Tips For Buying An Investment Property

Thinking of becoming a Landlord?  With current real estate prices and interest rates so low, many are saying, "Yes" to that question.

But what should one consider before jumping into such a commitment?  Below are a few thoughts:

Location, location, location.
Does the area where you are looking to purchase in have a high number of steady jobs?  Or is it near a University where you could get a steady stream of student renters?  Does the amount of rent you need coming in fit with the area, or would you need to charge too high of a rent for the area in order to cover your expenses?  Answering these questions BEFORE you purchase can save you a lot of months of no income on your new rental property while trying to figure out where to get a renter or how much rent you can charge to fit the area.


Who will take your maintenance calls in the middle of the night?
If you don't want tenants to be calling you personally with every question, concern, or maintenance need, you may want to consider hiring a Property Management company.  Remember to add the cost of such into your expenses, however, when thinking about how much rent you will need to charge to cover your expenses.


Do you know how to legally screen tenants and how much deposit money you can legally charge?
Again, the hiring of a professional Property Management company could help you in your beginning years as you learn the legalities of being a Landlord or if you don't want the hassle of screening, or of sometimes evicting, tenants.

Being a Landlord can be financially rewarding, however, knowing the Laws and Rights of both Landlord and Tenant before you purchase is not just wise, but will keep you out of a lot of trouble.  And thinking about all the expenses that come with owning an income producing property before you purchase, will help you avoid surprises in your budgets.

For a current list of possible income producing properties in Santa Clarita, read HERE or contact me directly for your own tailored list which can be automated and updated daily and delivered right to your own email box:
LeeAnn Bell 661-309-2364

LeeAnnRealtor@yahoo.com
DRE License #01260650

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Please notify me by email or by posting a comment in the COMMENT SECTION if you find a LINK not working.
Some LINKS may not work on this Site because of my constant updating and moving Articles around to keep this Site up-to-date and interesting for you the Reader. 
Your help is greatly appreciated!

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(c) 2011 LeeAnn Bell, REALTOR(R)

FHA Mortgage Information for Condominiums

Have you as a Buyer, been looking at condominiums to purchase only to hear your REALTOR(R) state, "That Condo Complex is not FHA Approved*?". 

Or have you as a Seller, been told by your REALTOR(R) that, "You are not getting a Buyer for your unit because your complex is not FHA Approved*" ?

I have made these statements to every single condo client in 2011, and to some in 2010, when Buyers did not have 20% of the Purchase Price as a Down Payment to make, and so I have seen firsthand the frustration this is causing both Buyers and Sellers.   And my clients are not the only ones frustrated, as evidenced in the below LA Times Article:

New FHA certification rules hamper condo sales, refinancings

The rule revisions, aimed at averting losses from delinquencies and foreclosures, have led to thousands of common-interest developments becoming ineligible for FHA mortgages.

October 23, 2011|By Kenneth R. Harney

Reporting from Washington — Is a little-publicized switch in federal mortgage policy causing huge problems for condominium sellers, buyers and homeowner association boards across the country — even depressing prices and blocking refinancings?

Individual owners and realty agents are emphatic that the answer is yes. They say a series of rule revisions by the Federal Housing Administration has caused thousands of common-interest developments to become ineligible for FHA mortgages. This has abruptly shut off loan money for would-be buyers and refinancers, forcing them to pursue conventional bank loans requiring much higher down payments — sometimes 20% or higher versus the FHA's 3.5% minimum — that they often cannot afford.

For its part, FHA says the rule changes it has adopted, which focus on budgets, insurance and financial reserves, have been prudent and are designed to avert losses from delinquencies and foreclosures. But the agency confirms that thousands of developments have failed to obtain or apply for required recertifications under the new rules. Out of approximately 25,000 common-interest developments nationwide with expiration dates for FHA eligibility between last December and Sept. 30 of this year, only 2,100 — just 8.4% — have been approved or recertified by the agency, according to Lemar Wooley, an agency spokesman.

"This has been a nightmare," said Ryan O'Quinn, a homeowner in a town house community in Calabasas. O'Quinn, a member of the board of directors of his homeowner association, has been trying to sell his condo since May. He has had multiple offers and been in escrow four times — twice with the same purchaser — but because the community's eligibility has lapsed, buyers who need FHA financing have been rejected by lenders.

...Critics say that FHA did not consult adequately with the condo industry before changing its rules — a charge FHA denies — and contend that the agency did not think through some of its policies. Andrew Fortin, government affairs director of the Community Associations Institute, said the rule that is hampering Robinson's refinancing — that no more than 15% of the units in a development be 30 days or more delinquent on their association dues — is often impossible for volunteer boards of directors in large projects to keep track of, much less to certify to FHA.

Even worse, according to other critics, the new rules put board members into legal jeopardy by requiring them to sign certifications attesting that the governing documents comply with all local statutes and that they have no knowledge of situations that could cause any owner to become delinquent at some later date. The mandatory certification carries a maximum penalty of $1 million in fines and 30 years' imprisonment if found to be incorrect. Large numbers of association boards have balked at this requirement, critics say, leading to the drastic drop in certification requests and eligibility.

Bottom line for owners, sellers and buyers: If an FHA loan figures in your plans, first check with the association board. If the development isn't certified, you are cut off — at least for now — from some of the most favorable mortgage terms in the marketplace. 

(Full/Originiall Article can be read HERE)

If you are looking to purchase or sell a property in an HOA Community in Santa Clarita, contact me to see if the complex is FHA compliant at:

LeeAnn Bell 661-309-2364 or
LeeAnnRealtor@yahoo.com

And remember to ask me about some of the risks associated with purchasing a unit in a complex that in not FHA Compliant (some are reported HERE).

 * To be FHA Approved a Complex must comply with the following:

- No more than 10 percent of the units may be owned by one investor; 

- No more than 15 percent of the total units can be in arrears (more than 30 days past due) of their condominium association fee payments;

- At least 50 percent of the units of a project must be owner-occupied or sold to owners who intend to occupy the units;
- Mortgagees must review the homeowners’ association budget (the actual budget for established projects or the projected budget for new projects) for all projects. This review must determine that the budget is adequate and:
• Includes allocations/line items to ensure sufficient funds are available to maintain and preserve all amenities and features unique to the condominium project;
• Provides for the funding of replacement reserves for capital expenditures and deferred maintenance in an account representing at least 10% of the budget; and
• Provides adequate funding for insurance coverage and deductibles (see Section VI, Insurance Requirements). 

These requirements AND MORE found at  www.hud.gov under question
"2) How can I get a Condominium approved?" 

Information provided as a courtesy by:

LeeAnn Bell, REALTOR(R)

DRE License #01260650
Verification of all information should be obtained by appropriate professionals.  

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Here is what a recent client had to say about working with me: 

Given the difficulties this sale presented (the foundation was cracked) you offered every option, answered all questions, and explained all paperwork immediately.  I would not hesitate to refer you to my family and friends.

- Gary R.

LeeAnn Bell, REALTOR(R) since 1998

661-309-2364

LeeAnnRealtor@yahoo.com
Kellar-Davis, Inc.
A Professional Real Estate Corporation
16670 Soledad Cyn Rd., Santa Clarita, CA  91387

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(c) 2010 LeeAnn Bell, All Rights Reserved
DRE License #01260650
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The Home Buying Process

When it comes to buying a house, many Buyers do not know what steps to take. Many think they know what price range they can afford and so go looking at homes in that price range.  But sadly, many Buyers get excited about the homes they find in that price range only to find out later that they actually cannot afford such a price range, because of the monthly additional costs of Home Ownership.

So, for Buyers who are just starting the process of thinking of buying a home, I have written down some steps that every Lender and/or REALTOR(R) will have you take before you can write an Offer on the house of your dreams.

Step #1 - Contact a Lender

Many Home Buyers do not want to start here, thinking they are just in the beginning stages and don't want a Lender involved yet, however, this is the first and foremost step to take so that you can know exactly what Loan Amount you can qualify for.  Your REALTOR(R) will want to know that you have spoken to a Lender before you start going into Homes For Sale as well, as REALTORS(R) have seen too many times, Buyers get their hopes dashed regarding the price range they can afford when they have looked at beautiful homes in one price range only to find they cannot qualify for any of them.


Your Lender will want to know:
What is your current income;
How long have you been employed with your current employer;
How much in savings you have;
What your current FICO score is (some information regarding FICO scores are found HERE). 

And remember to shop around when looking for a Lender.  You will find that their costs and the interest rate you may get can vary between Lenders.

Step #2 - Start saving every nickle you have for a good Down Payment and Closing Costs. 
If you want to be a Home Owner this will not be a hard task but an exciting one.  And an important cost to remember is Closing Costs, which many Buyers forget about.  Closing Costs will include the cost that your Lender will charge you for getting you a Loan; Escrow Costs which the Escrow Company will charge you for handling the funds and documents of the process of Buying a Home; your Property Insurance and Taxes; and other miscellaneous costs involved in Purchasing and Closing the Purchase of a Home (a more detailed breakdown on Closing Costs can be found HERE).

Step #3 - Contact a REALTOR(R)

If you want to start looking inside homes that you can afford, a REALTOR(R) will be the best way to help you do this.  Keeping your REALTOR(R) informed about your likes and dislikes, and about any major changes in your job, income, major expenses that suddenly appear, along with location needed to live, etc. will help keep your REALTOR(R) looking in the right areas for you.  And remember that your REALTOR(R) has the most current and up-to-date list of Homes that are For Sale in the area and price range that you are interested in versus the on-line data suppliers which often times are giving information that has not been updated.   Your REALTOR(R) should be out to help make the Home Buying process as easy for you as possible, supplying answers to all your questions in the most easily understood way possible.

Step #4 - Write an Offer and open Escrow on your new Home
This process can be overwhelming to Buyers who are not used to the amount of Paperwork and Disclosures that will be involved in purchasing a Home.  Choosing the correct REALTOR(R) who has a patient disposition from the start and one who is willing to answer every question thoroughly and simply is the REALTOR(R) that you should choose to help navigate you through this sometimes overwhelming and ofttimes, time consuming, process.  

Here is what one client had to say about working with me:

"You were easy going, not pushy, yet knowledgeable, helpful and friendly.  Not only knowledgeable but honest to the point of offering careful and helpful advice".

- Alan L

If you need any help in finding a home to buy in the Santa Clarita Valley or if you have questions about the Home Buying Process, please feel free to contact me directly by telephone, 661-309-2364 or by email, LeeAnnRealtor@yahoo.com. 
It will be my pleasure to make the Home Buying Process as easy, enjoyable, and as understandable as possible for you.  

(C) 2011 LeeAnn Bell

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FHA 203(k) Rehab Loan - a loan to help that "Fixer Upper" you just found

Have you found a home to purchase which you think would be just perfect, if only you had the extra cash to rehab it and bring it up to livable standards?

It can be hard for many to not just come up with a Down Payment for a new home, but add on top of that all inspections one may want to do during Escrow and the additional Closing Costs ... how does anyone have money left over for repairs which are necessary on so many distressed sales?


The FHA 203(k) Rehab Loan could be exactly what you are in need of.  Read below:

Home buyers thinking of purchasing a distressed property in need of repair, but who are concerned that the cost of the repairs could drain their savings account may qualify for the Federal Housing Administration’s (FHA) 203(k) rehabilitation program.

• The FHA’s 203(k) rehabilitation program provides loans for covering renovation costs as well as the purchase price of the primary residence.  Investors are not eligible for this program.  Additionally, similar to traditional FHA loan programs, the rehab program allows for a down payment of as little as 3.5 percent.
  

• A common misperception about the program is that the house needs to be unlivable.  Realistically, the property just needs to be outdated, according to a lender familiar with the program.  The property “just has to appraise below market value and then at market value with the repairs.”
  

• Improvements deemed “luxury” are ineligible; however, the program has a wide range of definitions for “repairs” and “modernization.”  Covered repairs include items such as a new roof or heating system, as well as decorative changes, like replacing vinyl with ceramic tile on the kitchen floor or painting the interior.
  

• In addition to putting down at least 3.5 percent of the current value of the property, buyers also must use a HUD-approved lender, appraiser, and a contractor approved by the lender for the repairs.  One list of approved businesses can be found at 203kcontractors.com.
  

• Borrowers considering the FHA rehab loan program should be aware that loan rates typically run around a percentage point higher than conventional loans, and come in 15- to 30-year terms, either fixed or adjustable.  Additional paperwork for inspection, appraisal, title updating, and the like can increase closing costs by $1,000 or more higher than the average.
  

• For additional information about the FHA 203(k) rehabilitation program, please visit http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm 

  Market Matters is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide.
  

Contact me if you are thinking of purchasing a home which needs some extra money put into it to become livable.

And if you are interested in finding distressed and/or foreclosed homes in the Santa Clarita Valley, email or phone me and ask to be put onto my DAILY AUTOMATED SEARCH SYSTEM which will send your personal home search criteria directly to your email in-box daily.  (Click this LINK to see an example of a personal Automated Search Page)

No matter where in Santa Clarita you are looking, it would be my pleasure to help get you into a home you will love!

LeeAnn Bell, REALTOR(R)
661-309-2364
LeeAnnRealtor@yahoo.com

DRE License #01260650

Comments Welcome

(c) 2010 LeeAnn Bell

Thinking of Buying a SHORT SALE Property?

Are you a Buyer in California who is excited to see some really low prices in the current housing market, but not sure what to expect if you put an offer on a home that needs to have the offer price "accepted" by the bank, or banks, who hold the loan(s), because the offer is less than what the owner owes the bank(s)?  

The process of a homeowner selling their home at a price less than what they owe is termed a SHORT SALE.  And there are many problems that both Buyers and REALTORS(R) are facing when placing an offer on such a home.  Some of the problems are listed below:

LOS ANGELES (March 8) – Fewer than three of five short sales close in California, illustrating the complexity and difficulty of navigating lenders’ and servicers’ short sale procedures, according to a Short Sale Lender Satisfaction Survey conducted by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).  The survey gauges REALTORS®’ experience in working with short sale transactions – transactions in which the lender or lenders agree to accept less than the mortgage amount owed by the current homeowner.
 
... Of the REALTORS® surveyed, 94 percent participated in a short sale transaction during 2010, demonstrating the surplus of short sale listings in today’s real estate environment. 

The most frequent problems REALTORS® cited in working with lenders and servicers during the short sale process include unresponsiveness, onerous procedures, and long processing delays. 

Nearly three-fourths (70 percent) of REALTORS® said that closing their most recent short sale transaction with a lender or servicer was “difficult” or “extremely difficult,” while only 10 percent said it was “easy” or “extremely easy.” 

“The lack of standardization, long approval process, and lack of lender approvals are hampering what should be a 45-day short sale process,” said Peerce.  “Instead we’re hearing the typical response time for lenders is at least 60 days, and in many instances, their response time exceeds 6 months.” 

More than half (63 percent) of REALTORS® said that lenders took more than 60 days to return a written response of the approval or disapproval of the short sale agreement submitted.  Only 4 percent said they received a written response in less than 14 days.  

Additionally, 44 percent of REALTORS® said that lenders took more than five business days to return any form of communication to REALTORS®.  Only 14 percent said lenders responded “within one business day.” 

“The survey results show that the short sale system is clearly flawed and must be standardized and streamlined to reduce the inventory of foreclosures,” said Peerce.  “Increasing the number of successful short sale transactions is one important way we can help California families avoid foreclosure and move our economy closer to recovery,” she added.

Further illustrating faulty communication problems, 64 percent of REALTORS® were “not satisfied” or “not at all satisfied” with the timeliness of lenders’ response to their inquiries, while only 22 percent said they were “satisfied” or “extremely satisfied.” 

Moreover, nearly three-fourths (74 percent) of REALTORS® were “not satisfied” or “not at all satisfied” with the amount of time it took to hear whether a transaction was approved or disapproved, while 16 percent said they were “satisfied” or “extremely satisfied.” 

In overall satisfaction with the lender they worked with, 67 percent of REALTORS® were “not satisfied” or “not at all satisfied,” while 19 percent were “satisfied” or “extremely satisfied.” 

C.A.R.’s Short Sale Lender Satisfaction Survey was conducted during the last two weeks of December 2010 to gauge REALTORS®’ experience in working with lenders or servicers of short sales, bank-owned properties (REOs), and foreclosures.  The survey was delivered to 20,000 REALTORS®, with 2,150 responding to the survey. 

Leading the way...® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.  

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Looking to purchase or sell a property in the Santa Clarita Valley?  Call me for an interview at:
LeeAnn Bell, 661-309-2364
REALTOR(R)
DRE License #01260650

FHA Gives Jobless Homeowners One-Year Break

Below I've pasted a couple paragraphs from a recent Associated Press Article, reporting that the Government is currently extending the time that an UNEMPLOYED HOMEOWNER can miss mortgage payments to TWELVE MONTHS before the foreclosure process begins.

 You can read the full Article HERE to see if you fall into the category of those covered by this new program.

If you find like to discuss the current housing market to find out how long homes are taking to sell, or what your home could presently sell for, feel free to give me a call.   Or email me, and  I can email you a free no-obligation list of homes currently FOR SALE, IN ESCROW, or recently SOLD in your neighborhood.

LeeAnn Bell, REALTOR(R)
Cell:  661-309-2364
Email:  LeeAnnRealtor@yahoo.com
DRE License #01260650

By DEREK KRAVITZ

updated 7/7/2011  

WASHINGTON — The Obama administration is making it easier for out-of-work homeowners to stay in their homes, as it tries to revamp its troubled foreclosure-prevention program. 

Starting Aug. 1, the Federal Housing Administration will extend the period for unemployed homeowners to miss mortgage payments to a full year from three or four months. That will allow qualified homeowners to go without making a monthly payment for 12 months before the foreclosure process begins.

The extended grace period only applies to FHA-backed loans, which are usually given to low- and middle-income borrowers and represent about 14 percent of all active mortgages and roughly 25 percent of new mortgages, and homeowners in the government's foreclosure-prevention program. About 10,000 homeowners in the foreclosure program and 3,500 FHA-backed homeowners per month would be eligible, officials said. 

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Here is what one client recently had to say about working with me:

"This one took a tremendous amount of patience, and you were a true professional!  Thank you."

- Dianne B., Canyon Country

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 LeeAnn Bell
661-309-2364
DRE License #01260650

Avoiding Refinance Costs After Divorce

By LYNNLEY BROWNING  Published: April 7, 2011

DIVORCED homeowners wrangling with the task of removing a former spouse’s name from the mortgage after buying out his or her equity stake in the marital house may think that refinancing is the only choice. 

There is another, little-known option that can avoid refinancing and its costs, which generally run 3 to 6 percent of the outstanding loan principal, according to LendingTree. You simply ask your lender to remove the former spouse’s name, leaving the loan note in your name only.
The problem is that not all lenders or mortgage servicers offer this option, known as release of liability. The lenders and servicers that do will most likely run a separate credit check on you — requiring, for example, that you meet minimum credit scores (typically from Fannie Mae, the giant government buyer of loans), and ensuring that you are current with the monthly mortgage payments. They may also require that any investors in the loan, after it is sold off, agree to the deal.
And if you are “under water,” and owe more on the mortgage than the home is currently worth, this process is not an option.
“This is a common and often messy business,” said Jack Guttentag, a mortgage expert and emeritus finance professor at the Wharton School of Business at the University of Pennsylvania. “Lenders seldom have a reason to take a co-borrower’s name off the note.”
But, he added, if a homeowner can prove that he or she can afford the payments and meet the required credit criteria — typically those of the investor in the loan — then release of liability may work.
Neil B. Garfinkel, a real estate and banking lawyer at Abrams Garfinkel Margolis Bergson in New York, says the lender “will require the borrower to prove that the borrower is able to support the monthly payments without the co-borrower spouse,” typically through monthly bank statements, annual tax returns and investment statements.
Having the name removed protects the credit of both parties, actually. If the former spouse failed to pay other debts, a lien could be placed on the home, and if you were delinquent on the mortgage payments, your former spouse’s credit could be hurt.
Most divorce settlements stipulate one of two outcomes for marital property. Either the house must be sold, or the person wanting to keep the property must buy out the other’s share, usually within months of the date of the settlement, and get the other party’s name off the mortgage — either through refinancing or a release of liability — typically within a year.
Under the second option, the former spouse signs a quit-claim deed at the divorce settlement, relinquishing his or her claim to the property. But while that action takes the former spouse off the house’s title and leaves it in one name only, it does nothing to remove his or her name from the actual mortgage.
Lenders or servicers typically charge $300 to $1,000 to execute a release of liability and require the property owner to pay an additional, nonrefundable application fee, typically $250 to $500. The process can take from 30 to 90 days, mortgage experts say.
One mortgage servicer, PHH Mortgage of Mount Laurel, N.J., requires that a homeowner with a loan sold to Fannie Mae have a minimum FICO credit score of 620 and a debt-to-income ratio of 50 percent or below (the ratio measures the amount of gross monthly income that goes to paying off all debts).
Still, a lender or servicer “generally has no obligation to release one of the borrowers,” Mr. Garfinkel said.
But Mr. Guttentag says homeowners may have one point of leverage. He suggested that qualified borrowers not accorded the release they seek tell their servicer or lender that unless a release of liability can be executed, the borrower will refinance the mortgage — at another lender.
“In such cases,” he said, “the servicer might agree to do it.” 

(Original Article Published HERE)

Need help buying or selling real estate in Santa Clarita? Call me!  

It is my goal to make the purchase or sale of your property a smooth and understandable experience!

LeeAnn Bell, REALTOR(R)
661-309-2364

Here is what one recent client had to say about working with me:

"We really like that you had patience with us and explained everything to where we understood it.  You also pointed out things that were wrong with the house that we didn't see, showing your honesty to protect us and not just close the deal."

-Chuck and Teresa M. 

LeeAnn Bell, Realtor(R)
DRE License #01260650

Will a Short Sale Affect Your Credit?

What is a Short Sale?

A Short Sale occurs when a Lender agrees to accept less than the amount owed to the Bank by the home owner because there is not enough equity to sell the home at the amount owed to the Bank and cover all the costs of sale.

Not all Lenders will allow a home owner to sell their home as a Short Sale just because a home owner wants to sell and finds their home value less than what homes are currently selling for in their neighborhood however, and it used to be that Lenders wouldn't even consider a Short Sale if your payments are current.  In some instances this has changed, but Lenders are still more agreeable to negotiation and the sale of the home at less than what you currently owe,  if your payments are in arrears. Also, if you have cash assets, the Lender might be less than agreeable to the Short Sale process, asking for payment from the cash assets that you have.

Fair Isaac, which developed FICO scores, released a report that says credit scores are affected about the same, whether a seller does a Short Sale or Foreclosure. Fair Issac says the average points lost on a FICO score are as follows:

• 30 days late: 40 to 110 points
• 90 days late: 70 to 135 points
• Foreclosure, short sale or deed-in-lieu: 85 to 160
• Bankruptcy: 130 to 240 

(Fair Isaac article found HERE)

The same article goes on to state:

Absorbing a big credit-score hit can make many transactions more costly. It's not just paying more for credit card debt and auto loans, insurance can cost more as well.

The average savings for someone with a good versus mediocre credit score is about $115 a year for auto insurance and $60 for home, according to Loretta Sorters, of the Insurance Information Institute.

A low credit score can even make it harder to rent a home because landlords often use credit scores to weed out prospective renters.

Mortgage brokers are also quoted as stating that the effect on a consumers credit report is quite similar, with no credit score advantage for the delinquent borrower doing a Short Sale versus a Foreclosure.

Therefore, if you are considering the possibility of selling your house as a Short Sale, thinking that you will be saving your credit score, it is my advice that you contact a lawyer, a tax accountant and/or a mortgage broker for more advice.  The above information is provided as a courtesy, with the advice that such professionals be consulted before the process of a Short Sale is started.

If you need further assistance to get your home sold via Short Sale, if you need questions answered regarding a regular sale of your current home, or if you are looking to purchase a home in the Santa Clarita Valley, please feel free to call me direct at:

LeeAnn Bell, 661-309-2364

Or email me at:  

LeeAnnRealtor@yahoo.com

It is my goal to make the process of selling or purchasing real estate as easy and as understandable as possible for you!

LeeAnn Bell, REALTOR(R)
DRE License #01260650

Here is what a recent home buyer had to say about working with me: 

"you are easy going, yet knowledgeable and honest to the point of offering careful and helpful advice"    

- A.L.,  Sand Canyon

Some Pitfalls of a SHORT SALE

On Thursday, March 10, C.A.R. (the California Association of REALTORS(R)  is running an open letter in several newspapers statewide, addressing the numerous challenges associated with short sales.

The open letter addresses the following topics: The benefits of doing a short sale rather than a foreclosure; the inconsistencies with short sale processes at banks; the challenges of working with multiple lien holders; and the slow and/or nonexistent communication by banks and servicers to REALTORS®, homeowners, and buyers.

The letter closes by calling on regulators, elected officials, nonprofits, business organizations, companies, and individuals with a stake in California’s economic future to resolve the short sale issue and other issues that get in the way of an economic and housing recovery.

The letter will be published in the Bakersfield Californian, Fresno Bee, Los Angeles Times, Mercury News, Sacramento Bee, San Diego Union-Tribune, and San Francisco Chronicle.

Below is an excerpt from the letter which is to appear in the papers mentioned above:

Unfortunately, many homeowners are unable to successfully negotiate a short sale.  According to a recent survey of 2,150 California REALTORS® who have assisted clients with a short sale, only three out of five transactions closed – even when there was an interested and qualified buyer.  

What’s the problem?  For one, no two mortgage agreements are the same, so it can be difficult to standardize short sale processes and procedures.  Many homeowners have second mortgages, which further complicate matters.  Then there’s the challenge of convincing multiple parties to take a financial loss or, in the case of loan servicers, to forego fees they otherwise might earn during the course of the foreclosure process.  Poor and slow service by many banks and servicers has only exacerbated the problem.  Horror stories abound from potential homebuyers and REALTORS® forced to wait 90 or more days for a response to a purchase offer or being required to fax short sale applications or other paperwork as many as 50 times.   These delays discourage potential homebuyers from considering a short sale purchase and undermine the process for those who short sales are intended to benefit – the hundreds of thousands of families facing foreclosure. 

The entire letter from the President of the California Association of REALTORS(R) can be read on March 10th in the Newspapers mentioned.

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If you are interested in purchasing or selling real estate in the Santa Clarita Valley, feel free to contact me for an interview:

LeeAnn Bell, 661-309-2364

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LeeAnn Bell, REALTOR(R)
DRE License # 01260650

How long should you keep your tax files for the IRS?

I received a question from a client asking how long he should keep his file after the sale of his property, for IRS purposes.  Below is my response:

Hi Gary:

In response to your question regarding how long you should keep your tax records for the sale of the Eagle Rock home, I'm posting below some information from the IRS website (found HERE).

How Long To Keep Records

You must keep your records as long as they may be needed for the administration of any provision of the Internal Revenue Code. Generally, this means you must keep records that support items shown on your return until the period of limitations for that return runs out.

The period of limitations is the period of time in which you can amend your return to claim a credit or refund or the IRS can assess additional tax. Table 3 contains the periods of limitations that apply to income tax returns. Unless otherwise stated, the years refer to the period beginning after the return was filed. Returns filed before the due date are treated as being filed on the due date.

Table 3. Period of Limitations

	IF you...	THEN the period is...
1	Owe additional tax and (2), (3), and (4) do not apply to you	3 years
2	Do not report income that you should and it is more than 25% of the gross income shown on your return	6 years
3	File a fraudulent return	No limit
4	Do not file a return	No limit
5	File a claim for credit or refund after you filed your return	The later of 3 years or 2 years after tax was paid.
6	File a claim for a loss from worthless securities	7 years

Property. Keep records relating to property until the period of limitations expires for the year in which you dispose of the property in a taxable disposition. You must keep these records to figure your basis for computing gain or loss when you sell or otherwise dispose of the property. Generally, if you received property in a nontaxable exchange, your basis in that property is the same as the basis of the property you gave up. You must keep the records on the old property, as well as the new property, until the period of limitations expires for the year in which you dispose of the new property in a taxable disposition.

Keeping records for nontax purposes. When your records are no longer needed for tax purposes, do not discard them until you check to see if they should be kept longer for other purposes. Your insurance company or creditors may require you to keep certain records longer than the IRS does.

How To Get Tax Help

You can get help with unresolved tax issues, order free publications and forms, ask tax questions, and get information from the IRS in several ways. By selecting the method that is best for you, you will have quick and easy access to tax help.

Contacting your Taxpayer Advocate. The Taxpayer Advocate Service (TAS) is an independent organization within the IRS whose employees assist taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe that an IRS system or procedure is not working as it should. Here are seven things every taxpayer should know about TAS:

• TAS is your voice at the IRS.
• Our service is free, confidential, and tailored to meet your needs.
• You may be eligible for TAS help if you have tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or you believe an IRS procedure just isn't working as it should.
• TAS helps taxpayers whose problems are causing financial difficulty or significant cost, including the cost of professional representation. This includes businesses as well as individuals.
• TAS employees know the IRS and how to navigate it. We will listen to your problem, help you understand what needs to be done to resolve it, and stay with you every step of the way until your problem is resolved.
• TAS has at least one local taxpayer advocate in every state, the District of Columbia, and Puerto Rico. You can call your local advocate, whose number is in your phone book, in Pub. 1546, Taxpayer Advocate Service—Your Voice at the IRS, and on our website at www.irs.gov/advocate. You can also call our toll-free line at 1-877-777-4778 or TTY/TDD 1-800-829-4059.

You can learn about your rights and responsibilities as a taxpayer by visiting our online tax toolkit at www.taxtoolkit.irs.gov.

I would think you are safe in letting your records go now, considering the length of time that has past since that home sold, however to be confident I would suggest asking your Tax Account.

Good to hear from you,
LeeAnn

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If you have any Real Estate questions, please feel free to email or phone me for a answer.  If I can't answer your question myself, I will put you in contact with the appropriate professional who can.

And for all of your Real Estate needs in the city of Santa Clarita feel free to contact me:
LeeAnn Bell,  REALTOR(R) ... 
661-309-2364 or LeeAnnRealtor@yahoo.com
DRE License# 01260650

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(c) 2010 LeeAnn Bell
No portion of this Site may be copied or reproduced without written permission

All Comments Welcome

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How Much Longer Will These LOW Interst Rates Last?

This is a question I am commonly asked.   And it is the question recently addressed in the New York Times Article posted below.

With interest rates still at historic lows, I believe now is the time to purchase a home ... or to sell a home for that matter.  Why?  As a seller, you may see that home prices drop even further as interest rates go higher, in order to allow new home buyers the ability to afford a home.   And as a buyer, if you wait for home prices to go lower but find that interest rates have risen while you waited, you could end up paying more for your home in the long run, at the higher interest rate over the life of the mortgage.

Want to discuss this some more?  Call me at ...

661-309-2364

Whatever your Real Estate needs are I am ready to help you get your answers and get you into the property you desire:
LeeAnn Bell
REALTOR(R)
DRE License #01260650

From The New York Times:

By LYNNLEY BROWNING

Published: December 23, 2010

MORTGAGE rates in 2010 were the lowest in six decades, but a recent and sustained increase may indicate that consumers can expect to pay more in the new year to buy or refinance a home. 

After hitting rock bottom in mid-November, fixed rates for 30-year mortgages, the most common type of home loan, have steadily risen.
With this year’s historically low rates, “there is a good chance that we have peaked, give or take a few basis points,” said HSH Associates, an independent publisher of mortgage and consumer loan information, in its most recent trends forecast. (One basis point is 0.01 percent.) According to Christopher J. Mayer, a senior vice dean and a professor of real estate, finance and economics at the Columbia University Business School, “The window of low rates could have left us.”

By Dec. 16, rates for a 30-year fixed loan rose for the fifth consecutive week, to 4.83 percent, up from 4.17 percent on Nov. 11, according to Freddie Mac, the government-controlled buyer of loans. Rates in the Northeast, which are often a tenth of a point or more above the national level, were on average the same as those across the nation. But by Thursday they had nudged downward, to 4.81 percent.

Mortgage rates typically track those of 10-year and 30-year Treasury and other government bonds. Yields, or interest rates, on those notes have been rising amid lender concerns that the White House’s deal with Congress on Dec. 7. to extend the Bush-era tax cuts and the Federal Reserve’s move in early November to buy back $600 billion in debt to stimulate economic growth will combine to fuel inflation and swell the budget deficit.

The 4.17 rate last month was the lowest since Freddie Mac began tracking rates in 1971 — as well as the lowest since World War II, according to Weiss Research, a financial analysis and publishing firm in Jupiter, Fla. The high point last year was 5.21 percent, in April.
So if you took out a 30-year fixed note for $400,000 at the recent 4.83 percent, you are paying $93 less per month than you would have in April — but nearly $157 more than you would have at the 4.17 percent benchmark.

Refinancing or buying a home is still more affordable, compared with the rates of 6 percent to 8 percent over most of this decade. (A table of historical rates is at http://www.freddiemac.com/pmms/pmms30.htm)
The Mortgage Bankers’ Association, a trade group, predicts that 30-year fixed rates will inch up to 5.1 percent by the end of 2011 and reach 5.7 percent in 2012. In a slightly more optimistic prognosis for homeowners or buyers, Frank E. Nothaft, the chief economist of Freddie Mac, wrote in an annual trend forecast on Dec. 6. that “while some rise in fixed-rates is expected, 30-year fixed-rate loans are likely to remain below 5 percent” throughout 2011.

Apart from rates, other factors may make it harder to buy or refinance a property in the coming year. Lenders of all stripes have significantly tightened their requirements and made it tougher than ever to qualify for a loan. And the real estate market is still depressed — only half of 109 housing economists polled in October by MacroMarkets, a financial technology company in Madison, N.J., expect housing prices to begin rising next year. 

This year has been a boom time for refinancings — four out of every five single-family loan applications in 2010 was for a refinancing, according to Freddie Mac — and there is more demand yet to come from homeowners next year, Professor Mayer said. 

If rates appear headed to rise later in 2011, it may be partly because of jitters about the effects on unemployment on the economy, said John Walsh, the president of Total Mortgage Services in Milford, Conn. Mr. Walsh said he thought the recent increase in rates was temporary. “We may come back down in the next 60 days or so,” he added.

A version of this article appeared in print on December 26, 2010, on page RE9 of the New York edition.

The Original Article can be found HERE

Here is what a recent client had to say about working with me:

You were "easy going, not pushy, knowledgeable, helpful, friendly ... offering careful and helpful advice".
                                                                     - Alan L.,  Canyon Country

(c) 2011 LeeAnn Bell