Great news for anyone with a mortgage through Bank of America ... they are starting a new program called a "Cooperative Short Sale" program.  A representative with Bank of America conceded their short sale process has been flawed and difficult to deal with.  BofA is now working to streamline this often frustrating process.  

How the Cooperative Short Sale is different:

- The process starts before an offer is recieved.

- The process starts even before the property is listed.

- BofA will review the homeowner documentation to see if you qualify for the program, and the listing agent (where we come in) submits everything via their online system.

- Bank of America will have the property appraised to determine its market value.

- Approval for the short sale (again all before listing) can be had in as little as 10 days.

- A hardship letter is no longer required - however you really should have had some change in your situation since you got the loan.  Furthermore, if you do not have a good documented hardship, bank of america will ask for a promissory note or cash contribution.  Ask me for more info if you dont think you have a hardship with BofA.

If you have a Bank of America loan, and are looking to lower your existing mortgage rate BofA has local modification departments to help you. 

Henderson Modification Office- local number is 702-473-6645

2285 Corporate Circle (off Green Valley Pkwy)

Henderson, NV 89045

Las Vegas Modification Office- local number is 702-515-8789

6900 Westcliff Drive (off Rainbow)

Las Vegas, NV 89145

Or visit this website: http://homeloanhelp.bankofamerica.com/en/index.html

If modification does not work for you and you'd like to see if you might qualify for a short sale, please visit my website at www.vegasvalleyshortsale.com to find out more!

FHA is lowering their upfront MIP to 1% as of October 4^th,2010!  The bad news is that they are INCREASING the MIP renewal from .55% to .90%, which, in purchasing terms, will decrease the buying power of your buyers by approximately $7500 from their maximum purchase price.

See below illustration:

• Up front mortgage insurance will decrease to 1.0% for all amortization terms
• Annual premiums will increase on amortization terms >15 years to:
  • .85% on LTV’s <95%
  • .90% on LTV’s >95%

Old MIP vs. New MIP illustration

Based upon a loan amount of $200,000 @ 4.5% rate @ 30-year @ 96.5% LTV:

(*The Borrower Pays $45 more per month which translates into a negative $7,500 in buying power.)

However, if home is sold at year 7:

[*FHA gets $2,102 MORE in MIP but principal balance is $2,175 less, so at year 7, it's basically a "wash". (the same calculation for 5 years, same deal.)]

Bottom line, FHA gets MORE, but the buyer builds up more equity.

As of right now, the MI is still deductible on income taxes (sunset on December 31, 2010).

Just a reminder, that the MI drops off after it reaches 78%, or approximately 10 years!

Please contact me with any questions!

John Longstreet, Loan Officer

20 Years Experience in the Mortgage Industry!

For all the doctors out there... after suspending it upon the foreclosure crisis, BofA has returned a revised version of its doctor loan program. It returns on August 9th, provides 95% financing for Doctors, and goes up to $850,000. It's even good on refinances and it has special rules for excluding student loans (key challenge these days for doctors qualifying).

It also applies to those in residency who will begin their new employment within 60 days. Let me know if you or anyone you know might need this loan type.

July 20, 2010

300 Jobs Coming to NLV!

The Straight Story 01/12/2008
What Does It All Mean? Credit Crunch / Housing Crisis/ Mortgage Meltdown
Submitted by Shawn Cunningham

The term euphamism is a fascinating one.  According to Merriam Webster, it's defined as the substitution of an agreeable or inoffensive expression for one that may offend or suggest something unpleasant.  The question I've had lately is what's the opposite?  What's the word used to make something sound worse or more sensationally bad than it is?  Let's consider some words we see everyday and what they mean..

• -- "The Media": The "big bad" these days that everyone blames for everything they don't like.  Media is a word that represents the ever-growing number of newspapers, tv stations, networks and websites that report news that are now owned by mega-corporations like News Corp. (Fox Empire, MySpace, Wall Street Journal), Disney (ABC, ESPN), Time Warner (CNN, Time Magazine) and Viacom/CBS.  I have always found it interesting how we all (me included) complain about the media.  The media only wants to make money.  Non-profit news is usually government sponsored and has an agenda, the media only has one agenda - what will sell.  Bad news sells.  End of story, thank you capitalism.
• -- "Credit Crunch": I crunch every time I hear this annoying term.  Because so many homes have gone into foreclosure, thus devaluing mortgage-backed securities and big mortgage banks, lenders have been forced to restrict who they lend to.  But let's be clear on this - restrictions are things like: a) you need to have a down payment to buy a house (unheard of!) b) you need to have good credit and c) if you're at the stage of life where you are investing in real estate, you need some money!  These three axioms, had they been observed by lenders for the last 5 years would have thousands of people in California and Nevada sleeping much better at night because they would not have gotten in over their heads.  *** As an aside, credit crunch has also spread to non-residential as commercial loans and construction loans are far harder to get.  Though again, perhaps these lenders were too loose with their lending as well.
• -- "Mortgage Meltdown": This is a special term for the fact that due to so many people getting ARMs and sub-prime loans, the mortgage industry has gone kaput.  For sure, free market forces are taking out a lot of lenders and there could be some biggies yet to fall.  However some of the lenders (i.e. B of A) are not as bad off for the simple reason that they never allowed option ARMS (neg. amortization loans) and other flimsy loans that in retrospect were lunacy.  As a realtor, I never allowed a client to agree to an option ARM loan, and I am amazed at how so many lenders thought that was a good idea.   Plus, to repeat what I said in an earlier post, no one should be going into foreclosure due to their ARM adjusting upwards.  As among realtors, the changes and challenges are shaking out mortgage companies and you can be assured that in no time in the near future will such mistakes be made again.
• -- "Housing Crisis": The mother of them all.  Not to use a euphamism, but it's a market correction.  It is hurting a lot of people and many owners (including myself) have seen equity fall dramatically.  The price drops are forcing many into foreclosure.  On the flip side, buyers (including some of the affected sellers), are enjoying tremendous advantages of a strong buyer's market.  In fact, buyers nationwide who were priced out of real estate several years ago can now buy.  Four years ago if a buyer told me they could only afford an $1100 a month payment, I would have said it was not possible.  However, today, it is easily possible as homes are priced well under $200,000 in some areas and buyers have more options than ever.

Could it be 'cacophemism?  That is replacing a polite word with a harsh one?  I don't know, but when you see these words in the newspaper or even here on this blog, remember what they mean.  I don't begrudge the seriousness of any of this but let's keep it in perspective.