BRAVO Real Estate Realities

Loan Mods Can Hurt Your Credit Score

2009-12-28T10:36:00.000-05:00

CNN Money is reporting the loan modifications can hurt your credit score. I can see that; when you get a loan modification, quite often you don't have to make a payment for a number of months, or for one reason or another, you have missed payments.

On the other hand, if we look at it from the point of view that this whole loan modification process has been pushed by President Obama's administration, then this make little or no sense to me.

Basically, it seems like they want to stimulate the economy, and they want to keep people in their homes. It all sounds great in principal, but if we keep people in their homes and kill their credit score, how are these folks going to go out an buy stuff if they can't get any credit? If people don't go out and buy stuff, how will the economy recover. And the wheel goes round and round.

Kevin McGrath - Broker/Owner
RE/MAX BRAVO
Fredericksburg, VA 22553
Licensed in the State of Virginia
http://www.fredva.com/

Pending Home Sales Up 21% Over Last Year - Or Are They.........

2009-11-16T14:05:00.000-05:00

The National Assoction of Realtors is reporting that PENDING HOME SALES are up to the highest level since December of 2006, to a level that puts it 21% up over a year to year basis.

That seems like a positive note to me, but I also wonder if perhaps there is another piece of the puzzle that has been left out of the box.

Here in our office in Fredericksburg Virginia, we had 17 closings that were sheduled to close by the end of October, but for one reason or another, they did not. Thats right - 17. Seventeen. I think that is a pretty big number. It is certainly bigger than the number of September closings that were delayed into October. That number was 8; my math tells me that is a difference of 9. If I start calculating my 9 closings multiplied by all of the other Real Estate Brokerages in the US, it seems to me that the pending homes sales number might be getting a little inflated.

Am I to understand that pending home sales are a good indicator of an increase in business? Or should I understand that it is an indicator of slackness in our industry?

It constantly amazes me that two parties can sign a legal document, thereby agreeing to all the terms, some of which may allow for penalties for one or both sides for failure to perform on time, and then some third party, like the lender, can come in and cause the closing date to be missed..

Until all parties who can have an impact on a closing date on a contract decide to understand that a closing date on a legal document is more than just some scribbly lines on a piece of paper, I am not sure that this data really means anything at all.

Kevin McGrath - Broker/Owner
RE/MAX BRAVO
http://www.fredva.com/
kmcgrath@remax.net
Licensed in the State of Virginia

Why Can't Your Loan Close On Time? The Nonsense Of Delayed Closings

2009-11-13T09:14:00.000-05:00

You go out and you find that perfect house. You are so excited that you will be able to take advantage of President Obama's Home Buyer Tax Credit. You complete your loan application with your lender of choice, and you provide them with all of the documents requested. Closing is scheduled to happen in 30 days.Then you go home and mind your own business. You don't call your lender every day and pester them for an update; they are professionals and it is safe to assume that they are doing their job.

Fast forward to a couple of days before your scheduled closing date. The lender calls; they need more documents in order to close.

Wait a minute! When you made your loan application you gave them everything they asked for. You assumed they were working off of some sort of list. You probably also made the assumption that if they needed more documents, they would not need to wait until after they have been holding the file for 27 days before they decided to pull out the second list. What second list, you might ask? Well, I can only assume theat there is a second list. I mean, there has to be a list, right? They can't be making this up as they go, can they? So assuming there is a second list, why not get rid of the first list? Streamline the whole process, so to speak.

I'm sorry, but I find it hard to believe that in the 21st century we have a home loan process that is so bogged down in processes that flat out do not make sense.

Think about it. In any other industry that I can think of, if I treated a client like this, I would be FIRED. Sent packing. But in the mortgage industry, they seem to be able to grab you by the shirt collar and emotionally shake you to the point that you are ready to leap out a freaking window, and there is little or nothing that can be done about it. You need to close, and the lender is effectively holding the key to your house hostage.

The quick fix? You do need to be in touch with your lender, maybe not daily, but pretty close to it. In writing, via email. Save all correspndence. Ask pointed questions. "Do you have everything you need?" "Are we on track to close on time?" "Did you look up the word commitment in the dictionary before you gave me that approval letter?" That sort of thing. It may not fix it, but it may at least make it painful for them to call you up and ask for that last minute document.

Kevin McGrath - Broker/Owner
RE/MAX BRAVO
Fredericksburg, VA
Licensed in the State of Virginia
http://www.fredva.com/
kmcgrath@remax.net

Foreclosures & The Home Buyer Tax Credit

2009-11-12T07:23:00.002-05:00

The President has now signed the extension to the Home Buyer Tax Credit. Big deal. Yesterday I took a little drive through two local neighborhoods here in Fredericksburg, Virginia. Each neighborhood had about 200 or so homes in it. I started counting properties that were vacant, that had been secured by the lender (if you are Realtor you can tell), and that were not currently listed for sale. I stopped counting at 20. So, at least 10% of the homes in two large neighborhoods here have been abandoned by the borrower or tenant, yet for one reason or another, they are not listed for sale. They may or may not have even been foreclosed on yet.

Unless you live under a rock, you are by now aware that our economy is facing a few challenges, and depending on which channel you watch, the economy is either getting better, or getting worse. Either way, something needs to be done. So our Governments answer is to create a stimulus that encourages people to buy things that are not for sale?

This is sort of like throwing the cookie on the floor, showing it to the dog, then grabbing him by the collar and holding him back while he tries to eat it.

I just don't get it.

Kevin McGrath
Broker/Owner RE/MAX BRAVO
http://www.fredva.com/
kmcgrath@remax.net
Licensed in the State of Virginia