Real Estate Information Archive


Displaying blog entries 1-3 of 3

Would you like Two Principal Residence Exemptions?

by Group One Realty Team - Real Estate One

Principal Residence Exemption

Sellers who have taken advantage of the opportunity to retain two principal residence exemptions must file Form 4640 by December 31.

Legislation (signed in 2008) enables that the seller can retain an additional exemption for up to three years on property previously exempt as the owner's principal residence if the following criteria are met:

  • the property is not occupied
  • the property is for sale
  • the property is not leased or available for Lease
  • the property is not used for any business or commercial purpose.

For your convenience, a copy of Form 4640 is available at link to the form on the Michigan Government website.

Changes coming to HUD and Good Faith Estimates

by Group One Realty Team - Real Estate One

There is a new Good Faith Estimate and HUD coming January 1st.  The same Good Faith Estimate (GFE) will be used by all companies.  The government stepped in and "helped" with the Good Faith...and made it 3 pages long. 


Something that will help buyers is whatever is disclosed on the GFE, is what has to be on the HUD.  Some costs will have a 10% tolerance, but most will not.  One item that we still are a little unclear on how buyers can receive a GFE before a Home is found.  The reason this may be a problem is what is disclosed, must be charged.  The buyers sale price obviously may change from their pre approval, and if their costs go up (for example...title insurance) because their sale price increases, the mortgage company must eat that cost.  Not being able to give a buyer a GFE at the pre approval stage concerns loan officers presently.  I'm sure they want buyers to feel comfortable about the purchase and be able to confidently make offers.  One idea is to put together a Homeowners Worksheet that will be given at the pre approval stage rather than a GFE.  This will help buyers know what their costs are and what you need to ask for in concessions.  The GFE, of course, will be given at the time of the application.  You could ask for an unsigned GFE I suppose too?


Another step that is being required is for the mortgage company to send the GFE to the title company at the time of closing.  The title company will be required to compare the GFE to the HUD and make sure it is in compliance and exactly the same.  Mortgage companies and title companies will be working closely together on this part. 


There have been a lot of changes throughout this past year.  Most recently, new disclosures laws (MDIA), HVCC and Short Sale changes.  I will continue to keep you updated throughout the rest of this year and next.  Some upcoming changes will be the finalization of the condo underwriting changes, FHA appraisals being good for 4 months rather than 6 months (est. to be January 2010) and some more changes for sure.  Lets hope for a strong year next year for all of us!  For listing information please click here.  Have a great holiday!


Federal Short Sale Guidelines

by Group One Realty Team - Real Estate One

The Obama administration has released long-awaited guidelines for a program that will provide incentives for loan servicers and homeowners to engage in short sales when borrowers who are eligible for the Home Affordable Modification Program (HAMP) don't qualify for a loan mod.

The guidelines prohibit loan servicers from demanding that real estate brokerages reduce the commission stated in the listing agreement as a condition of approving a short sale -- a practice that's been a sore point with many real estate agents.

Troubled borrowers interested in exploring a short sale will also be allowed to receive preapproved short-sale terms prior to the property listing, and servicers must agree to fully release them from future liability if the sale goes through.

The incentive program, which includes payments to second-lien holders who often stand in the way of short sales, was announced in May, but issuance of the guidelines was stalled over legal concerns.

Troubled borrowers who agree to a short sale or deed-in-lieu of foreclosure will receive up to $1,500 to assist with their relocation expenses. Loan servicers and investors who sign off on payments to subordinate lien holders will earn up to $1,000 for successfully completing a short sale or deed-in-lieu.

Subordinate lien holders are limited to recovering no more than $3,000 from sale proceeds, although those who object to the cap can engage in short sales outside the program.

Jeff Lischer, the National Association of Realtors' managing director of regulatory policy, told the groups' members last month at their annual conference in San Diego that the incentives should make a difference but won't be a cure-all for foreclosures.

In order to "hold (loan) servicers accountable for their commitment to the program," they will be required to submit schedules for making a decision on each HAMP-eligible loan. Servicers failing to meet performance obligations under a servicer participation agreement may be subject to monetary penalties and sanctions, the Treasury Department said in announcing that initiative.

The initiative also offers new Web tools for borrowers, including Links to all of the required documents and an income verification checklist to help borrowers request a modification in four easy steps.

Some economists and housing analysts have warned that lenders' foreclosure prevention efforts aren't keeping pace with deteriorating loan performance.

An industry coalition of mortgage servicers and investors, HOPE NOW, says its members have provided 2.1 million loan workouts in the first eight months of 2009. While nearly half of homeowners entering the foreclosure process in in 2007 ended up losing their homes, only about one in three do today, the group said.

Nationally the number of homes in foreclosure or headed there continues to grow. A record 14.1 percent of homes with mortgages were at least one payment behind or in foreclosure at the end of September, according to the latest numbers from the Mortgage Bankers Association.

Nearly one in 10 loans outstanding on one- to four-unit residential properties -- a seasonally adjusted 9.64 percent -- were delinquent, up from 9.24 percent at the end of June and 6.99 percent a year ago.

Another 4.47 percent of outstanding loans were in the foreclosure process, up from 4.3 percent at the end of June and 2.97 percent a year ago.

MBA Chief Economist Jay Brinkmann said delinquencies and foreclosures continue to rise despite the recession having ended in mid-summer, "because mortgages are paid with paychecks, not percentage-point increases in (gross domestic product)," and unemployment remains high.

Over the last year, the ranks of the unemployed have increased by about 5.5 million people, Brinkmann said, increasing the number of seriously delinquent loans by almost 2 million.

Prime, fixed-rate loans accounted for the largest share of foreclosures starts and were the biggest driver of the increase in foreclosures, Brinkmann said. One in three foreclosures started in the third quarter were on prime fixed-rate loans, and those loans accounted for 44 percent of the quarterly increase in foreclosures, he said.

The foreclosure numbers for prime fixed-rate loans will get worse, he said, because they also represent most of the recent increase in loans 90 days or more past due, but not yet in foreclosure.

More than 4 million loans were in foreclosure at the end of September or "seriously delinquent" -- more than 90 days past due, the MBA said. That's slightly more than the total number of homes currently on the market, although there's some overlap between the numbers.

Brinkmann said he expects delinquency and foreclosure rates will continue to worsen before they improve. It's unlikely the economy will begin adding jobs until sometime next year, he said, and then only at a very slow pace.

When the economy does begin to add more jobs, those jobs probably won't be in regions of the country with the biggest excess housing inventory and the highest delinquency rates, Brinkmann said.

To get foreclosure listing information click here.


Displaying blog entries 1-3 of 3