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    I know a blog is supposed to be the writers ideas and thoughts and that is what I will always strive to achieve. That said this news came from the FHA. This article is as it appeared on the following web site and felt it worthy of reprinting it here. This is good news for everyone that wants to get into a new home and for neighborhoods that are suffering form vacated and foreclosed properties. Kudos the FHA for coming up with this program!

http://www.hud.gov/news/release.cfm?content=pr08-082.cfm

The title of the artical is..

FHA EXTENDS FINANCING FOR IMMEDIATE PURCHASE OF FORECLOSED HOMES
Measure seen to bring stability to home values and accelerate sale of vacant properties

WASHINGTON - In an effort to stabilize declining home values in certain neighborhoods, the Bush Administration today announced a temporary policy that will extend government-backed mortgage insurance and allow for the immediate sale of vacant foreclosed properties.

For one year, the Federal Housing Administration (FHA) will insure foreclosed properties marketed and sold by property disposition firms on behalf of lenders. The properties, which must purchased by owner-occupants, will no longer be subject to the customary 90-day waiting period.

“A glut of foreclosed and abandoned homes harms neighborhoods, frustrates homebuyers and delays a community’s recovery,” said Brian D. Montgomery, Assistant Secretary of Housing-Federal Housing Commissioner. “The action we take today will allow homebuyers to purchase these homes in much greater numbers and ease the excess supply of unsold homes in neighborhoods across the country.”

FHA’s new temporary policy will help stabilize neighborhoods experiencing high rates of foreclosure by reducing the inventory of unsold properties. Many foreclosed properties remain vacant for months, inviting vandalism and reducing values of surrounding homes. To address that sizeable inventory, lenders have hired companies that specialize in the marketing and disposition of foreclosed homes. It’s reasonable and appropriate that these firms have the ability to sell the properties to borrowers using FHA financing.

With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This prohibition is intended to prevent property “flipping,” a predatory practice that strips a home of its equity before being quickly resold at an inflated price to an unsuspecting buyer. FHA’s new policy will permit the immediate sale of foreclosed properties to legitimate borrowers wishing to use FHA-insured financing.

To read the full text of this new temporary policy, visit FHA’s website.

      How are you searching for your dream home, or your next investment deal?  Looking for land but it seems to be so time consuming?  Does it feel like that special home you’re looking for with all the details defined is so hard to find and you spend hours each day online looking?  Stop doing that and contact me at TETConsulting right away. 

The first thing I’ll ask you is “are you qualified to buy?  Now I’m not talking about that 30 minute Pre-Qual that any lender can do.  I’m talking about a full loan application submitted to the underwriter for approval.  If that is done great, if not, we need to get it done first before we move on.  The last thing I want to do is start showing you properties you can’t afford to buy!  After that we will sit down, do a needs assessment for that special home, land or investment property you’re looking for and then give me your email address.  Then check your email daily!  That’s it.  I will create a script in the MRMLS with your predefined criteria and anytime a property hits the listing service that meets your needs you’ll get an email.  Now remember, you’re already qualified to buy so when you get the email, call me right away and we can go look at the property and if we’ve done a good needs assessment this home or property should be just what you wanted.  Your next step will be putting in a purchase offer.  That’s it. No more hours online, driving around or looking through endless publications.  All you have to do is call me and lets get started!

    A few weeks ago I wrote a blog about now being the time for buyers to step up.  I need to elaborate on some issues though.  I actually believe we have seen where the bottom of this real estate market is going.  That bottom is homes priced under $200,000.  I have personally had listings under this threshold with multiple offers and some even being bid up.  The problem is we don’t actually have enough good properties under this threshold yet.  Give it some time we will.  Additionally, we are seeing investors jump back in the game, especially if they can get properties at 60-70 percent of the broker price opinion. The reason they are returning is because the market is full of potential renters that actually have lots of cash.  These potential renters have cash because they haven’t had to make a mortgage payment for over six to eight months due to short sales or foreclosure.  Most of these people still have jobs with the ability to make payments, just not the amount they have to pay to keep a home that isn’t worth what they paid for it.  How do you spell bad investment?  These people are great prospects for renters and even in some cases, rent to own prospects, with nice healthy deposits up front.  Music to the ears of any would be investor for sure!

The other folks getting into the game are first time home buyers. According to CAR statistics the minimum household income needed to purchase an entry-level home at $356,350 in the first quarter of 2008 was $68,830, based on an adjustable rate of 5.65 percent and assuming a 10 percent down payment.  They went on to say that first time buyers typically purchase a home equal to 85 percent of the prevailing median price.  The monthly payment and insurance was $2,260 for the first quarter.  At $68,830 the minimum qualifying income was 30 percent lower than a year ago.

In the High Desert that means 64 percent of the people can afford to by a home according to CAR, along with Sacramento County, this is the highest affordability area in the state.  In the rest of the Inland Empire it varies between 30 and 45 percent.  Those are very good numbers, much improved over years past.  However to do this you need to have full documentation of income, good credit and where the down payment will come from.  With FHA the down payment part is simple; it can be gift money, either from your family or from a charitable organization like the Nehemiah Group.  Credit I’m finding is another issue all together.  It seems there was an additional reason why folks didn’t get into the housing market the past few years and it has nothing to do with home values.  Some folks just don’t understand their credit report.  No credit is equally as disqualifying as bad credit.  My first advice to everyone is to know what your credit report looks like.  Go online and Google “credit report” and you will see plenty of sites.  My favorite is the one we see all the time on TV and has the cute little jingle sung by the guy in the fish restaurant, freecreditreport.com.  Next, get with someone that can help you understand this and start getting it in shape.  If you have any late payments, charges off, repossessions they all need to be cleaned up before you can buy.  If you have a judgment, pay it.  If all these “dings” on your report have been paid but still show open you need to contact the creditors on your report and ask them to remove these items.  Now you may need to supply supporting evidence it is paid, so do your research.  If the bad credit is your spouse and you can show enough income on your own and you don’t need your spouse, you may be okay.  With people that don’t have any credit, you need to establish at least four lines of some form. Also, folks open up a checking account!  Don’t pay bills with cash or money orders; you have no record that you made payments.  If you’re renting you can use the utility bills but if you paid in cash you have no record of paying.  If this is the case you will need to go to the utility companies and beg them for a record of payment; however that may or may not show who made the payments so you can’t establish credit in your own name and that is what you need. Also, things like too much credit or open accounts and a lot of inquiries will hurt you.  If you were shopping for a car and you went to several dealers they may have all looked at your credit report.  That is not good ether.  If you know in advance what your report looks like you’re ahead of the game. It amazes me that when I sit down with prospects and I ask them “what I can expect to see on your credit report” they have no clue or they assume that everything is okay!  Be informed folks it’s that simple.  Bottom line is this, understand your credit report before you try to get a loan and be honest and up front with your lender.