These loan modifications are considered on a case-by-case basis. The information you will need to supply to your lender is your loan number, income information and documentation, most recent mortgage statement, bank statements and a letter demonstrating your financial hardship.

There are also a couple programs designed by the federal government to help struggling homeowners modify their loans. Here is information on these programs, as well as pertinent information on four of the major lenders.

Of course this applies to homes that are traditional sales, i.e. homes with equity. Another remodel that has great return is the installation of vinyl windows where the percentage of return in 2008 was 93%. However, if you don’t want to go through the cost of remodeling, there are much simpler things that can also make a home more sellable such as painting and removing all clutter.

Those who have been sitting on the fence need to realize that THIS is the time to buy a home. Quite often people say they are waiting until San Diego’s real estate market “hits bottom.” However, most people don’t realize we hit bottom until prices start going up again. Isn’t it interesting that when home prices were skyrocketing, buyers were out there in force, worried that they wouldn’t be able to get a home in the San Diego real estate market? Now that prices are affordable again and interest rates are down, they are concerned about paying too much so many have adopted that “wait and see” mode. If your dream and desire is to own a home in the San Diego real estate market, you can’t expect a better time than now to take action.

When an offer is submitted, the offer is submitted to their lender along with a very comprehensive financial package. This package includes tax returns, bank statements, pay stubs, a financial statement, and a hardship letter explaining why the owner can’t continue making payments. The offer is subject to approval by the lender. They will review the package and decide if they want to process it. They will order a BPO (broker’s price opinion) to determine the fair market value. A negotiator will be assigned to review the file and process it.

The whole process usually takes anywhere from one to three months. After the lender approves the short sale, the escrow period for the new buyer begins. Keep in mind that the sales price needs to be within a certain percentage of the BPO value, which percentage is determined by the lender. They will not take just anything for the property.

At the height of the market in 2004 where San Diego homes were selling quickly, there was less than 2 months supply. Meaning if no new listings went on the market, it would take less than two months to sell the existing home inventory. In 2007, San Diego fewer homes for sale, and there was over a 16 month supply. In San Diego we are now just under a 7 month supply, and the number of homes for sale is decreasing. You know the law of supply and demand.

With more people buying homes in San Diego, the demand is going up, the supply is going down, and that means increased prices will be on the way. If you are thinking about buying a home in San Diego, now is the time. You can go to my website, www.karencrabtree.com, and search for properties that meet your criteria. If you would like personal assistance, just send me an email.

FHA and VA home loans are on a comeback. With the FHA loans you have to have 3% of your own money (it can be gift money), and with a VA loan you can buy with zero down. From my experience, the more money you put down, the greater the chance your offer will be accepted when in a multiple offer situation.

Buyers should talk to their lender and be pre-qualified before looking for a home. Once they know their mortgage, they know the price range in which they need to look. It’s very disheartening to fall in love with a house that you find out you can’t afford the mortgage, and then everything else in your price range just doesn’t measure up. Also, a mortgage pre-approval letter from your lender should accompany your offer. Most sellers won’t even consider an offer without a mortgage pre-approval letter.

If you need me to put you in touch with a reputable lender to find out your qualification or have other questions about mortgages, feel free to send me an email.

Many San Diego residents who have experienced foreclosure, originally bought homes on stated incomes (not verified by the banks), no money down, and adjustable interest rates. Now those loans are adjusting, payments are going up, and people can no longer afford the home, which lead to the dreaded foreclosure. Since San Diego home values have declined, home owners cannot refinance because there is no equity and now may possibly face foreclosure.  To avoid a foreclosed home, home owners options have been to do a “short sale” (where the lender agrees to take less than what is owed), or let the home go to foreclosure.

There have been a couple bright spots for these troubled potential foreclosure listings in San Diego. One is the HOPE Program sponsored by the government. You can go this foreclosure website to learn more about options if you are facing this issue.

Also, San Diego lenders certainly don’t want a foreclosed home, and are now more inclined to do loan modifications to keep people in their homes. If the borrower is facing foreclosure, they should contact their lender and ask for the loan modification department and explore this possibility with them. Our market is cyclical and this wave of foreclosures will eventually subside.

First-time home buyers are finding it now within their reach to have the American dream of owning their own house. There are great home-buying bargains to be had with all the short sales and REO’s. These affordable houses together with declining home prices have created a lot of competition, very similar to when the prices were climbing and home buyers had to make several offers before they could get one accepted. Home buyers are again, often having to make multiple offers before they get one home offer accepted.

When I write a home offer for a client, I first do a comparative market analysis to see what fair market price is, and we use that information to make an informed offer on a house. Many of the short sale and REO properties are listed at an extremely low price which makes a buyer think they can get it at that price. However, this really creates an auction type atmosphere, and the highest bidder wins out. One of the best virtues to have during this buying process is “patience.”