Getting a Mortgage on a Foreclosure/Bank Owned Home – CAN IT BE DONE???

Getting a Mortgage on a Lehigh Valley Foreclosure/Bank Owned Home – Can it be done??

Yes!  All Day long…The question is what type of mortgage can you get?  That is the question.

When dealing with any type of large purchase you should make sure that you are working with experienced professionals all the way around.

Real Estate Sales – Is a sales business but you should weed through those fast talking sales type personalities…and look for a Real Estate agent that works more like a Real Estate Consultant instead.

This is one of the largest purchases a person makes in their life – I do not care how much you spend but next to buying a car and getting married this is the 3rd most expensive investments and just as stressful as the rest.  Interview and ask questions – make sure you know who you are working with before you make a written commitment to work with them.

Okay – So, what kind of loans can you get on a Bank Owned/Foreclosure? Well, It Depends!

Let’s talk about Residential Owner Occupied properties in this Blog.

It depends on what type of loan you are looking for: The best way to think about this is, How much do you have saved to buy a home? Are you looking to purchase a home with the least amount of money out of pocket? Do you want to avoid paying mortgage insurance?

1) I always ask my buyer’s are you looking for the least out of pocket type of loan? If so, then there are a few options.  There is the typical FHA loan and this is a loan for owner occupied properties – with this loan you only need 3.5% down and if the property you want to purchase has a bad roof or mold in the basement or even the cooper piping has been ripped out – you can get an FHA 203K Rehab loan and you will be set.

2) If you are looking for purchase a home anywhere above North of Coplay, west of Macungie, North East including Bath and above than the property may be eligable for USDA Rural Housing loan which is 100% financing. This means you do not have to put anything down to get the loan like with FHA you must put 3.5% down to get the loan.

3) If you have saved money for your purchase and/or you are selling a home and plan on putting a significant amount of money down on your purchase then you best bet is a conventional loan – There are less restrictions on this type of loan but depending on the condition of the property you still may need a renovation loan.

4) Are you a First Time Home Buyer? Do you find it difficult to save money and will you have less then $5000 in savings/checking but you can pay your monthly obligations on time and you currently live in Lehigh County and want to purchase a home in Lehigh County -Depending on your Family household monthly income, you could qualify for a special program through the Neighborhood Housing Services of the Lehigh Valley – They work with 2 local mortgage companies that will help you with a 2nd loan that will give you 5% down and 6% closing costs necessary to purchase a home.  If you keep the home for 5 years – this loan will be forgiven!! There are also programs for Northampton counties but no loans are forgiven there.

Sometimes – repairs needed are unknow until you have a professional home inspector out to the property you plan on purchasing – When you make an offer on a property you typically have a minimum of 7 to 10 days to conduct due diligence or inspections to make sure there isn’t anything about the property that you do not accept – an unknown material defect like Mold, Roof, defective Heating, plumbing systems etc.  Basically, anything that is going to cost over $2000.00 total to replace/repair.

Looking for More Details: Click here Lehigh Valley Down payment and Closing cost assistance programs.

Hope this Blog was helpfu.

12 Surprising Factors Affecting The Short Sale Timeline – Information about Short Sales

12 Surprising Factors Affecting The Short Sale Timeline

Information useful for Homeowners going through a Short Sale and The Buyer who purchases that short sale

 The amount of time it takes to sell a property via a short sale depends on a number of factors, all of which must align to produce a sale.  It may take anywhere from a couple of months to well over a year to complete a short sale.

Below are some of the factors:

  1. The seller’s responsiveness.  One of the biggest causes of a delay in the short sale is the seller themselves.  Their mortgage lender asks for documentation throughout the short sale process, and many times the lender will ask for updates on paperwork that was already submitted.  Many sellers are slow to produce paperwork, either because they are disorganized, emotionally upset, or confused about the nature of the paperwork.  The ideal short sale seller responds immediately to requests for paperwork without questioning why the lender wants it.
  2. The lender’s internal policy.  Each lender has its own timeframe for a short sale. They may have a policy on who has authority to advance or escalate the file to the next stage.  Many borrowers attempt a loan modification first, and many lenders will not consider a short sale while a loan modification is being considered.  In most cases, the lender’s staff is overwhelmed and that delays the process.
  3. Involvement of other lienholders.  If there are multiple lienholders, that might prolong the short sale negotiation because everyone has to approve the sale.  In most cases, each lienholder may attempt to limit what the other lienholders receive, which can complicate the negotiation.
  4. Involvement of a mortgage insurer.  If a mortgage insurer is involved, then they have to agree to the amount of the loss that the lender will take.  That injects an additional decision maker into the process.  The mortgage insurer may have certain rules about what they would approve, and the lender may have to abide by those guidelines.
  5. Involvement of a Government Service Entity (GSE).  If Fannie Mae, Freddie Mac, the Veterans Administration (VA), the U.S. Department of Agriculture (USDA), or the Federal Housing Administration is involved, then they too have to approve the short sale.  That injects an additional decision maker into the process, and each entity has their own procedure.
  6. The type of short sale program.  There are federal short sale programs, like the Home Affordable Foreclosure Alternatives (HAFA).  There are lender programs, like the traditional short sale and the cooperative short sale.  Each program has guidelines on timing.  One program may require that the property not have an offer on it yet, while another lender’s program may only consider a short sale if there is a signed contract with a buyer.
  7. Involvement of a third party vendor negotiating for the lender.  Some lenders, particularly Bank of America, like to use third party vendors to help negotiate with the seller.  These third party vendors work for the bank and may have their own procedures in addition to the lender’s rules.
  8. Involvement of a third party vendor or attorney negotiating for the seller.  A third party vendor or attorney working for the seller may have their own guidelines. They may only advance the short sale if all paperwork is received from the seller up front.
  9. The ability of the listing agent to procure a buyer.  Even if the short sale approval process is moving along quickly, it is essential to have a ready, willing, and able buyer.  Without a buyer, there is no closing.  Some properties, such as houses in need of repair, may only appeal to a certain segment of the buyer pool.  If a lender pre-approves a short sale at a certain price, but buyers believe that price to be too high, then there will be extreme difficulty in finding a buyer.
  10. Expiration of the appraisal or Broker’s Price Opinion (BPO).  Even if there is a buyer and if the process is moving along quickly, a lender may slow the negotiation because the previous valuation of the property is too old.  Some lenders may only consider an appraisal if it occurred in the past three months, while others may only approve a short sale if the appraisal is less than six months old.  Also, it may take days or weeks for an appraiser or BPO agent to submit their report.
  11. The amount of time it takes to prepare a preliminary HUD-1 Settlement Statement.  Sometimes a title agent or attorney may not be able to put together the preliminary HUD-1 form fast enough.  A lender needs to see a preliminary HUD-1 statement prior to making an approval decision.  The title clerk may have insufficient information about the outstanding liens and payoffs to meet the deadline posed by the lender.  The lender could arbitrarily close a file if a single document is not received.
  12. The buyer’s willingness to stay in the deal.  Some buyers back out of a short sale even when it is approved.  They may lose their ability to obtain financing, or they may find a more enticing property to buy.  Some buyers become frustrated and terminate their contract, which may occur mere days before an approval is granted.