You clung to your Laguna Beach home like glue. No way were you leaving the place you so dearly cherished. But the stack of delinquent mortgage payments got too heavy. Pushed you straight through a trap door. Now you’re in the pit. The mortgage pit. Debt collectors are hissing like snakes. Foreclosure fiends are clawing at you. How will you get out of this trap?

Luckily, there’s an escape route. It’s called short sale – a program that lets you sell your home for less than the total amount owed. Protects you from the hissing debt collectors and foreclosure fiends. Frees you from the pit. Get ready!

Launching Your Escape

Remember, a short sale isn’t a magic amulet. Plan on digging in your heels and expending much personal energy. You’ll begin with three documents, all of which should be signed and dated.

• A financial worksheet listing all of your monthly expenses. The more, the merrier.
• A hardship letter explaining why you got behind. You’re making your case here, so let the details flow.
• A letter authorizing your Realtor to access certain account information. The letter should include the last 4 digits of the borrower’s social security number, the complete account number, and property address.

What Else You Should Know

• The clock is ticking, so dawdle at your own risk. If the short sale doesn’t close within 30 days, chances are you’ll need to start the approval process over. Now wouldn’t that be a hoot.
• Send all inquiries, (and if necessary, bribes), to the assigned negotiator. The identity of this individual will be revealed during the introduction call.
• A short sale is never an inside job. This means, the property may not be purchased by anyone with close ties to the seller. This includes but is not limited to family members, friends, neighbors, personal trainers, and bookies.
• In certain cases, investors and mortgage insurance companies require lenders to sign an unsecured note for part or all of the difference between sale proceeds and the total amount due. This information is specified as part of any response to a short sale offer.

Well there it is. You see? There is an escape from the mortgage pit. And if you’re considering a short sale for your Laguna Beach home, I want to make sure you’re good and prepared for the journey.  I’ll make certain you get started on the right track. And stay on the right track. As an experienced professional well-acquainted with this prime beachfront community, I can answer all of your questions and help you discover the numerous opportunities the Laguna Beach Real Estate market has to offer.

Feel free to contact me at 949.922.8490 or hillary@thecoastalpropertyexperts.com.

Until next time, keep it classy, Laguna.

Included in H.R. 5623, the Home Buyer Assistance and Improvement Act that is headed to President Obama’s desk for signature, is an extension to September 30, 2010 for those transactions to close escrow and qualify for the tax credit. Many buyers were experiencing delays in getting their loans finalized. Part of this was attributed to the increase in the number of loan applications and lenders being short-staffed; while others are entangled in the short sale process which often involvs a little more time than a traditional equity sale. See More….

Other items that the Bill provides include:

• Enhanced information sharing that would prevent prisoners from claiming the Homebuyer tax credit;
• Applying a bad check penalty to electronic checks payable to the IRS;
• Modifying the Travel Promotion Act of 2009 to extend the authority of the Department of Homeland Security to implement fees that they project will reduce the deficit by $95 million over 11 years.

To read the full text of the Bill: http://thomas.loc.gov/cgi-bin/query/z?c111:H.R.5623

Are you sorry that you missed the $8000 Tax Credit?

For example, the average interest rate in the Month of April, prior to the deadline, was 5.34%. A borrower with a 30 year fixed rate on a $280,000 mortgage would pay $1561.82 per month. If that same borrower were to purchase in May with an average interest rate of 4.625%, that payment would be $1439.59 per month. This is an annual savings of $1467 which over 30 years result in savings of over $44,000. That’s quite a bundle!

“In the months immediately following the expiration of the tax credit, we expect measurably lower sales,” said Lawrence Yun, chief economist for the National Association of Realtors.

Borrowers who wanted to take advantage of the credit have now purchased. Some describe these as “borrowed buyers” who would have normally purchased over the course of the summer months, concentrating buying activity into a set amount of time. This concentration resulted in an increase of 30% in home sales for the month of March.

For now, with the interest rates as low as they are, there is still a good incentive to purchase which will soften the landing for the tax credit expiration. And there are Laguna Beach Homes for Sale which could become great values with favorable prices and low interest rates.

However, there is still the question of that “shadow inventory”, the millions of foreclosures that need to be sold but haven’t yet been listed. That number could be as high as 4.5 million homes owned by banks and individuals that are waiting for the right time to enter the market.

When they do, the normal supply and demand factors will come into play to determine price. As prices rise, inventory will increase which could drive the prices down as supply outpaces demand. As the inventory decreases, prices will creep up again until demand is met. This cycle could result in a sawtooth recovery of home prices – moving up and down until inventory is stabilized.

For buyers looking for a bottom in the market, it may be wise to watch for several dips and be ready to take advantage of the right home at the right price. As always, get your financial ducks in a row before you find the home of your dreams. If you are going to use bank financing, get preapproved now. It is always best to be ready so when that home you want enters the market, you will be able to act.

And for Laguna Beach Homes for Sale, you just may be able to find a home priced less than $1 million that could qualify for favorable financing. Imagine, investing and living a Laguna Beach Lifestyle!

Until next time…

http://www.TheCoastalPropertyExperts.com

Don’t miss these hidden treasures! Laguna Niguel Homes for Sale. If you think that you should buy a short sale to get the best deal you are only partly right. You always need a great short sale negotiator – Heck, when purchasing a home, you always need a great negotiator…period! Find out why Hillary Caston, Laguna Beach real estate agent has clients coming back to her over and over again to help negotiate their home purchases. Go with the best….or you may find yourself being fed to the sharks!

Call Hillary direct at: 949-922-8490

25081 Calle Playa B-Laguna Niguel-CA

24905 Via Kristina-Laguna Niguel-CA

24905 Via Kristina-Laguna Niguel-CA-Bank-Owned Property-Kitchen

136 Costa Brava-Laguna Niguel Short Sale-Living Area with View

136 Costa Brava-Laguna Niguel Home for Sale-Kitchen

Boston Fed President, Eric Rosengren said that he believes mortgage rates will rise about three-quarters of a percent to about 6 percent as a result. Things may be a little “wobbly” at first; however, there is an acknowledgment by Fed Vice Chairman Donald Kohn that “We are still in unchartered waters…We will need to be flexible and adjust as we gain experience.”

It is anticipated that the Fed is unlikely to step in again unless a renewed crisis occurs, such as a sudden and destabilizing rise in mortgage rates. There seems to be an indication that the Feds would like to move away from their reliance on unconventional policy measures.

In a policy statement issued after the Fed’s December meeting, the central bank reiterated plans to finalize the program by the end of March and was planning to continue to close down other emergency measures as scheduled.

Said Torsten Slok, senior economist at Deutsche Bank,” That was a fairly strong signal that they will not continue the purchases later on”.

Read the full story…

So, let’s take a look at what options are still currently available for folks interested in purchasing a home in the Orange County Real Estate Market in the next few months:

• Home prices that have been adjusted lower from their market peaks
• Low interest rates
• Tax Credits for both first time home buyers and existing homeowners
• Buyer protection programs offered by some banks and some Real Estate Groups, such as California Association of Realtors
• A large inventory of homes from which to choose – with many custom homes in the Laguna Beach Real Estate Market

Everyone seems to be in agreement that we need to get the inventory of distressed homes off the market before we see overall market recovery in prices. The question is, are you ready to be one of those new homebuyers that will benefit from the current market and the government incentives?

Take the time to review your personal financial situation, talk to your lender, and be certain that you are not missing a rare opportunity. Don’t be concerned if you are not quite ready to make that purchase, find out what you need to correct, improve, or save, in order to get yourself ready to purchase that home you’ve had your eye on.

Until next time…

First, read about the Government’s extension of the Home Buyer Tax Credit with an added benefit for existing homeowners.

Then, read on about the Buyer Protection Program offered through Bank of America.

This information is coming to you compliments of Kevin Budde at Bank of America. If you are wondering how much home you can safely afford, be sure to contact Kevin, or your lender and get the right information to make your decision. If you call Kevin, let him know that the team of Hillary Caston at The Coastal Property Experts referred you. Now, we don’t get anything out of the deal…we just know that Kevin does a great job and we want to hook you up with a top notch professional in the industry.

Home Purchase Tax Credit Revisited

With the extension of the first time homebuyer tax credit and the addition of a tax credit for existing homeowners there have been changes that need to be noted. Please find compiled the most important facts associated with the new laws. You will find below a break down of both the $8,000 first time homebuyer tax credit and the $6,500 existing homebuyer tax credit.

 $8,000 First Time Homebuyer Tax Credit

 The income limits have changed. In order to receive the full tax credit amount, the income limit for a single person is $125,000 and a married couple is $225,000. They can earn more than that but the amount received will be phased out to a maximum income of $145,000 for a single person and $245,000 for a married couple. In addition, no tax credit is available if the cost of the home exceeds $800,000. The buyer may not acquire the property from any relative on either side of the family.

 The same restriction applies as before which is they cannot have owned a home in the last three years and they must continue to live in the new house for 3 years or it will be required to pay the credit back.  The buyer must enter into a binding contract to purchase by April 30, 2010 and close no later than July 1, 2010. In order to receive the tax credit the buyer must file his or her federal tax return with the Internal Revenue Service along with the HUD-1 and IRS Form 5405. As an example, if the first time buyer owes the government $5,000 in tax, they will receive a $3,000 check from the Internal Revenue Service, not the entire $8,000.

$6,500 Existing Homebuyer Credit

 To qualify the buyer must have owned and lived in a home for at least five of the last eight years. The existing home may have already sold and not been replaced in the last year or two. The home purchased must be the primary residence and the existing home may become a rental property or second home. The new purchase does not have to cost more than the existing one.

 If the existing home is sold, taxable profits from the sale will be added to the buyer’s other earnings to determine if the adjusted gross income exceeds the allowable thresholds. Remember, some profits from the sale of the existing home do not count as income. Taxpayers are allowed to exclude $250,000 per person or $500,000 per couple if they lived in the home two of the last five years. The $6,500 tax credit also phases out for singles earning more than $125,000 and couples earning more than $225,000. Always consult a professional tax advisor for tax advice.

Borrower Protection Plan

The Borrower Protection Plan (BPP) is a unique mortgage feature available only at Bank of America. The BBP will cancel 6 principal and interest mortgage payments if the protected borrower suffers a qualifying Disability, Involuntary Unemployment, Hospitalization or a Loss of Life.

 There is No Cost for the first 12 months to protect one borrower. BPP is available on owner occupied purchase transactions and loan amounts below $500,000. It is very easy to enroll and there are no medical exams required and no age limit. When the debt is cancelled there is no requirement to repay later.

Even though there is no cost to a single borrower for the first 12 months, joint protection can be offered at a deeply discounted rate of 3% of the principal and interest payment for the first 12 months. The price after the first year is 7.5% of the principal payment for a single borrower and 10.5% of the principal payment for joint borrowers.

The Borrower Protection Plan is applied for when the borrower applies for their new home loan at Bank of America. Again, there is no cost to one borrower for the first year and the protection begins after 90 days of the note date.

Now is a great time to buy a home but potential borrowers are concerned about the economy and their job. The Borrower Protection Plan from Bank of America offers borrowers security by knowing they are protected giving them the confidence to purchase the home they want.

To find out more please contact a member of the Kevin Budde Team