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.

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.

The snow was falling early this morning

Yes it does snow in Charlotte!  Proof is in the pictures I took this morning as the flakes were falling in Southeast Charlotte, cancelling school and causing many to stay home from work. Many who didn’t grow up in this area like to laugh at Southerners who appear to panic at the first flake and stay home as long as anything white remains on the ground - but their feelings are justified as more often than not, snow in Charlotte comes with ice in Charlotte.  Driving on ice is NOT the same as driving on snow.

Regardless, it’s the perfect combination for all – the snow is pretty, kids get a day off from school, and then within a day or two it’s all gone and we’re back to dry streets and yards.  No slush or dirty roads to deal with.  What more could you ask for?

These pictures were taken this morning from my house.  As of 11am, it is still coming down, although tapering off.  I’m sure that by later today things will calm down and we’ll be back to normal.

So don’t laugh at us – if you can’t beat ‘em, join ‘em!  Take the day off and find a nearby hill and have fun with the kids.  We don’t get too many chances to enjoy this!

Snow was clinging to the trees

Early morning snow in Charlotte

With newcomers to the Charlotte area hungry for information on our schools, this tool will be invaluable.  I haven’t tried it out yet, so I can’t offer an opinion on how user friendly it is.  If anyone has tried it, let us know what you think.

Read the story on the Charlotte Mecklenburg Dashboard.

Access the Charlotte Mecklenburg Data Dashboard.  (Instructions are in the upper left hand corner)

Charlotte #1 Place to Live

Charlotte Dethrones Asheville

I moved here 13 years ago with no job and a couch to sleep on in my aunt & uncle’s house.  Now I am raising a family and running a successful business in what is in my opinion the best city in America!

For the next week, through May 4, the Wachovia Championship golf tournament returns to Charlotte once again.  Tiger Woods won’t be here this time (knee surgery), but it’s still a strong field as usual.  I believe that tickets are sold out, but Mulligan tickets can be bought most days at the parking areas.  Mulligan tickets are ones that have been turned in by patrons leaving the tournament earlier in the day.  They are resold for a nominal amount and allow last minute spectators to see the tournament.  It’s a great idea.

The well-run tournament is always a great way to spend the day and enjoy the beautiful surroundings of Quail Hollow Country Club.

For more information, visit  Wachovia Championship.

Helen Sztarkman joins more than 16,000 real estate professionals in North America who have earned the SRES^® designation.  All were required to successfully complete a comprehensive course in understanding the needs, considerations, and goals of real estate buyers and sellers aged 55 and older.

The SRES Council, founded in 2007, is the world’s largest association of real estate professionals focusing specifically on representing senior clients in real estate transactions. There are more than 16,000 active members of the organization world-wide.  The NATIONAL ASSOCIATION OF REALTORS^®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.

While primarily aCharlotte real estate site, we will also offer news and information about living in Charlotte and relocating to Charlotte.  With so many people across the country interested in moving to our wonderful city, it only makes sense to help them feel at home and show them around a bit before they arrive.

If you check out the different categories we have, you’ll see that we try to cover all things about Charlotte, NC.  A question often heard is, "Why is everyone moving to Charlotte?"  We can show you, we can tell you, we can write about how much we all love living here – it’s a combination of climate, the people, lifestyle, and so many more intangibles.  Certainly Charlotte life isn’t for everyone, but we’d love to talk to you about why we love to call Charlotte home.

Do you live in the Charlotte area?  Did you relocate here?  Let everyone know what brought you here.