Short-Sales Can Be Depressing

Dire Straights

One of Access’ partners, on our warehouse line, is enabling us to fund loans for clients in dire need.  How dire?  Check this out!

Relocating?

Let’s say that you’ve had perfect mortgage payments and great credit all of your life. Unfortunately, you’re in a bind.  Your company has decided to relocate you and give you a nice promotion.  However, you’re upside down on your mortgage, meaning you owe $500,000 on your residence, yet the residence is only worth $300,000.

Do not fret!

Get in touch with a knowledgeable, experienced Real Estate Agent (we can help), and they can negotiate a short-sale for you.  Also, as long as you keep your payments current, until the short-sale is completed, you’re able to enter into a purchase contract and close, subject to FHA underwriting guidelines.  It’s a huge opportunity, that only some of our most experienced agents have taken advantage of, but YOU SHOULD TOO!

Late Mortgage Payments

So, you may ask, what if we just couldn’t keep up with the payments, at the end, and short-saled, but the last two payments didn’t get paid.  Twelve months from the final short-sale, you may purchase.  So, keep the faith!

Guidelines

FHA has put some restrictions on the program.  You’ll have to fill out a form that inquires into your reason for the short-sale and the distance from your current residence to your new residence.  As FHA does not want people taking advantage of a declining market place. Also, qualifying ratios are 36/45.  Not too shabby, actually.  So, call Access and earn a commission when you short-sale one property, and maybe another, or a referral, on the other property.

Related Must Reads

Understanding FHA-Why It’s King
Changes Occurring For FHA
Why Buy Now?
You STILL Qualify For $6,500 Primary Residence Tax Credit

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Foreign Investment Leaving?

Start Getting Ready To Buy!

If you haven’t figured out that now is a great time to buy, than you haven’t been paying much attention to where interest rates are, and where home values are.  Foreclosures are starting to rear their ugly head, and this will cause opportunity for low purchase prices.  I am currently in escrow on two investment properties (shortsales) because I believe that it doesn’t get much better than now, to buy and build.  Let’s look at what’s happening in the market today…and what the future may hold in store. 

Earlier in the week, the stock market took a nose dive.  General Motors reported a $39 Billion loss for the third quarter.  Keep in mind that GM formerly held GMAC which was their financing company who did a lot of loans these past few years. 

China Moving $$$ OUT of the US

Remember that I have mentioned numerous times in my article that foreign investment in our mortgage-backed securities is what has kept our long term (30 year fixed) interest rates so low the past decade or so?  Well, this last week China indicated that they would be moving their investments away from the US Dollar.  “We will favor stronger currencies over weaker ones, and will readjust accordingly.  The US Dollar is losing its status as the world currency.”  So, China will start to sell off their US holdings including Mortgage Bonds.  Also, their participation in purchasing new Mortgage Bonds will continue to hurt Bonds, pressuring their yield (and therefore interest rates) higher.  A good time to buy? 

Oil Is Just Too Expensive

Oil is touching on $100 per barrel.  This is inflationary and remember that inflation is interest rate’s worst enemy.  What really saved us last week was that we bounced off of the 50-day moving average.  Remember that these averages cause trends in bond values and therefore interest rates…so the 50-day moving average (or that trend) was a level of support for interest rates because markets don’t like to shy away from trends…they follow them!  

10-Year Treasury Yield Throws Off Unprepared Mortgage Professionals

Interesting to note this week that the yield on the 10-year Treasury Note and the yield on Mortgage-Backed Securities were moving in opposite directions…so if you were working with someone that really didn’t understand how interest rates worked, you could have ended up paying for it in your interest rate. 

Initial Jobless Claims were reported at 317,000, however, the market anticipated 325,000.  Of importance was the fact that the Bank of England (BOE) and the European Central Bank (ECB) announced their monetary policy this week.  They both decided to leave their overnight rates where they were.  This is important because foreign yields on bonds have a direct impact on investments in our bonds. 

Foreign Investors Shying from US

The first test of auctioning our Treasury Bonds didn’t fair so well this week.  This is something that we’ll continue to keep our eyes on. 

Wachovia Corp. announced a $1.1 Billion loss on CDO’s.  Collarteralized Debt Obligations are the fancy-shnancy critically calculated investment bundles that included included mortgage backed securities that are losing value with each passing mini-second.

Retail Sales numbers will be coming out soon, however, the markets are moving on speculation because WalMart reported strong earnings.  WalMart is always watched by the market, just because as the nation’s largest retail chain, it would make sense that if they had strong earnings, than the nation should follow suit.  Remember, also, that when Retail Sales come in strongly, than the stock market would do well, taking money out of bonds, or mortgage backed securities.  So, buy, buy, buy!  Values are down and rates are low…but with all of this information in your pocket, how long will rates remain low?  Until next week…