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A short sale is a pre-foreclosure sale. The seller, who is facing foreclosure, lists his/her home and, when an offer is obtained, asks his/her lender to approve the sale for less than the amount of the mortgage. The seller must provide the lender with a documented hardship.

With new laws going into effect, the short sale process could move a lot faster. Starting this summer new rules will require mortgage servicers to respond to offers within 30 days. Fannie Mae and Freddie Mac, the nation’s two largest mortgage backers, will implement the guidelines on June 15. The lender must 1) acknowledge that documentation was received within three business days 2) notify the borrower within five days if more paperwork is needed 3) review and respond to a borrower within 30 days of receiving all documentation 4) take no longer than 60 days to negotiate with insurers 5) provide weekly updates when the sale goes beyond 30 days.

The changes are aimed at streamlining the short sale process, which often takes months to complete. Because the lender and investors are being asked to take a loss, the process can get lengthy. All parties with a financial interest negotiate the amount each will get from the sale proceeds. Such transactions can get so complicated that many prospective buyers won’t even consider offering on a short sale. Because of time length, buyers who do bid often walk away because lenders take so long to make a decision.

With the new time lines in place, short sales may get more attention from buyers and may sell more quickly. Prices may not have to be deeply discounted in order to obtain an offer. Short sales may become competitive with other sales. If inventory clears more quickly and the total inventory is reduced, the lack of supply may cause prices to rise. A decreased supply coupled with continued demand could be a critical step toward the recovery of the housing market.

A VA loan is a mortgage loan guaranteed by the U.S. Department of Veterans Affairs and helps eligible veterans purchase properties by supplying them with home financing.

VA vs. Conventional Loans
A conventional loan today requires a 10 to 20 percent down payment. However, a VA loan is backed by the federal government and requires no down payment. In addition, private mortgage insurance on VA loans is not required. Qualification standards are different. Because VA loans are government backed, the bank assumes less of a risk and the loans are easier to obtain.

VA Process

Until last year, buyers were not allowed to cover certain fees, leaving those fees up to the seller to cover. Those guidelines have been removed. Also, those fees can be bundled into the closing cost and can be rolled into the loan. Second, if the appraiser finds items that require repair, the seller may be asked to take care of those repairs prior to closing. The appraiser will go back before closing to ensure all repairs have been made.

Guidelines for a VA Property

The Property must be in good condition. The home should have working plumbing, flooring covered, bathrooms complete, no broken windows, clean swimming pools, roof in good condition, no chipped or peeling paint, operational water heater and operational heating system, no exposed wiring. AC must be operational, if present. The pest report must be clear. If the property is in an HOA, there can be no more than a 15 percent dues delinquency.

Tips for a VA Buyer
Find a lender who knows the process inside and out. When you have a lender who can offer no fees to the seller, you’re in a positive negotiating position. Be sure you can close in 30 days or less. Explain the positives to the seller.

What is the mortgage interest deduction and what does it mean for today's homeowners? The "mortgage interest deduction", or MID, is the amount paid by homeowners for interest on their mortgage. This includes both acquisition debt (a loan to build or buy a house) and equity debt (a loan to improve you home). The IRS allows this cost to be deducted on your tax return along with your property taxes. It provides a means of recovering some of the cost of home ownership.

How much does the MID save today's homeowners? According to Trulia.com, 38.5 million homeowners (around half) take the mortgage interest deduction. The average mortgage interest tax deduction is $12,200, and a typical benefit for home owners is $3,050 a year.

The mortgage interest deduction isn't an incentive for all-cash buyers, who now make up approximately a 30 percent share of the market. While many of those cash buyers are investors, many are buyers simply wanting a debt-free lifestyle. These types of purchases may mean missing out on certain deductions and on low rates, but it also means 100% assurance of owning your home. All-cash buyers find ready and willing sellers who have the assurance that the sale will close, as opposed to the large number of buyers who need to use financing to buy.

The National Association of Realtors has been a leading proponent of keeping the mortgage interest deduction alive, despite the fact that Washington has been toying with the idea of eliminating the deduction in hopes of saving the government money during these times where federal debt has reached new highs. Harm could come from raising taxes on already struggling American families. Moe Viessi, NAR President, stated, "NAR firmly believes that the mortgage interest deduction is vital to the stability of the American housing market and economy. We urge the president and Congress to do no harm." Removing the deduction would raise taxes on the nation's homeowners and erode home values at all prices levels. The NAR believes that the MID is vital to the stability of the housing market and the economy.

Losing your home can be devastating to your credit, but if you lost your home to foreclosure or a short sale, don't lose hope. Begin today putting yourself in a good position to buy. You can buy again in as few as three years after a foreclosure or short sale if you rebuild your credit and maintain a healthy, on-time credit profile; you can take advantage of low down payment and low interest rate loans.

• Rebuild your credit by making your monthly debt payments on time. Don't ignore your remaining credit obligations during foreclosure or after losing your home. Your credit score gets a boost based on the number of positive accounts in your credit report. The more positives you have, the faster your credit score rises, even after losing a home.

• Pay down your credit cards. Your credit score will improve if you borrow and pay back on time. Don't close out your credit cards because a longer credit history is positive.

• Most homebuyer programs today require a down payment. FHA loans require 3.5 percent down. You will have closing costs, another 2 percent to 3 percent of the sales price. Do the math to determine how much you need to save over three years to have enough to cover your down payment and closing costs.

• Buy only when you are ready. It will take time to rebuild your credit and save for a down payment. Home buying deals will continue to be available for years to come.

• Avoid adjustable rate mortgages (ARMs) and consider a 30-year fixed rate mortgage (FRM) that is a fully amortized loan so your payment and interest rate are fixed for the duration of the loan.

• Buy based on what you can afford. Lenders will pre-approve you based on your gross monthly income. Know your comfort zone. Calculate all your expenses. Don't over-extend yourself.

Buying a home is likely the biggest purchase you'll ever make. It is important to protect this investment. For this reason you will need homeowners insurance. If you have a mortgage, your lender will require that you have coverage on the dwelling.

Homeowners insurance provides you with broad coverage for loss that damages the dwelling. Your policy should also cover your personal property, theft and vandalism, and liability for accidental injury to another person or property. Your policy should cover you in the case of a disaster, whether from fire, flood, theft, or a liability lawsuits. Repairs and replacement costs can add up fast.

Each year you pay a premium. The amount is based on numerous factors, including the value of your home and the location where you live. You want a policy that gives you the right amount of coverage. Ask about additional coverage for flood and earthquake if you live in an area where these natural disasters could occur. Such coverage is normally excluded from basic policies. Also, most companies exclude are mold, fungus, wet rot, dry rot and bacteria. Be sure you're protected if someone becomes injured on your property. Be prepared if the injury requires medical treatment.

If you must file a claim, you will need to pay a deductible. This amount can range from a few hundred to several thousand dollars. Once the loss is greater than the deductible amount, the policy will begin paying. Consider a policy that has replacement cost coverage, not just the present value. If you lose a sofa that will cost you $1,000 to replace, you will want to be covered for more than just the present value.

Be sure you create an itemized list of possessions, updated yearly, that gives evidence of what you have. Take photos. Put the list in a safety deposit box.

The Obama Administration this week announced a cost-cutting move to open the door to cheaper government loans for as many as 3 million borrowers. The Administration ordered the Federal Housing Administration to significantly cut costs on loans refinanced under the Federal Housing Administration's (FHA) Streamline Refinance Program, a move which will help refinancing homeowners cash in on the rock bottom mortgage rates of today.

Effective June 11, 2012, for borrowers who qualify under this program, the cost for the upfront mortgage insurance on FHA loans will be reduced to 0.01 percent of the loan amount, down from 1 percent, according to a White House fact sheet. The annual mortgage insurance amount will be reduced from 1.15 percent to only 0.55 percent per year.

To qualify for an FHA streamline refinance, qualifying borrowers must be current on an existing FHA insured mortgage taken out on or before May 31, 2009. The new lender is not required to verify the homeowner's income, employment or credit score. Also, with no appraisal required, the homeowner can be underwater, owing more than the home is worth.

According to the FHA, currently 3.4 million households with loans signed on or before May 31, 2009, pay more than a five percent annual interest rate on their FHA-insured mortgages. By refinancing through the FHA's streamlined process with the lower insurance costs and lower interest rates, borrowers could save an estimated $250 a month or $3,000 a year.

FHA also announced an increase in upfront premiums on most non streamline loans to 1.75 percent. Fees above $625,000 will be higher. After the housing crash, FHA loans have accounted for as much as 50 percent of all purchase loans in some area. Before the housing collapse, FHA wrote only 3 percent of all home loans.

"FHA can make a difference by helping homeowners who pay on time take advantage of low interest rates through this streamline refinance program" said Acting FHA Commissioner Carol Galante. "Reducing costs for these borrowers will benefit the broader economy in the process."

Foreclosure rescue operations demanding up-front fees continue to rob homeowners looking for relief, even when the services circumvent state and federal laws enacted to prohibit the way they conduct business. The laws primarily prohibit foreclosure relief or foreclosure rescue services from collecting fees before services are actually rendered, and they come with heavy disclosure requirements.

State and Federal laws: In California Senate Bill 94, effective Oct. 11, 2009 prohibits the charging of advanced fees as does the Jan. 31, 2011 Federal Trade Commission's Mortgage Assistance Relief Services (MARS) Rule. Despite state and federal laws, some operations ask homeowners to pay for each itemized service as it is completed. That process is illegal, according to the Dept of Real Estate. Payment for services is only due upon completion of a mortgage modification or other service and the service isn't complete until the lender has issued, in writing, a trial or permanent loan modification.

Forensic loan Audit Scams: A related scam is the forensic loan audit which comes with the promise of a reduced interest rate, the promise of a reduced loan balance, even the promise of a full mortgage cancellation if errors are found in the homeowner's original loan documents. "There is little evidence these audits will reduce anything but a homeowner's bank account even if they're conducted by a licensed, legitimate and trained auditor, mortgage professional or lawyer," according to the FTC.

Bottom line for Mortgage Relief: If you believe a mortgage modification relief program can help you, educate yourself on the program. Chances are you don't need to pay for mortgage modification assistance. Examine your options at Making Home Affordable or by calling 1-888-995-HOPE for free personalized advice from agencies certified by the U.S. Department of Housing and Urban Development (HUD). Study their guidelines. A certified agency should be able to go over the qualification requirements for specific lenders to determine your eligibility before you begin the mortgage modification. Throughout the process, whenever you talk with your lender, document (date, time, discussion details) every conversation and action. Finally, report scams to your local district attorney's office, local real estate regulator and local state bar as well as federal regulators.

According to the National Association of Realtors, pending home sales are on an upward trend, which has been uneven but the trend is meaningful since pending home sales reached a cyclical low last April, and are well above a year ago.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose to 97.0 in January, which is 8.0 percent higher than January 2011 when it was 89.8. The data reflects contracts but not closings.

The January index is the highest since April 2010 when buyers rushed to take advantage of the home buyer tax credit. Lawrence Yun, NAR chief economist, says this is a hopeful indicator going into the spring home-buying season. “Given more favorable housing market conditions, the trend in contract activity implies we are on track for a more meaningful sales gain this year. A sustained downward trend in unsold inventory, (fewer homes for sale) would bring about a broad price stabilization or even modest national price growth, with local variations.”

“Movements in the index have been uneven, reflecting tight credit, but job gains, high affordability and rising rents are hopefully pushing the market into what appears to be a sustained housing recovery,” Yun says. “If and when credit availability conditions return to normal, home sales will likely get a boost, speed up the home-price recovery, and significantly reduce the number of homeowners who are underwater.”

In the Northeast, Midwest, South and the West pending home sales are higher than January 2011. Rio Vista is no exception. Currently there are 87 homes for sale in all of Rio Vista. Of those, 50 homes are active while 37 or 57% are pending or in contract. Of the active homes, 32 are in Trilogy, 18 are in downtown Rio Vista. Of the 37 pending homes, 19 are in Trilogy, 18 are in downtown Rio Vista. More interesting is the price range of the pending homes. Of the 37 total pending, only 7 are for homes priced over $200,000.

If you watch HGTV, then chances are you have probably seen some of the network's popular home improvement shows, nearly all of which have stressed the importance of staging your home for sale. What are the odds the television crew will knock on your door? If you are tired waiting and you want to give staging a try, here are some tips to help make you an expert.

Remove Clutter: When buyers walk into your space, they need to imagine their belongings there. They need peace of mind and lack of distractions in order to do this. Clutter in that space will disrupt their gaze and interfere with their focus. Keep the space clear of paper stacks and knick knacks so that buyers will focus on your hardwood floors or fireplace.

Organize: Examine your closets and drawers. Do you find items you have not worn in some time? Is it time for a trip to the Goodwill? Grab a plastic bag and begin selecting out items you no longer need. For seasonal clothes purchase inexpensive plastic tubs, label them and move those items to the garage. Does paper rule? Do you have small stacks of paper that need addressing? A trip to your local office store for folders and files will solve that problem and help you sort and categorize. Label each file and, if necessary, invest in an inexpensive filing cabinet.

Clean: You want your home to appear move-in ready. Make sure your home looks and smells clean. Mop, vacuum, wash down and dust each surface. If you need help with this task, consider hiring a professional service.

Refresh Paint: Walls fade over time even in the cleanest of homes. Consider a fresh coat of paint to brighten up, at a minimum, the common areas. If appropriate, add a touch of color in a neutral tone to give rooms an updated look.

Room Appropriate: If your home is two bedroom home, do your best to ensure this is what a buyer will find. A den or office (a bedroom without a closet) should reflect the same. It is important that buyers see rooms for what they are designed to be.

Create Ambiance: Ambiance is about the way a home makes you feel. In most homes buyers seek a warm and homey atmosphere. You can accomplish this through appeal to the senses. Consider baking cookies, burning a vanilla candle, lighting the fireplace or staging an area of a room with a game table.

Staging Outdoors: Don't forget the importance of your outdoor space. Extend your living area to the great outdoors. Stage your patio with simple, comfortable furniture, outdoor dining sets, comfortable seating and attractive potted plants

Leave No Closet Unturned: Organize, sort and group your clothes. Consider shelving for shoes or items you can fold. Tops can be grouped together by color. Belts and scarves can hang attractively on hangers made for such purposes. Turn to built in storage only if it is in the budget.

First Impressions: The front of your home is the first thing buyers see when driving by or arriving for a showing. It is essential that the first impression be a positive one. Give the front door a fresh coat of paint. Make sure the yard is tidy and trimmed. A new welcome mat and pots of colorful flowers add a great finishing touch.

Staging is one of the best ways to let your buyers see the true potential of your home. By creating an ambiance that is clean and stylish you can attract buyers to that lifestyle and inspire them to buy your home!