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The Back to Work Program Helps Home Buyers with Financial Problems

Have you been having trouble buying a new home due to a financial hardship?  If so, the Federal Housing Administration  also known as “FHA” may have some good news for you.  The Back to Work program, effective as of the fifteenth of August 2013, is providing struggling home buyers with the aid they need to get back in the housing market and secure the home of their dreams.

Under these new guidelines, the usual waiting periods that follow a derogatory credit event has been reduced.  Recent events have inspired the FHA to acknowledge that a bad credit history is occasionally out of an individual’s reasonable control, and doesn’t necessarily reflect your ability to make mortgage payments.  Therefore, if you’ve experienced any of the following over the past few years, you may be eligible to get a new FHA-insured mortgage to become a homeowner again:

• Pre-foreclosure sales
• Short sales
• Deed-in-lieu
• Foreclosure – was 3 years – now only 1 from release of lien on title.
• Chapter 7 bankruptcy – was 2 years – now only 1 year from discharge
• Chapter 13 bankruptcy
• Loan modification
• Forbearance agreements

These timelines have been shortened for  people who have suffered such hardships should be prepared to demonstrate that their ability to make payments was caused by a loss of employment or other such significant loss of income that was beyond their control by 20% or greater.  The potential borrower must then demonstrate a recovery from the hardship, and complete housing counseling with an HUD-approved agency.  If the FHA is satisfied, you will once again be able to buy a home with the current market interest rates and home prices.

For more information on the Back to Work program, you can contact Lynnwood mortgage lender / broker David Haley.

House-Flippers Gain Confidence in the High-End Market

For a long while, the luxury real estate market has been a no-man’s land for investors.  It was hard enough to unload a cheap home without losing money, and the prospect of buying a mansion to fix up and flip for a profit simply was not in the cards.  However, recent years has seen an improvement in the market, and ambitious property investors are once again working to buy, sell, and make out like bandits in the world of high-end houses.

The up and coming players in this recovering field have been the money lenders.  While banks remain reluctant to provide house-flippers with the short-term, quick financing that they need, private lenders like Jan Brzeski have been stepping up to fill the need.  Thanks to her loan, realtor Scott Ryan was able to buy a house for $1.5 million, improve the property for $600,000, and put in on the market for $3.3 million.  In all-too recent memory, this house might have sat on the market for several years and several cuts in the asking price, but the current market is giving them optimism to secure a sale within a week.

According to Brzeski, he was originally wary of the high risk associated with high-end real estate investments.  However, after pouring roughly $2.5 million into a venture back in 2011, he was pleased to discover that the realtor was met with a line of all-cash offers as soon as it was placed on the market.  The property sold for $3.5 million, and Brzeski was sold on mansion-flipping immediately.

The causes behind this recent recovery in the high-end housing market seem to be based in the freshly robust stock market.  With a slew of wealthy individuals suddenly flush with extra money, many of them are gaining confidence in buying the houses of their dreams.  House-flippers are therefore gaining confidence that their riskier investments will pay off more quickly and more profitably.

Since 2011, flips of houses valued at upwards of $1 million have increased by about forty percent across the country.  Between 2011 and 2012, such flipping jumped 456 percent in Phoenix, 867 percent in Orlando, and 730 percent in Las Vegas, according to RealtyTrac.  These figures are based off of high-end homes that were bought and sold within six months.

Read the original article here.

Home Affordability Remains Strong Despite Price Rises

Black Knight Financial Service took a look back on January’s home affordability and foreclosure metrics, and made some interesting discoveries. It would appear that foreclosure starts reached a twelve month high at the start of 2015, both in terms of first time foreclosures and repeats. As of then, repeat foreclosures accounted for better than half of the total foreclosures.

Meanwhile, home affordability, despite two years of rising prices, remains better than what we saw prior to the housing bubble. The low interest rates at the time served well to offset price increases so that the mortgage-to-income ratio average throughout the United States was at 21%. This is an improvement over the 26% average observed from 2000-2002, but it’s still up from the 17.6% low in October of 2012.

Here in Washington state, we are slightly above the average at 21.3%. However, this represents an improvement of 6.5% from 2000-2002, exhibiting a greater-than-average increase of mortgage affordability.