Short Sales…the dirty little secret

 With all the hype around foreclosures, it’s close cousin the short sale has received relatively little attention. A short sale is a pre-foreclosure, where the bank agrees to take less than what is owed on the mortgage in a sales transaction, thus eliminating the need for the bank to foreclose on the home. Since the passing of the two housing acts, Mortgage Forgiveness Debt Relief Act of 2007 and The Federal Bailout Legislation in October 2008,home owners are no longer on the line for paying taxes on the difference between what they owed the bank and what they “short” sell the property for. This legislation continues until 2012.
 
  There are many benefit for a bank and a homeowner to go the short sale route rather than the foreclosure route. First, the seller prevents the embarrassment of a public foreclosure advertisement. They also get to live in the home while a real estate agent attempts to secure a buyer for the property. And although a short sale impacts your credit similar to a foreclosure, you can buy a home within two years, whereas a foreclosure typically takes five to seven years before a lender will loan you money for your next home. The bank benefits because they do not have to take back the property and incur all the fees associated with seizing the property, getting it ready for sale, marketing it and managing it until it’s eventually sold, which is typically for pennies on the dollar anyway. They also avoid the liquidity issues imposed on them by the Federal Reserve when taking back homes. In other words, for every home they take back, they are required to reduce the amount of money they can lend thus reducing their profitability. For more information on short sales, please contact us at info@eraexecutives.com.

So have we hit the bottom yet?

Economic turmoil seems to be the buzz word in today’s time. The stock market has had unprecedented gains and losses. Intraday wild swings have been so dramatic, it would make even the most avid roller coaster rider nauseous. Many people are wondering what do to. Should I pull out of the market? Should I buy more stocks? Should I just wait and see? What impact will this have on my job, my home, my quality of life? And of course the big question everyone is asking, have we hit the bottom? One thing is for sure, trying to time the market is like trying to cut your finger nail with a machete: there’s  a slim chance for success and failure can be catastrophic. Consider this, if you jump out of the market when it was at its lowest point, you would have effectively locked in your losses and would have not benefited from any of the gains the market made up over the next few days. So what should one do in these times of uncertainty. For one, stop panicking. One of the main reasons the marketing is moving so violently is because of low investor confidence. Don’t add fuel to the fire. Now is an excellent time to invest for your future. Since when has buying at a discount been a bad thing? Stock prices are extremely low, home prices are the lowest they have been in many years. The government is pulling all punches to keep the economy going. If you plan properly, you can be the victor when all is said and done. If you follow these few principles, you will navigate through this storm on a wave of economic enlightenment:

 

1.       Don’t pull your money out of the market. Remember, if you did recently, you would not have been able to see the record gains over the last couple days.

2.       Start buying discounted stocks. Talk to your broker or do some research on stocks that have solid financials and management but are taking a beating simply because of the current crisis. The goal is to buy low and sell high, not the other way around.

3.       Consider buying a home or two. The prices of homes are at a bargain right now. The number one method to build wealth is real estate. It always has been and probably always will be. Do this only if  you are financial able to however.

4.       Live within your means. Don’t let the heavy weight of debt keep you from enjoying life.

5.       Diversify. Have your money in money markets, stocks, bonds, mutual funds and real estate. The best way to protect yourself from major losses is to have a well balanced portfolio based on long term objectives.

 

For more information regarding the current economic crisis or if you are interested in securing some below market real estate assets, please feel free to contact us at info@eraexecutives.com

Atlanta #1 City For Singles

For the first time ever, Atlanta tops Forbes list of the best cities for singles because of its hopping nightlife, relatively high number of singles and sizzling job growth. Rankings were based on
America’s largest urban areas in terms of their friendliness to the nation’s 74 million single adults.

In our opinon, there is no better city to work and play. Atlanta is home to many different people from all walks of life with a common goal of enjoying where they live. The low cost of living and exciting big city atmosphere leaves no one out. If you are interested in getting a relocation package, please feel free to contact us today at info@eraexecutives.com.

Atlanta is still a hot market for investors!

With so many homes on the market and so much doom and gloom in the news, it’s understandable why many investors are sitting on the sideline. Getting burned in real estate can be a costly mistake to overcome, so being cautious is not a bad trait for an investor. Waiting for prices to go up before you buy may not be the best decision either. The age old adage still applies, buy low and sell high. But how can one be confident that we have hit the bottom? The truth is there is no sure method of coming to this conclusion. But one thing is sure, by the time this actually occurs, your buying opportunity may have already evaporated.

So how do you invest wisely in today’s market? First and foremost, work with a knowledgeable Realtor who understands the current climate and can help you navigate through the sea of available investment properties. The risks are too high and too costly to go in it alone. Your Realtor can help you assess what areas are good to invest and what homes will give you the best return for your money. It’s no secret, foreclosures are a fact of life in this market. But all foreclosures are not created equal. Choosing the right property to meet your needs is a mixture of art and science. Those who get it right will be grateful they invested in this hot market for years to come. Historically speaking, real estate is the one true investment proven to grow over time and build real wealth for you and your family. For information on finding the right foreclosure opportunity, please visit us at www.eraexecutives.com. You can also contact us at 770-661-1313 or info@eraexecutives.com. We are currently scheduling a foreclosure bus tour. Contact us today for details!

Atlanta Foreclosure Bus Tour

Although the media may be portraying the real estate market as doom and gloom, many saavy buyers are taking advantage of the current real estate market.  The best time to purchase real estate is when inventory is high and demand is low and that time is now! The Atlanta market is a hotbed for foreclosures, or bank-owned homes. Many foreclosures are selling for huge discounts, up to 70% off!

According to RealtyTrac, Georgia foreclosure activity for May 2008 increased 11 percent from the previous month and 23 percent from May 2007, giving Georgia 10,241 properties with foreclosure filing in May 2008- the nation’s sixth highest total.

If you have ever thought about buying a foreclosure or have an interest in investing in foreclosures, please join ERA Executive Realty on the “Foreclosure Bus Tour.” One of the first of its kind in Atlanta, GA. This exciting and informative tour will give you details on purchasing a bank-owned property, the opportunity to tour 8-10 homes, and get pre-approved for a mortage on the spot.

Date: Saturday, July 26, 2008

Time: Registration begins at 9:00 am
Tour runs from 9:30 am – 2:30pm

Place: Bus leaves from ERA Executive Realty office
2690 Cobb Parkway, Suite A3
Smyrna, GA 30080

Cost: $20/adult before July 19
$25/adult on-site registration

RSVP by: Saturday, July 19st

Breakfast will be served. Tour will include homes in the South Fulton area, including Camp Creek & Cascade.

Visit www.ERAexecutives.com for more information and to register.

Short Sales – How you can benefit from the current housing crisis

Bank of America (BofA) announced that as a result of its acquisition of Countrywide, the combined company would work to modify $40 billion in troubled mortgages in the next two years — about 265,000 loans.

Across the country, banks are taking drastic measures to prevent pending foreclosures. Through a process called a short sale, banks are taking their losses prior to properties going into foreclosure. In essence, if a homeowner can no longer afford to pay their mortgage, the bank will agree to a sale and
accept proceeds less than what is owed on the mortgage. This usually occurs when there is not enough equity in the home for it to be sold at a price where the bank can recoup its loan. Often times, these homes are sold at significant discounts in order to liquidate them quickly. Most of the times,
rather than going through a lengthy foreclosure proceeding which can yield as little as 30 cents on the dollar after all is said and done, banks opt for a quicker sale that may yield 50 to even 70 cents on the dollar.

Why such a huge disparity? The significant reduction in what the bank gets back stems from the fact that they have to list the property and maintain it until it gets sold. There are also Federal Reserve requirements that must be met when a bank takes back a property which eats into their liquidity. Let’s
also not forget the public’s perception when a bank is taking back properties for bad loans.

But how do short sales help the consumer? If you’re a seller facing foreclosure, a short sale can prevent the embarrassment from a public foreclosure notice as well as save your credit for having a foreclosure reported. And of course if you’re a homebuyer, you can get a steal and have instant equity to build from.

If you would like to learn more about short sales and how you can potentially benefit, please contact us at info@eraexecutives.com.

 

Foreclosure Prevention Act of 2008

The Senate began debate on a bipartisan measure to deal with the housing slump. The Foreclosure Prevention Act of 2008 is a legislative package intended to address the national housing crisis and help Americans avoid foreclosure. If enacted, the bill would address the following:
1. Help families keep their homes by increasing pre-foreclosure counseling funds, expanding refinancing opportunities, and amending the bankruptcy code to allow the modification of nontraditional and subprime mortgages on primary residences; this proposal is currently the most hotly contested of the bill.
2. Help communities impacted by foreclosures by allowing localities with high foreclosure rates to access Community Development Block Grants (CDBG) funds to purchase foreclosed properties for rehabilitation, rent or re-sale;

3. Help struggling businesses recover by expanding the carryback period from two years to five for them to utilize losses incurred in 2006, 2007 and 2008 to offset prior years’ income;

4. Help families avoid foreclosure in the future by amending the Truth-in-Lending Act to improve loan disclosures during the original loan and refinancing process.

100% Financing All But Gone

With 100% financing all but completely going away by April 1st, you might want to look at FHA and MyCommunity Mortgage as good resources to take the place of 100% financing. Below are some of the things you should know about both programs:

FHA
• 3% down payment
• Down Payment Assistance Programs (DAP) are still available to handle the buyer’s 3% down payment
• Appraisals no longer require unreasonable property improvements (many Realtors are still remembering the nightmares of the past)
• Seller concessions up to 6% (and the 3% DAP is in addition to this 6%)
• Low monthly PMI
• Low interest rate
• FHA has no minimum credit score requirements, but does have pretty rigid ratio limitations
• New higher loan limits recalculated to 125% of the county’s median price, with a limit of $729,000
• Manufactured housing available (double wide only) with 30 year amortization
MyCommunity Mortgage Highlights
• Single family homes only (no 2-4 units or manufactured homes)
• Purchase and term/rate refi’s (no cash out refi’s)
• DU (automated Desktop Underwriting) approved (manual underwriting can be requested)
• 620 minimum Fico (alternative credit-landlord rating, utility bills, etc.)
• Alternative credit ok with manual underwriting
• Interest only option on the 30 year fixed and 5/1 arm (not on the 7/1 or 10/1 arm)
• 41% total DTI (debt to income) ratios allowed
• 45-50% total DTI if the borrower is a teacher, police, firefighter, or public health worker
• 2 months reserves requirement if ratios are greater than 41%
• Mortgage insurance factor is .59% on 100% LTV (this is really low for 100% LTV)
• Expect to pay .5% over the regular 30 year fixed rate, higher still for interest-only
There are still a few banks that will offer 100% loans, but the numbers are dwindling every day. Contact us today at info@eraexecutives.com to find out what your options are for purchasing your next home.

Sale of City Hall East for New Mixed Use Development

The sale of the City Hall East property on Ponce De Leon has been pushed back until summer 2009. The city negotiated a deal to sell City Hall East for $27 million to Ponce Park LLC, which is planning a mixed-use development called Ponce Park   for the complex. The complex was built in the 1920s as a Sears, Roebuck & Co. department store. The city bought the building for $12 million in the early 1990s and it has been used as a municipal annex ever since.The Atlanta City Council on March 17 extended the closing date on the sale from August 2008 to June 15, 2009. In a prepared statement, the council said it delayed the closing date due to the time required to install the city’s new digital radio system at the new 911 call center and because a proposed lake to be built on the site of the new North Avenue Park will not be done until 2009.Ponce Park’s plans include 182,610 square feet of retail space, 154,380 square feet of office space and 1,167 residential units. The development will feature at least 40 residential units for people with physical and developmental disabilities.

 Current View of City Hall East

Renderings of Ponce Park

Leave a comment or email us at info@eraexecutives.com  if you would like to know about potential investment opportunities available.

Courtesy of Atlanta Business Chronicle

Fed Slashed Key Interest Rate

 The Federal Reserve slashed a key interest rate by three-quarters of a percentage point Tuesday, in the central bank’s continued effort to restore confidence in the economy and battered financial markets.The Fed cut its federal funds rate, an overnight bank lending rate, to 2.25%. It is the sixth cut in the past six months and comes at a time when the Fed is trying to keep the economy from slipping into recession – although many think it has already entered one.

Interest rate cuts are usually viewed as beneficial for the economy since they typically lead to more lending. The federal funds rate affects how much consumers pay on credit cards and home equity lines of credit, as well as the rate paid by many businesses on loans tied to banks’ prime rate. But some experts think lower rates won’t solve the credit crunch paralyzing Wall Street.

The Fed cited a weakening labor market and a slowdown in spending by consumers, as well as a continued crisis in financial markets and tight availability of credit to justify the cut. U.S. employers have cut 85,000 jobs so far this year, according to the Labor Department, the most in four years.

The prime rate will fall three-quarters of a percentage point, also, to 5.25 percent. Variable-rate credit cards and home equity lines of credit are pegged to the prime rate, so they will drop, too. The goal is to encourage consumers to borrow and spend more to revive the economy.

Radical steps
The key is settling down the turmoil, and the Fed has been working on that, too, by engineering the fire sale of Bear Stearns and coming up with creative ways to keep money moving through a financial system that keeps threatening to seize up with fear.

Long-term rates, such as those for fixed-rate mortgages, don’t respond directly to the Fed’s rate decisions. Instead, long-term rates are guided by inflation expectations. They could go either way, depending on whether the bond market decides whether the Fed’s rate policy is too restrictive, too permissive, or just right.

The federal funds rate is the target interest rate for banks borrowing reserves among themselves. The discount rate is the interest rate that the Fed charges banks to borrow reserves from the Federal Reserve. The Fed wants to be the lender of last resort: It wants banks to borrow from one another at the federal funds rate before borrowing from the Federal Reserve at the lower discount rate.

By lowering interest rates, the Fed hopes to ease the financial strain of mortgage resets, which are scheduled to affect millions of homeowners with subprime adjustable-rate mortgages. A lower federal funds rate should translate into reduced monthly payments for these homeowners.

Source: –CNNMoney.com , Bankrate.com

For more information on this subject or information regarding specific lenders we recommend for refinancing contact us at info@eraexecutives.com.