions and automatically becomes the property of the bank that holds the mortgage.  About a month ago, there was stir created when Federal Housing Finance Agency gave a green light to Fannie Mae and Freddie Mac to convert REO properties available through bulk sales to investors for use as rentals.  This program is a part of the President Obama initiative to help underwater homeowners.  The goal is to reduce the inventory of REO properties contributing to low prices of homes while helping property owners and investors meet the increasing demand for rental properties.  Don’t get excited as I received a lot of phone calls about this and have to do some research and talked to lenders on how the program works.

Though this seems works better for underwater homeowners; the program is not acceptable in NorthernVA.  This is because REO properties are already selling well.  The program applies only in areas where there is significant need wherein there is a high REO inventories.  Obama administration is sensitive to the different market conditions and intends to limit the program to places with high REO inventories.   

FHA FEES: Up for Purchasers; Down for some Refinances:  The FHA mortgage insurance premium will increase by .10% for purchase money borrowers started April 1.  The increase was part of the 2011 legislation to extend payroll tax cuts.  There is an additional .25 % increase on jumbo loans to take effect June 1.  The upfront mortgage insurance premium has gone up April 1 to 1.75%.  If you are in the process of buying a home under FHA loans, you may want to contact your loan officer or bank to get more details on this on how it will affect your future loan.  Meanwhile, borrowers who took out loans before June 1, 2009, the administration is reducing the upfront premium on FHA refinance to .01% and lowering the annual premium to .55%; however you have to meet certain eligibility requirements.  Pick up the phone and call your lenders as you may qualify for this.

Deb Cancellation Relief  Federal law that provides tax relief for homeowners who receive debt forgiveness through foreclosures, shot sales or modifications is set to expire this year but already extended until December 31, 2013.  This is the third extension as it should expire originally in 2009.  The market still unstable to date and still high number of short sales and foreclosures. Analysts say the extension is needed as lenders restructure millions of loans.

Homeowners are more attractive than renters!!  Eat your heart out, recent CNN survey of 1,000 single people.  More than 1/3 of women said they would prefer to date a homeowner rather than a renter and about 18% of me said the same thing.  Moving back with parents might be a good idea just like us Filipinos but will not be attractive for your love life.  So find a Realtor® and a loan officer as soon as possible.

Mortgage Disclosures:  The Consumer Financial Protection Bureau is now looking for similar disclosures as to credit card offers so lenders can’t pull a fast one.  The goal is to make it easier for consumers to make informed decisions and compare lender rates before making the final decision.  This will be in effect soon.

Is 15 the new 30?

Something to think about.  About 90% of people prefer the 30-year, fixed-rate loan.  Last quarter of 2011, it was down to 60%; meaning more homebuyers prefers the 15 to 20 year loans instead.  Those who are refinancing switch to 15 year mortgage.  People start to think longer-term, bigger picture.  While typical payment on 15 year term is 50% higher than the 30 year mortgage, interest rate is significantly lower.  Example 3.41% for a 15 year mortgage versus 4.05% on a 30 year.  

Note:  Jocelyn Porteria is a Realtor® licensed in VA. She earned a designation of ABR, GRN Accredited Buyer’s Specialist and GREEN Designation, CDPE Certified Distressed Property and Short Sale Expert, (SFR) Short Sales and Foreclosure Resource. For more info, call her at 571-432-8335 or email at realdealconsulting@yahoo.com   for a free confidential evaluation of your individual situation, property value, and possible options. She is also an accredited agent of Ayala Land, SM Residences and Century Properties in the Philippines.<D>


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