Why Pay Private Mortgage Insurance (PMI)?

Reese Ward from Benchmark Home Loans, one of the mortgage providers we work with sent me this article which I thought was interesting to share:

"Private Mortgage Insurance (PMI) is required by most lenders when a borrower puts less than 20% down on a purchase loan. Paid for by the borrower, PMI not only protects the lender from foreclosure, it also enables many buyers to qualify for loans and purchase real estate when they couldn't have otherwise. On January 1st, 2007, legislation went into effect making PMI tax deductible for new borrowers whose personal adjusted gross income is $100,000 or less. This has created additional opportunities for ma...

13 Absurdities of Short Sales

At our Keller Williams annual convention I had the pleasure of attending a panel on Short Sales that included Edward Goldfarb, a KW colleague in Florida who is a short sale expert. He shared with us a white paper on the absurd current situation regarding short sales, including these 13 absurdities:

1. Homes must be sold over and over because the banks, investors and MI companies take so long to approve the Short Sale that the first, second, third or even more buyers walked away in desperation.
2. After taking months for Short Sale negotiations, the banks will foreclose on a home only to turn it over to the REO brokers who sells the home within days for thousan...

New Photo Requirements For Appraisals

JoAnn Terrell from Bank of America sent us this information today, which we thought was interesting to share with everyone, especially with our friends the appraisers:

New Subject Property Photo Requirements - On the all interior inspection assignments, including FHA and Conventional, the appraiser must include, at a minimum, the following photographs:

• The kitchen
• All bathrooms
• Main living area
• Examples of physical deterioration, if present
• Examples of recent updates, such as restoration, remodeling and renovation, if present
• All modifications/additions to the exterior of the subject
• Exterior pictures of front, street, rear and sides of the...

Belle Hall Plantation Keeps Strong in 2010

Belle Hall Plantation, is one of the most popular and sought after planned subdivisions in Mount Pleasant, SC. The combination of a wide range of price points (from entry-level housing in the mid $200Ks to multimillion dollar custom homes), great community amenities, convenient location close to shopping and I-526 and great schools make Belle Hall a very desirable location.
Home sales in 2010 were strong, with 54 properties exchanging hands (same number as in 2009!).

The lowest price was $226,000 and the highest price was $765,000. Average price per square foot was $164, down from $174 in 2009.

For more information about Belle Hall Plantation go to...

SHOULD YOU PAY CASH FOR A HOME?

If you have the cash and plan to buy a home, there are different issues to consider to determine your best strategy.

First, you may consider peace of mind. Does having no debt make you sleep like a baby? 

Next, consider financial effectiveness, tax and retirement planning. If you pay cash for a home and in the future need to refinance with cash out to use some of the equity, the interest you pay on the mortgage will NOT be tax deductible.

The tax code says that deductible mortgage interest must be from either:

• First lien ACQUISITION indebtedness; or
• Second lien (i.e. equity line, 2nd mortgage) of up to $100,000 - funds can be used for any purpose.
...

RealtyTrack, a service that tracks foreclosures in the U.S. reported that lenders foreclosed on 1 million properties in 2010, a record number since it started tracking foreclosure activity in 2005.

That's a huge number! It means that banks are now proud owners of 1 million homes which will come back on the market this year. In Charleston and Mt Pleasant, we are already experiencing an increase in the number of lender-owned (REOs) that are being listed. There are currently more than 400 homes listed as REOs, and this number is probably much higher, as some REO agents do not label their listings correctly. 

These properties will be aggressively priced, since banks will want to offload the...

QUICK FACTS ON THE CHARLESTON REAL ESTATE MARKET

Our market was generally healthier in 2010 than in 2009. Here are some facts for the Charleston MLS area that were recently published by the Charleston-Trident Association of Realtors:

No. of Closed Transactions: 8,649 (Up 5.2% from 2009)

Median Sales Price: $188,979 (Up 3.0% from 2009)

Average Sales Price: $266,106 (Up 4.7% from 2009)

Days On Market Until Sale: 107 (Down 4.8% from 2009)

• Single Family Detached: 106 days
• Condos/Townhomes: 146 days

Percent Achieved (Sales Price/Original List Price): 90.6% (Up 1/9% from 2009)

• New Construction: 96.0%
• Pre-Owned Homes 88.6%  

Months of Supply at Year-End: 10.9 (Down 18....

WELLS FARGO RELAXES CREDIT SCORE REQUIREMENTS

Wells Fargo announced last week that they will consider issuing mortgage loans to buyers with lower credit scores.

FHA loans are usually requiring a 620 middle score and will lend up to 96.5% (3.5% downpayment) Conventional loans usually require a minimum 10% downpayment. 

As of last week, Wells Fargo was the only lender to have relaxed their requirements to:

• Credit scores from 550 (with a 5% downpayment)
• Credit scores from 500 (with a 10% downpayment)

This will allow some buyers that may have had some problem with their credit but are still "good risk" to borrow money for a home purchase. These loans will be manually underwritten, s...

FHA Extends Anti-Flipping Rule Exception 

"With certain exceptions, FHA regulations prohibit insuring a mortgage on a home owned by the seller for less than 90 days. Early last year, FHA temporarily waived this regulation through January 31, 2011. FHA this week posted a notice extending this waiver through the remainder of 2011. This action will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold throughprivate sales. It will allow homes to resell as quickly as possible,

TOP TEN REASONS WHY WE WOULD CHOOSE NOT LIST YOUR HOME

Why would we say such thing? After all, aren’t all Realtors supposed to list whatever they can, whenever they can?  

You see, we believe that transactions must be Win-Win for all the parties involved. If we list your home and are not able to sell it, you will still have your home to sell, we all wasted a few months, our relationship with you suffers, and our reputation as professional, effective agents may take a hit. This is a lousy long-term business strategy!

Professional, effective and efficient Realtors must be very careful about which homes they choose to carry in their inventory. After all, their objective should be to SELL ...

Bank of America announced it is launching a new loan program for medical professionals

The Doctor Loan from Bank of America is for licensed, practicing physicians or residents, dentists or other eligible medical professionals. It features a range of fixed and adjustable rate loans and offers significant advantages including:

• As little as 5% down on mortgages up to $850,000
• Employment start date up to 60 days after closing
• Student loan debt excluded from total debt calculation

Bank of America joins SunTrust in targeting this segment (see below).

The Doctor Loan Program is a residential mortgage loan developed specifically for Licensed Residents/Interns/Fellows and Licensed doctor...

Woo hoo, I love getting testimonials like this one!

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" To Whom It May Concern:

About a year ago, I faced a personal hardship and a dilemma of what to do with my condo, since I could no longer afford it. Given my financial situation at the time, I thought I only had two options: Sell it or let it go to foreclosure. I was not aware of any other options for someone in my situation.

At that time, I contacted Alan Donald to get his advice. He explained very thoroughly all the additional options available to me, including the pros and cons of each scenario. This information was very useful to allow me to reach a final decision. After evalu...

Foreclosure Myths

There always seems to be a "hot topic" that draws the public's attention. In the last 2-3 years foreclosures have taken over the media and it seems that every day there are news and articles written about this topic. I recently read an article on Trulia.com that mentioned some of the interesting myths around foreclosures:

1. Foreclosures Happen Quickly 
   Not necessarily - in many states the foreclosure process takes at least 6 months. However, the Home Affordable Program of the Obama Administration, while it has not prevented many foreclosures, it did slow them down. It seems that all parties (the banks, the government and the homeowners) want to delay the process rather ...

Bank of America announced this week that they were freezing all their foreclosure processes until all the foreclosure documentation had been reviewed. 

In its most recent report to shareholders, BofA disclosed that it solf $453 million in foreclosed properties during the second quarter of 2010. It still has an inventory (REO's) of $1,740 million worth of foreclosed homes it needs to dispose of.

Bank of America is the fourth lender that has temporarily halted foreclosures pending review of their documentation. The government is increasingly concerned that lienholders may not be carrying due process and correct documentation for their foreclosures, and lenders like BofA want to make sure ...

Today I listed this great 3 bedroom, 1.5 bath townhome that was extensively renovated 2 years ago, including new siding upstairs, new roof, new windows and exterior doors, engineered hardwood floors downstairs and complete kitchen re-do including new cabinets, stainless steel appliances and granite countertops.

Nestled in a group of quaint townhomes and single family homes, this home is located centrally, with very easy access to I-526, schools, restaurants and Town Center Shopping. A 15-minute drive will take you to Downtown Charleston or to the Airport, Charleston AFB and Boeing. 

Real lane access provides 3 spaces to store your vehicles or boat. A fenced backyard provides privacy and...

Why not be foreclosed? Why sell short?

Experienced professionals provide this list of reasons:

• Avoid the foreclosure stigma– Homeowners will always have to disclose that they had a foreclosure on any mortgage application and (many job applications) that they submit in the future. This can have an adverse affect on their future mortgage rates. Foreclosure is asked about specifically in credit inquiries. There is no seven-year time limit on this item. 
• Protect credit score– Credit scores will be lowered by 300-plus points (per loan) by foreclosure. The impact of a short sale—about half that much. 
• Improve eligibility for a government insured loan– The homeowner will be ineligible for...