For Heidi Uhrig, successfully buying or selling a house for somebody isn’t the end of a process, it’s where things really start.
I frequently have clients call me months, even years, after a sale to ask for recommendations regarding remodeling, furniture shopping, appliances, you name it,” said Uhrig, a real estate agent since 2005 and broker/owner of her own independent real estate company, Glass Slipper Homes, since last year.
With more than 5 million home owners unable to make their monthly mortgage or currently in default, lending giant Fannie Mae has started to get tough on strategic default.
At the end of June, Fannie Mae announced that it would no longer look the other way from borrowers who walk on their mortgage. They also announced that the penalty would be a seven year ban from the GSE (Government Sponsored Enterprise) program. Additionally, Fannie plans to take legal action against borrowers who strategically default on their loans.
While Fannie Mae is standing tough on their decision, the reality is that with unemployment still at 9.5% or higher in some regions and a sluggish economy is having many home owners feel that they have no choice but to walk away from mortgages that they have no hope of catching up on.
“We’re taking these steps to highlight the importance of working with your servicer,” said Terence Edwards, Fannie’s executive vice president for credit portfolio management. “Walking away from a mortgage is bad for borrowers and bad for communities and our approach is meant to deter the disturbing trend toward strategic defaulting. On the flip side, borrowers facing hardship who make a good faith effort to resolve their situation with their servicer will preserve the option to be considered for a future Fannie Mae loan in a shorter period of time.”
Here’s how Fannie breaks it out:
Deed-in-Lieu of Foreclosure> — reduced from four years to two years with 20% down; four years with 10%.
Pre Foreclosure Sale — two years with 20% down; four years with 10%.
Short Sale— will be the same as pre-foreclosure sale
Strategic Default (Walk Away) — seven years.
Many experts are fearful that this move will contribute to the already dismally depressed home market by cutting out the government backed borrowers. Fannie Mae and Freddie Mac, fund more than 90% of new mortgages and so far, Freddie has not followed suit.
Learn about the history and experience the thrill of the soap box derby’s heyday in Madison from the mid-1930s through the 1950s as well as the excitement of today’s derby-racing action. Visit Madison’s Wisconsin Historical Museum for this unique exhibit. See unique cars, mementos, souvenirs, photos, and film from the days when zooming down a hill in a home-built car was the most fun a kid could have.
This interesting exhibit will run from June 26, 2010 – September 11, 2010. Located on the Capitol Square in Madison, the Wisconsin Historical Museum is full of wonderful information about the State’s rich history. The museum is open from 9am-4pm daily and is located: 30 N Carroll St . Madison, Wisconsin 53703 and you can reach them by (608) 264-6555. Suggested Donation is $2.00/person
If you have bought or sold a home, the final step in finalizing that sale is when you close. There will be alot of paperwork to complete and the closing costs will be indicated at this time. Most homebuyers are aware that their will be closing costs but many sellers are surprised to find that they are responsible for closing costs as well.
Closing costs refer to all of the taxes, fees and costs required to close a real estate transaction. The amount and who will be responsible can vary from state to state.
If you are sellling your home, it is important to ask your agent for a breakdown of what you are expected to pay in closing costs as well what the buyer will pay. In most states the buyer and seller split closing costs but some states consider the buyer to be responsible or both parties can be required to pay the costs.
The real estate market can have an impact on on who will be responsible for paying closing costs. For example in a market that is plentiful, the seller could have more of a chance in having the buyer pay the majority of the closing costs. But in a market that is struggling such as now, buyers tend to have the upper hand and many sellers will pay the majority of the closing costs in order to complete the sale.
Below are some of the common closing costs faced by sellers and buyers:
•Escrow/attorney fees: Some states require third-party escrow companies handle real estate closings, while others dictate attorneys perform the function. Title companies, title agents, lenders, brokers and even real estate agents are allowed to handle closings and/or escrows depending on the state. These fees are usually split between the buyer and seller. •Title insurance: There are usually two types of title insurance that must be purchased – the lenders’ policy and the owners’ policy. Usually either a title company or in some states a lawyer will research the title to make sure there are no liens against the property or unidentified owners. These policies protect the lender and new owner for the full value of the property. Usually, the seller pays for the owner’s policy and the buyer pays for the lender’s policy. This is often referred to as clearing title. •Transfer or documentary taxes: These are paid either to the state, county, city or a combination depending on the state. This is where the government agency gets their share of the transaction. This is also known as a reconveyance tax. •Recording fee: Usually paid to the county for recording the deed, which shows ownership of the property. •Mortgage tax: This is an additional tax collected by some states. Alabama, Florida, Georgia, Hawaii, Kansas, Maryland, Minnesota, New York, Oklahoma, Tennessee and Virginia are the states that collect this tax. •Brokerage commission: The fee you contractually agreed to pay for the selling of your home.
Aside from these costs, the seller may be responsible for costs such as any credits that were promised to the buyer for repairs or home warranties. Don’t forget that Federal law requires that sellers and buyers receive a copy of a HUD-1 form outlining all charges in a real estate transaction.
One of the requirements that mortgage lenders will request during the home buying process is a real estate appraisal. For many first time buyers, there may be some misconceptions as to exactly what this is. A real estate appraisal is a detailed report that is created by a licensed appraiser in your state and establishes the market value of a residential property. This is a very important aspect and several different considerations go into an official appraisal, and it forms the basis of the bank’s determination of the loan value. While appraisals do consider market comparisons, the actual appraisal value comes from much more than a market analysis.
Here are the components of a residential appraisal:
Comparisons to at least three similar properties
Evaluation of the market conditions in the area
Environmental conditions that could decrease the property’s value
Structural issues that could decrease the property’s value
Estimate of time on the market
Status of the home site – new development, established neighborhood, acreage
Appraisals are owned by the lender and not the buyer
Assessed values don’t necessarily match market value
Realtors do not provide appraisals
Consumers do have the right to question appraisal facts and contest them
Understanding the neighborhood and ‘comps’ are an important part of your buying experience, but you are also bound to the official appraisal given to the lender. Work with your realtor, lender AND appraiser to make sure you understand all the details in the appraisal report of your new home.