Well, August has arrived in Central Virginia, and it's HOT as usual. We finally got some rain, and for those of you familiar with Richmond, German School Rd & Midlothian Turnpike intersection flooded.....AGAIN!!! Just stay away from that corner if it looks like rain!
As I said in a previous blog, I am not looking for a job at the Weather Channel!
Well, Wall Street said interest rates were going to go up, 3 months ago! But quess what......they went down.....around 4.5%. Now, that is for the BEST borrowers. You need a credit score over 720. Even if your score is around 620, the rates are still around 5%.
Real estate in Central Virginia is moving slowly. I had a listing that was headed toward foreclosure, but I found an investor 2 days before the foreclosure and got it stopped. The owner/seller will have a short sale instead of a foreclosure on his credit report. if we are able to get it closed this month.
What does that mean, you ask. Since short sales are a fairly new event in real estate, we are still learning all the details. As we know so far, you will be able to obtain another mortgage in as little as 1 year, possibly 2. If you have a foreclosure, you won't be allowed to obtain financing from Fannie Mae or Freddie Mac for up to 7 years.
So you understand, the 2 agencies mentioned above own over 50% of the mortgages in the US. But, you say, my loan is owned by Bank of America or Wells Fargo, not one of those agencies. Well, sometimes, those big banks are only servicing the loans. In other words, they get paid a fee to collect your money for the government agencies. I have heard that it could possibly be as much as 80% of the loans that BofA services.
So you need to listen when you hear Fannie Mae or Freddie Mac talking. They may actually own your loan, and you didn't even know it. So what does that matter to me, you ask!
Well, think about short sales and foreclosures. The banks lose money, RIGHT!!! WRONG!!!! If the loan is owned by the government, then the taxpayers actually lose the money, because the government then has to step in and bail the 2 agencies out.
Now, is it beginning to make sense. The banks aren't really hurting as much as they make us think they are. Fannie Mae and Freddie Mac are hurting worse. And that is with our tax dollars.
I'm sure I have probably confused some of you. The thing is, our economy needs to get past the "Short Sale & Foreclosure" part of real estate history in order for things to move forward.
It is a proven fact that the banks will lose LESS money by approving a short sale versus going through a foreclosure. And, as stated above, it is to the sellers advantage to do a short sale.
So, if you are behind on your mortgage payments, or know someone who is, do something! Don't ignore the problem, it won't go away. Please, get with a Realtor that you know and trust, and get the facts. BUT, DO NOT pay anything ($) up front. My advice is FREE, but not all Realtors work that way.
And, as the 'ole saying goes........"If it sounds TOO good,,,,,you know the rest!!
Have a good week and stay COOL!
