MORTGAGE RATES LOWER FOR THE THIRD STRAIGHT WEEK:  In a repeat of last week, the bond market finished over 80 points higher – again pushing pricing / rates lower and lower.  Now is a great time to look into a new loan as we are seeing the lowest rates since early December 2010.

30 Year Fixed Par rates dropped to 4.625% and they are not far from 4.5%.  15 year fixed rates down to 3.875%.  5/1 ARMS are still at 3.125%.  If you want a fixed rate in the low 3% – maybe consider a 10 year fixed where that rate is available.

SHORT SALE VS. FORECLOSURE:  It is no secret that many homes across the country are upside down – meaning an owner owes more than what the home is worth.  There are some loan programs that will allow you to loan up to 105% of the value of your home, but many owners are much farther upside down than that.  With loan modifications hard to qualify for and usually not including reduction of principal – many home owners are forced to consider a short sale or foreclosure.

A short sale is selling the house for less than you owe.  The home owner comes to an agreement with their existing lender to accept a purchase contract for less than what is owed.  The good thing about a short sale is a home owner does not have to sign the agreement unless they are happy with the terms – the most common concern that homeowners have is that the debt is forgiven and that the bank can not come after them after the purchase is completed.  This is typically included in all short sale agreements. 

A short sale is a good way for a homeowner to move on from a home that has lost so much equity that they may never gain it back.  Many homeowners are $200,000 and $300,000 upside down and don’t want to stake their whole financial future on home values coming back.  A short sale is a good way for the bank to get a fair market value on the home without having to go through the costs and process of a foreclosure. 

A foreclosure is when a homeowner does not make the payments (because they can’t or because they choose not to).  Eventually the bank will seize the home and put it up for auction. 

Every person has a different view on whether short sales or foreclosures are right or socially responsible, but this does not change the fact that they will continue to happen and are a huge part of the housing market today.  Please let me know if you would like to talk to myself or a realtor in your area about the possibility of looking into a short sale.

CREDIT AND LENDING DIFFERENCES WITH A SHORT SALE AND FORECLOSURE:  Short sales and foreclosures have different consequences when a homeowner eventually wants to buy again.

FHA and conforming loans are the 2 most popular loan products on the market today.

If a customer goes into a short sale – they can not purchase again for 2 years with an FHA loan and 3 years with a conforming loan.

If a customer goes into a foreclosure – they can putchase again for 3 years with an FHA loan and 5 years with a conforming loan.

Both a short sale and foreclosure are considered public records on your credit report.  Overall, it is easier to purchase again quicker by going through a short sale versus a foreclosure. 

Right now the MORTGAGE DEBT RELIEF ACT allows homeowners to sell or foreclose on their primary residence without being taxed on the loss.  After 2012, a consumer will get a 1099 for the loss and must pay income taxes on it.

MY FREE SMART PHONE APP:  Go to WWW.WORKINGBUSINESSCARD.COM/DOWNLOAD.PHP on your smart phone.  Use my activation code 4802065577 (also my phone number).  This is compatible with I-phones, Blackberry, and Droids.  The app is completely free and gives you the ability to always have current mortgage rates right on your phone.  The application also has a mortgage calculator and prequalification tool for new purchase loans.  You must download from smart phone.