| Tuesday, September 28, 2010 How to Buy a Home at a $100,000 Discountby Josh Bottfeld on Tue, Sep, 28, 2010 11:58 AM
Below is an article from Smart Money Magazine regarding purchasing foreclosure homes from Fannie Mae. If you want more information, drop me a line at: josh@justjosh.com. I'll be happy to explain it.
How to Buy a Home at a $100,000 Discount
Real Estate by AnnaMaria Andriotis, SmartMoney
To pare down their growing inventory of properties, Fannie Mae and Freddie Mac are scrambling to unload nearly 150,000 foreclosed homes. And that means 2004-esque deals – like requiring as little as 3% down, offering to pay a portion of the closing costs and arranging special financing and warranties for repairs and renovations.
It's another option for home owners who want to trade up -- and an easier way into the market for first-time home buyers, says Dean Baker, co-director of the Center for Economic and Policy Research who studies the housing market.
The best bargain might be the home’s price. A SmartMoney analysis revealed that buyers could save $100,000 by buying a Fannie or Freddie home instead of similar fair-market properties just a few blocks away.
And while many of Fannie and Freddie’s homes are at the lower end of the market and in less-desirable areas, a SmartMoney.com search of Fannie Mae and Freddie Mac listings revealed that buyers could find properties in good neighborhoods – and for $100,000 less than comparable houses nearby. For example, a five-bedroom, three-bath with a backyard, deck and two-car garage in tony Alexandria, Va., was listed for $445,000, $100,000 less than the average listing price in the area, according to Trulia.com. Four blocks away, a similar non-foreclosed colonial is listed for $639,900.
Or how about a three-bedroom, two-bath in Bergen County's leafy River Edge, N.J for $359,900 -- $85,000 less than the average listing in the area. One avenue over, a non-foreclosed similar home is listed for $474,888.
The downside: Angry neighbors. These types of listings are devaluing nearby properties, says David Howell, realtor and executive vice president at McEnearney Associates, which sells homes in the metropolitan Washington D.C. area. That means in some areas where Freddie and Fannie homes are on the market, buyers could find a better deal on a nearby market-rate home that doesn't require repairs, he says.
Buying a Fannie or Freddie home can be more complex than pursuing an open-market real estate listing — or even a commercial bank foreclosed property. There’s a smaller selection of appealing properties — there were just six higher-end homes listed on a recent day in Alexandria, for example — and those tend to sell the fastest. And there's little room to negotiate price
Read more: How to Buy a Home at a $100,000 Discount - Personal Finance - Real Estate - SmartMoney.com http://www.smartmoney.com/personal-finance/real-estate/tips-on-buying-a-home-at-a-100-000-discount/?cid=1122#ixzz10qMFW3dY Thursday, September 9, 2010 New Guidelines from Fannie/Freddie re: reestablishing creditby Josh Bottfeld on Thu, Sep, 9, 2010 04:19 PM Conventional (Fannie Mae/Freddie Mac) guidelines have changed with respect to obtaining a new mortgage after a bankruptcy, pre-foreclosure/short sale or full foreclosure. The major change is that if the client has had a full foreclosure (not a short sale or deed in-lieu), they may not obtain a new conventional loan for 7 years. If the borrower can prove extenuating circumstances, they may be able to obtain a new mortgage in 3 years.
Here are the full details:
Conventional Derogatory Credit Updates
Effective for new registrations on or after September 10, 2010, the requirements for re-established credit after a bankruptcy, foreclosure, pre-foreclosure, deed-in-lieu, or short sale have been updated to align with GSE requirements and current market conditions. These guidelines will apply to all conforming loans. Non-conforming loans will follow these guidelines unless stated differently within the product description.
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy guidelines are being enhanced to allow a recovery period of 2 years after a dismissal or discharge when extenuating circumstances are documented. Previously, there was no reduced recovery period for extenuating circumstances.
Pre-Foreclosure / Short Sale / Deed-in-Lieu of Foreclosure
Enhanced guidelines for pre-foreclosure, short sale, and deed-in-lieu of foreclosure now allow a shorter recovery period based on the Loan-to-Value ratio (LTV) of the loan. Previously, a deed-in-lieu required a recovery period of 4 years.
• 2 years from completion date; 80% Max LTV
• 4 years from completion date; 90% Max LTV
• 7 years from completion date; LTV follows product guidelines.
If extenuating circumstances can be documented, the recovery period is 2 years with a maximum 90% LTV.
Foreclosure
Foreclosure guidelines have been updated to reflect the requirement for a full 7-year recovery period. Previous guidelines allowed a 5-year recovery period. The recovery period with documented extenuating circumstances remains unchanged at 3 years. |
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