Here is a list of the top 5 changes to FHA

1. The annual mortgage insurance premium (MIP) for most new mortgages will increase by 10 basis points (.10 percent). Premiums on jumbo mortgages ($625K or higher) will increase by 5 basis points (.05 percent). New annual MIPs will range from 1.3% to 1.55%
2. FHA will require borrowers to continue paying annual premiums for the life of their mortgage loans. This change will be effective on or after April 1, 2013.
3. Lenders will have to manually underwrite loans for borrowers with a decision credit score below 620 and a total DTI ratio greater than 43%. This change will be effective on or after April 1, 2013.
4. Down payment requirements for mortgages with original principle balances above $625K will be raised from 3.5% to 5%. (A federal register notice was published on Feb 6th. Comments are due March 8th.)
5. Greater oversight will be required for borrowers who are trying to obtain a new FHA loan 3 years following a foreclosure.

Consider this, if you bought a home using FHA before April 1st and you made extra payments on your loan and one day you have at least 22% equity in your home, you can remove the mortgage insurance saving you around $200 a month. If you buy a home after April 1st you must pay the $200 a month for the full 30 years!!! That could cost you tens of thousands of dollars.

If you are looking at buying this year and planned on going FHA financing, you should consider buying before the April 1st deadline. You don’t have to be closed on a home by April 1st, but you must have a property identified by that date with an FHA case number assigned.

Call me at 801-683-9666 if you have any questions or would like me to assist you in buying a home in Utah.

Go ahead and check it out and let me know what you think!

Visit CheapUtahRealEstate.com

Short sale transactions can be an excellent choice for homeowners who must sell & who owe more on their homes than their current values. Unfortunately, there are numerous misunderstandings regarding short sales, & it is extremely important to understand the proper procedures & best practices in this process should you choose this path for your homeowners/sellers.

Misunderstanding 1: THE LENDER/BANK WOULD RATHER FORECLOSE THAN CONSIDER A SHORT SALE TRANSACTION.
This is likely the most common misunderstanding. In reality, banks DO NOT want to foreclosure on properties, as the foreclosure process is rather costly and lengthy. Banks, lenders, investors, and even the Federal Government have stated publicly if a homeowner is qualified for a short sale, the transaction needs to be considered, based upon:

• FINANCIAL HARDSHIP: there is a current hardship causing the homeowner to have trouble affording his mortgage.
• MONTHLY INCOME ISSUES: The lender will want documentation showing that the homeowner cannot pay the monthly payment or will soon not be able to afford the monthly payments.
• INSOLVENCY, The lender will want proof that the homeowner does not possess significant liquid assets that could pay down the debt of the mortgage.

Misunderstanding 2: YOU MUST BE LATE ON YOUR MONTHLY PAYMENTS TO BE ELIGIBLE FOR A SHORT SALE.
While this may have been true in the past, today, lenders/banks are interested in verifiable hardships, monthly payment shortfalls, or pending monthly payment shortfalls and insolvency.
If the homeowner meets these requirements, & is unable to afford his mortgage, act immediately. Any delay may limit the homeowner’s options for a short sale transaction.

Misunderstanding 3: IT IS TOO LATE TO NEGOTIATE A SHORT SALE TRANSACTION BEFORE THE FORECLOSURE.
This misunderstanding probably hurts the homeowner the most. Many mortgage holders do not understand that foreclosure is a long process, & there is time to evaluate options & potentially make decisions that could result in a better outcome.

Misunderstanding 4: LISTING A PROPERTY FOR A SHORT SALE IS AN EMBARRASSMENT TO THE HOMEOWNER.
It is quite understandable that homeowners may have reservations about going public regarding their financial distress. Recent predictions, however, indicate that one in eight homeowners in the U.S. is currently behind in their payments.

Misunderstanding 5: SHORT SALE TRANSACTIONS ARE IMPOSSIBLE & NEVER GET APPROVED.
This is inaccurate. Short sales are becoming more streamlined & lenders have become more knowledgeable & willing to work with homeowners to complete these types of transactions. Real estate professionals are also becoming better educated in the short sales process.

For example, Realtors with the “Short Sales Certified” designation have received extensive training in methods to help homeowners in distress and how to successfully process short sale transactions. There are absolutely no guarantees in any distressed situation; however, the short sale transaction process has become more efficient, while timelines for approval have also become much shorter.

Misunderstanding 6: PROSPECTIVE PURCHASERS ARE NOT INTERESTED IN SHORT SALE TRANSACTIONS.
This is a major myth and homeowners hear this frequently, oftentimes causing them to be wary of listing their homes as short sales. This is not accurate. In fact, many real estate professionals receive phone calls/emails from prospective buyers who only want to look at short sales or foreclosures.

In conclusion, brokers/agents who have been awarded the “Short Sale Certification” designation have been trained in all aspects of the short sales process. Banks/lenders have come to expect that real estate professionals who have received this designation are the ones with whom they desire to work with.

I AM Short Sale Certified and have worked with numerous sellers to successfully sell their home through short sale. Call me today if you are considering short selling your home at 801-792-5040

The requirements for the incentives are:
• owner occupant utilizing FHA-insured financing
• offering full current list price

If you have questions, please call me at 801-792-5040 and I can send you a list of eligible foreclosed HUD homes.

No monthly payment is required & no interest accrues on any down payment assistance given.  Down payment assistance is paid back when (and if) a triggering event occurs, such as the homeowner sells the home, transfers title or refinances to take out equity.  If the amount owed is partially forgiven (e.g. $2,500 in Murray instead of $5,000 after 15 years), the remaining balance does not become due at that time – it would be paid back when a triggering event occurs, such as those already mentioned.
Cities that have down payment assistance:

• Salt Lake City
• Kearns
• Magna
• Sandy
• Murray
• West Jordan
• West Valley

Availability changes daily, first come first serve basis. For specific guidelines and applications you can contact:

Amber Segura
Loan Officer
Security National Mortgage    
801-815-9564

Real estate investors are finding opportunity in depressed home prices, sluggish sales and the expanding pool of renters.

Inman News examined housing, demographic and economic data for hundreds of metropolitan areas nationwide in developing a list of 10 markets that may be best suited for house-hunting investors.

The analysis considered markets with high affordability, low and dropping prices, a high market share of foreclosure sales, high population growth, an improving unemployment rate that is close to or better than the national average, high projected return on investment (ROI) over the next decade, and a low total cost of ownership-to-rent ratio.

The analysis also considered InvestorScores from investment analytics firm SmartZip. InvestorScores are risk-adjusted financial assessments generated for individual properties that are based on projected cash flow and annual investment yield over 10 years.

On a scale of 1 to 100, properties that score above 50 are expected to outperform the market while those that score below 50 are expected to underperform. The analysis considered only those markets with scores of 50 or above.

After the final 10 markets were chosen, they were ranked according to InvestorScore. Where InvestorScore was the same, the markets were ranked by projected return on investment, another metric created by SmartZip.

Projected ROI is the percentage of money expected to be gained or lost by owning a property in this market relative to the amount of money invested. In its ROI calculation, SmartZip considers total first-year investment (down payment and closing costs), annual net cash flow, 10-year estimated appreciated value of the property, and closing costs associated with the eventual sale of the property.

The 10 markets are, in order: Indianapolis-Carmel, Ind.; Winchester, Va.-W.Va.; Gainesville, Fla.; Tucson, Ariz.; Tallahassee, Fla.; Hagerstown-Martinsburg, Md.-W.Va.; Salt Lake City; Richmond, Va.; Gainesville, Ga.; and Winston-Salem, N.C.

Seven out of the 10 markets are in the South, two are in the West, and one is in the Midwest. None of the markets are in the Northeast.

The results of the analysis mirror two major economic trends: population growth and improving employment. In the past decade, the South has seen the biggest jump in population, up 14.3 percent to about 114 million people, according to the U.S. Census Bureau. The nation’s second most populated region, the West, saw its population jump 13.8 percent to nearly 72 million.

The Midwest and the Northeast registered much smaller population increases — up 3.9 percent and 3.2 percent to about 67 million and 55 million, respectively. Those smaller growth rates eliminated many of the markets in those regions from consideration in this report.

Nationally, unemployment stood at 9.2 percent (not seasonally adjusted) in March. The Midwest and the Northeast had the lowest unemployment rates among the four regions: 8.7 and 8.3 percent, respectively. The South was not far behind, however, at a rate of 8.9 percent.

The West was the only region to see an unemployment rate higher than the national rate: 10.9 percent. The two markets on the list from this region — Tucson and Salt Lake City — had considerably lower unemployment rates compared to major metro areas nearby, such as Phoenix and Las Vegas.

Four of the chosen markets are state capitals (Indianapolis, Tallahassee, Richmond, and Salt Lake City) and at least three others benefit from proximity to either a state capital (Gainesville, Ga., to Atlanta) or the national capital (Winchester and Hagerstown-Martinsburg).

Riding the rental upswing
Despite recent job growth, unemployment is still high across the country and foreclosures continue to plague many markets, turning many former homeowners into renters. Affordability has hit a record high, with home prices continuing to fall in many markets, leaving some buyers skittish and waiting for the proverbial market bottom. Those who do attempt to buy a home may find their desires thwarted by higher credit standards and down payment requirements.
In such an environment, investors, especially those with ready cash, see a chance to put their money in an asset with income potential for years to come.

“Everyone has to have a place to live. Because people are not able to afford their mortgages and are selling — usually short sale — or just walking away, the rental market is strong,” said Betty Armbrust, broker-owner at Southridge Realty Co. in Denver.

“As an investor in a lowering price market, I look for deals with either a fix-and-flip or rental (potential). I know that if a property won’t sell, it will rent.”

A recent report from property search site HotPads found that rental listing prices on the site climbed 7.4 percent between April 2010 and April 2011, while for-sale listing prices dropped 8.8 percent.

“We predict investors looking to ride the rental upswing will continue renting properties and will wait for home values to appreciate,” the report said.

“Increasing demand for rental properties is an indicator of a growing preference for low-risk housing options, which is closely linked to the broader economic uncertainty.”

A rise in rental interest among consumers has also manifested itself in real estate search traffic. Visits to sites that specialize in home and apartment rentals climbed 33 percent in February compared to February 2010, according to Web metrics firm Hitwise.

Investors accounted for an average of 21 percent of transactions in first-quarter 2011, about the same share as in first-quarter 2009, according to NAR survey data. Cash buyers made up an average 33 percent of transactions in first-quarter 2011 — the highest share of any quarter since NAR began keeping track in fourth-quarter 2008. NAR’s data does not separate out investors from cash buyers, though the association does say that most cash buyers are investors.

By contrast, first-time homebuyers have accounted for an average 32 percent of purchases for the past two quarters, which is the lowest share since fourth-quarter 2008.

In March, total distressed property sales, including foreclosures and short sales, trended upward to 40 percent of total sales, NAR said. Investors snapped up 54 percent of those distressed sales, according to economic research firm Capital Economics.

“Investors, looking for diversification and an inflation hedge, are looking at deeply discounted homes to generate rental income. The median price of an investor-purchased home in 2010 was cheap — at $94,000,” said Lawrence Yun, NAR’s chief economist, in the survey report.

“One thing that was lacking for the second-home market in the past two years was mortgages to buy … non-primary-occupant homes — because government-backed mortgages are not there for these properties. An eye-popping 59 percent of investor home purchases were made with cash in 2010.”

Only 39 percent of investors used a mortgage to finance their purchase in 2010, compared with 80 percent of primary-home buyers, according to NAR’s 2011 Investment and Vacation Home Buyers Survey.

Buyers of investment properties had higher median household incomes than buyers of primary residences — $87,600 compared with $69,600, the survey said. Investors also tended to be older than buyers of primary residences — 45 compared with 37.

Like buyers of primary homes, investors favored purchases in suburbs or subdivisions — 33 percent bought in that type of location. A quarter of investors chose to buy in small towns, compared with 16 percent of primary-home buyers. Both types of buyers bought rural and urban properties at the same rates in 2010 — 17 and 18 percent, respectively.

Also similar to primary-home buyers, investors favored the South (32 percent) and the West (24 percent). Investors lived a median 19 miles from the home they purchased in 2010.

“Having chased ‘markets,’ the thing I now value most is proximity,” said Sean O’Toole, a real estate investor and founder of ForeclosureRadar.

“I truly believe that a good investor should be able to find value in any market, so we believe investors are better off focusing on the market(s) they know, and properties they can easily and regularly visit.” Most investors (63 percent) bought detached, single-family homes, followed by condos or duplexes, in buildings with two to four units (16 percent).

The biggest proportion of investors bought their property through a real estate agent (44 percent), while 20 percent bought directly from an owner they knew, and 17 percent bought through a foreclosure or trustee sale. “To rent to others” was the most popular reason to buy among investors, according to the survey. The second most popular reason cited was “to diversify investments/good investment opportunity.”

The median length of time investors planned to own their purchase was 10 years. More than half of investor buyers (52 percent) said it was at least “somewhat likely” that they would buy another vacation or investment property in the next two years.

Investors tended to be more confident about the housing market than primary homebuyers: 77 percent of investors said “now is a good time to purchase real estate,” compared with 68 percent of primary-home buyers. “Historically speaking, whenever economics favored buying rather than renting, or … were about even, people favored buying because of the perceived benefits of homeownership,” said Rick Sharga, senior vice president of foreclosure data site RealtyTrac.

But now a “psychological hangover” is preventing potential buyers from entering the market, Sharga said. “Nobody wants to wind up on our foreclosure list.”