Category Archives: Financials

Navigating a Charlotte Area Short Sale

Prior to listing a property for sale, the seller must document hardship and the inability to pay the promised mortgage to receive approval from the lending bank to allow a short sale. Those documents must be updated monthly. Once the property is listed, showings and offers begin.

From a buyer’s point of view, once he’s decided to make an offer, the homeowner accepts, rejects or negotiates the offer. If and when all terms are agreed upon, the home goes under contract with the homeowner. The Offer to Purchase and Contract package is sent to the lender’s loan liquidation department along with a proposed HUD or settlement statement.

From there, an asset manager, sometimes called a file manager, is assigned. That can take hours to days, depending upon the bank’s volume of sales in the short sale department. Once the asset manager is assigned, all paperwork is forwarded and reviewed. Back up offers from other interested sellers are also received and submitted for consideration.

If all goes well, within 30 days or so, the investor who purchased the loan from the bank reviews the Offers/Contracts and decides whether or not he also accepts the terms offered. The bank then communicates the decision back to the seller who lets all parties know the verdict.

Behind the scenes, the bank must also eliminate or settle any second mortgage or other liens to make way for a clear title to be transferred to the buyer. Title companies won’t issue a title policy assuring no one else can step forward to claim ownership with any money still owed.

It can take as many as long as 6 months to iron out all the details. At any time, until the day and time of closing when the documents are signed and recorded, the investor may accept any other offer and bump the buyer’s to a null position.

Because many buyers don’t stay in the game for the duration, and for other reasons, fewer than 40% of short sales close. The property then becomes a foreclosure owned outright by the bank. It’s negotiated simply and can close in 15 days for a cash buyer, 30 days for conventional loan, and 45 days for an FHA loan.

It takes a special kind of dedicated buyer to pass by all other listings and continue hammering through a short sale for weeks and months at a time with no update from the bank. It you think that’s you, let’s talk. There are many great deals out there. Call me to discuss your big picture. 704-562-1030

What NOT to Do When Preparing to Apply for a Mortgage

What  NOT to Do When Applying For (or preparing to apply for) a Mortgage

Guest Contributor, Kathy Trotta, Mortgage Banker, Wyndham Capital Mortgage

Kathy Trotta, Branch Manager Mortgage Broker

 

The loan process is not over until the loan closes.  Until then, income, liabilities and assets will continue to be scrutinized to make sure they fit in with any guidelines established for the particular loan.  All borrowers are different, and none of this is written in stone, but in general it is best to avoid these common mistakes:

  • Do not take on new debt. Most lenders will check your credit report just before funding the loan, usually a few days to the day before closing,  to verify that you have not added any new monthly payments to your overall debt picture. Car payments, increased credit card balances, etc. can increase your debt ratio beyond the limits allowed by the lender.
  • Do not spend any of your cash reserves, even to pay down debt, without talking to your loan officer first. A lot of loan programs require the borrowers to have a certain amount of money in reserves when the loan closes.
  • Do not change jobs.  While this can be unavoidable, if at all possible, wait to give your notice until escrow closes.  Lenders always verify employment within a day or so of funding the loan and will almost always cancel the deal if your employment has changed.  Switching from one employer to another with the same job description may not guarantee a problem, but stability is the key here.  Do not switch jobs if the new one is in a completely different field, and do not, under any circumstances, decide to become self employed.  If you do, your income will not be useful for another two years, so stay put if at all possible.
  • Do not co-sign for anything. If your name is attached to that debt, it will be treated as yours and factored into your debt ratio.
  • Do not lease a new car. This should fall under the “no new debt” category, but for some people get confused about this and think leasing is not the same as buying. The bottom line is it’s still an expense that comes out of your income, so it can still push you over the limit with your debt ratio.
  • Avoid credit inquiries if you can. Though not as damaging in the past as far as your credit score is concerned, a lot of recent inquiries will not look good to an underwriter that. In most cases a few inquiries aren’t that big of a deal, but it’s best to avoid any if you can.

  • Avoid making large deposits that cannot be documented. This mainly applies to accounts where money to make the down payment or close the loan will come from. If the source of funds cannot be verified, such as “mattress money”, avoid depositing it into an account that the lender is aware of. If the amount is significant enough, they will usually want to know where it came from, primarily to make sure it’s not another loan with another monthly payment. Most deposits need to be documented, and unverifiable funds can create an enormous problem. This issue should definitely be addressed beforehand.

Call me early in the process, even before you call Chrystal, and I’ll evaluate your needs.  If your time frame is 30 days or 6 months out, I am dedicated to helping you fulfill your dream of becoming a home owner.   Let’s get started now!  Call me at 704.577.5309 today.  It’s still possible to qualify for the tax rebate, and prices and values have never been better.

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Kathy is Mortgage Banker at CertusBank and is experienced, knowledgeable and dedicated to helping you meet your mortgage needs.  She is available now, ready to give you her full attention.

You can pre-qualify or consult Kathy by phone 704.816.7383, or by email: KathyTrotta@CertusBank.com CALL Now to Learn Your Score and for a No Obligation Payment Quote on a sales price.

OPM = OPR or Other People’s Money is Other People’s Rules…

APPLYING FOR THE LOAN

Often, the loan application process is the most disliked during a real estate transaction.  Suddenly, after falling in love with your new home, you’re hit with a seemingly insurmountable stack of legal documents that come with warning, known as the loan application.

But not to worry!  If you don’t have a preferred loan officer, I have several excellent loan officers that I have worked closely with over the years who can sit with you to make sure your every question is answered.  They will make sure you fill out the application properly and with understanding.

For someone who has been employed at the same job for several years, the standard documents are needed at loan application, such as: last two month’s bank statements, last two year’s IRS filed tax forms, W-2’s, etc.

For self-employed buyers, especially those who have relocated to another market, the requirements may mean more documentation.

Remember, when it’s Other People’s Money (OPM), it’s Other People’s Rules (OPR).  Though you may not like the requirements, unless you are buying with cash, there is no way around meeting the requirements of the lender.

LOAN STANDARDS FOR ALL

However, there are limits.  A recent loan officer I worked with asked for what I thought was an unnecessary document from the buyer.  My first comment was to put the messenger, the loan officer, at ease, “I understand;  when it’s other people’s money it’s other people’s rules.”  Next, I asked, ‘Is this a routine request?’  The loan officer said no.

Aha!  I thought to myself.  Pause…

With this, the loan officer said, ‘Let me see if I can get the investor to rescind the request.’  It was rescinded.

SOME INFORMATION IS CONFIDENTIAL

Once, at the final walk through new construction, a buyer client was told by the builder’s sales agent that the in-house loan company was requiring the diagnosis of a disabled child to finalize the loan package.

The client lost it.  She shouted it’s nobody’s business what the condition of my child is.  She swore that rather than disclose, the request itself being a violation of the HIPAA Law, she would pack up and move back to her home state.  To say that things were falling apart was an understatement.

From my perspective, I could see the sales agent and my client at an impasse.  The loan could not proceed without that information, we were told, and my client was not going to divulge the condition.

It was clear to me that for the purpose of the loan, the lender wanted assurance that the condition was permanent, since the income listed on the application included that child’s benefits.  I suggested that the client request her child’s doctor provide a letter to the lender stating that the condition was permanent for the purpose of the income stated.

She said, ‘Oh, OK.’  The builder rep agreed that would probably work, and in seconds, we were back on track.

YOUR REALTOR PROMOTES YOUR BEST INTERESTS

Never underestimate that extra pair of eyes and ears a wise buyer agent brings to the transaction.  Sometimes it takes outside-the-box, unemotionally involved quick thinking to overcome what looks like a deal breaking objection.

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realtorLogochrystal (2)Chrystal Safari Roy, Team Lead of The Safari Groupand Broker in Charge of Real Estate Realty LLC, an Investor-Centric Real Estate Firm bringing you from Purchase to Portfolio located in SouthPark Towers, has over 22 years experience in investing, personal property management and residential real estate sales and is a licensed REALTOR® in North and South Carolina.  Her best Buyer’s Deal is $100,000 off a new construction home with a national builder and the home site wasn’t even cleared yet!  Chrystal is a Certified Military Residential Specialist, Luxury Home Specialist, and HUD Registered Agent.  View your Dream Home at TheSafariGroup.com.  Text 704.562.1030 for faster service or email Chrystal@TheSafariGroup.com

Survey says…

It surprised me to find, while thumbing through our son’s college sociology textbook, that when asked this survey question of the wealthy and of the poor, ‘Do you think your personal choices affect your financial position?’ that two different answers were given.

The wealthy said yes, and the poor said no.

The truth is that every choice affects every other choice.  Choosing not to study for a test affects the grade a student might earn.  That, in turn, affects the overall grade point average, which affects college choices, which may affect ability to earn…

Choosing to be married eliminates the choice to be single, though some still may live as though they are single within marriage…

May we be wise to see beyond the immediacy of the choice at hand and be forward thinking to the future choices it allows or eliminates.