Erin Attardi’s Blog

Sacramento Real Estate and other items of local interest

By Erin Attardi | Agent in Sacramento, CA

Bank of America is now offering up to $30k for doing a Sacramento Short Sale...

If you follow me on Facebook or Twitter you will already know that last week I received a notice from Bank of America that for a limited time, they are offering a relocation incentive of up to $30,000 to homeowners who complete a short sale. WOW. No you did not just hallucinate. Thirty. Thousand. Dollars. For completing a short sale of your Sacramento home.

If you are a homeowner with a Bank of America mortgage and are considering a short sale, you must list the house as a short sale and allow your agent to "initiate" the short sale in BofA's online short sale management portal (aka, the Equator system), so your file can be reviewed by Bank of America loss mitigation.

Per Bank of America, the relocation assistance payment is calculated based on the appraised value of the homeowner's short sale 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 their 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 their short sale agreement, they will not receive the relocation assistance payment.

I can help you navigate this BofA short sale process if any of that sounded like a foreign language to you.

As I mentioned, per Bank of America, this is a limited time program...while the short sale must close by September 26, 2013, the program must be initiated prior to then -- however they have not specified an initiation expiration date. If you are a Sacramento-area homeowner, have a Bank of America mortgage and need to do a short sale, I welcome your call.

Five Reasons I Like Negotiating Short Sales with GMAC Mortgage...

I love doing Sacramento short sales with GMAC for a couple reasons...the first reason is that they generally use the online system Equator to facilitate their short sales, which makes transmitting documentation and information to the short sale negotiator pretty simple and (relatively) painless. The second reason is that I usually receive the direct contact info for the short sale negotiator employed by GMAC. The third reason is that they are usually pretty fast to respond to the initiation of the short sale process with a few proprietary documents -- for example they usually send an "Affidavit of Arm's Length Transaction" document with buyer and seller names within a week or so of receiving all of the info. The fourth reason is that GMAC is generally pretty quick to order their BPO's (Broker Price Opinion -- essentially a type of appraisal / valuation of the property used to validate the price that has been offered by a buyer)....AND the fifth reason I like to work with GMAC short sales is that they generally overall seem to approve their short sales in less than 60-days. I even once received one GMAC short sale approval within 2 weeks! So, if you are going to be selling a short sale in Sacramento with GMAC, here is what you need to gather;

GMAC Mortgage

Loss Mitigation / Short Sale Tel: 214-874-2500

Seller's Documents Generally Required for a Short Sale:

-3rd Party Authorization Letter

-Hardship Letter

-Last 2 months of bank statements

-Last 2 months of pay stubs

-Last year's federal tax return

-Most recent quarterly Profit & Loss Statement (ONLY if self-employed)

-GMAC Financial Analysis Packet (includes an IRS 4506-T, Dodd-Frank Certification, and Hardship Affidavit)

Sacramento Help for Homeowners Events - Coming March 20th, 2012

Sacramento homeowners who are struggling to make their mortgage payments will have the opportunity to meet face-to-face with their mortgage companies, as well as HUD-approved housing counselors, in an effort to assist explore foreclosure-prevention options and to move toward solutions to their mortgage problems.

Help for Homeowners Community Event
Tuesday, March 20, 2012 from 1:00pm – 8:00pm
Sacramento Convention Center
1400 J Street, Hall D
Sacramento, CA 95814

Free parking is available in the Memorial Garage (entrance on 14th and H Streets). It is highly recommended that you bring with you:
-Request for Mortgage Assistance form
-IRS Form 4506T and/or last two years of tax returns
-Monthly mortgage statement
-Information about other mortgages on your home, if applicable
-Two most recent pay stubs for all household members contributing toward mortgage payment
-Unemployment benefits award letter, if applicable
-If self-employed, the most recent quarterly or year-to-date Profit and Loss Statement
-Documentation of income you receive from sources (alimony, child support, social security, etc.)
-Two most recent bank statements
-A utility bill showing homeowner name and property address

Sacramento Short Sale Information

Buying a house and getting divorced at the same time? Be careful that divorce isn't finalized a few days before closing!

So this morning I closed another short sale...the unique thing about this particular transaction was that the original closing date that was approved by the short sale lender (HSBC) was January 20, 2012. Well, today is February 28, 2012...a mere 5 weeks later!!

So among some other tabloid-worthy circumstances that made this short sale a nightmare (let's just say one of the sellers -- the wife -- fled the country mid-transaction...but literally thanks to some PI work THAT didn't hold up our closing), the most significant issue that lead to the buyer's late closing was that just a few days prior to our scheduled closing date, his divorce became final.

Now why would that matter, you may ask yourself?? The implications of the finalization of the buyer's divorce -- part of his divorce settlement included having to pay monthly spousal support (aka, alimony). That spousal support then had to be factored into his overall debt-to-income ratio to qualify for his loan, and th

is addition to his monthly debt suddenly elevated him to a level that made him UNABLE to qualify for his 5% down conventional loan just days before closing...so the lender had to switch the loan to another type of loan that would accommodate a slightly higher debt-to-income ratio (from conventional to FHA), requiring a whole new appraisal and new underwriting of the loan. UGH.

FHA lending standards are a bit different than conventional lending standards, and since the home was a bit of a fixer, the underwriter required that some repairs be made to the house that were not required before. At the end of the transaction, I ended up obtaining (more like begging for) FIVE separate one-week extensions to the closing date for this short sale. The short sale negotiator must have been tired of hearing from me!!!

Luckily in the end, we were able to close the transaction -- and buyer and seller are both elated. And I am sure that the HSBC short sale negotiator is elated to be done with me too! Ahh...

It's 2012 -- does it make sense to rent a home in Sacramento, or buy a home in Sacramento?

Last year around this time I wrote a post detailing the monthly mortgage payments vs. average rent payments in certain neighborhoods in Sacramento, and I thought I would start 2012 with a similar post, updated with today's interest rates, average Sacramento home prices, and average rents.

Today was the first business day of 2012, and my phone rang off the hook. Who was calling me? Prospective home buyers who finally have decided that now is the time to buy a home in Sacramento. It seems that the overall sentiment among them is that it has become more affordable to buy a home in Sacramento than rent a home. In many areas and under many circumstances, I believe this to be true. Prices are slightly down from last year, while rents seem to have increased. If you don't believe me -- just compare this data to a similar post from around this time last year.

When you take into consideration the average home price and probable monthly mortgage payment in particular Sacramento neighborhoods vs. the average rent, often times the mortgage payment is less. Let's take a look at a few different areas...just for the sake of citing my information sources, for average home price (used to calculate mortgage payment scenarios) I am using most recent November 2011 Trendgraphix data (December's data is not available yet, and I don't expect a huge variance) which is taken directly from MLS, and for average rent I am using the most recent Q4 2011 Homepointe Quarterly Residential Rental Survey. For my mortgage payment calculations, I am basing it on a 4.25% interest rate (which is actually slightly above today's average market interest rates), and including the full PITI - loan principle, interest, monthly property taxes, and monthly homeowner's insurance (and mortgage insurance where applicable).

Natomas - 95833, 95834, 95835
Average single family home sale price: $194,000
Average rent for a 3 bedroom home: $1,422
30-Year Fixed VA Loan (Zero downpayment): $1,226
30-Year Fixed FHA Loan (3.5% downpayment): $1,368
30-Year Fixed Conventional Loan (10% downpayment): $1,208
30-Year Fixed Conventional Loan (20% downpayment): $1,022

Elk Grove / Laguna - 95757, 95758
Average single family home sale price: $213,000
Average rent for a 3 bedroom home: $1,384
30-Year Fixed VA Loan (Zero downpayment): $1,346
30-Year Fixed FHA Loan (3.5% downpayment): $1,502
30-Year Fixed Conventional Loan (10% downpayment): $1,326
30-Year Fixed Conventional Loan (20% downpayment): $1,122

Rosemont / College Greens - 95826, 95827
Average single family home sale price: $154,000
Average rent for a 3 bedroom home: $1,194
30-Year Fixed VA Loan (Zero downpayment): $974
30-Year Fixed FHA Loan (3.5% downpayment): $1,086
30-Year Fixed Conventional Loan (10% downpayment): $959
30-Year Fixed Conventional Loan (20% downpayment): $811

Arden - 95821, 95825, 95864
Average single family home sale price: $250,000
Average rent for a 3 bedroom home: $1,466
30-Year Fixed VA Loan (Zero downpayment): $1,580
30-Year Fixed FHA Loan (3.5% downpayment): $1,763
30-Year Fixed Conventional Loan (10% downpayment): $1,556
30-Year Fixed Conventional Loan (20% downpayment): $1,317

Carmichael, Fair Oaks - 95608, 95628
Average single family home sale price: $236,000
Average rent for a 3 bedroom home: $1,370
30-Year Fixed VA Loan (Zero downpayment): $1,492
30-Year Fixed FHA Loan (3.5% downpayment): $1,664
30-Year Fixed Conventional Loan (10% downpayment): $1,469
30-Year Fixed Conventional Loan (20% downpayment): $1,243

Citrus Heights, Orangevale - 95610, 95621, 95662
Average single family home sale price: $164,000
Average rent for a 3 bedroom home: $1,300
30-Year Fixed VA Loan (Zero downpayment): $1,036
30-Year Fixed FHA Loan (3.5% downpayment): $1,157
30-Year Fixed Conventional Loan (10% downpayment): $1,021
30-Year Fixed Conventional Loan (20% downpayment): $864

South Land Park, Pocket / Greenhaven - 95822, 95831
Average single family home sale price: $177,000
Average rent for a 3 bedroom home: $1,244
30-Year Fixed VA Loan (Zero downpayment): $1,119
30-Year Fixed FHA Loan (3.5% downpayment): $1,248
30-Year Fixed Conventional Loan (10% downpayment): $1,102
30-Year Fixed Conventional Loan (20% downpayment): $933

Obviously there are other tangible and intangible benefits to home ownership as well...for example, a tangible benefit is the fact you can write-off your mortgage interest on your income taxes, and also deduct some other related expenses each year. An intangible benefit might be that as a homeowner, you have the freedom to paint the walls, decorate, plant a garden, remodel, etc.

So clearly these numbers are just a baseline to give you an idea of housing affordability in certain areas. You definitely need to consult a loan officer to see what type of financing is the best fit for you, and ultimately just how much you can afford - and there are several variables that will affect your interest rate and terms. You should also speak with a CPA or qualified tax professional regarding the mortgage interest and other tax deductions to see how it will affect your particular situation. If you need a good referral to either one, feel free to contact me and I can put you in touch.

Bank of America is holding a "Borrower Outreach" event this week in Sacramento -- register now!

Bank of America will be holding a "borrower outreach" event this week at the Sacramento Convention Center starting Thursday, November 17th - and going through Saturday, November 19th. Hours of the event each day are from 8am - 8pm. They are encouraging their borrowers to register online and schedule an "appointment" time rather than just dropping in.

Their goal is to help Sacramento Bank of America mortgage customers who are experiencing hardships to find alternatives to foreclosure -- such as loan modification, short sales, etc.

There is a list of documents you must print from their website and bring with you:

A "Request for Modification & Affidavit" --
A Hardship Letter -- explains your hardship and why you are seeking assistance
An IRS Form 4506-T -- this allows Bank of American to request your income tax information from the IRS.
A Dodd-Frank Certification form -- this certifies that you have not been convicted of a financial crime in the last 10 years (among other things, be sure to read it before signing)

There are also other financial documents they want you to bring:

Recent Utility Bill
Copies of your 2009 and 2010 tax returns
Copies of your most two recent bank statements for all accounts
A summary of your monthly expenses
Recent HOA bill (if applicable)
Copies of your most recent two months of paystubs (or profit and loss if self-employed)
Copies of your rental lease (if property is tenant occupied)

In order to register for your appointment time for the Sacramento Bank of America Outreach Event, visit the Bank of America Events Registration page on their website by clicking here. If they advise you to consider a short sale as an alternative to foreclosure, I am happy to provide you more information regarding the process and assist you as well.

FHA Short Sales in Sacramento -- the process explained for home buyers and sellers...

I have been doing a bunch of FHA short sales lately, and I have to say I enjoy doing them. No, I'm not crazy! It just so happens that the US Department of Housing and Urban Development (HUD), the federal agency that handles the FHA programs, has created a short sale process that loan servicers are required to follow...

Loan servicers (think Bank of America, Wells Fargo, Chase, GMAC, etc) must follow the steps of the HUD "Pre-Foreclosure Sale" process. That's right -- they MUST. Which is really nice for me...as a real estate agent that does A LOT of short sales, predictability in what is generally a pretty unpredictable process is a luxury.

A few general criteria if you have an FHA loan on your Sacramento area home and are contemplating selling via a short sale;

FHA usually requires that the home be owner-occupied. If you must move out of your home because of a hardship that requires you to relocate, such as a job transfer, divorce, to care for a sick relative, etc, there are some exceptions.
Theoretically, the seller must be at least 31 days delinquent on the loan. Let me clarify that in order to negotiate the short sale, the borrower can be totally current with the monthly mortgage payments. It is when escrow closes on the sale that you must have missed one payment...and (shh!), I have gotten an FHA short sale completed where the seller wasn't technically 31 days late.
There is a FHA Pre-Foreclosure Sale application that must be completed and filled out. The borrower will need to know the FHA "case number" for the property. This can be found on the original loan documents. If those aren't handy, you can call FHA's help line at 800-225-5342 and find out.
You will also need to collect your bank statements, paystubs, write a hardship letter, write an explanation regarding the occupancy status, and if utilities are on and being paid, etc.
FHA conducts a full-blown appraisal of the house to determine value.
Once all of the document and appraisal conditions have been satisfied and hardship determined, FHA issues a form 90045 -- Approval to Participate in the Pre-Foreclosure Sale.
FHA Form 90045 will disclose the appraised value. The NET proceeds to the loan servicer generally must be greater than 88% of this value, taking into account paying all of the costs associated with the sale, including real estate agent commissions, title insurance, escrow fees, transfer taxes, etc.
Often times, with a timely close of escrow, the seller can receive a "relocation incentive" of up to $1,000 at the close of escrow, paid from the sales proceeds of the house.

The seller MUST be approved by FHA for the pre-foreclosure sale program before the loan servicer can review or approve any offers...so keep that in mind. Approval timeframes after receipt of the 90045 vary per the loan servicer, but I'd estimate 1-3 weeks.

Also if you are a buyer of an FHA short sale property, FHA does not approve any seller credits to the buyer of an FHA short sale UNLESS the buyer is obtaining a new FHA loan -- and in those cases the credit for closing costs is limited to 1% of the purchase price. Also, the property is sold as-is, and the FHA will not cover the cost of any buyer home warranty. So buyers, prepare yourselves for that reality.

So...if you are contemplating doing a short sale on your Sacramento area home and have an FHA loan, be sure to select a real estate agent that is intimately familiar with all of the steps of the process. I would be happy to explain the process in more detail for you and assist you with your transaction. Of course I am happy to do the same for any non-FHA short sale you want to do as well.

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