We are doing various seminars during Money Smart Week.

If you missed the Short Sale Webinar, you can view it here:

No Negotiation of Preforeclosure Sales Commission

Servicing Guide, Part VII, Section 504.02: Contacting Selected Borrowers

Effective March 1, 2009, closing of preforeclosure sales may not be conditioned upon a reduction of the total commission to be paid to real estate agents to a level below what was negotiated by the listing agent with the borrower, unless the fee exceeds 6 percent of the sales price of the property in the aggregate. Servicers are reminded that they must continue to obtain any approvals that may be required by interested third parties in connection with preforeclosure sales.

In the midst of the mortgage meltdown, Fannie Mae changed it guidelines limiting investors to a maximum of four mortgages.  This limitation affected many investors’ ability to secure financing with reasonable pricing.  However, it seems that Fannie Mae has had a change of heart. 

Effective March 1, 2009, the four mortgage limited is being lifted.  As stated in the February Announcement, “Fannie Mae is committed to providing financing opportunities for high-credit quality, bona fide investors.  Experienced investors play a key role in the housing recovery and Fannie Mae’s continued support for investor borrowers is consistent with its mission to provide stability, liquidity, and affordability to the nation’s housing system.”  The new limit will be increased to a maximum of ten mortgages. 

This financing tool is only for the experienced, responsible investor.  A 720 minimum credit score is required, including 25% down on 1-unit purchases and 30% down on 2-4 unit purchases.  In addition, the reserve requirements are even more stringent.  If the borrower owns one to four financed properties (including the subject property), the borrower must have six months reserves for the subject property and two months reserves for each of the other financed properties.  If the borrower owns five to ten financed properties (including the subject property), the borrower must have six month reserves for the subject property and six month reserves for each of the other financed properties. 

It is important to note, that Fannie Mae has also expanded the definition of reserves.  Normally reserves are measured by the number of months of principal, interest, taxes and insurance (PITI) payments that a borrower could make with personal financial assets.  This definition has been expanded to include all components of the monthly housing expense:
PITI, ground rent, special assessments, owner’s association dues (excluding utility charges for individual units), cooperative corporation fees (less the pro rata share of the master utility charges for servicing individual units), and any subordinate financing payments on mortgages the property secures. 

The last guideline to address is the Multistate 1-4 Family Rider.  This rider is required for closing of all mortgage loans secured by an investment property.  The rider authorizes the transfer of rents and revenues to the lender in the case of default. 

I must admit, that as a mortgage professional, it was music to my ears to hear and read about Fannie Mae’s new policy updates.  I know many investors that were bound by the four mortgage limit who are now excited about the opportunities that exist in the market place.  If you are an investor or have been thinking about investing in real estate, now is the time to take action.  Pick up the phone and call an experienced loan originator to help you get started.

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About the Author:
AC, the Mortgage Closer, is a licensed loan originator in the Chicagoland area. For more information, visit her website at www.ownsomethingtoday.com or her blog at www.realmoneytalks.net.

Coffee or Not, the Bronzeville Coffee house has become my favorite spot to meet with clients and discuss the abundance of REO properties in the area which if managed properly can turn into gold mines. Why? The Bronzeville Coffee House you ask. Well it’s located in the heart of some of the most sought after Single Family Homes, Multi Unit Buildings, and Condo’s. I’ve never had a problem with parking, and the muffins and smoothies are delicious.

I don’t really go for the coffee but, I do buy something because I use their storefront as a regular meeting spot to discuss and show (Free Wi-Fi) what’s HOT-Foreclosures. I love the facts that with a little sweat equity my buyers are making out like bandits. They say it’s a depreciating market but my buyers are amassing a 100k (+) in equity once they complete the renovations on the numerous properties they are acquiring.

Next week we will close on yet another 203(k) loan where my first-time home buyers will have a 135k in equity after they convert a foreclosed three unit brownstone into their single family dream home. Talk about happy clients.

Looking to Buy or Sell in the Bronzeville, North Kenwood, Oakland, Grand Boulevard, Woodlawn, or Hyde Park area my team is here waiting to serve you. Now is an excellent time to buy.

Stop complaining and get up off your butt and create a real estate legacy. For the past two days I’ve attended NAR EAH (Employer Assisted Housing) program. I’ve identified yet another niche in real estate that can lead to an endless supply of buyer leads. What a great idea to work with employers in the communities that you service to help them retain and aide their employees with home buyer incentive programs. There is generally more money available for under served communities which are plagued by foreclosures.

Last week I had the pleasure of closing a new construction condo with a fresh out of college single parent. My client is resourceful and wanted every first time homebuyer incentive available. I negotiate numerous upgrades that the developer provided at no additional cost. But the greatest benefit was the $23,000 in forgivable subsidies that my client received. First Chicago Public Schools gave $3,000 that will be forgiven in five years and the City of Chicago gave $20,000 that will be forgiven over four years. After attending NAR event I now know that some buyers are receiving up to $75,000 in buyer incentives. Instead of reading headlines on how bad the real estate market is, I plan on researching how much money is out there for my buyers seeing that you’re too busy complaining about the market. For those who practice real estate in Illinois our incentives are underutilized.

For more information copy and paste the link below:

http://www.realtor.org/government_affairs/housing_opportunity/programs/home_from_work/take_a_home_from_work_class

Marki D. Lemons

National Trainer, Certified Residential Broker

CRB, CRS, CNE, QSC, SRES, ABR, ABRM, CRMS, MBA

Rubloff Residential Properties

773-454-0274 Cell

888-205-4615 Voice and Fax

www.markilemons.com

www.shortsaleresultsnow.com

Investors come in all shapes and sizes, whether you are a novice or an old seasoned professional you can always use the expertise of a Realtor^®. All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS^® can be called a REALTORS^®. We proudly display the REALTOR “^®” logo on our business card or other marketing and sales literature. REALTORS^® are committed to treat all parties to a transaction honestly. We owe our clients fiduciary responsibilities that include obedience, loyalty, disclosure, confidentiality, accountability, and reasonable care. REALTORS^® subscribe to a strict “Code of Ethics” and are expected to maintain a higher level of knowledge of the process of buying and selling real estate.

Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $250,000. If you had a $250,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $250,000 law suit, would you deal with it without the help of an attorney? Considering the fact that a Realtor^® is an asset would you want to take on the liabilities of doing it on your own, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR^®.

But if you’re still not convinced of the value of a REALTOR^®, here are a few more reasons to use one:

1. Your REALTOR^® can help you determine your buying power and plan for your investment. Lack of a plan is the biggest mistake we see new investors make. The first step is to develop a plan based on what you can afford and how long you can afford it. In today’s market, holding times have increased therefore a contingency plan must be in place in order to survive. If you give a REALTOR^® some basic information about your available savings, income and current debt, he or she can help you to develop a long term strategic plan to make your investments successful.

2. Your REALTOR^® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties. Realtors^® have the resources to target specific areas or property types to match the investor with a suitable property.

3. Your REALTOR^® can assist you in the selection process by providing objective information about each property.  Real estate isn’t easy.  Investors don’t make money because they pay too much for their properties. Agents who are REALTORS^® have access to a variety of informational resources. REALTORS^® can provide local community information on utilities, zoning. Schools, taxes, existing mortgages etc. There are two things you’ll want to know. First, will the property provide the environment I want for an investment? Second, will the property have resale value when I am ready to sell?

4. Your REALTOR^® can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.

5. Your REALTOR^® provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR^® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your REALTOR^®, title company or attorney can help you resolve issues that might cause problems at a later date.

6. Your REALTOR^® can help you in understanding different financing options and in identifying qualified lenders. Numerous properties are in need of work. It is ideal for an investor to work with a purchase rehab lender to insure that the property can be financed.

7. Your REALTOR^® can guide you through the closing process and make sure everything flows together smoothly. Closing the deal always comes with some anxiety. A Realtor^® has experience in different situations and can always shed a positive light as to what is going on until the very end.

8. When selling your home, your REALTOR^® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors to getting your property sold for the best price, quickly and with minimum hassle.

9. Your REALTOR^® markets your property to other real estate agents and the public. Your REALTOR^® can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your REALTOR^® markets your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your REALTOR^® acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc.

10. Your REALTOR^® can help close the sale of your home. A key to your success is building the right team of professionals. You need a good relationship with at least one Realtor^®. It is impossible to build a business as an investor if you’re spending all of your time sitting at an open house. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your REALTOR^® is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).

Each day, the media is focusing on the struggling economy that is heavily influenced by the real estate/mortgage market.  Many people got caught up in over-inflated property values & bad or misappropriated mortgage products.  As a result, unfortunately many of them are losing their properties.  This is not only impacting homeowners, but many investors who jumped in head first.  We all understand that real estate investing carries some risks - yet at some levels, the risks can be calculated.  Not many rely on the crystal ball to predict their investment outcomes and those that get it, plan first.  Therefore, the story is a little different for savvy real estate investors in this market.  These investors understand the importance of education/knowledge, mentorships, planning and networking.   They understand that they shouldn’t try to do it all themselves to save money.  They understand the logistics, but work with the professionals to get true results.   They are ones that are able to go in now and take advantage of the “pennies on the dollar” deals.  They are the ones that will join “Millionaire Clubs” when the market heads back up.  Now is the time, this is the season.  Ask yourself - WILL YOU BE A PART OF THAT GROUP?