With more and more Americans facing the prospect of declining home values and unemployment levels not seen in quite some time, many homeowners and their lenders are facing the situation where the home is worth less than owed.  This is no problem if the owner doesn’t have to move and can afford their current payment.  If the owner is forced to sell for whatever reason, then the possibility of a short sale becomes a very real option.

What is a short sale? A short sale is an option you have before you reach the point of foreclosure where you are selling your home for less than what is owed. However, the bank has to agree to a short sale as they stand to lose money via either process.  Banks do short sales because of cost.  An average cost to the bank for foreclosure is around $65,000, so they are smart to take the short sale.

You must have an offer in hand for the bank to tell you whether they will do a short sale or not.  They have the say-so whether or not a short sale will be accepted.

The 4 requirements to have a short sale are:

1. The home’s market value has dropped.
2. Mortgage is in or near default status.
3. The seller has fallen on hard times . . . unemployment, divorce, medical emergency, bankruptcy, death
4. The seller has no assets to speak of.

Foreclosure is on your FICO score for 6 years.  Short sales start to repair themselves after 2 years.

Short sales can be a win-win for the lender and the seller.  The lender recovers more of their capital faster than would be possible if they went through foreclosure.  The owner wins by relieving themselves of the financial burdens of the home and taking a smaller hit to their credit than would happen if a foreclosure occurred.

Unfortunately it’s not as simple as it appears.  Every lender and every situation is different.  There are pitfalls to be avoided and terms to be negotiated to reduce or eliminate any further obligations for the borrower after the short sale is concluded.  It is critical to have a team of experts in place to guide you through the process.  A seasoned real estate Broker and a real estate Attorney who specializes in such transactions are the backbone of such a team.

This morning I had the opportunity to hear from one of the passengers who was on USAir Flight 1549 that crash landed in the Hudson River.  He spoke about understanding why he thinks everyone survived and reminded us to think about the important things in life by being better husbands, sons, fathers, brothers and dads.

I look at what I have in my life; my family and my business.  He reminded me to be grateful for what I have and never take it or anyone for granted – not that I ever do.

Stephen Grellet wrote, “Do It Now”:

I expect to pass through this world but once.   Any good thing, therefore ,that I can do or any kindness I can show to any fellow human being let me do it now.  Let me not defer nor neglect it; for I shall not pass this way again.

This weekend I fly to NYC and back.  I wonder if I’ll be thinking about what I heard today? 

The Charlotte Chamber of Commerce has put together a series of maps that show estimated commute times from certain points in the metro area. This is a pretty cool tool for folks thinking of moving to Charlotte and are unfamiliar with commute times in different parts of the city. The times are only estimates, of course. Included in the report are occupations shared by residents in the various areas, thus allowing those who might be currently unemployed to use this information while searching for employment. The study focused on 15-30 minute drive times in 15 different areas of Charlotte.

Check it out at:

Charlotte Commuting Time Estimator

Today we have a guest blogger from the mortgage industry. Paul Bender with Countrywide Mortgage has an important update for all homebuyers:

EFFECTIVE TODAY:  Customers that are purchasing homes with less then 20% down, now must have a 700 credit score and have a debt to income less then or equal to 41%.   Government loans (FHA, VA) are not effected.
If the customers are putting 20% or more down then they can have a credit score less then 700, the DTI still needs to be 41%.
This is coming on the heels that the PMI companies are not wanting to insure loans to customers with lower credit scores. So if you are working with a borrower that has been in contact with their lenders, get them to call and either LOCK their loans or see about changing programs to a government loan.

I want to take a moment and try to explain what PMI does and why we have seen the latest changes.
If a borrower buys a home as many did over the past several years and needs financing for more than 80%  of the purchase price, then the banks can do that only if they can get insurance from the PMI companies for the amount above the 80%. of the purchase price

Example: 150,000
Down payment 10% $15000
Loan to Value 90%
Unprotected amount $15000; therefore covered by PMI

The insurance company will insure the bank for the other difference between 120,000 which  it would be at 80% to avoid PMI and the loan amount of 135,000…the extra $15,000.

Well, as you can imagine if a customer goes into foreclosure or default on their loan, the PMI companies must step in and pay the banks off down to the loan to value of 80%, hence making it then easier for you all to get a short sale complete at a lower than balance owed price.

So  with all the foreclosures, the PMI companies have been hit really hard with having to pay up.  With all the claims that they’ve have had to pay out . . . they have pushed back and said, “No more” . . . they do not want to take any more risks.

The insurance companies have researched and found that it is the folks with lower credit scores and higher DTIs that have defaulted. So little by little, they have been raising the credit scores and lowering the DTIs for loans they are willing to insure.

As a result the banks are having to react as well . . . if we can’t get insured for the dollar amounts we are wanting to loan above 80% then it is a risk to the banks and the banks are pushing back . . . the banks have money to lend, but they are also wanting to be protected.

Thank goodness for small favors – Government loans are not affected by this latest round of changes.

Imagine dining uptown under Carolina Blue skies.  You say to yourself, “The food’s great and so is the atmosphere but can it get any better?”

Two hours later the evening goes from good to out of this world!  Here I am a 59 year old baby boomer who remembers the 70’s like it was yesterday when the only thing I had to worry about was hanging with my best girl.  Well I married her and last evening we went to the best concert that I have ever seen and will be for the rest of my life! 

On Saturday night, two icons – Elton John and Billy Joel – rocked the house and for 3 and 1/2 hours! I felt like I was in my twenties again with not a care in the world.  I didn’t worry about lost homes, lost jobs or making that extra sale.  Yeah, I did look at my e-mail every now and then but I swear just for a moment and then I snapped another picture, sang to the music and remembered when It was great again.  They are two of the most amazing entertainers I have ever seen and I know because ’60′ is suddenly around the corner.  I may never get a chance again to see a concert like this, in a great city, at a wonderful venue, with people that bring back my youth so magically. 

So when you have nothing to do, see what’s happening in Charlotte and as the song is titled – bring your “uptown” girl uptown!   Tell me if you were there and share your thoughts!

The American Heritage Dictionary defines the word Stimulus as “anything causing or regarded as causing a response.  Something that rouses to action; an incentive.”

We continue to pour money to bail out AIG, banks, auto industry and the like.  Instead of doing that, why not give every adult over the age of 18 a stimulus in the amount of 1 million dollars? That would be far less than we are pouring in to failing companies with no end in sight.  What would happen if my company fails tomorrow?  Would the government bail me out? 

Look, I love my country.  I’ve raised and educated my children, taught them how to be model citizens and not expect that they are entitled, rather they must earn their way in this world.  We are telling generations to come that it is okay to fail because someone will bail you out if you do.  In fact they will bail you out so much so that they will even pay you when you do fail.  Is that a crazy concept or what?  Don’t worry, if you fail we’ll give you money and prop you up.  

If there is no fear of loss there is no fear of failure!  Am I the only one that feels this way?  I’d like to hear your comments as well.  What happened to the american work ethic?  I know – we’ve sent it overseas!  

The Charlotte Regional Realtor Association is sponsoring Realtors Care Day in Mecklenburg and Iredell Counties, April 24th.  Irv & I are putting together a team from our office to participate.  Click here to find out more and to sign up – Realtors Care Day

It’s no longer about me and how much I need or how much I have.  It’s really about how lucky I am to have a healthy family, a great job in Real Estate (yes even at these times) and the ability to help others.

One of my past clients has introduced me to his company, The Victory Junction Gang.  The purpose of this organization is to “enrich the lives of children with chronic medical conditions and serious illnesses by providing life changing camping experiences that are exciting, fun and empowering in a safe and medically sound environment.”  It’s in quotes because I didn’t want to miss a word.

I know these are troubled times and sometimes I wonder how or when things are going to turn around.  Then I look toward doing something to help others and try to not have a pity party because my life is so much better and so much fortunate than others.  I feel good knowing that a small contribution has made a difference.

Learn more about The Victory Junction Gang and then volunteer! 

“I wish I would have bought when the market was low.”
 
The article below sums up where the real estate market is today and makes the case for buyers to take advantage while the getting is good.

I am constantly asked what I think the Charlotte real estate market is going to do tomorrow or in the next few months.  I tell everyone if I knew where the market was going we wouldn’t be talking, I would be on my yacht making phone calls all over the world to buy and sell investments because I had the ability to time markets!

All kidding aside, I do know that all markets are cyclical and by the time we know the market is going back up it is too late to get in.  For those who are making the leap now, they may not get in at the absolute bottom, but they’ll be very happy they got in when they did.  Let me know your thoughts whether you agree or disagree.
 
Time To Invest In Real Estate!

Located in Southeast Charlotte, NC in prestigious Providence Country Club, this home is a great buy at $435,000! Built in 2005, it features 5 bedrooms and 3.5 baths, with a master suite on the main floor, and a guest suite upstairs. Spectacular appointments include granite counters, stainless steel appliances, hardwood floors, plantation shutters, a covered terrace overlooking the fenced yard, and much, much more! Great schools nearby (Flat Branch Elementary, JM Robinson Middle, Ardrey Kell High) are a bonus.

Neighborhood features are numerous: golf, tennis, pool (membership fees apply), sidewalks, ponds, and shopping is very close by as well.

#829092.