Underwater Today Has A NEW Meaning,,,,

14 million Americans are currently “underwater”, according to an executive at Deutsh Bank last week. The same executive went on to forecast that home prices will likely fall another 14% before bottoming out. So, as prices continue to fall, the number of over-leveraged mortgagors could reach 25 million. That would mean that over 48% of ALL mortgagors have negative equity. (Full interview @ CNNMoney.com)

The foreclosure filings for July were 7% higher than June and 31% higher than July of 2008 according to RealtyTrac. That is the third time in 5 months that there has been a record set.

But isn’t the Obama Plan Working?

Simple answer is NO. Banks are not moving fast enough to make the modification programs effective for the millions promised relief. Bank of America for instance has modified the loans of ONLY 4% of their eligible borrowers since the program was unleashed months ago. What is worse after struggling through red-tape, run-arounds, and delays, the majority of home-owners that successfully modify end up becoming a short sale candidate in months. What are the banks that received bail-out money using the money for?

The rest of the programs are not set to bring long-term economic repair either. Cash for Clunkers will only bring car part and car price inflation while encouraging more Americans to open lines of credit they cannot afford. The Cap–n–Trade Bill will only cause housing inflation, more over-leveraged property, and unnecessary tear down of properties that meet the price criteria for first-timers and rehabbers. The bill will also bring even more unemployment. Taxpayers who have managed to maintain employment now have to work harder to earn less and pay more taxes. ...and Never before has a government mandated program stood to unravel the very basis of American Capitalism and our historical economic strength like the health bill. We are not facing an end of the recession that should be left to occur organically by free trade and an investor driven market, but are instead facing mandated government pocket picking that is building a hollow future.

One solution we can bring to this situation is short sales. Short sales solve a problem and fill a need.

 Seller ends up with a better situation: out from under debt and credit salvaged

 Lenders NET MORE versus REO sale

 Neighborhood values are not as impacted

 Less vacancies and vandalism

 Municipalities get their tax money

For those of us in the Real Estate Industry finding a team to work to bring more Short Sales to close is vital. One solution is Loss Mitigation. There all types of loss mitigators to review so choose carefully. You may wish to check out http://www.RRES.ManageMyShortSale.com.

>>TIME IS RUNNING OUT>>>>

Time is running out on the $8000 Tax Credit. The average time to close a home is 45 days now. So to take advantage of the Tax Credit a purchase offer should be accepted by October 15, 2009 to close by the November 30th deadline.

Review the highlights below:

March 19, 2009 -- The American Recovery and Reinvestment Act of 2009 was just signed into law. One of the major provisions provides an $8,000 tax credit to qualified First Time Home Buyers defined as those who have not owned a home in the last three years.
$8000 tax credit highlights:

• The $8000 tax credit or 10% of the home’s purchase price, whichever is less, is available only for first time home buyer defined as those who have not owned a home in the last three years.

• There is a $75,000 adjusted gross income limit for tax filers filing as single and $150,000 limit for joint return filers. It is available only for primary residence.

• The tax credit does not require a repayment in most cases. The tax credit does have a repayment provision if the homeowner does not occupy the property for a minimum of 3 years from the closing date.

• The home buyer must purchase a home between January 1, 2009 and close by November 30, 2009

• The $8000 tax credit is received when you file your tax return. Home buyers may file an amended 2008 tax return with a 1040X form. You should consult with a tax ad visor to ensure you file this return properly.

Successful Short Sales Benefit Many & Help Stimulate the Economy

Every time a short sale does not close & goes into foreclosure many people & industries that provide goods & services don’t see a penny. This continues the downward spiral to the US economy instead of boosting it. Successful short sales get money moving back into the economy.
Nobody benefits when a home goes into foreclosure. The Bank owns a property they don’t want. The property owner loses any equity they had in the property. They also get a poor credit score, preventing them form making another purchase in the near future. Also neighbors home values depreciate.
Many people benefit from a successful short sale. It doesn’t matter if a real estate investor, landlord, or a prospective homeowner makes a successful short sale transaction. They are putting money back into the economy. This is something the Banks & the government don’t see. Many industries make money with each short sale completed.
 Bank makes more on short sale than on foreclosure
 Realtors & Real Estate Companies
 Lawyers & Title Companies
 Mortgage Brokers & Lending Companies
 Appraisal Companies
 Home Inspectors
 Electricians
 Plumbers
 Contractors
 Hardware & Home Supply Stores
 County, Town, & City Government. Taxes are paid up & tax base increases.
 Insurance Companies
 Neighbors (their home value began to stabilize)
The successful closing of a short sale not only benefits the new property owner. It creates jobs and puts money into local business large & small, that are also involved in the industry. Every successful short sale is putting money back into our economy.

Fannie Man supports Short Sale Borrowers to Buy Again!

Homeowners have a multitude of questions when facing the possible loss of a home. The main two questions we here are: “How will a short sale affect my credit?” … and “when will I be able to buy another home. Did you know that Fannie Mae wants homeowners who short sale to own another home as soon as possible?

When every a homeowner ask you a financial or legal questions it is imperative that you advise them to seek the advice of professionals unless you are one. Some of the professionals they may speak to are major credit reporting bureaus, lawyers, mortgage professionals and even a financial advisor. Then communicate Fannie Mae policies on those who choose a short sale as an alternative to a foreclosure or deed in lieu.

Fannie Mae desires short sale borrowers to own again. In as little as two years those who have had a short sale may be considered for any type of loan program without restrictions. Homeowners that choose the deed in lieu option must wait 4-7 years before being consider for another loan. Borrowers that permitted their home to go to foreclosure must wait between 5-7 years before they are eligible for a loan for a primary residence with a sizable down-payment and strong credit score.

Here is the principal message Fannie Mae will loan to a borrower who took the short sale option faster and with less restrictions than those who choose foreclosure or deed in lieu. Short Sales save the homeowner, the lender and help the community.

This does not mean that Fannie Mae loans are fast to process as short sales. Fannie Mae’s should compel servicers to become more efficient in their review and processing of short sales. Fannie Mae preference of short sales is not reflected in their control on servicers handling the short sale reviews.

Short Sales help the homeowner, the lender and our community! Welcome your feedback!

[Based on information released by Fannie Mae in 08 and Short Sale Daily News]

More Sellers Are Becoming LandLords!

More people are becoming landlords in an economy where selling a home can be challenging.

The nation’s second-largest home insurer, Allstate Corp., says the number of homeowners converting their homeowners insurance to landlord policies rose 27 percent in the first quarter of 2009.

Many Real Estate companies are beginning to offer property-management services for absent owners, many of whom are convinced it will be easier to sell in a couple of years.

Holding on probably isn’t the best answer, says economist Edward Leamer, director of the UCLA Anderson Forecast. Leamer suggests negotiating a short sale instead. “Better to take your losses and move on.”

But with good property management it can be a solution for distressed homeowners.

Another factor to consider is whether renting will reduce or eliminate the value of the capital-gains tax exclusion. Federal tax law requires living in the home at least two of the previous five years to qualify for the full capital-gains tax exclusion when the house is sold. Of course, if there is no profit to be had, then this isn’t a problem.

As always Rapid Real Estate Solutions are here to assist you with complicated real estate challenges. You may call us at 616-328-5127.