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Valerie Mcneal's Blog

By Valerie McNeal, CDPE, CRS, GRI | Agent in Maryland
  • Buying a Home After Short Sale or Foreclosure

    Posted Under: Home Buying in Baltimore, Home Selling in Baltimore, Foreclosure in Baltimore  |  March 24, 2011 6:29 AM  |  1,475 views  |  3 comments

    Buying a Home After Short Sale or Foreclosure

    As a Realtor who has been heavily involved closing Maryland short sales over the last 3 years, one of the questions that I get asked quite often from home sellers is how long will it take before I will be able to buy a home again.

    The answer to this question does not have any clear cut and dry answer. There are quite a few variables involved when trying to figure out when someone will be able to purchase a home after a foreclosure or short sale.

    Going through either a short sale or a foreclosure has the potential to seriously impact ones credit.  Government entities Fannie Mae, Freddie Mac and FHA do not directly loan money to individuals but are the governing body that work with lenders to guarantee loans and free up money to provide mortgages.

    Banks typically have the authority to lend to whoever they want but will generally follow the guidelines set forth by these entities. There are some lenders of course that will take greater risks with some borrowers than others.

    Below are the general guidelines that FHA, Fannie Mae and Freddie Mac follow when considering a loan after a short sale or foreclosure:

    Short sale with FHA Loan

    • Can purchase right away with no mortgage default
    • 3 year wait if in default at the closing
    • Reduced wait if the borrower has re-established good credit and can show extenuating circumstances

    Short Sale With Fannie Mae Loan

    • 2 year wait if the borrower puts 20 % down
    • 4 year wait if the borrower puts between 10% to 20% down
    • 7 year wait if the borrower puts less than 10% down
    • 2 year wait if the borrower can show extenuating circumstances and puts more than 10% down

    Short Sale with Freddie Mac Loan

    • 4 year wait before being able to get a loan
    • 2 year wait if the borrower can show extenuating circumstances

    Foreclosure with an FHA Loan

    • 3 year wait before being able to get a loan
    • Reduced wait if the borrower can show extenuating circumstances and re-establishes good credit

    Foreclosure with a Fannie Mae Loan

    • 7 year wait from the completed foreclosure sale date
    • 3 year wait if the borrower can show extenuating circumstances. Additional underwriting requirements apply for 4 years after a 3 year waiting period.
    • 7 year wait for a 2nd home, cash out re-financing, or an investment property

    Foreclosure with a Freddie Mac Loan

    • 5 year wait from the completed foreclosure sale date
    • 3 year wait if the borrower can show extenuating circumstances

    ** As a side note a deed in lieu of foreclosure follows the same guidelines as FHA’s foreclosure policy, the same as Fannie Mae and Freddie Macs short sale policy.

    When analyzing the difference between completing a short sale or going through a foreclosure in regards to purchasing another property in the future it boils down to the waiting time which is more favorable in a short sale.

    Credit Scoring After Short Sale and Foreclosure

    The other question that I get from folks considering a short sale is how it will impact their credit. There is a lot of misleading information that come from Realtors, as well as online forums about the impact on credit scores. On many occasions you will hear that a short sale is far better for your credit than getting foreclosed on. This is incorrect! A credit score in a short sale or a foreclosure have the potential to be about the same. Maybe marginally better in a short sale.

    According to Fair Issac (My FICO) a company that provides analytic, decision making, and credit scoring services for financial service companies a credit score will go down by 40 to 110 points after being 30 days late.  Further, the scoring drop will increase to 70 to 135 points after 90 days late on a mortgage payment.

    The average scoring drop in a short sale, foreclosure or deed in lieu is 85 to 160 points. You need to keep in mind that in both short sales and foreclosure it is possible that the credit score drop could be closer to 200-300 points.

    Credit scoring factors vary from individual to individual. The scoring change is heavily dependent on where the credit score was before the negative event took place. Both a short sale and foreclosure are considered a loan that was not paid as agreed.

    What happens to your credit score in each of these events could be different than someone else who goes through the same financial event. Unfortunately, most of the time the higher the credit score the greater the decrease from where you started.

    When trying to decide whether a short sale is right for you do be fooled into making the decision under false hopes that your credit will not be impacted all that much. The biggest advantage in a short sale is the shortened time frame in which you will be able to purchase a home in the future.

    One of the most important steps after going through either a short sale or foreclosure is to be conscious about trying to improve your credit standing. .

    *** The above information for waiting periods before buying a home after completing a short sale and foreclosure was sourced by the Fannie Mae and Freddie Mac selling guides along with the FHA handbook.



    Your Realtor,

     

    Valerie McNeal, CDPE, CRS, GRI, IRES

    Certified Distressed Property Expert

    Certified Residential Specialist

    Graduate, Realtor Institute

    International Real Estate Specialist

     

    The MAC Team of RE/MAX First Choice

     

    410-391-6900 Office

    443-405-3587 Direct

    301-704-8129 Cell

    1-866-796-3809 eFax

     

    Valerie@TheMACTeam1.com

     

    Check out my website at:

    www.TheMACTeam1.com

     

    Facing Foreclosure? We can help, please visit:

    www.mdforeclosureassistance.com

     

    "Thank You For Your Referrals and Your Continued Trust"

     

    If you know someone who is considering buying or selling or need information on foreclosure assistance, please give me a call. I will provide professional & courteous service along with knowledgeable guidance through the process.

     

  • Certified Distressed Property Expert (CDPE MD)

    Posted Under: Market Conditions in Baltimore, Home Buying in Baltimore, Home Selling in Baltimore  |  March 21, 2011 4:22 AM  |  1,431 views  |  2 comments

    Valerie McNeal of RE/MAX First Choice  in Baltimore  is a Certified Distressed Property Expert (CDPE), having completed extensive training in Foreclosure Avoidance and Short Sales. This is invaluable expertise to offer at a time when the area is ravaged by "distressed" homes in the foreclosure process.

    Short sales allow the cash-strapped seller to repay the mortgage at the price that the home sells for, even though it is lower than what is owed on the property. With plummeting property values, this can save many people from foreclosure and even bankruptcy. More and more lenders are willing to consider short sales because they are much less costly than foreclosures.

    In the Baltimore area, more than 1 out of 5  homes are in danger of foreclosing. It is happening in all price ranges. Local experts say that even high-priced homes are not immune.

    "This CDPE designation has been invaluable as I work with sellers and lenders on complicated short sales," said McNeal. "It is so rewarding to be able to help sellers save their homes from foreclosure." 

    CERTIFIED DISTRESSED PROPERTY EXPERT

    1 out of 5 homeowners who go into foreclosure end up there without having received any professional help.  A Licensed Realtor like Valerie McNeal who has earned the prestigious Certified Distressed Property Expert (CDPE) is uniquely qualified to help homeowners in financial trouble and may be facing the possibility of foreclosure.

    Definition of a Distressed Property:

    1.  Property that is in poor physical condition.

    2.  Property that is or will be in some stage of the foreclosure process.

    3.  Property that is owned by a person or persons who is or are experiencing a period of financial instability.

    4.  Property on which the mortgages total an amount higher than the current value and an owner must sell.

    There are many reasons why a property may fall into one of the categories above.  Some of the reasons are:

    • SubPrime lending market began to show major signs of issues in 2005 and 06 - mortgage companies and lenders actually began closing and declaring insolvency at alarming rates. 
    • Rapid appreciation of the real estate market drove the creation of a new category of homeowner, the "investor".
    •  Nat'l Assoc. of Realtors reported that in 2005, 4 in 10 or 40% of home purchases were investment or second homes. 
    • A boom in the condo and new construction markets. 
    • Many borrowers who may have the credit and income to refinance no longer have the equity in their properties due to the depreciation in their homes value. 
    • The decrease in number of lending institutions has decreased the number of options that buyers have making it difficult for those now buying a home to qualify for financing. 
    • Many areas of the country, homeowners who have to sell are competing with builder closeouts, REOs, and other distressed properties that are driving down values.

    Areas of Expertise

    Valerie is a Certified Residential Specialist as well as a Certified Distressed Property Expert and International Real Estate Specialist currently specializing in Short Sales, Foreclosures and Distressed Properties of all kinds.

    International Real Estate Specialist designation allows Valerie to be able to market prestigious properties to the World. Today, sophisticated buyers and sellers from around the world are looking for Global agents, not just Local agents. Knowledge about the International Real Estate Market is of the utmost importance.

  • Housing Inventory Snapshop Baltimore/DC Metro Area

    Posted Under: Market Conditions in Baltimore  |  June 3, 2010 3:31 AM  |  1,397 views  |  No comments

     

       

    Valerie McNeal, CDPE, GRI
    RE/MAX First Choice
    Direct (443) 405-3587
    Office (410) 391-6900
    Cell Phone (301) 704-8129
    Fax (866) 431-0427
    Valerie@TheMACTeam1.com
    www.themacteam1.com

    Dedicated to Helping Families
    In Financial Distress

     

     

       Hi,

    I hope you will find the following snapshot of local Real Estate inventory interesting. The table represents aggregated values based on MLS data for the specified date.

    Housing Inventory Snapshot

    May 31, 2010

     

    Average List Price

    Median List Price

    Average Days On Market

    Anne Arundel County, MD

    Single Family under $500K

    $332,560

    $329,000

    131

    Single Family over $500K

    $1,052,815

    $749,999

    180

    Condo/Townhome under $300K

    $194,382

    $209,999

    128

    Condo/Townhome over $300K

    $460,228

    $379,000

    131

    Baltimore County, MD

    Single Family under $500K

    $280,704

    $265,000

    122

    Single Family over $500K

    $914,592

    $679,900

    148

    Condo/Townhome under $300K

    $169,124

    $165,000

    115

    Condo/Townhome over $300K

    $433,518

    $389,000

    117

    Baltimore City, MD

    Single Family under $500K

    $233,793

    $219,900

    128

    Single Family over $500K

    $855,148

    $689,900

    166

    Condo/Townhome under $300K

    $124,209

    $119,900

    140

    Condo/Townhome over $300K

    $509,657

    $410,000

    146

    Howard County, MD

    Single Family under $500K

    $369,162

    $375,000

    111

    Single Family over $500K

    $824,708

    $699,900

    154

    Condo/Townhome under $300K

    $210,266

    $219,900

    93

    Condo/Townhome over $300K

    $399,312

    $365,000

    65

    Montgomery County, MD

    Single Family under $1M

    $528,164

    $496,900

    87

    Single Family over $1M

    $2,053,150

    $1,624,900

    104

    Condo/Townhome under $600K

    $261,262

    $250,000

    93

    Condo/Townhome over $600K

    $1,081,597

    $820,000

    89

    Prince Georges County, MD

    Single Family under $500K

    $255,759

    $244,900

    127

    Single Family over $500K

    $848,628

    $643,995

    217

    Condo/Townhome under $300K

    $163,155

    $165,000

    122

    Condo/Townhome over $300K

    $386,774

    $350,000

    98

    District of Columbia (DC), DC

    Single Family under $1M

    $424,595

    $349,950

    119

    Single Family over $1M

    $3,086,633

    $1,995,000

    144

    Condo/Townhome under $600K

    $302,338

    $285,000

    104

    Condo/Townhome over $600K

    $1,243,238

    $900,500

    108

    Carroll County, MD

    Single Family under $500K

    $329,603

    $325,950

    131

    Single Family over $500K

    $817,620

    $659,900

    218

    Condo/Townhome under $300K

    $193,778

    $198,000

    119

    Condo/Townhome over $300K

    $347,064

    $322,900

    104

    Harford County, MD

    Single Family under $500K

    $311,914

    $315,000

    129

    Single Family over $500K

    $734,534

    $634,990

    166

    Condo/Townhome under $300K

    $186,252

    $194,990

    110

    Condo/Townhome over $300K

    $424,113

    $375,900

    134

     

    MORTGAGE. National Averages (May 31, 2010)*

    30-year fixed

    Rate - 4.92%

    APR - n/a%

    15-year fixed

    Rate - 4.33%

    APR - n/a%

    5/1 ARM

    Rate - 3.79%

    APR - n/a%


    * Mortgage rates were collected from publicly available sources (yahoo.com) on the date stated. The accuracy of the information and the availability of these rates are not guaranteed by the publisher. Rates are provided for informational purposes only and are subject to change without notice. Actual market interest rates may vary.
    ** There are not enough listings in this category to compile comparative analysis.
    *** MLS doesn't provide access to this data.

    If you know someone who is considering buying or selling a home, please give me a call. I will provide professional & courteous service along with knowledgeable guidance through the process.

     

    With very best regards,
    Valerie McNeal, CDPE, GRI
    RE/MAX First Choice
    Direct (443) 405-3587
    Office (410) 391-6900
    Cell Phone (301) 704-8129
    Fax (866) 431-0427
    Valerie@TheMACTeam1.com
    www.themacteam1.com

     

 
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