Move forward to today, Fall 2009, and condo buildings are selling out in 6-8 weeks … at $200 sqf.  Peter Zalewski, a real estate broker who runs the Condo Vultures, explains that the Miami Condo market’s price reset has sparked interest in Latin American and South American investors. They seem to be cash buyers and feel that the current prices are a relative bargain.

The challenge that is preventing more buyers form purchasing is that financing is very hard to obtain in these new construction condo buildings.  Fannie Mae and Freddie Mac are denying loan applications to well qualified purchasers simply because there is such an over-suply of units that reselling a unit could prove a dauting challenge.

The lesson we all need to learn here is that to sell real estate ANYWHERE you need to price it correctly for today’s market. If you are interested in a condo, or a home in the Cincinnati area contact me today!

The Making Home Affordable Program was created to assist homeowners whose home values have declined to the point where they may no longer have equity in their homes. So the homeowners have not be able to refinance their homes and take advantage of lower interest rates. In addition, many of these homeowners are also locked in to 3,5 or 7 year adjustable mortgage rates which will soon reset at higher rates. To try to assist these homeowners  the federal government started the Making Home Affordable Program. The purpose of the program is to stop the cycle of foreclosures and short sales and to provide homeowners who are in this position to have options to save their home and financial stability. This program has eligibility requirements that must be met.  For more information please visit the Making Home Affordable Website. This site  helps borrowers learn basic facts about mortgages, homeownership, and resources available, with more than 17.7 million page views in less than two months.

Fourteen servicers, including the five largest, have now signed contracts and begun modifications under MHA. Between loans covered by these servicers and loans owned or securitized by Fannie Mae or Freddie Mac, more than 75 percent of all loans in the country are now covered by the program. The 14 participating servicers have extended offers on over 55,000 trial modifications and mailed out over 300,000 letters with information about trial modifications to borrowers.

There are four options for homeowners who are in this position:

1) Loan Modification- If the homeowner wants to try to keep their home, they can negotiate with the bank to try to come to agreeable terms. This is something that the homeowner can do themselves although there are professionals who will charge you a $1000 to assist with the process.

2) Short Sale- If you have 1 or 2 liens on the property this option can be available to you if your bank is willing to participate. If you have more than 2 liens it can be more difficult or not an option at all. Even if your property sells all deficiencies aren’t always forgiven so be sure to consult a realtor who specializes in short sales, a real estate attorney, and an accountant prior to making the decision to sell your property in a short sale.

3) Deed in Lieu of- Can only be used if there is 1 lien on the property. A hardship must exist, and the homeowner must provide a letter explaining the circumstances of the conditions of the hardship for bank review. Usually this option is exercised once a short sale has failed to unload the property. Essentially what happens is the homeowner signs the deed back to the bank, gives back the keys, and moves out of the property. Federal law does not allow the banks to come after the homeowner for deficiencies.

4) Sheriff’s sale- This is a last resort. Allowing your property to be foreclosed and be auctioned off on the courthouse steps can severely damage your credit and ability to obtain a Fannie or Freddie backed loan for a minimum of 7 years.

For more information on this topic please email me or call me and I can refer you to my colleagues who specialize in this area of Cincinnati real estate.

Freddie Mac released the results of its Primary Mortgage Market Survey®  in which the 30-year fixed-rate mortgage averaged 4.78%. The 30-year fixed rate mortgage has not been lower in the life of Freddie Mac’s weekly survey,dating back to 1971 for the 30-year fixed rate mortgage.

According to  the National Association of Realtors, housing affordability reached an all-time high in February 2009 since the series’ inception in 1971. By region, sales surged by nearly a third in the Northeast and Midwest, but fell in the West. More good news for Cincinnati homebuyers and sellers looking to make a move!

For a free market analysis of what homes are selling for in your neighborhood or a neighborhood you are looking to move to. Please email or call me.

The LA Times explains that a buyer with a FICO score between 700 and 720 will pay an extra three-quarters of a point. Even someone with a 739 FICO will get dinged with a quarter-point add-on. Applicants buying a condominium that cannot come up with a 25% down payment will be hit with a three-quarter point add-on penalty, no matter how high their credit score, simply because they are not buying a traditional detached, stand-alone home. Buyers of duplexes, in which one unit is owner-occupied and the other is rented, will be charged a flat 1% add-on from Fannie, even if they’ve got FICO scores above 800 and make 50% down payments.

There is still one option for buyers looking to secure a loan without these penalties – FHA loans. Currently in Cincinnati, and across Hamilton County, the FHA loan limit is $337,500 and the down payment requirement is 3.5%.  FHA loans have different restrictions such as PMI insurance that need to be paid for by the borrower. For more information on how you can leverage an FHA loan, especially in lieu of the tightening loan regulations, contact me at Alison.Moss@comey.com.

• Primary residence, “cash out” refinances are limited to 85% loan-to-value
• Second home, cash out refinances are limited to 75% loan-to-value
• Investment properties cannot be refinanced without a 25% equity position

The changes are designed to lower the exposure to lenders, and to make sure home owners have more of stake in their own homes. We are advising our clients who will be looking for homes to make thier move before the changes take effect.