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.

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!

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!

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.

Las Vegas distressed homeowners whose loans are backed by mortgage giant Fannie Mae now have a new place to start their search for answers.  “Know Your Options.com” a website specifically designed for upside down homeowners, describing the workout options refinancing, forebearance, loan modifications.  

Fannie Mae also offers the unique Deed for Lease program where you can remain in the property after handing it back to them up to 12 months.  To qualify…

• The loan involved is a first loan on a primary residence. It cannot be on a second home or investment property. You can not have a second loan of any kind. 
• You have had to have made at least three payments since getting the loan or  a loan modification.
• At the time of referral to Fannie Mae for consideration under this program, you  cannot have missed 12 or more payments on the loan.
• You cannot have filed for bankruptcy.
• You have to be employed with income which can be verified

IF you aren’t sure if your loan is a Fannie Mae loan – click here: http://loanlookup.fanniemae.com/loanlookup/.  Call me with questions on this!

If your loan is not Fannie Mae, you do not want to keep your home or may not qualify above, call me at 702-530-5002 or visit www.vegasvalleyshortsale.com to discuss other options including a negotiated sale with the bank (my specialty) where we negotiate a much smaller payoff in order to sell the home at today’s market value.

Can a borrower pay a fee charged by a third party negotiating a short sale on the seller’s behalf?

Per FHA, a borrower can pay a fee charged by a third party negotiating a short sale on the seller’s behalf under the following conditions:

·         The dollar amount of the fee, and that the borrower agrees to pay such fee, is disclosed in the sales contract.

·         The fee charged is not based on any percentage but rather a set dollar amount.

·         The fee charged is considered standard and customary for the area when compared to other third parties negotiating similar short sales contracts. (Determined by the underwriter at time of underwriting)

·         The lender has verified that the third party has no identity of interest with any other party to the loan transaction.  (Signed certification by all parties of the transaction stating such)

·         The lender has independently verified the legitimacy of the company/person charging the fee. (Copy of services with fee schedules of company/person, verification of website, directory assistance verification of phone number etc.)

John Longstreet, Loan Officer

300 Jobs Coming to NLV!

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.

Happy New Year!  We have some extremely exciting news happening here in Las Vegas and as a valued client of our team, I want you to know about it to determine whether it makes sense for you to be involved.  To bottom line it, the Las Vegas real estate market is on a collision course with a housing shortage.  Not a mild one, a big one.  A new detailed report on projections of housing supply and housing demand from local research firm Applied Analysis has put a spotlight on this coming probability.  It was even highlighted in the Review-Journal before Christmas, though as always, good news seems to get buried. 

To be sure, the bad news is plentiful for home sellers, as home price declines have accelerated in the last 90 days to double-digit percentages mostly due to banks showing far more flexibility in prices than they have in years.  You can still look around and see thousands of homes listed for sale and home prices that have fallen more than 30% in some areas (when comparing apples to apples) from the market's peak.  This however does not bely the fact that inventory is starting to show declines and prices are next up to flatten out and eventually rise again.  Why?  Because of the shorgage that will come first in the market - the job shortage.

More than 100,000 new jobs are coming to Las Vegas just between now and 2012.  These jobs are fuled by tourism, construction, the fast-growing furniture and tech industries and service industries. Our Investor Prospectus features highlights of the biggest job generators - e-mail me for a copy!

WHAT DOES THE FUTURE HOLD?

We have created the following projection for what is more likely to happen to the market over the next 24 months.  We don't guarantee appreciation but have created a projection based on available data from today's sources. 

• The next 30 days:  Inventory will show the first signs of decrease in more than a year.  Prices will continue to decline but close in on a bottom that will be dictated by the banks cutting deep to finally move their stagnant homes.   Builders will eliminate the last of their standing inventory and fall-outs.  Bank repos will account for more than 6 out of 10 homes closing escrow for the first time this decade. 
• Up to 6 Months:  The market will see further price declines although inventory will level out almost immediately (in the first quarter) and start declining at a regular pace.  Inventory in new homes will fall first. 
• Up to 12 Months: The market will see prices level off by the end of the year.  We could see another surge in speculative buying after American elections spur increase economic growth worldwide.  "Desparation selling" will have dissipated as soon as the summer (perhaps sooner) and sellers will become much more optimistic about their home prices.  This alone will have a real impact on home prices.  According to Applied Analysis, housing demand will rise  to 29,953 units (up from 21,000 in 2007).
• 2009: Home prices will start a strong upward rise of perhaps 5-7% annual appreciation rate.  Job growth will rise to the highest level in a decade as job hiring in the tourism and construction industry picks up and encourages more growth in the services sector.  The opening of Project City Center, Encore at Wynn, Fountainbleau and the M Resort will generate more than 30,000 new jobs alone, along with more growth in the furniture industry via the World Market Center.  Housing demand will start a sharper rise (rising to 43,672 according to Applied Analysis) while new home inventory will decline to the lowest levels of the decade.  Builders will have cut back on staff, land purchases and permits pulled to such a degree that it will not be equipped to deal with the rise in demand fueled by job growth.
• 2010: Housing shortage will be pronounced and home prices could see a rapid rise until builders are able to catch up.  As in 2003 (prior to the last boom market of 2004-2005), the available of new homes will shrink to zero and result in waiting lists in the first quarter of 2010 as Echelon Place opens amid a shortage of workers in Las Vegas and recruiting intensifies among the big casino companies to bring in skilled and unskilled laborers from all over the world to fill jobs and keep their new resorts operating.  We will see a shortage of 13,445 housing units in 2010 according to Applied Analysis.

WHAT DOES IT MEAN?
My idol Warren Buffet likes to say that the time to buy in a market is when desperation selling is happening.  Banks and builders are desperation selling right now which is creating a tremendous opportunities for buyers to pick up deals on homes priced at 2002 prices. 

TEAM KUPTZ has created an Investor Prospectus package which goes into depth on the big projects coming to Las Vegas.  This package can be mailed or e-mailed to you for review.  We also have an Investment Alert! list where we e-mail you immediately when a new stellar deal is coming on the market in a hot location.  This alerts are almost always before it even hits the MLS.  You will see Alerts on this blog at least weekly so check back often!

What do you think about the market projections?  Do you care to make any of your own?

According to Clark County population estimators, the county added its 2 millionth resident sometime during the fall.  According to the Review-Journal, an error in reporting added 27,000 more residents than though to push the number overboard without much fanfare.  What does this mean for Las Vegas? 

For the 15 years I have lived in Las Vegas and Henderson, we have always had three consistent themes: never-ending Strip development, never-ending residential development and complaints about everyone about the consequences of too much development.  An article in the Review Journal on Dec. 26 considers every complaint about this growth imaginable.  A product of local schools myself, I personally felt them to be quite good (though I came from Detroit so I have no good comparison).  The schools are crowded but no more so than most places right now that are experiencing growth.  In the past 15 years we have seen an average of one new school open every month in Clark County!  That does not include the many older schools that have been refurbished or completely rebuilt even in the lowest-income areas of town.  I’m very proud of this achievement, and though our schools need more funding and more teachers, this is an obstacle that we can overcome.

What about strain on urban services?  This is certainly true in areas of transportation.  Much like L.A. and Phoenix, Las Vegas is a very western city with people who can’t conceive of public transportation.  We build freeways where perhaps we should build trains or monorails.  Again, I could point to many places with a traffic problem, and while ours is certainly worse than it was over a decade ago, it is a lot better than our western mega-city neighbors.  Consider the renowned annual study by the Texas Transportation Institute in  2006 that determined traffic congestion in Las Vegas to rank 18^th in the nation compared to 1^st for Los Angeles and 15^th for Phoenix.  This is before the just-opened expansion of US-95 to double its former size (plus an HOV lane) and further completions to the I-215 Beltway (which is now half-way completed to freeway standards and fully completed in some form).  Much more needs to be done to improve local traffic and it will be.

What about the strain on water?  Water is always an issue in the west and in Nevada, Arizona, Utah and California we have been dealing with a prolonged drought in the Colorado River.  Will Vegas run out of water?! Is a coming question, however there are other places we get our water.  Vegas itself was founded before there was a Hoover Dam on underground aquifers, and there is a lot more water in Nevada than people think.   The water authority is prepping to build a huge 285-mile long pipeline (at a cost of $2 billion) and recently stated, I think correctly, that if the will is there, we will always have enough water.  Oh, and another proud fact – water useage in Vegas has dropped in 5 of the last 6 years despite a 36% population boom.  When I moved here in 93, lawns were the rage, and now you rarely seem them.  We have adjusted to our lifestyle and happily so, I have seen no quality of life reduction by not having a lawn to mow every week!

This leads to the central argument – is growth good or bad for Clark County?  I, being in real estate, of course love growth, it’s good for our business and I believe all major businesses in Las Vegas.  And it’s good for the residents here in the long run as we have more amenities, more options and more jobs than we had 15 years ago.  

The opposing argument is that growth stymies livability.  Perhaps the most stark opposing views on this subject comes from two Las Vegas neighbors to the south - Boulder City and the much larger Henderson.  Boulder City, a militantly anti-growth town has bought up so much land to isolate itself, it now ranks as the 7^th-largest municipality in the U.S. in terms of land area.  Its northern neighbor Henderson is the most pro-growth city in Clark County, aggressively annexing land also – but to sell to developers. 

In the past 15 years, Boulder City’s population has remained stagnant (rising from 13,626 to 16,206) while Henderson has boomed from 104,000 residents when I moved here to 266,000 today, the second largest city in the state.   Prevention Magazine named it among the 10 best “walking cities” in the U.S., and has consistently been rated one of the most livable cities in the U.S. by U.S. Conference of Mayors/Waste Management, Money Magazine and even the AARP!

That being said, I pose a following question to the anti-growth crowd: if Henderson can boom as it has and maintain its standing as a jewel of Clark County, is it growth that is the challenge or just government planning?  

Clark County’s official population estimate (most recent exact numbers are as of July 1) was 1,996,542.  See below for population estimates by community:

1. ARM Adjustment is OverBlown

 For one thing, there is a lot of misconception about what is truly driving the mortgage "meltdown".  While news media spends a lot of time focusing on the adjustable rates - I have a newsflash... if any person right now calls their mortgage loss mitigation (not re-fi) department and says the increase of the rate will force them into foreclosure, I would be shocked if the lender didn't work it out with them.   In fact, it isn't too difficult for anyone to do.  I have a client who called his lender eight months ago (when big banks starting offering to do free loan modifications) and changed his 4.75% 1-year ARM to a 5.75% 30-year fixed.  That's when rates were a point higher.  How much did it cost?  Nothing.  I would concede many people simply aren't aware of what the banks will do for you.  And the ones who are close to losing their homes are especially unaware, because financial problems usually leads to putting blinders to the problem. 

Although I take Countrywide's research with a grain of salt, just as an FYI - this is what their statistics show as of September 2007 for the reasons for their loan defaults...

--Curtailment of income: 58.3%
--Illness/Medical: 13.2%
--Divorce: 8.4%
--Investment Prop./Unable to sell: 6.1%
--Low regard for property ownership: 5.5%
--Death: 3.6%
--Payment adjustment: 1.4%
--Other: 3.5%

2. Price Declines Are the Key Factor

But the ARM adjustment is not the foreclosure problem, not the main one anyway.  It's a simpler one... prices are dropping.  For the past two years prices have been declining nationwide and in Las Vegas the past 12 months has seen price declines of as much as 20%.  This is far worse than anyone predicted and is due to a myriad of factors from a rush of too many investors in 2003-2005 to builder greed to the high-rise bubble bursting.  These three main reasons are what has led to the sharp rise in short sales and foreclosures, and short sales and foreclosures lead to big price drops. 

What do big price drops lead to in any market (especially the down payment-averse Las Vegas)?  Foreclosures.  In Vegas, where we have a lot of investors who don't live here and a lot of residents who move far more than the national average of 5-7 years, when your home is woth less than you paid for it, foreclosure is often the only option.  I speak to in excess of 20 people every WEEK who MUST sell their home but simply can not.  They are too far upside down.  Short sales are not the best scenario - less than 1 in 5 ever close escrow due to the challenge of working with banks who may have PMI to insure their losses anyway.  This means foreclosure for many people. 

3. People Losing Their Jobs is the Second Answer

In real estate, thousands of agents are not selling even 1 home a year in Las Vegas, and mortgage companies, real estate companies, and title companies have cut back staff or shut their doors.  This leads to... foreclosures...  The worrisome fact to me is that Washington (at least the White House) is still too far detached from what's really going on. 

4. All Washington Can Do is Slow the Bleeding

The market changes are necessary to make homes more affordable and those who can't weather the change will need more than a rate freeze - they need time.  Although I am by no means "pro-Hillary", her idea of a moratorium on foreclosures for 90 days I think is a very good one.  It gives lenders time to sort out who can pay and homeowners time to figure out a plan. Would some abuse this?  Sure, but with dozens of homes entering some stage of foreclosure daily, the banks have no shortage of real estate to liquidate. 

IN CLOSING - If you are in trouble on your home right now - call the bank.  Then WRITE them a letter.  Ask for what you want and you might be suprised.  Don't give up without a fight, and especially don't wait for Washington to save you - it might be a long wait.

Link to the article here, entitled "Home sellers take different approach:
'For Sale By Owner' gaining momentum", http://www.lvrj.com/business/11963821.html

First off, I want to be the first to acknowledge - REALTORS by and large are not doing a good job of proving value.  I see it as my highest use of time to spend day in and day out doing other agents' job for them (to ensure my client gets the deal done). 

But I say this loud and clear to the frustrated general public: do your due diligence first!  There are thousands of agents, and like accountants, doctors, lawyers, financial advisors and any professional out there, the majority of them are crap.  The difference is in these other professions, consumers have accepted they have to pay more to get more while realtors may be the only profession there is where consumers expect to get more for less. 

There is a troubling myth pervading that REALTORS are like travel agents - extinct now that the internet is here.  Here are some FACTS for you...

- According to NAR stats for 2006, only 16% of all homes listed by owners privately (FSBOs) sold.  16%!

- Only 47% of the few FSBOs that went under contract closed.  47%!

- The average FSBO sale netted 16% less than the average sale with a realtor involved.  16% less!  How much commission did you pay for your last sale again?

* You may ask why this is?  I am a firm believe in exchanging real value for money.  I know that if we as an industry do not, we wil cease to exist.  Realtors exchange a ton of value. 

I have seen many occassions where if a seller sells their house but forgets to ask for the right things (i.e. - loan approval) from the buyer.  The buyer can't close, and the seller loses three months with nothing to show for it.  What does a realtor (a good one) bring?  We do a thorough evaluation of a buyer who makes an offer on our listing - even in this buyer's market. We advise our clients to demand the right amount of earnest money and impose stringent timeframes on the lender to ensure that the deal is not going south the day before closing.  We do this because we sell a lot of houses. 

I have personally been involved with over 1,000 real estate transactions - the average person may do up to 8 deals in their entire lifetime.  Do you see the difference here? 

I can usually predict any scenario in any real estate transaction and the ones I can't predict I can respond to with logic, negotiation and as favorable a resolution as possible for my client.  I ask you - How does the internet replace experience? 

Ask yourself - is the problem with realtors or just bad ones?  If it's bad ones - consider interviewing the next agent you hire to help you buy or sell a home.  Stay tuned - I'll give you 23 questions to ask any realtor before you hire them!