Utah Real Estate & Mortgage Blog

Major FHA Changes Coming!

Kris Bowen — Sat, 09 Feb 2013 17:56:09 +0000

If you are thinking about buying a home in the near future and obtaining an FHA loan, you better act fast. The costs and guidelines of FHA loans have continued to change over the past few years and are becoming a less desirable loan option for borrowers. The next wave of changes are major and really can add to the total cost of the loan to home owners.

Here is a list of the top 5 changes to FHA

The annual mortgage insurance premium (MIP) for most new mortgages will increase by 10 basis points (.10 percent). Premiums on jumbo mortgages ($625K or higher) will increase by 5 basis points (.05 percent). New annual MIPs will range from 1.3% to 1.55%
FHA will require borrowers to continue paying annual premiums for the life of their mortgage loans. This change will be effective on or after April 1, 2013.
Lenders will have to manually underwrite loans for borrowers with a decision credit score below 620 and a total DTI ratio greater than 43%. This change will be effective on or after April 1, 2013.
Down payment requirements for mortgages with original principle balances above $625K will be raised from 3.5% to 5%. (A federal register notice was published on Feb 6th. Comments are due March 8th.)
Greater oversight will be required for borrowers who are trying to obtain a new FHA loan 3 years following a foreclosure.

Consider this, if you bought a home using FHA before April 1st and you made extra payments on your loan and one day you have at least 22% equity in your home, you can remove the mortgage insurance saving you around $200 a month. If you buy a home after April 1st you must pay the $200 a month for the full 30 years!!! That could cost you tens of thousands of dollars.

If you are looking at buying this year and planned on going FHA financing, you should consider buying before the April 1st deadline. You don’t have to be closed on a home by April 1st, but you must have a property identified by that date with an FHA case number assigned.

Call Kris at 801-683-9666 if you have any questions or would like me to assist you in buying a home in Utah.

-Kris Bowen

Scammers Post Fake Rentals on Craigslist & Other Internet Ad Sites

Cameron North — Fri, 12 Oct 2012 16:46:23 +0000

If you are in the market to rent a home in the near future, then take heed of this warning. Scammers are trying to rent you homes that are not available, not on the market, and frequently occupied. Homes that are REO or Short Sales are being targeted. Almost always the REO properties are vacant and the short sales are often vacant as well.

The scam works like this: After a house is listed on the market, a scammer then posts an ad online trying to rent out the home before it is sold. Interested candidates will then contact the scammer about renting the property. The scammer asks for them to submit their personal credit information for the lease application as well as two months of rent. Once they have your information, they have you!

Often times the renters don’t even know it’s a scam until they pick a key up from the scammers “office” and go and try to move in. They find the key doesn’t work, and sometimes the home will still be occupied by the current owners if it is a short sale.

Freddie Mac is aggressively watching the internet ads and removing any posting they find, but they won’t catch them all. To ensure you don’t get caught up in this, there are a couple of very obvious indicators to look for when talking to the “landlord.”

1. Try to get the current homeowners name. If they cannot give you the name, then it’s likely a scam.
2. If they are out of the country, keep your guard up.
3. They might ask you to send payment to them through Western Union.
4. They will try to “rent” the home to you without a lease being signed.

If you notice any of these indicators, please flag the ad as inappropriate or as a scam, and contact the proper authorities. Spread the word to all of your family and friends that are needing to rent a home so they don’t become the next victim.

For more information, please contact me at 801-999-8305.

3 Tips to Staging Your Home

audrey — Wed, 10 Oct 2012 16:00:29 +0000

Are you thinking of putting your home up on the market for sale, but uncertain where to start? Afraid it will take too long to offer, or that you will not get the price you would like? Think about “staging” your property, or in other words, setting up the picture for immediate buyer interest in your property.

To be truly efficient, you should review the condition of both the exterior as well as the interior of your house. Here are 3 pointers to get you started with the inside of your home:.

1. De-clutter. This is one of the best and most critical things you should do. It may be much easier to visualize de-cluttering with the thought that you’re moving at any rate, so why not start getting ready right now?

Pack up everything you do not need and stash the boxes out of sight in the garage (or consider temporarily renting out a small storage unit).

2. Organize your closets – put comparable colors together, pants together, skirts together, shirts together etc. For what reason? Because it will make the closets seem bigger. An organized closet appears bigger, and you want your closets to show as roomy and as large as possible.

3. Make your house resemble a model home. You want to de-personalize as much as attainable so that potential homebuyers can easily picture themselves, as well as their own personal possessions filling the area throughout your home. This means reducing and putting away all the things that you really don’t require or make use of. Clear off kitchen counters as much as possible and store all the small appliances you really don’t use. Put various small clutter inside a couple of appealing bins or boxes.

And the most important strategy of all? Visualize yourself as a prospective buyer examining your home for the very first time. Just what impressions are you having? Would YOU purchase your house? Exactly what would you desire to see transformed before you putting an offer on your house?

And don’t worry about paying thousands of dollars to get your residence ready to put on the market. You’ll obtain all of it back after your house sells. Proper staging enables you to sell your house within a shorter period of time and at the price you desire.

Short Sale now or pay the IRS!

Kris Bowen — Mon, 01 Oct 2012 18:22:52 +0000

If you have experienced a hardship in your life and are struggling to make your mortgage payment, you may be a candidate to short sale your home.

The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.

If you are contemplating short selling your home, you better act NOW. If your home does not close by the end of this year, you may be liable for the discharged debt.

For a free consultation, call Kris Bowen a Short Sale Specialists at 801-683-9666.

Utah Housing Market

Cameron North — Tue, 14 Aug 2012 22:42:30 +0000

According to recent numbers from the Utah Association of Realtors, home prices have increased for the third month in a row, rising about 3% in June over the previous year. In June 2012, the median sales price was $182k. This was up from $177k in June 2011. April and May of this year saw similar price gains, which shows major change from what we’ve been seeing since 2008.

There’s a definite increase in consumer confidence. Sellers are getting more showings on their properties, offers that are within 5% of the list price, and closings are happening quicker.

Sales have been on the increase for most of the year, and in the first half of 2012, closed transactions were up slightly over 10% from the first half of 2011. We continued seeing gains in the month of July as well. This shows us that more and more people are buying/selling homes.

Home Values:

Salt Lake: Up 12%
Weber County: Up 11%
Box Elder: Up 44%
Washington County: Up 11%

The foreclosure market in many counties has dried up or significantly dropped, and inventories all around are greatly reduced.

In some areas, mainly in Washington, Utah and Salt Lake Counties, the new construction industry is going strong and they’re often selling them out faster than they can build them.

Statewide inventory fell about 20% from last year. In lieu of the reduced inventory, buyers are finding they have to act fast on properties they are interested in. Not only that, but the offers being made are needing to be very close to list price.

Nationwide, we’re predicting that prices will decrease by about 1%. Utah is beating the trends, and our prices are rising.

If you are considering buying a home in the near future, we would love to sit down with you and go over the entire home buying process. In a market where homes are not staying on the market very long and prices are increasing, we have ways to get you into the home of your dreams (before someone beats you to it) and get you a great deal (before someone outbids you).

Call our office today for more information. I can be reached at 801-999-8305.

Bank of America Short Sale Relocation Assistance Program

Kris Bowen — Tue, 15 May 2012 22:18:06 +0000

If your mortgage is with Bank of America (BofA) and you are contemplating short selling your home, there will never be a better time than now!

$2,500 to $30,000 in relocation assistance!!

For a limited time, Bank of American is offering enhanced relocation assistance payments in which qualified homeowners who initiate a short sale without an offer could be eligible to receive $2,500 – $30,000* in relocation assistance and owe no more on their mortgage with the sale of their property.

Don’t miss this limited-time offer to get the help you need!

Determining eligibility is easy:

BofA will evaluate the homeowner for this offer quickly to determine if they qualify for the enhanced relocation assistance.

The homeowner must participate in one of the pre-approved price short sale programs, such as HAFA (Home Affordable Foreclosure Alternatives) or Bank of America’s proprietary program. Specific investor participation and eligibility criteria do apply to these programs.

Have an active pre-approved price short sale? Don’t worry.
Bank of America is reviewing all current, in-process pre-approved price short sale agreements to determine who is eligible for this limited-time offer. Eligible homeowners actively participating in a pre-approved price short sale program (such as HAFA or Bank of America’s proprietary program) will receive a letter if they qualify for the additional relocation assistance. The relocation assistance will be paid at closing.

Frequently Asked Questions:

Q: How can I find out if my client qualifies for this limited time offer?
A: Call us today at 801-999-8005 to determine if you qualify.

Q: If a short sale is initiated with an offer, will it qualify for this relocation assistance?
A: No. This relocation assistance is only available on pre-approved price short sale programs. Short sales initiated at the time an offer is received do not qualify for the enhanced relocation assistance funds.

Q: Can the relocation assistance funds be used to pay off existing liens?
A: Yes, the homeowner may use funds to pay off existing liens or to help with relocation expenses.

Q: Is the relocation assistance added to any other incentives, such as the HAFA or Bank of America proprietary program incentives?
A: The homeowner incentive will be inclusive of the $3,000 HAFA incentive. For example, if the homeowner is eligible for a $5,000 homeowner incentive, $3,000 will be from the HAFA incentive, and $2,000 will be from the homeowner incentive.

Q: Is the enhanced relocation assistance available for other programs?
A: Currently, the enhanced relocation assistance is only available to short sale programs initiated without an offer. However, as we gauge the success we may extend this incentive to other programs.

If you want more information on this program or considering short selling your home, call us at 801-999-8005 today for a free no-obligation consultation with a Zoom Short Sale Certified Realtor.

*The relocation assistance payment is calculated based on the appraised value of the homeowner’s property. The total amount will be no less than $2,500, but no more than $30,000. The payment will be delivered at the time of closing if the homeowner complies with all terms and conditions of the Short Sale Agreement, which includes but are not limited to the following: a full walk-through appraisal must be completed and the homeowner must satisfy all junior liens and provide clear title for the property (the relocation assistance payment can be used to clear those liens). The short sale must close by September 26, 2013. If the homeowner does not comply with all terms and conditions of the Short Sale Agreement, they will not receive the relocation assistance payment. The amount of any deficiency and relocation assistance will be reported to the Internal Revenue Service (IRS) on the appropriate 1099 Form or Forms. We suggest that the homeowner contact the IRS or their tax preparer to determine if they have any tax liability.

Down Payment Grant Money Availability

Kris Bowen — Fri, 04 May 2012 17:48:03 +0000

If you are looking for grant money to assist you with the downpayment of your home, here is a list of cities that may have funds available to you! If you are interested in learning more about the grants, give a zoom Realtor a call - Jared Brandt 801-719-4769

Clearfield (Not Available)

$5,000 Down Payment Assistance (Detailed Information Available)

Davis County (Not Available)

$5,000 Down Payment Assistance (Detailed Information Available)

Kearns (Available)

$10,000 Down Payment Assistance (Detailed Information Available)

Layton (Not Available)

$3,500 and $5,000 at Home in Layton (Detailed Information Available)

West Jordan (Available)

$5,000 First Time Homebuyers (Detailed Information Available)

Magna (Available)

$10,000 Down Payment Assistance (Detailed Information Available)

Morgan (Available)

$2,000 First Time Homebuyers (Detailed Information Available)

Ogden (Available)

$3000, $5,000, and $10,000 DPA (Detailed Information Available)

Provo (Available)

$10,000 to $20,000 First Time Homebuyer (Detailed Information Available)

Salt Lake County (Not Available)

$10,000 Down Payment Assistance (Detailed Information Available)

Summit County (Available)

Reduce Approx. 20% home price (Detailed Information Available)

St. George (Available)

$10,000 Down Payment Assistance (Detailed Information Available)

Tooele County (Available)

$3,000 Down Payment Assistance (Detailed Information Available)

Utah Multiple County (Not Available)

$5,000 to $10,000 DPA (Detailed Information Available)

Weber County (Available)

$5,000 Down Payment Assistance (Detailed Information Available)

West Jordan (Available)

$5,000 Down Payment Assistance (Detailed Information Available)

West Valley (Available)

$5,000 First Time Homebuyer (Detailed Information Available)

If you are interested in learning more about the grants, give a zoom Realtor a call - Jared Brandt 801-719-4769

Deficiency Laws in Utah have Changed for Short Sales

Kris Bowen — Tue, 01 May 2012 17:10:39 +0000

Great News!

As of March 15^th, 2012, the time frame for banks to pursue a deficiency judgment after a short sale changed from 6 years to 3 months. This is a significant change, and may be important if you are involved in a short sale, especially if the deficiency was not negotiated or addressed during the short sale.

S.B. 42, passed by the 2012 Utah State Legislature and signed by the Governor, imposes a 3-month statute of limitations within which the mortgage lender must file a lawsuit to collect a remaining balance after the closing of a short sale. The 3-month period begins with the recording date of the reconveyance (the release) of the lender’s trust deed. The objective of the bill is to encourage borrowers to engage in short sale negotiations with some comfort in knowing that the limited 3-month statute of limitation would apply to a lawsuit to collect the remaining balance rather than the 6-year statute of limitations applicable generally to all written contractual obligations. The legislation recognizes also that often a short sale agreement between a lender and a borrower will include a written payment plan for some or all of the remaining loan balance. The 3-month statute of limitation does not apply to such an agreement. Finally, the 3-month statute of limitation does not apply if the borrower engaged in fraud in connection with the short sale. The legislation will be found at Utah Code Section 78B-2-313.

If you are considering short selling your home or have any questions regarding the process, give a short sale specialist a call at 801-683-9666.

Cancellation of Mortgage Debt Explained

Kris Bowen — Wed, 14 Mar 2012 21:20:43 +0000

A lender will, on occasion, forgive some portion of a borrower’s debt. The general tax rule that applies to any debt forgiveness is that the amount forgiven is treated as taxable income to the borrower. Some exceptions to this rule are available, but, until recently, the borrower was required to pay tax on the debt forgiven. A new law enacted in December 2007 provides relief to troubled borrowers when some portion of mortgage debt is forgiven. However, this relief expires on December 31, 2012 and
NAR will be working to obtain an extension throughout the year.

Below is some general information you need to know about this law and cancellation of mortgage debt.

General Rule for Debt Forgiveness
If a lender forgives some or all of an individual’s debts, the general rule is that the forgiven amount is treated as ordinary income and the borrower must pay tax on the forgiven amount. Exceptions apply for bankruptcy, insolvency and certain other situations, including mortgage debt.

Current Law for Mortgage Debt
(Jan. 1, 2007 through Dec. 31, 2012): A borrower can be excused from paying tax on forgiven mortgage debt. The debt must be secured by a principal residence and the total amount of the outstanding obligation may not exceed the original mortgage amount plus the cost of any improvements.

Does the relief apply only to a sale?
No. The provision has broader application. Lenders might forgive some portion of mortgage debt in a short sale (when value at sale is less than the amount owed) or in a foreclosure where the debt is wiped out. In addition, if a borrower still living in the home is able to make an arrangement with a lender that reduces the principal balance of a mortgage, the amount forgiven in that workout will not be taxed.

Can the homeowners in a short sale or foreclosure claim a loss?
No. The loss is considered a personal loss and is, therefore, ineligible for either capital loss or ordinary loss treatment.

What happens to the seller when mortgage debt is forgiven?
Until January 1, 2013, the homeowner will pay no tax on any forgiven amount.

Does this provision apply to a refinanced mortgage?
Only in limited circumstances. The relief provision can apply to either an original or a refinanced mortgage. If the mortgage has been refinanced at any time, the relief is available only up to the amount of the original debt (plus the cost of any improvements). Tax relief is generally not available for second mortgages or home-equity lines of credit where the funds are not used for home improvement. Any amount that is not eligible for the relief provision will be taxed as ordinary income.

How does the homeowner get the correct information to the IRS?
The lender is required to provide the homeowner and the IRS with a Form 1099 reflecting the amount of the forgiven debt. The borrower/homeowner must file a Form 982 to reflect the amount forgiven and to show the reason why the forgiven amount is not taxable. Any taxable portion of forgiven debt will then be reported on the homeowner’s Form 1040 for the tax year in which the debt was forgiven.

What if a property declines in value but the owner stays in the house?
The provision would not apply. The provision applies only at the time of sale or other disposition or when there is a workout (reduction of existing debt) with the lender.

Do all lenders forgive mortgage debt when property values decline or the home is in foreclosure?
No. Some states have laws that allow a lender to require a repayment arrangement, particularly if the borrower has other assets. Forgiveness of debt is always at the lender’s discretion.

—————–Linda Goold

If you are contemplating short selling your home or have any questions regarding Utah Real Estate, please contact Kris Bowen at 801-683-9666

FHA to Increase Cost of Up-Front Mortgage Premiums for New 30-Year Loans

Kris Bowen — Thu, 01 Mar 2012 01:23:02 +0000

Dear zoomUTAH.com Members,

I am compelled to alert you all that FHA is proposing some major changes concerning the dynamics of their Purchase loans. In their infinite wisdom, and contrary to any semblance of reason, they are shooting the Housing Market in the head (not the foot). Below, you will see the changes coming April 1st. You must have an FHA case number assigned to a home by April 1st to avoid the new guidelines:

1. The up front mortgage insurance premium (UFMIP) is the portion that gets added to the loan amount at closing. The current factor is 1.0%. The new factor will be 1.75%. On a $200,000 loan, the UFMIP would go from $2000 to $3500

2. The annual premium that gets paid monthly in your payment will be increased from 1.15% to 1.50%. On a $200,000 loan, the payment will increase by $58.33/mo.

3. Currently, FHA allows concessions of up to 6% so the Seller or Loan Officer can help pay for closing costs, home inspection, prepaid expenses, etc… It’s in discussion, though not yet definite, that FHA is lowering the maximum concessions to 3%. This will cause some Buyers to have to be out-of-pocket more than just paying their down payment. A home selling for approx. $225,000 breaks even on closing costs that equal 3%. Because of the nature of half of your closing costs being a fixed cost, the percentage rises the lower the purchase price gets below the $225,000 threshold. For instance, a purchase price of $125,000 requires approximately 4% concessions to pay for all the closing costs. The fact that 1% cannot be paid requires the Buyer to come in with $1250, in addition to their down payment.

It’s not all doom and gloom. I just get emotional when our Gov’t gets in the way of progress in a battered Housing Market. I have some solutions for this dilemma and I welcome your calls so we can address your individual needs and come to a solution to your financing plans. For anyone sitting on the fence, you may want to step things up in a big way. Keep in mind that, although you qualify for FHA Financing, you may not qualify for Conventional Financing and identifying a property now may be warranted.

Call me today at 801-949-4872 if you have any questions or would like to get pre-qualified before the new rates hit April 1st.

Sincerely,

Joel Ellowitz, CMPS NMLS #290849
SecurityNational Mortgage
6965 S. Union Park Center Ste.470
Midvale, Utah 84047
c 801-949-4872
w 801-545-7276