Real Estate & Relocation ^ Colorado

Facing Foreclosure? Don't Walk...call for help

In troubled times homeowners sometimes go into denial, thinking if the situation is ignored, it will go away. The fact is, if you are having trouble making your mortgage payment sooner or later you will have to face up to the situation.  It's best you face up to it as soon as possible. 

Consulting a real estate professional is a good place to start.  Perhaps with some help and planning you can get your home sold and avoid a foreclosure and further negative remarks on your credit report.

How can a REALTOR help?

If you have equity in your home (the difference between your loan balance and your "net" after sale), an agent may be able to sell your home.  If you are "upside down" on your loan, meaning you owe more than it is worth, you may qualify for a "short sale" with your lender.

What is a "short sale?"

A short sale is generally defined as a sale in which the lender permits the property to be sold for less than what is owed on it.  Short sales are another form of pre-foreclosure sales.  The purchaser on a short sale gets the property for a lesser amount than the seller's mortgage.  The buyer finances the home however he chooses much like any other real estate transaction.

Who can qualify for a short sale? It is up to the lender to decide if a borrower is eligible for a short sale.  There are many factors the lender considers some of these factors are: The borrowers  overall financial condition The cost to get the property into resale condition The property's value...repaired The properties "as is" value The cost of marketing and selling the property

Homeowner Hardship Test Any homeowner who wants the help of a short sale in lieu of foreclosure will have to pass the lender's hardship test.  Tests vary according to lender, but the borrower must be experiencing some of the following:

Illness of the borrower or immediate family, causing havoc on family finances.
Death of a spouse, with financial implications rendering inability to make mortgage payments
Transfer out of area without being able to sell home
Active duty personnel without income to make payments Borrower experiences a disability, rendering work impossible
Unemployment of borrower with no foreseeable employment future due to local economic conditions
Insolvent borrower

Be prepared to present documentation Borrowers will be required to provide the lender information for consideration of a short sale.

A hardship letter defining what the issues are to prove the claim. A financial worksheet of net income & expenses
Copies of 2 years Federal Tax returns
Copies of last 2 months payroll stubs
Copies of last 2 months bank statements for all accounts
A copy of the signed sales contract Net sheet showing breakdown of all projected costs, including Realtor commissions.
After completing and submitting the above documentation to the lender, it could take 1 to 6 months for approval (timing is dependent on the lender). Being proactive and getting an early start is critical to the success of a short sale.  The lender is in total control, the proof is up to the homeowner.  Cooperation, honesty and communication are basic elements for completing a short sale.

What is a "deed in lieu of foreclosure?"

On occasion a lender will offer a homeowner a "deed in lieu of foreclosure" on a mortgage that is in default.  This situation is often times more cost efficient as opposed to going through a foreclosure.  The advantages to doing a deed in lieu of foreclosure (at least in Colorado) is the amount of time it takes to complete.  Colorado foreclosure laws have statutory time lines, whereas "deed in lieu of foreclosure" can be accomplished much quicker, as both parties agree to the timing.  For the homeowner it is more private, no public notices are published in the newspapers.

An important fact to remember, if the homeowner is successful in obtaining a short sale or a deed in lieu of foreclosure, these are a taxable event in the eyes of the IRS. The homeowner may still have a tax obligation, it is wise to consult a tax professional to determine the amount of tax due.

The above information is to be used as a general guide and is by no means to be used as legal advice.

Denver Welcomes the Urban Land Institute

  More than 6000 of the world's leading developers, architects, planners and others are attending a conference in Downtown  Denver through this week. 

These leaders focus on developing with smart growth and transit oriented, sustainable neighborhoods.  Timing is everything.  In this arena, Denver is offering a tour of the new FasTracks transportation plan.

Some of the attendees will be offered a tour on the new, not yet open to the public, Light Rail. Denver aims to impress!

Speakers at the ULI conference are Robert Redford, who's topic is whether environmentally friendly development is possible.  Colin Powell, retired general and former secretary of state, will present on "Diplomacy: Persuasion, Trust & Values".

This conference is the biggest ever for the ULI, with attendees coming from all over the world, including Europe, China and Japan.

ULI...Welcome to Denver!  We are happy to be your hosts, please enjoy your stay.

<photo is the Light Rail Stop in Lone Tree ~ still under construction, copyright 2006 Kristal Kraft>

Colorado Growth

Today the U.S. is celebrating it's 300,000,000 person.  Colorado has a population of 4.8 million and a growth rate that is faster than the rest of the nation.

The nation is growing at 1% a year, Colorado's rate is 1.4%.  Experts are predicting a future growth of 1.8% is on our horizon.

Denver and the Front Range of the Rockies is the population hub. Douglas County is the fastest growing county with Weld and Adams Counties following just behind.

Relocating to Colorado?  You aren't alone! One thing we know as Colorado residents, people WANT to live here!

Good weather, outstanding views, friendly people all packaged together to create the kind of home town most people enjoy.

Short Sales of Real Estate

Colorado's Foreclosures have reached a ten year high.  Many homeowners are finding they owe more than their home is worth. What's a home owner to do?

Selling your home "short" may be the answer.

My blogger friends, Maureen Frances and Dmitry Koublitsky, of  MiOakland County (Michigan) posted a great resource written by lender, Ken Macia on Short Sales.

If you are facing hard times, foreclosure or just need to talk, do it now!  Time is NOT on your side.

Out of area lenders

Jim Duncan Realtor in Central Virginia has a good blog, reflecting my feelings of Out of State Lenders....

Rate Shopping?

Here's the inside scoop on how to do it right...

Buyers looking to finance homes are easy prey for non-discriminating lenders who look to confuse buyers in order to make a profit.  In Colorado Lenders are not licensed, nor do they have educational standards. Good advice to follow when looking for someone to finance your home is to learn as much as you can about the process and what you are doing.  A professional lender who has a long-term track record of providing solid advice and who explains the process in a manner you can understand is your best choice.

Finding a home loan is easy, finding the BEST home loan may take some footwork on your part.  How do you decide?  The following questions are typical questions  you should ask your prospective lender.  The answers should help you decide if your choice is a good one.

Financing is more than just getting a good rate.   

1. What are mortgage interest rates based on? ~ The correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT the 10-year Treasury Note.  While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, they can move in completely opposite directions.  DO NOT work with a lender who has their eyes on the wrong indicators.
2. What is the next Economic Report or event that could cause interest rate movement? ~ A professional lender will have this at their fingertips.  For an up-to-date calender of weekly economic reports and events that may cause rates to fluctuate, visit this site.
3. When Bernanke and the Fed "change rates," what does this mean and what impact does this have on mortgage interest rates? The answer may surprise you.  When the Fed  makes a move, they can change a rate called the "Fed Funds Rate" or "Discount Rate." These are both very short-term rates that impact credit cards, Home Equity credit lines, auto loans, ARMS and the like.  On the day of the Fed move, long-term Mortgage rates most often will actually move in the opposite direction as the Fed change.  This is due to the dynamics within the financial markets in response to inflation.
4. Do you have access to live, real time, mortgage bond quotes? If a lender cannot explain how Mortgage Bonds and interest rates are moving in real time and warn you in advance of a costly intra-day price change, you are talking with someone w ho is still reading yesterday's newspaper, and probably not a professional with whom to entrust your home mortgage financing.  Would you work with a stockbroker who is only able to grab yesterday's paper to tell you how a stock traded yesterday, but had no idea what the movement looks like at the present time and what market condition could cause changes in the near future?