• Archives
June 2008
• Jun. 25, 2008 - And you thought "No Money Down" Mortgages were Dead!
The Good The Bad and The Ugly on Zero Down Payment Mortgages
Below is a link to an AP story discussing the NEW proliferation of No Money Down Mortgages.
No downpayment mortgages have largely disappeared as a financing option from private lenders. But they are still available - and growing more popular - using existing FHA programs in conjunction with nonprofit groups' downpayment assistance programs.
The article mentions the "Not For Profit" organizations that help buyers with little or no funds get a loan. We have been seeing more of these as well. In some cases we have seen the "Not for Profit" charge $500 to $750 to basically convert a SELLER's contribution to the buyer's closing into a $5000 "gift" which is handled differently for the purposes of qualifying for a mortgage than simple seller contribution to closing is. Many lenders have pretty strict limits on the amount the seller can contribute to the buyer's costs but these programs seemingly overcome that limit - at some expense of course.
So what's good, what's bad and what's ugly. Well good from a first time buyer's perspective is that yes there does still seem to be, even in this new era of tighter lending criteria, a way to get into a home with little or no money. Also good for some sellers desperate to get SOLD and Realtors who are desperate to get paid (and make no mistake we like to get paid!) - so these "creative" steps get deals done.
Bad is that in tightening up these requirements we have now created this little cottage industry that converts seller contributions at what looks to us as a cost of over 10% of the amount contributed. The very nature of this seems to be to circumvent some restrictions AND it either ends up costing the buyer more or reducing the net for the seller.
The Ugly? Well the ugly is probably one of the "remains to be seen" issues but clearly the largest number of mortgage defaults are when buyers no longer have ANY equity so they don't feel compelled to keep paying should rates rise or should market conditions further soften. Statistically, in a lot of areas of the US right now, prices continue to fall. Are all these new no money down loans creating just another foreclosure spike somewhere a little further down the road AND this time it won't be private lenders exposed but the US Taxpayers.
Here's a link to the article, you may need to copy it into your browser address window:
http://www.floridarealtors.org/NewsAndEvents/n1-062508.cfm
- Mike W. |
Comments (0) :: Post A Comment! :: Permanent Link
View more entries tagged with: Fha, No Down Payment, Zero Down Payment, Mortgage |
• Jun. 10, 2008 - Foreclosed homes bring stinky pools and health warnings!
Foreclosed homes bring stinky pools and health warnings!
Saw this article today from Florida Association of Realtors and the South Florida Sun-Sentinel about the number of dirty pools in Florida due to foreclosures and it struck home.
From what I've seen it is not just foreclosures that end up with that as an issue. As you know if you read this blog at all, we now do a large number of short sales and distressed properties and it seems like the VERY first thing to go when homeowners are cutting back and considering having to short sell is....the pool guy!! :-) And a lot of the property management companies that banks use to sell their REO property may have the lawn mowed but never hire pool care.
The OTHER thing I have learned is that, particularly down here in Paradise, you stop putting chemicals in the pool and even if you run the pump night and day it will be green in about a week to ten days. When they let the electricity go off and then the pool doesn't run - well the pool looks like pea soup in as little as 4-5 days. And if there is no cage then it starts looking like a science project with polliwogs and toads and snakes and mosquitoes pretty darn quick.
I AM amazed though that I find home LISTED for SALE where the power is ON but because the owner fired the pool guy no one is putting chemicals into it and even though it's running it's green. What we find is that, regardless of how well priced it is - if the pool is green it is SO much harder to sell. So I am always encouraging sellers, even those upside down on the loan, if they are serious about selling to keep the pool up but quite honestly I now almost always have a bag or two of shock in the back of the car and some chlorine tablets. At the last short sale we closed (and it was for three quarters of a million dollars on Siesta Key) the buyer asked for the number of the pool guy so he could continue on the "contract" with them. I opened my trunk and pointed to my chlorine tabs and said that the pool guys last day was.....TODAY! Me!
Here's the article - the situation really ISN'T funny if this pool is next door to you:
http://www.floridarealtors.org/NewsAndEvents/n3-061008.cfm
- Mike W.
|
Comments (0) :: Post A Comment! :: Permanent Link
View more entries tagged with: Foreclosures, Florida Foreclosures, Florida Short Sales |
|
|
|
Real Estate Market statistics, buying, selling strategies, financing, insurance for Sarasota, Siesta Key and the barrier islands from Ann & Mike Winger, REALTORS with REMAX Tropical Sands.
Links
• Home
• View my profile
• Archives
• Email Me
• Blog Manager
|
PageEntry 1 of 1
Last Page | Next Page
|
|
RSS Blog Feed