Carlos Ordaz Jr.

The housing market is starting to heal, but too many people aren’t aware of it because they’re judging a housing recovery on the wrong sign: What’s happening with home prices. Higher prices won’t be the sign that the housing market is on the mend — that can be a lagging indicator — but rather an increase in overall home sales.

Here are some showing signs of improvement: Existing home sales in 2011 rose to 4.26 million compared to 4.19 million in 2010. In the last six months alone, home sales have increased 13 percent. The evidence reminds us that perhaps we should change our expectations of what a housing recovery might look like, particularly following a crisis marked by record foreclosures and a financial crisis that sent the economy into one of the deepest recessions. The recovery we have been anticipating is defined more on the rate at which the glut of vacant properties comes off the market as opposed to any steady rise in prices, which some think won’t happen for another few years.

In today’s market, most people are underwater. Meaning, you owe more on your home than it is worth. Solution, a Short Sale. A Short Sale is when your lender agrees to allow you to sell your home for less than what is owed on the mortgage.  I have heard a lot of people say they are just going to walk away.  I say that is a BAD IDEA! Contact an experienced Short Sale Agent to educate you on all the pro’s and con’s of both a Foreclosure and Short Sale. With my experience and Negotiation skills, I can have your home sold in as little as 28 days. The right agent makes all the difference on your side! Call me today, and I will be more than happy to discuss all your options with you.

The average U.S. rate on the 30-year fixed mortgage fell back below 4 percent this week, staying near historic lows.

Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan dropped to 3.99 percent from 4.08 percent last week. Last month, the rate touched 3.87 percent, the lowest since long-term mortgages began in the 1950s.

The average rate on the 15-year fixed mortgage also fell, to 3.23 percent. That’s down from 3.30 percent last week and above the record low of 3.13 percent hit earlier this month. The low rates have made home-buying and refinancing more affordable at a time when the housing market is flashing small signs of improvement.

The deals are out there! Let an experienced agent work for you so you can take advantage of these historic rates and find that dream home. Call me today and let’s get started!

Your Credit After a Foreclosure or Short Sale:     The most questions we get from buyers are questions about a person’s credit after a short sales, foreclosure, or bankruptcy as it relates to getting a real estate loan or consumer loan afterward. 

Rule of thumb guideline to help you understand some of the timelines and requirements after an event such as, bankruptcy, foreclosure, or a short sale. 

Conventional Underwriting

After a Short sale

- Extenuating circumstance: 2 years, re-establish good credit, min fico 620

- Financial mismanagement: 4-7 years, re-establish good credit, min fico 680

After a Foreclosure

- Extenuating circumstance: 3 years, re-establish good credit, min fico 620

- Financial mismanagement: 7 years, re-establish good credit, min fico 680

After a Bankruptcy

- Extenuating circumstance: 2 years, re-establish good credit, min fico 620

- Financial mismanagement: 4 years, re-establish good credit, min fico 680

Fha Underwriting

After a Short Sale

2 years

After a Foreclosure

3 years,

After a Bankruptcy

 2 years,

Re-established good credit or chosen not to incur new debt. Exception is granted when less than 2 years but greater than 1 year due to extenuating circumstances – Re-established good credit. Exception is granted when less than 3 years due to extenuating circumstances if borrower was not late on their mortgage payments/ 3 years if they were late on their mortgage payments.

As always, the thing to remember is that no matter how bad things are, and no matter how bad your credit is now, once you change the circumstances you can start anew, rebuild your credit, and in time establish stellar credit by following the following guidelines: 

1)  Keep the amount of your credit balances in total to less than 40% of the total amount of credit you have open.  For example, let’s say that you have a total of $10,000 in available credit between all of your credit cards and lines of credit.  In order to maintain stellar credit you need to keep the amount of balances in total to less than $4,000.

2)  Never allow a payment to go further than (29) days late.  Even if you have already incurred a late charge because you have passed the grace period, go ahead and make the past due payment before the end of the (30) day period.

3)  Avoid having public filings against you.  Sometimes people allow a collection to go to the stage of filing against you on public records just because of a $10.00 dispute.  This can greatly impact your credit score and undue years of hard work in getting your good credit back. 

4)  There are other factors affecting your credit, but if you follow these simple rules you will be surprised how quickly and easily your credit will return to stellar.

In my years in Real Estate, I don’t believe there has ever been a better time to buy a home.

Why? For starters, 30-year fixed-rate mortgages can be had for less than 5 percent. Recently, the 30-year rate hit 4.6 percent. If you want a 15-year mortgage, you can (for now) still get it for less than 4 percent. These are astounding rates. It’s almost like borrowing free money.

At this point, it seems everyone wants the real estate market to get better:

• Realtors are selling a fraction of the homes they once were, taking a huge hit in income.

• Builders (at least, those that are still in business) are selling about one-eighth as many homes as they were selling in 2005.

• Appraisers continue to take some of the blame for the housing crisis, for over-appraising property in the boom years and under-appraising it now. Realtors say that more than 75 percent of the homes sales that fall apart do so because the appraisal comes in so far below the contract price that a deal can’t be worked out.

• And homeowners are desperate for the housing market to rebound — especially the more than 25 percent who are underwater with their homes — so they can refinance or sell their homes and move on with their lives.

There’s no reason you shouldn’t buy a home now and take advantage of super-low prices, historically low mortgage interest rates, and a significant supply of homes on the market. But to be successful in today’s real estate market, you need to understand that the game has changed.

Here’s my list of the biggest shifts:

1. R.I.P., Big Housing Price Jumps

If you want to buy a house, you have to have enough income to support the mortgage. Now, take it the next step: If everyone in a particular neighborhood earns around the same money, then all the houses in the neighborhood will be priced about the same and home values will only rise 3 percent per year.

That’s about the typical raise most Americans used to get, but the decidedly old-fashioned expectation went out in the 2000s because banks told borrowers that exotic mortgages (like the infamous pay-option adjustable-rate mortgage, or ARM) would allow them to “leverage up” to a much more expensive house payment. It was a payment most clearly couldn’t afford; the bulk of those loans started going delinquent within three months of closing. Now that every borrower has to have a job and some sort of down payment, and the only basic loan types available are 30-year and 15-year fixed-rate mortgages, you won’t be able to leverage up with your mortgage, and housing prices will remain far more steady.

In short — buy now, but don’t expect a huge pop in home prices. It ain’t going to happen.

2. Mortgage Lenders: Just Not That into You

Most home buyers don’t have enough cash in their pocket to purchase a home without a mortgage. But, lenders are extremely risk-averse at the moment — so they don’t want to approve a mortgage application unless you have an extremely good FICO score (preferably 700 or higher, and at least 760 to get the best rates); you have plenty of cash in the bank (for your down payment, closing costs and a healthy cash reserve); you don’t have anything weird or amiss in your financial data. And it helps if you have another loan application approved from a competing institution. Which is to say: They only want you if you don’t really need them.

You’ll also need to make sure the property appraises at or above the contracted price and the neighborhood is steady (without too many foreclosures).

3. The Best Deals Are in New Places

Sure, there are amazing short sales and foreclosures out there. To find them, you’ll have to hire a great agent who really knows what he or she is doing (ME), has connections with the foreclosure-sale (also known as real estate owned, or REO) departments of big lenders, and can help you navigate a tricky and frustrating negotiation cycle.

4. Investing? Focus on Income

Somewhere along the way, ordinary civilians got the idea that there were massive profits to be made in real estate, if only they could flip the properties fast enough. The problem with that strategy became apparent when the real estate market crashed, and investors (who were leveraged to the hilt) couldn’t get out of their properties in time. When you’re paying thousands of dollars for a mortgage but don’t have any income — nor hopes of a sale — it’s a fast track to bankruptcy.

But now is an amazing time to buy investment property. Purchase a foreclosure or two (or up to 10, if you can find the financing), and focus on how much income you can get each month. If you buy a foreclosure in the Atlanta area for $75,000 and can get $800 to $1,000 per month in rent, that’s a terrific return on investment.

5. Time to Think Medium Term … at Minimum

I’m not sure where home buyers got the idea that they could buy and flip houses every 24 months and collect a king’s ransom’s worth of tax-free profits. But those days are over. Whether you’re buying as an investor or plan to live in the property, you’ll need a 7- to 10-year plan in order to make sure you won’t lose money after factoring in the costs of sale.

Even those investors who are buying bottom-feeder foreclosures and fixing them up might not be able to resell them so quickly. And if they do, they might find that lenders won’t finance their buyers. So come up with a long-term plan that will let you rake in money … while the rest of the real estate market catches up.

New single-family home sales rose unexpectedly in April to notch their second straight month of gains and prices increased, offering some hope for the stagnant housing market.

sales increased 7.3 percent to a seasonally adjusted 323,000 unit annual rate, the highest level since December, from a slightly upwardly revised 301,000-unit pace in March.

Forecast for new home sales unchanged at a previously reported 300,000-unit rate. All four regions recorded gains in sales, with the West reporting a 15.1 percent rise.

However, compared to April last year sales were down 23.1 percent.

It suggests maybe we’re beginning to see some signs of stabilization in housing, but it’s too early to say we’ve bottomed out!

The government is expected to report on Thursday that the economy grew at an annual 2.1 percent rate in the first quarter.

LOTS OF HOMES FOR SALE

There’s still a tremendous overhang in the housing market, and while new home sales are starting to percolate, that doesn’t change the fact that we still have such huge inventory.

An oversupply of used houses and a relentless wave of foreclosed properties are curbing the market for new homes, even as builders are keeping lean inventories.

There were a record low 175,000 new homes available for sale last month, down 2.8 percent from the prior month. Data last week showed a steep drop in new home construction in April and a dip in sales of previously owned homes.

The median sales price for a new home rose 1.6 percent last month to $217,900. Compared with April last year, the median price increased 4.6 percent.

At April’s sales pace, the supply of new homes on the market dropped to 6.5 months’ worth, the lowest since April last year, from 7.2 months’ worth in March.

A new bill to improve the process for approving short sales may soon bring relief to distressed home owners who are unable to keep their homes and hope to avoid foreclosure. The bill, introduced in the U.S. House yesterday and strongly supported by the National Association of Realtors®, would impose a deadline of 45 days on lenders to respond to short sale requests.

The legislation, the “Prompt Decision for Qualification for Short Sale Act of 2011,” was offered in Congress by U.S. Reps. Tom Rooney (R-Fla.) and Robert Andrews (D-N.J.).

“The current short sale process can be time-consuming and inefficient, and many would-be buyers end up walking away from a sale that could have saved a home owner from foreclosure.

“Realtors® and consumers continue to raise issues about delays in the short sale process, because lenders are unable to decide whether to approve a short sale. After many months of delays, and with no response from lenders, potential buyers are losing patience and cancelling their contracts, often resulting in the property entering foreclosure. A short sale minimizes the negative impact on sellers and generally costs the lender less than a foreclosure.

NAR has been actively pushing the lending industry to improve the process for approving short sales, which represent about 13 percent of recent home sales according to NAR data. Phipps praised Reps. Rooney and Andrews for their efforts on the bill and urged Congress to pass the bill quickly.

“As the leading advocate for home ownership and housing issues, Realtors® want to help more home owners avoid foreclosure by facilitating a short sale when a family is absolutely unable to keep their home; however, that can only happen if lenders and servicers approve short sale offers in a reasonable amount of time. “Streamlining short sales transactions will reduce the amount of time it takes to sell the property, improve the likelihood that the transaction will close and reduce the overall number of foreclosures. This benefits sellers, lenders, buyers and the entire community.”

With a great agent it will make the process that much smoother and quicker. Call me today!

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

Investors drove up U.S. home sales last month, plunking down cash to grab cheap homes at risk of foreclosure. But purchases made by first-time homebuyers, who are crucial to a housing recovery, fell.

Sales of previously occupied homes rose in March to a seasonally adjusted annual rate of 5.1 million,  That’s up 3.7 percent from 4.92 million in February. The pace is far below the 6 million homes a year that economists say represents a healthy market.

Foreclosures or short sales, when the lender agrees to accept less than is owed on the mortgage, rose to 40 percent of all purchases. And deals paid for entirely in cash accounted for 35 percent of all sales. That’s the biggest percentage since they have been tracking all-cash sales.

Many of those purchases are being made by investors, who are targeting cheap properties in areas hit hardest by foreclosures:

Another sign of the investor activity is that sales of homes priced under $100,000 have risen 10 percent from a year ago. In that same period, sales of mid-priced homes, between $100,000 and $500,000, have fallen more than 14 percent.

Fewer first-time homebuyers, the types of people who set down roots and raise families, are entering the market. Sales among that group fell to 33 percent in March. A more healthy percentage of first-time buyers is 40 percent.

The median sales price rose in March to $159,600, but it is still down 5.9 percent from a year ago.

Homes at risk of foreclosure usually sell at 20 percent discounts compared to their original listing prices. So when sales of distressed properties rise, prices fall. Part of the market-clearing process is that distressed properties must be sold, so the fact that this is occurring is good.

Many would-be buyers are holding off, worried that home prices haven’t hit their bottom. Other potential buyers are having trouble getting mortgages because banks have tightened lending requirements.

One major obstacle to a housing recovery is the glut of unsold homes on the market. There were 3.55 million unsold homes in March. It would take 8.4 months to clear them off the market at today’s sales pace. Analysts say a six-month supply represents a healthy supply of homes.

Economists say the situation is much worse when the “shadow inventory” of homes is taken into account. These are homes that are in the early stages of the foreclosure process but have not been put on the market yet for resale.

“It is unlikely that home prices can recover on a sustained basis until the inventory-to-sales balance improves further and the number of distressed properties is significantly reduced,” said Steven A. Wood, chief economist at Insight Economics.

Foreclosures are also playing a big role in weakening the housing industry. A record 1 million homes were lost to foreclosure last year and expect 1.2 million more will be lost to foreclosures this year.

For March, sales rose 8.2 percent in the South, 3.9 percent in the Northeast and 1 percent in the Midwest. Sales fell 0.8 percent in the West.

Sales of single-family homes rose 4 percent to an annual rate of 4.45 million units. Sales of condominiums rose 1.6 percent to a rate of 650,000 units.

If you are on the fence, call me today and I can provide you any and all information yo need to make the right decision, whether it is to remain on the fence or it is to move forward.

There might finally be some good news this year about the nation’s dismal housing market. Or, at least, the bad news could stop.

Either way, it will be welcome relief for current homeowners as well as for potential real-estate investors. Reasons to be optimistic have been sadly lacking since the housing bubble burst in 2006.

Houses Are a Good Deal

Housing is the most affordable it has been in decades.

Nationally, the cost of a house is the equivalent of about 19 months of total pay for an average family, the lowest level in 35 years. Prices usually average close to two years’ pay, although that varies nationally. Pricing is down so much in some markets that when you analyze renting versus owning it makes much more sense to own. 

It is definitely bullish. But what about timing? Housing prices will probably bottom in 2011.  Prices might dip another 5%. Still, in the scheme of things, that’s small. Consider this: In some markets, home prices have fallen by half or more since 2006.

Plan to Stay Put

Buy and hold. While the good news is that the worst of the housing crash might be over, the bad news is that the fast gains of the glory days of 2005 and 2006 won’t be back any time soon. So to cover the costs of buying and selling, and what could be a prolonged recovery, plan to own for more than 10 years.

Call me TODAY and let me assist you with the purchase or selling of your home.