How To Purchase House

I was sitting in a local restaurant by myself for lunch this week when I overheard two gentlemen talking about foreclosure properties. Both of these men had their own opinions regarding the market and where to find the best deals. It was interesting listening to both menâ??s opinions and interesting enough, both of them were wrong. It is amazing how many people claim to be subject matter experts but have no formalized training or accreditation to support their hypotheses.

 

According to national statistics there are approximately 2,203,295 foreclosure filings and about 1,285,873 foreclosed properties on the market today. The substantial increase in foreclosures has flooded the supply of available properties which then forces home values to decrease. We all learned about supply and demand in high school economics class and many home owners are feeling the effects today.

 

Finding that deal may not be as easy as it may seem, you need to look beneath the dirt. Understanding the value of a home, cost of repairs and legalities of submitting an offer is critical and you need the help of a licensed Real Estate Expert to navigate you through the foreclosure maze. Get with a Realtor team that has the resources and connections to help you with every step of the purchase transaction.

 

Great Realtors, or as I call them the top 1%, will have a â??Dream Teamâ? that will be able to work with the client. They will have a solid mortgage broker, a reputable property appraiser, a reliable insurance agent, a mold consultant, a conscientious property inspector, an esteemed general contractor and a renowned ASP certified staging professional. Being able to go to one Realtor and obtain all the necessary professionals to complete a transaction is critical.

 

Having a team of these professionals will reduce your exposure of making a mistake and buying a home that is not of value or has too many substantial repairs to make it worth the investment. It is important to use a professional Realtor who is experienced, trustworthy and a true professional.

 

Here are some essential tips you need to know when you start your foreclosure prospecting.

 

 

The bottom line is there are great deals beneath the dirt of a foreclosure. Having a vision of what that looks like for you as the buyer is important. Understanding what you are looking for in a property a year from now is the perspective that you need to have. Many clients that buy homes spend money on remodeling, changing out carpets or cabinets, or putting in new floors. If you are going to go through and spend money on a property improving it to your taste why not get that property at a bargain-basement price. If you are interested about Real Estate Dream Teams please see my website www.fortmyers-naples-realestate.com.

I was sitting in a local restaurant by myself for lunch this week when I overheard two gentlemen talking about foreclosure properties. Both of these men had their own opinions regarding the market and where to find the best deals. It was interesting listening to both menâ??s opinions and interesting enough, both of them were wrong. It is amazing how many people claim to be subject matter experts but have no formalized training or accreditation to support their hypotheses.

 

According to national statistics there are approximately 2,203,295 foreclosure filings and about 1,285,873 foreclosed properties on the market today. The substantial increase in foreclosures has flooded the supply of available properties which then forces home values to decrease. We all learned about supply and demand in high school economics class and many home owners are feeling the effects today.

 

Finding that deal may not be as easy as it may seem, you need to look beneath the dirt. Understanding the value of a home, cost of repairs and legalities of submitting an offer is critical and you need the help of a licensed Real Estate Expert to navigate you through the foreclosure maze. Get with a Realtor team that has the resources and connections to help you with every step of the purchase transaction.

 

Great Realtors, or as I call them the top 1%, will have a â??Dream Teamâ? that will be able to work with the client. They will have a solid mortgage broker, a reputable property appraiser, a reliable insurance agent, a mold consultant, a conscientious property inspector, an esteemed general contractor and a renowned ASP certified staging professional. Being able to go to one Realtor and obtain all the necessary professionals to complete a transaction is critical.

 

Having a team of these professionals will reduce your exposure of making a mistake and buying a home that is not of value or has too many substantial repairs to make it worth the investment. It is important to use a professional Realtor who is experienced, trustworthy and a true professional.

 

Here are some essential tips you need to know when you start your foreclosure prospecting.

 

 

The bottom line is there are great deals beneath the dirt of a foreclosure. Having a vision of what that looks like for you as the buyer is important. Understanding what you are looking for in a property a year from now is the perspective that you need to have. Many clients that buy homes spend money on remodeling, changing out carpets or cabinets, or putting in new floors. If you are going to go through and spend money on a property improving it to your taste why not get that property at a bargain-basement price. If you are interested about Real Estate Dream Teams please see my website www.fortmyers-naples-realestate.com.

How To Buy Property from the Bank and Pocket the Profits

The daily newscasters and “talking heads” feature regular stories of the tragedy of foreclosures in America. Indeed, the rate of foreclosures is continuing to increase, partially driven by the financially illogical variable rate mortgages. With that said, if you are a financially savvy investor with solid financials, this is a great time to capitalize upon these intriguing opportunities, especially in the form of REO properties.

Banks are in the business of lending money, not owning, managing, or selling real estate. However, oftentimes a bank is forced to foreclose on an investment, and a property reverts from an investment to Real Estate Owned, or REO.

Real estate investors can purchase REO properties from banks for less than the full market value of the property, but in most cases, REO properties are sold by lenders at or just below market value. A smart investor will have a strong strategic plan for bidding on and financing a bank-owned property to get the best value.

Bidding on REO property

Even though banks do not want to hold and manage real estate properties, there is a wide misconception that banks want to ‘dump’ REO properties at far below the market value simply to get if off the books. Closer to the truth is the fact that a REO property is not considered a liability, and banks will want to get full or near market value for their asset.

If an investor makes an offer on a REO property lower than the bank’s calculated full market value, the bank will probably make a counter-offer closer to the market value at which they want to sell. An important thing for investors to remember is that banks do want to sell their REO properties as quickly as possible, so patience and persistent bidding is the key for a potential investor to get a good deal. But also remember that a bank is looking after their own best interests – not yours.

Understand that REO is “as is” property

Banks will usually sell their REO properties in “as is” condition, meaning if there are any renovations or repairs needed in order to qualify for traditional financing, a bank will not perform the repairs. They may, however, offer a credit on the sale price for the deferred maintenance of a property.

Investors should analyze a property carefully and have thorough inspections performed by licensed inspection firms. A proper inspection will reveal items that an investor will need to consider improving before the property can be achieve full resale or rentable value.

If a property with numerous defects does not qualify for a traditional mortgage from a bank or other lender, a real estate investor will need an alternate plan to finance the property. The investor should form a plan for repairs and renovations and could work with partners to invest money in the fix up project. Hard money lenders may also be a source of short-term financing.

Enjoy favorable terms

An investor will often reap favorable sale terms from a bank REO property. The properties are usually clear of any prior liens. Additionally, a bank may offer financing to an investor will favorable terms, such as low down payment or low interest rate.

Swift closings can also be a great benefit since the title will be owned free and clear by the bank.

Benefits of buying REO

As previously mentioned, a REO home is generally free of all liens from prior lenders and contractors. Having a home for sale free and clear offers a safe investment and quicker closing times. A REO property will also be vacant and ready for an investor to occupy or begin renovations immediately after the sale. Any owners or tenants will already have been evicted prior to the final foreclosure.

REO properties can be a great investment – as long as an investor is savvy about purchase strategies. Knowing the condition of the property and bank REO selling procedures is an asset to the investor. With a little experience, a real estate investor can reap many financial rewards with a niche in REO properties.

The investment quandary as to the best method for acquiring foreclosed property at heavily discounted prices inevitably surfaces at the same stage in the real estate cycle every ten to twenty years. After housing booms and home prices correct back to affordable levels, real estate investors are suddenly inundated with an almost overwhelming supply of potential homes to choose from. These prospective buyers peruse city blocks searching for evidence of distressed properties that might lead to investment opportunity by taking dead lawns, unpaid utility notices, and default notices all into account. They investigate “For Sale” signs with “Bank Owned” or “Foreclosure” riders attached. Technologically savvy bargain hunters browse websites online to identify properties in default. These opportunists also compare notes with one another at various social functions, water coolers, chat rooms, and anywhere else real estate is spoken. Here they may learn that in order to obtain the most lucrative price, investors are best served to purchase property directly at a foreclosure sale on the court house steps. Regardless of the preferred method for locating distressed properties, it is imperative to thoroughly comprehend the different foreclosure processes in order to develop and implement a successful investment strategy. If a homeowner fails to make prescribed loan payments to the bank, the borrower is deemed to have defaulted on the loan. If the delinquent payments are not cured in a timely fashion, the lender is permitted to foreclose on the property to acquire title to the home as security for the unpaid debt. For national investors it is important to understand that lending practices and foreclosure procedures vary from state to state. For example, some states are considered “mortgage” states while other states prefer the “deed of trust” method of lending and holding title as security for the loan.MORTGAGES Mortgage states utilize a two party security system where a mortgagor (or borrower) provides a promissory note to a mortgagee (or lender), along with a voluntary lien called a mortgage that serves as security for the borrower’s promise to make the loan payments described in the promissory note. Since title to the property resides with the borrower when the mortgage is created, foreclosures in mortgage states can be relatively lengthy and costly for banks to pursue. Further, mortgages also provide borrowers redemption rights that allow borrowers a specified period of time after the foreclosure and ultimate sale to a third party to pay off the original loan amount and regain title to the property. As a result, buyers at foreclosure sales in mortgage states must be aware that they will often be unable to obtain clear title to foreclosed homes as the previous owner will likely be afforded the opportunity to pay off the original promissory note and reclaim the property.DEEDS OF TRUST A minority of states that include California favor the three party deed of trust system due to the relative cost efficiency and expediency provided to lenders in the foreclosure process. Additionally, lenders are often able to provide buyers of foreclosed property clear title as no right of redemption exists for borrowers. The Deed of Trust process involves a trustor (or borrower) that gives a promissory note to the beneficiary (or lender), and the trustor also gives title through a trust deed to a trustee (neutral third party) as security for the note. The important difference here is that title to the property is held by the trustee rather than the borrower. The trustee is typically a neutral third party designated by the lender to hold the deed of trust during the loan period with the power to more easily administer a foreclosure sale in case of default by the borrower. It is clearly important to determine whether one is bidding on a property that was subject to a mortgage or a trust deed at a foreclosure sale. This differentiation can often be confusing as many real estate professionals and experts in deed of trust states will often casually refer to home loans as mortgages. Many lenders in these states will refer to themselves as mortgage brokers or mortgage companies when they actually originate promissory notes secured by deeds of trust. Deed of Trust states also refer to foreclosure sales as trustee’s sales, where the highest bidder purchases the property in an auction setting. However, purchasing a home at a trustee’s sale can be a risky proposition as the buyer has little or no opportunity to inspect the home prior to purchase. Further, the buyer must pay with all cash as financing is typically not permitted at trustee’s sales. There is also no guarantee that the property is not currently occupied by tenants or a previous owner. Finally, purchasers at a trustee’s sale are not protected against clouds on the property’s title like tax liens from a previous owner’s unpaid property taxes, so title insurance is often unattainable for buyers at trustee’s sales.REAL ESTATE OWNED (REO) If a home is not sold to a new buyer through the foreclosure process, the lender holding the promissory note will often acquire the property and attempt to sell it on the open market to a new buyer. Once title to the home that once served as security for the unpaid promissory note is transferred to the bank, the property is deemed real estate owned (REO) by the bank. The bank will then typically retain a REALTOR® to market the property for sale at a price below market value, remedy any defects on title, remove any tenants or squatters occupying the property, and often retain contractors to repair any major physical defects in existence on the property. Although the typical price paid for an REO property may in theory be slightly higher than buying at a foreclosure sale, purchasing an REO property is clearly a much less risky proposition. REO sales also provide investors adequate opportunity to inspect homes prior to making offers to purchase, and buyers are permitted to utilize financing when purchasing these bank-owned properties. Whether purchasing foreclosed or REO properties, the various risks and rewards associated with an investment may not only depend on the characteristics of the home itself, but also the type of security the home provided to the previous owner’s lender. In order to avoid the displeasure of telling foreclosure horror stories in real estate investment circles, an ounce of diligent research into a property’s financial history can prevent a pound of investment headaches.

Sales of US homes rose for the third consecutive month in June 09, suggesting that Property investors are flocking back to pick fruitful deals as the US property clock has wound prices back to the same levels as in 2003, according to financial researchers Standard and Poor’s.

‘’The US Housing marketing is bottoming out and now really is the time to invest. We have come across some super bank owned properties, which yield as much as 25 % rental on a three bedroom house that can be picked up for under £25,000, in Detroit which include costs of property Aquistion, all legal costs, property refurbishment and placing of a tenant. Prices, are staring to rise due the massive amount of overseas investment. Last month over 2,800 properties sold in Detroit mainly to overseas investors “The June sales number appeared to confirm the stabilisation, down a mere 0.2% from a year earlier.’’

‘’Prices also showed signs of stabilising. The average price of existing home sales was 181,600 in June, 15% lower than a year ago but up from 174,700 in May.

Now that the meltdown has happened, the new emerging market is the United States,” Tom Shapiro, president of real estate investment firm GoldenTree InSite Partners, said at the Reuters Global Real Estate Summit in New York.

The company are looking to sink up to $1 billion in to property, and are ready to return to the US market and take advantage of the rock bottom prices.

Directors of the London based Mayfair Group said “ Areas like Detroit have fallen by as much as 60 % making Detroit a very popular place to invest with overseas investors. ‘ CNN recently voted Detroit as one of the top places to invest in the US, due to rock bottom prices and high rental yields. We recently sold one property to an investor which had sold in 2007 for $180,000. A typical investment package we would offer would be for a round £24,500, with a tenant in place paying from $800 – £900 pm or higher in some cases. This investment will pay for itself in 4 years, making this a great income or pension. A lot of our investors have previously held funds in high interest bank accounts. The bank interest has become so low they have come to us because of the high 25 % rental yields offering a huge return on investment.

Though with prices starting to rise and Obama keen to stop the Foreclosure market, these amazing bargains may not be around for much longer.

For further information contact us

email: info@mayfair-group.comweb:   www.mayfair-group.com

With interest rates rising rapidly, it is more important than ever to make the most of every loan. As refinances begin to dry up and you begin to deal more with purchases, you will undoubtedly encounter new roadblocks and hurdles on the way to the closing table. It’s a fact–purchase loans are far more time consuming and stressful than their refinance counterparts.

Borrowers are emotional, erratic, demanding, panicky, unsure, deliriously happy or sad and a whole host of many other emotions. In their minds, they’ve picked out the carpeting and wallpaper and have mentally already moved in! Geesh! Try dealing with a person who thinks they’re the landlord and they don’t even have the keys yet!!!

Keeping this in mind, here are some tips when dealing with purchase loans. These come from my years of experience and many number of loans (I’ve lost count.)…

1. Don’t show your hand too early (meaning the interest rate you can offer). Explain to the borrower that it is up to them when they decide to actually “lock-in” the interest rate. If they press you for an actual rate, tell them what today’s rate is you can offer, and that you will watch the interest rates for them. If they drop, you will call them at the first moment. What you really want to do here is knock the borrower off their “rate” short-sightedness. Say something like, “Well, as you know, the interest rates change every day. With purchase loans, time is critical. What we can do is get the process started, so that you don’t lose the house, and when the interest rates get to a point you feel comfortable with, we can lock it in for you. We will be working hand-in-hand through the entire process. Now, how do you spell your last name?”.

2. Explain the difference between a pre-qualification and a commitment letter. Borrowers think just because they have been pre-qualified somewhere, that it guarantees them the loan. This isn’t the case. As you know, the underwriter has the final say. If the property does not appraise for the correct value, the borrowers’ situation changes, or the seller pulls out, the deal is dead. These are things entirely out of your control. What I tell borrowers, is that we are going to go one step further than a simple pre-qual letter. We want to give them an advantage with their loan, and get them a full commitment letter from a lender as soon as possible. This lessons the chance of them getting their expectations set too high and not getting the loan in the end.

3. Phone the real estate agents early on and explain you are in control of the process. Call them BEFORE they call you. You want to show that YOU are in control—NOT them. Doing this, puts you at a higher level and they will respect you for it. Believe me.

4. Set expectations with the borrower upfront. Explain the entire loan process from start to end. First-time homebuyers just simply don’t know. Emphasize to them, if they have any questions, to call you first—NOT the realtor.

5. Make it known that you are the point of contact for all parties involved in the transaction. This includes the seller and buyer agent, appraiser, lawyer, title companies, etc. Usually, the realtor thinks they are in control for the whole process, but remember the sale is mostly out of their hands after the purchase and sales contract is signed. Then it is entirely up to you—the loan officer—to succeed! By being the “driver” in the process, you can minimize any confusion or crossed signals that may arise.

6. If you get a sales call from a borrower looking to purchase a home, ask if they have already been pre-qualified elsewhere. Most of the time they have been and are simply shopping around for the lowest rate. (In other words, go back to rule number one above… don’t show your hand too early). If the borrower shops behind the other loan officer, they will certainly do it to you too.

7. Explain to the borrower whether you are acting as a direct lender or broker. Each has pluses and minuses. Explain what you are and the role you play. Sell yourself. For example, you can say “As a lender, we have direct control of the process, we make the final decision and can tell you upfront whether you qualify.” or “As a broker, if you get denied by a lender, we can easily shop you to another lender, saving you time and effort. This will help you ensure you get the house you want and not jeopardize the process”. Sell your advantages…don’t mention your weaknesses.

8. Factor in all payments for the borrower, including the full principal, interest, taxes and insurance and be certain that the borrower is well aware of these entire costs upfront. If they can’t afford the house, you want to know as soon as possible. Or you’ll be left with nothing!!! I always say, it’s best early on to kill ‘em or keep ‘em. Don’t let timewasters run away with your income.

9. Watch critical dates, especially rate lock expirations and underwriting turn-times. Be well aware of the “commitment letter” date as stated in the purchase and sales contract on the property. Oftentimes, borrowers wait until far too late in the process before deciding to move ahead and these contract deadlines can be impossible to meet. Get an extension on this ASAP with the seller’s agent on the property.

10. Finesse your way through the process. Don’t lie. Only tell each individual party involved in the process what they need to know. Don’t share too much information…it creates confusion. And don’t tell someone something unless you are absolutely certain. It always comes back to bite you in the rear!

11. Stop the shopping. Make the borrower understand that once they decide to move ahead with the process, they risk losing the home, if they decide to leave you. Another broker/lender will be unable to meet the tight deadlines in the contract. They have to make a decision and stick to it.

12. Stop the shopping—part two. If the borrower is qualifying for a home based on a special program that your company is offering, tell them the criteria upfront. Not every loan officer has what you can offer. In other words, you have a specialized program and are making an “exception” just for them. Not all rates are created equal. The other “competitors” for the loan may not have all the correct information upfront, to be able to properly quote them an accurate interest rate. Let me emphasize that again—an ACCURATE INTEREST RATE. Educate the borrower on this, show them you’ve done your homework, and are quoting accurately. Ask qualifying questions that others don’t.

By keeping these tips in mind, it should make your next purchase loan go a lot smoother.

If you are looking for a firm step-by-step process to help you get your purchase loans to the table faster, please…please…please…take a minute to read about my Sink or Swim Loan Closing System at http://www.loanclosingsystem.com

And, as always, best of luck in your business. This is STILL a wonderful industry to be in! Stop being discouraged and go get ‘em!!! I know it’s tougher out there, but you can do it!

Attempts by Federal and State governments in the first quarter of 2009 to stimulate home sales have resulted in the creation of significant incentives for buyers seeking to take advantage of attractive housing prices across the United States. In order to reduce the large inventories of available homes for sale and thereby stabilize housing values that serve as security for loans held by financial institutions and investors around the world, an irresistible environment for real estate investment has been established that deserves closer examination.American Recovery and Reinvestment Act of 2009Included in what has become otherwise known as the Federal Economic Stimulus Plan, the United States federal government increased the first-time home buyer tax credit previously implemented by The Housing & Economic Recovery Act of 2008 (Summer 2008) from $7,500 to $8,000, and removed the requirement that the credit be paid back in the future. The expiration date for receipt of the credit has also been extended from July 1, 2008 to Dec. 1, 2009. Consequently, homebuyers must have purchased a home after January 1, 2009 and before December 1, 2009 to be eligible for the $8,000 credit. This credit only applies to first-time home buyers purchasing owner-occupied homes and not investment properties.State Tax IncentivesMany state governments are also independently attempting to address housing market distress within their own state lines by enacting legislation that provides further tax incentives for prospective home buyers. For example, the California state legislature passed a new-home buyer tax incentive as a portion of the state’s 2009-2010 budget. According to this incentive, purchasers of new single-family homes, that have never been previously occupied, as their principal residence between March 1, 2009 and March 1, 2010 will receive a tax credit equal to the lower of 5% of the purchase price or $10,000. Therefore, first-time home buyers in California who purchase a new home as their single family residence between March 1, 2009 and December 1, 2009 should qualify for both the Federal $8,000 tax credit and the State of California $10,000 tax credit at the same time, resulting in a combined $18,000 tax savings.FNMA Lending Requirements Relaxed for InvestorsFederal government sponsored enterprises have also reached out to real estate investors by providing them with increased ability to leverage funds and purchase more investment properties. Fannie Mae (FNMA) has announced that on March 1, 2009 it will increase the maximum number of permissible financed properties from 4 home loans to 10 home loans for borrowers seeking to purchase non-owner occupied properties. Investors attempting to take advantage of this policy revision must: have a 720 FICO score or higher, show funds in reserve to cover six months of future payments, pay a 25% down payment, have no history of foreclosure or bankruptcy, have no delinquent payments within twelve months, and provide full documentation of all rental income.Time will only tell as to whether these bold incentives will serve to generate the requisite number of home sales to effectively stabilize housing prices and the economy as a whole. Regardless of whether these enticements will succeed on a macro-economic level, the cumulative effect of astonishing low housing prices and interest rates combined with these new measures has clearly created a housing market ripe for prospective buyers.

It is time for a new Television show, Bulldoze That House! The theme for the show could be done to the tune of Elvis Pressley?s Viva Las Vegas; that gambling town. For gambling is what many home owners have done over the last four years; supplementing or creating income through no-doc-cash-out-refis on their homes, assuming the free money ride would never end.

Home ownership has always been about more than making the minimum payment, but with teaser rates and ?pick-a-pay? loans doing the minimum was all this so-called housing boom was about.

The housing boom was about easy credit rather than economic expansion. While the average American family actually lost purchasing power over the last eight years, easy credit allowed us to maintain the illusion of prosperity while masking the truth: that the American economy has transitioned from higher-wage manufacturing jobs to lower-wage service jobs. That the American economy is based on consumption rather than production.

Since 2004, the basic rules of the housing game were discarded in an effort to put more and more people into homes. Home ownership was no longer something to aspire to through hard work and sound money management. With the barriers, income, assets, savings, a decent credit score, to home ownership removed anyone and everyone could own a home.

According to the Hoover Institution, home ownership was 66% in the year 2000 and peaked at 69.2% in 2004. The rate of homeownership fell to 67.8% in 2008 and reflects the rising tide of foreclosures in America. According to RealtyTrac, foreclosures have exceeded 250,000 units per month for the last 10 months. If current trends continue, 3 million people will lose their homes to foreclosure over the next year. According to the National Association of Realtors (NAR), there was an inventory of 3.8 million existing homes at the end of December 2008. The NAR estimated that it would take 9 months to work off the existing backlog. The median home price has fallen to $181,000 dollars in part because the numbers of homes bought under distressed conditions are driving the price of homes down. With an estimated 3 million homes coming on the market due to foreclosure, housing prices have nowhere to go but down.

For ill or for good, home ownership has been considered one of the greatest vehicles for creating wealth in America. The decline in home prices means the loss of wealth that may take a generation to recover.

The mythology of the housing downturn is shifting to the economy. Previously, foreclosures were blamed on bad loans not bad borrowers. Now the economy is to blame. The reality is that just over one-third of delinquencies were due to job loss in 2006 and 46% of delinquencies were due to job loss in June of 2008. What this means is that if only the economy were to blame fewer than 1.5 million new homes would be on the market due to foreclosure rather than the projected 3 plus million homes.

Now the banks and borrowers are waiting to see what the Obama administration will do. Borrowers don?t want to lose their homes and banks don?t want to face the truth, that many of their assets are worthless. Municipal and state governments don?t want to lose the tax revenue so everyone is waiting to exhale.

But let?s look at the rules of the housing game: the rules as they were 10 years ago. Ten years ago, a borrower had to show income. Not only did that borrower have to show income, they had to show their qualifying income for at least five years. Ten years ago a first time borrower had to have a down payment of at least 5 percent, earnest money and closing costs. Ten years ago principal and interest payments could be no more than 28% of gross income with total debt payments being no more than 33%. Ten years ago, these were the minimum standards for owning a home.

The reality of home ownership is that it takes more than meeting minimum standards to truly own a home. Homes must be maintained and the cost of maintaining a modestly-priced, three-bed room, two bathroom, home is approximately $3000 per year. Property taxes and insurance payments are guaranteed to increase 3% to 20% per year depending on the market. In other words, a home-owner must have sufficient cushion of three to five thousand dollars per year to truly own their home. If not, a water heater, furnace, landscaping or paint job will become an economic catastrophe.

The reality is that many borrowers do not meet the minimum income requirement or debt to income ratios to remain in their homes. Some borrowers purchased $10 dollars worth of house for every $1 dollar in income. The only way to keep that borrower in their home is to re-price that home to 30% of its original value. Housing prices have not fallen 70% from their peak, therefore how does the government setting a new price bottom so that that borrower can remain in their house help the overall market? It doesn?t. What about the borrower who has significant credit card debt and was slightly over leveraged, borrowing 3.2 dollars for every dollar of income in order to purchase a home? That borrower would be helped by stretching the mortgage term to 40 years. What about the borrower who lost his job after qualifying for a mortgage and found a new job at 80% of qualifying salary? That borrower might be helped by stretching out the term of the loan to 40 years and setting the loan at today?s fixed rate of 5.26%

A borrower purchasing a house today at the median home price of 181, 000 and an interest rate of 5.26% will have a payment of $1000.61 (assuming nothing down). The income to afford that house is $61,000 per year. According to the Census Bureau 25% of US households meet or exceed that income.

The reality is that the government has few tools at its disposal to help borrowers without hurting broader society. Those tools are extending the loan term, re-setting the interest rate, re-pricing the homes, direct subsidies to borrowers. Both re-setting the interest rate and extending the loan term are two solutions that are both sustainable and limit the collateral damage. The contract began with borrowers and the banks and it stays there. Re-pricing the homes extends the damage to neighborhoods and potentially creates a windfall for the delinquent borrower. As an example, look at a borrower with an income of $40,000. That borrower leveraged into a $200,000 dollar home during the housing boom. In order to afford the home, the borrower took out an interest only loan at the teaser rate of 4.85 percent. The interest-only payment was $808 dollars. The loan resets 5 years later to the prevailing interest rate of 5.26% and the principal and interest are amortized over 25 years. The new principal and interest payment for this borrower is $1199.68 more than 1/3 of monthly gross income. The market has already re-priced homes in the neighborhood to $180,000. Re-pricing the outstanding principal to $180,000, the amount set by market conditions, setting the interest rate at 5.26 percent and extending it over 40 years will make the principle and interest payment $899.00. This borrower might just make it. But the presence of other debts, rising insurance and property tax payments will ensure that this borrower?s economic situation remains tenuous at best. The government then re-prices the home to $150,000 dollars in an effort to keep this borrower in his home. Now the cost to the neighborhood exceeds the penalty imposed by market conditions forcing housing losses in that neighborhood of 25% rather than the market losses of 10%. If this borrower cannot maintain his home, the neighborhood still loses. Direct subsidies to borrowers is a solution without end. At a time when this nation is without a plan to deal with the entitlement obligations of Social Security and Medicare direct subsidies to borrowers is both untenable and unsustainable.

There is a reality that too few people seem to want to face: there are too many homes. In an effort to increase the percentage of home ownership from 66% in 2000 to 69% in 2004, credit flowed too freely and too many homes were built. Cities are populated with unfinished neighborhoods, incomplete apartment complexes, vacant-homes falling into disrepair, and boarded up apartment buildings. Neighborhoods suffer as abandoned buildings house squatters and crime instead of working families. Preferring to board up foreclosed buildings, banks have been loathe to maintain them. Because of the now complex relationships among borrowers, banks and investors, local governments are often unable to locate the parties responsible for a given, abandoned property. It is time for state and local governments, through the power of eminent domain, to take possession of abandoned properties and Bulldoze That House! Local governments could turn the new land into green spaces and community gardens or sell the land for commercial purposes such as bookstores, coffee houses, laundromats. Bulldozing that house is another way to preserve neighborhoods and support housing prices by removing excess inventory. Bulldozing that house also has the added advantage of forcing banks and investors to face their losses and re-price their assets, something they have not done despite receiving billions in taxpayer funds.

If You Have a House You Really Need to Sell Fast in Hattiesburg, Mississippi, You’ve come to the Right Place!

You’re probably asking, “How can I sell my house in 7 days? That would be a miracle!” You can sell your house fast in Hattiesburg Mississippi by selling your house to us! You see, we’re not Realtors® who simply want to list your house for a commission and hope it sells one day. Instead, we’re a group of Professional Home Buyers who buy and sell houses in any condition or price range all over the Hattiesburg Mississippi area, including Petal, Oak Grove, Purvis, Sumrall and throughout Forrest and Lamar Counties. If you’d like to sell us your house faster than you ever thought possible, please take a moment to complete our Seller Questionnaire.

“What kind of houses do you buy?” We buy houses every day from homeowners just like you in Hattiesburg Mississippi just like yours and buy them as-is. We buy pretty houses needing few repairs and ugly houses in need of major repairs. We buy all sorts of houses including single family homes, multi-family homes, condominiums, town homes and even mobile homes. We buy homes in Hattiesburg, Purvis, Petal, Oak Grove, Sumrall, and all over Forrest and Lamar Counties and throughout Mississippi.

“How can you buy my house so quickly?” If your house meets our purchase criteria, we can pay all cash, take over your mortgage payments or lease-purchase your house immediately! As Professional Investors we specialize in finding creative solutions that meet your immediate needs. And, unlike traditional home buyers who must qualify for a bank loan to buy your house, we use private funds and/or owner financing to close on your house fast. We’ll handle all of the paperwork, make all the arrangements and close within a few days if necessary. You’ll get a quick sale with no hassles, so you can put your home selling worries behind you once and for all. Tell us about your house for sale today!

“How do I know if my house meets your purchase criteria?” To see if your house meets our purchase criteria, please take a moment to complete our Seller Questionnaire . Tell us all about the house you are selling and one of our Professional Homebuyers will get back to you ASAP about buying your house fast!

“Can you buy my house if it’s in foreclosure?” Absolutely! If you’re behind on payments or facing foreclosure and can’t afford to get caught up, and you need to sell your house and sell it fast, we can help! If you complete our Seller Questionnaire before it’s too late, we may be able to buy your house by negotiating a reasonable payoff with your lender(s) or catching up your back payments. Take action now! There are more options available than you may realize. We also work with homeowners who want to save their home.

“What does this cost me? This sounds too good to be true.” Unlike a Realtor who charges huge commissions to sell your house, we don’t charge any fees for our services. As Professional Home Buyers we don’t make any money until after we purchase your home.

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