Mark Cheng's Blog: Buyer Resources

Since 2006, conforming loan limits have stayed at $417,000 but on February 13, 2008, the President signed an economic stimulus package that includes a temporary increase of conforming loan limits.

For those not familiar with the industry, Fannie Mae and Freddie Mac are governmental institutions that purchase mortgage loans from banks. Each year, they collaborate to set criteria loans must meet so they can be purchased and these loans called conforming loans. These loans are typically set at a lower interest rate and have better terms than non-conforming loans. The reasoning behind the change is to help homeowners stave off foreclosure and defaults due to high or adjusting mortgage rates.

While banks have still not included these new loan limits in the…

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In today's turbulent market, lender's and banks are being forced to tighten down, requiring larger down payments, more reserves, and more documentation that it had previously. In most ways, it's a step forward in preventing unqualified borrowers from purchasing homes they can't or won't be able to afford in the future. However one of these restrictions, if not implemented correctly, can potentially lead to lost deals and even lawsuits.

Lenders have always relied on appraisals to determine the market value of a property. However, in today's market, appraisers also provide information on whether a market is soft or stable. If a particular market area is determined to be soft, a lender will require an additional 5-10% down payment and possibly additional…

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Continued from Short Sales, Part 1: Taking Advantage of the Buyer's Market

Why Work with a Short Sale Expert?

When it comes to purchasing short sales, INFORMATION IS KEY. Work with an agent and company that is experienced in short sales to maximize your chance of a smooth, successful transaction. An experienced knowledgeable real estate agent can give you a competitive edge when it comes to finding the right home in the following ways:

1. Exclusive Inventory
Agents who work with short sales often have information on off-market listings that can't be found on an MLS. They may be in contact with sellers may be facing financial difficulties but have not yet publicly listed their homes because he or she is still trying to avoid the sale or is in… Read Full Post

What is a short sale?

Pre-Foreclosures, also known as short sales, occur when the selling price of the home minus all closing costs amounts to less than the total loan amount (the first and if second mortgages combined). This differs from foreclosures which is when a buyer fails to pay his or her mortgage for a period of time, typically 6 months, and the bank takes ownership of the property making the house a Real Estate Owned or REO.

For example, an owner purchased a home in the real estate boom for $500,000 with 0% down with an interest only loan. He realizes that he can no longer afford the home and decides to sell it. The home, in today's market, is now worth $470,000. After closings costs, his net cash might amount to $450,000, not enough to repay… Read Full Post