Added Commercial Foreclosure List

Friends,

Many of my most recent investors have been looking at foreclosures in commercial real estate and multi-family properties. Since many of my clients have deemed this to be a favorable avenue for investment, I have decided to unveil these exclusive properties to the public. If you are interested in seeing what’s available, check out commercial foreclosure properties and apartment foreclosures.

Cheers

100% Financing is Back!

Last October, the Housing Recovery Act of 2008 did away with down payment assistance programs where the seller paid the down payment for the buyer.  Did it make sense to do that while in the midst of a housing crisis?  Of course not!  Well, for a short time, HUD will be undoing the damage they’ve done.  Yesterday, they announced that they will be allowing down payment assistance programs from the US Government!

When you apply for your next FHA loan, you will be afforded the option to get a bridge loan.  This bridge loan will be in the amount of your $8000 first time home buyer tax credit.  This loan will be used directly to pay for your down payment on your first loan.  Effectively, you won’t be paying for this loan, and when you get the tax credit, you pay back the lender.  This makes too much sense!

To read more about this program, go to HUD.

Tempe Housing Market Update

Tempe has continued its trend of having about 500 homes available on the market. For the month of April, we had an inventory of 8.68 months. We are starting to see more homes trickle into the $50k-$100k price range. Many of these homes are bank owned and require a lot of rehab. The 8.7 months of inventory in this price range is misleading because we just recently broke into this barrier, and they are all getting snatched up quite quickly.

Price Active Pending Sold Inventory
Total 456 160 71 8.68
50-100k 20 15 4 8.75
100-150k 31 37 16 4.25
150-200k 83 42 25 5.00
200-300k 154 46 22 9.09
300-500k 113 23 7 19.43
500k+ 60 3 1 63.00

As expected, homes in the $100k-$200k price range are flying off the shelves. We have less than 5 months of inventory.This is the price range that is hitting many investors that are looking for cash flow as well as first time home buyers.

Over $300k, the price range where most home buyers are moving up from their first home, is at over one year supply. At this price point, a few things come into play. First, many people are less motivated to move up to their next house. The other issue is FHA loan limits as well as Jumbo loan guidelines. Additionally, the pace of homes moving at sub $300k is applying more pressure on the higher price range.

2920292 Carmel

What would you say if a large organization has just told you, “We want to sell your house.  We really do!  We just don’t want people to find your house on Google, Yahoo, or any other search engine of choice.”  Would that make you happy?

Currently, the Metropolitan Indianapolis Board of Realtors has decided that none of its members will be allowed to have their clients homes available for Google to find.  That means that it violates the boards’ terms if buyers can find YOUR house on Google.  It was a local issue at first, but when the National Association of Realtors came into the picture, they sided with MIBOR!  That means that if we don’t right the ship right now, this policy can come to a board near you (read AAR)!

To read more about this subject, read http://agentgenius.com/?p=12261

If you like the idea of having Google find your house when you want it sold, write to CNiersbach@realtors.org

Don't bank with your mortgage lender if…

This might seem like such common sense, but let me state it explicitly as Joel the Realtor recently had his checking and savings account pillaged by Wells Fargo.  If you are facing foreclosure, if you are unable to make payments, please please please do NOT leave money in the same bank that you are facing foreclosure with.  Recently, a local Realtor had Wells Fargo wipe out his checking and savings account.  They were the second note on the account, and according to Wells Fargo:

“State and federal law gives financial institutions the right to claim unpaid and past due amounts owed to them….  This is a common industry practice.”

So again, it might seem like common sense to us all, but let us learn from Joel’s lesson.

Mortgage Help

I just ran into a neat site about mortgages.  Those over at Mortgage Forum can answer any questions that you may have.

The Recession is OVER

At least, that’s what Warren Buffett says.  According to this article, the recession started some time around December of 2007, and will likely end soon.  History has shown that job losses is a lagging indicator, and so hopefully, job losses will continue their trend of decreasing.  Read more here:

http://news.yahoo.com/s/ap/20090504/ap_on_bi_ge/us_warren_buffett

March Inventory Update

Hello Friends,

New figures are out, and we are seeing a dramatic decrease in inventory levels.  If you are waiting for the time to buy, it looks like the time is near, if it isn’t here already.  We are seeing many situations where we have as many as 14 bids on just one property.  Don’t believe me?  Look at this table:

Dec-08 Jan-09 Feb-09 Mar-09
All 10.39344 12.83063 11.15896 7.970189
Ahwatukee 10.16667 11.25714 11.55714 8.861702
Apache Junction 13.12 13.73469 13.54 7.517647
Chandler 8.135036 12.59893 12.625 8.119205
Gilbert 7.993289 11.03493 9.949612 8.060976
Maricopa 7.928994 9.694444 8.666667 5.370656
Mesa 10.11514 13.19098 10.97345 7.65047
Scottsdale 17.95468 25.09486 22.38621 17.97003
Tempe 10.81111 18.01754 14.77465 14.51351
Queen Creek 6.698551 8.219081 7.590164 5.135945

Cheers,

Steve

$15000 Phoenix Grant Update

Great news!  I was able to get my hands on the fact sheet straight from the city of Phoenix.  Here it is in all its entirety:

Neighborhood Stabilization Program (NSP) Homeownership Assistance Fact Sheet

NSP Program Overview

As part of the Housing and Economic Recovery Act (HERA), passed by Congress in July 2008, $3.92 billion was provided to communities hardest hit by residential foreclosures and mortgage delinquencies. The city of Phoenix received $39,478,000 in Neighborhood Stabilization Program

(NSP) funds to help families purchase foreclosed homes at a discount, which in turn helps stabilize neighborhoods. NSP Homeownership Assistance funds are for down payment and closing cost assistance for eligible homebuyers.

Homeownership Assistance Description

The NSP Homeownership Assistance Program provides a $15,000 loan for down payment and closing cost assistance for buyers of foreclosed homes anywhere in the city of Phoenix. The full amount of the loan is paid back to the city when the homebuyer sells the home or refinances. The program targets foreclosed single family homes, townhouses and condominiums (condo conversions are not eligible) that meet HUD Housing Quality Standards (HSQ). The Homeownership Assistance program is for down payment and closing cost assistance only and cannot be used to fund rehabilitation activities.

Eligible Homebuyer

Eligible families can earn up to 120 percent of area median income (AMI), which is based on family size. In determining a family’s income, all wages and salaries of all family members over age 18 are considered as well as other sources of income.

Family Size 120% AMI Income

1 $53,950

2                         $61,650

3                         $69,350

4                         $77,050

5                         $83,200

6                         $89,400

7                         $95,550

8                         $101,700

Families must be FHA creditworthy and have completed the NSP-required eight-hour Homeownership Education and Credit Assessment counseling. Families must maintain the property as their principal residence.

Eligible Property

To be eligible for NSP Homeownership Assistance funds, properties must meet the following requirements:

  • Located in the city of Phoenix
  • Foreclosed and have changed title
  • Appraised within 60 days of the purchase contract
  • Purchase contract must contain four contingencies:
  • Sales price at least 15 percent below appraised value
  • Property clear of the city’s top eight neighborhood code violations (see phoenix.gov/CLEANPHXltopseng.pdf)
  • Pass inspection according to HQS before close of escrow
  • Signed “Lead Disclosure Form” from seller for properties built pre-Jan. l, 1978

Program Description

The NSP Homeownership Assistance program consists of three-phases – each with very specific requirements:

Home buyer Education and Credit Assessment

  • Complete eight hours of counseling from a HUD-certified housing counselor
  • Receive a Certificate of Completion from the HUD-certified counselor
  • Qualify for a 30 year, fixed rate, amortizing loan (not subprime)

Eligibility Verification

  • Determine income eligibility and invest $1,000 from own funds
  • Find eligible bank.-owned foreclosed property
  • Verify purchase price of at least 15 percent below appraised value

Closing Requirements

  • Sign purchase contract with city required contingencies (see above)
  • Pass Housing Quality Standards (HQS) inspection before close of escrow
  • Completed HUD environmental impact assessment (provided by the city)
  • Lead Disclosure Form signed by seller if property pre-Jan. 1, 1978
  • Obtain three-year Home Warranty contract, not to exceed $1,500
  • Execute city Homeownership Assistance loan documents/agreements

Questions and answers from the NSP Homeownership Assistance Information Session

  • Is the $15,000 loan subject to interest?
    • No. It has to be paid back when the home is sold or the property is refinanced OR if you own the home more than 45 years. If you do own the home 45 years, you can ask the City of Phoenix for another 45 year extension on the $15,000 loan.
  • Can the money be used for repairs?
    • No. For closing costs and down payment only.
  • Can the 203k be used with this program?
    • No, not in this Phase of the program.
  • The appraisal has to be done to determine the value of the home- who pays for this?
    • Typically the home buyer will pay for this unless it is negotiated in the contract.
  • Do we have to follow your guidelines or the Lender’s guidelines for this program?
    • You have to follow both. You have to fall into the income limitations set for this program, the DTI 31 %/41 %, counseling/credit requirements AND the property has to meet the requirements of the HQS. Any additional lending requirements must be met for the loan.
    • NO non-occupying co-signers allowed.
  • Is there a cost for the counseling?
    • Each counseling agency has their policy on the charge for the counseling session. Please contact the HUD-approved counselors for costs.
  • How long will it take to close on a home once I have completed the classes?
    • Once you find a home, it will take a minimum of 45 days from a fully executed contract until closing. Once the assistance documents are signed, it takes a minimum of 10-days to have the funds wired to the escrow company.
  • Who pays for the inspection?
    • The buyer pays for the inspection and any re-inspection that is needed. And the inspector must use the HSQ inspection sheet in order to buyer’s to use this program.
  • What if the seller won’t do the repairs? Can I do them after I move in?
    • If the seller doesn’t do the repairs, the house doesn’t qualify under the currently guidelines and the property isn’t eligible for the program. No, the repairs have to be done by the seller.
  • What if the seller won’t lower the sales price of the home to 15% below the appraised value?
    • The house doesn’t qualify for this program.
  • Is the program based on “need” or can anyone use it for a foreclosed home in the City of Phoenix?
    • The program is not “need” based at this time. You can use FHA/VA loans for this program. This is not for cash buyers at this time.
  • Do I need a 3-year home warranty? Who pays for this?
    • A 3-year home warranty is required for use of this program. The buyer or seller can pay for this. Wasn’t made clear at the meeting if this can be covered by the $15,000 loan.
  • Can I income-qualify alone for my family or does everyone that receives income have to qualify?
    • Everyone that will be living in the home as a principal residence will need to be included under the income requirements. Any SSI, worker’s camp, Pension, etc … will need to be disclosed.
  • Can I own other real estate and use this program?
    • No, you cannot own any other real estate.

Phoenix wants to give you $15000

The City of Phoenix has just announced that they will give you $15000 to buy a foreclosure.  This is even more reason to get off your seat and buy today!  You can use the $15000 however you want.  It can be used towards your downpayment, closing costs, or whatever you would like.  The best part is that you can combine it with the $8000 stimulus bill we just enacted, and end up getting $23,000 just for buying a foreclosure property in Phoenix.  Details are still developing, and I will be happy to answer any of your questions.