USDA Rural Loan Guarantee Program Has Funding Extended ...

Great news for folks trying to purchase rural properties in Central Oregon.

Two weeks ago on May 26, 2010, the Department of Agriculture, authorized the issuance of Conditional Commitments for USDA’s Section 502 Single Family Housing Guaranteed Loan Program beginning immediately and continuing until $2.5 billion in loan limits is exhausted. If you are looking to purchase property outside of the Bend urban boundries this program maybe of great benefit to you!!

There are many properties close in to Bend and far from Bend that will qualify for these programs. Let me do the homework for you in your search for these properties!

Bend, Oregon Real Estate Trends April 2010

Residential
Price Range	Number Active		Number New	Number Pending	Number Reduced		Number Sold			Avg SP/LP		Avg DOM	Months of Inventory
$125,000 - $225,000	227		95	108	86		71			99%		133	3.2
$225,100 - $325,000	131		49	43	31		27			98%		166	4.9
$325,100 - $425,000	103		37	25	17		14			96%		257	7.4
$425,100 - $525,000	58		13	9	20		6			95%		350	9.7
$525,100 - $625,000	35		9	7	18		2			54%		270	17.5
$625,100 & up	98		21	5	22		8			90%		201	12.3
Total/ Average	652		224	197	194		128			89%		230	9
	Active		$125-$225	$225-$325	$325-$425		$425-$525			$525- $625		$625 & up	Total
	5/1/10		227	132	105		58			35		98	655
Residential with Acreage
Price Range	Number Active		Number New	Number Pending	Number Reduced		Number Sold			Avg SP/LP		Avg DOM	Months of Inventory
$125,000 - $225,000	36		7	9	15		6			94%		221	6
$225,100 - $325,000	31		5	3	8		0
$325,100 - $425,000	25		6	1	3		2			97%		103	12.5
$425,100 - $525,000	21		5	2	7		0
$525,100 - $625,000	11		1	0	4		3			93%		209	3.7
$625,100 & up	63		9	0	9		0
Total/ Average	187		33	15	46		11			95%		178	7
	Active		$125-$225	$225-$325	$325-$425		$425-$525			$525- $625		$625 & up	Total
	5/1/10		36	31	25		21			11		63	187
Bare Land
Price Range	Number Active		Number New	Number Pending	Number Reduced		Number Sold			Avg SP/LP		Avg DOM	Months of Inventory
$125,000 - $225,000	115		20	23	25		12			91%		177	9.6
$225,100 - $325,000	80		7	1	14		3			90%		117	26.7
$325,100 - $425,000	66		1	1	7		1			100%		254	66
$425,100 - $525,000	28		3	0	1		0
$525,100 - $625,000	10		1	0	1		0
$625,100 & up	19		0	0	1		0
Total/ Average	318		32	25	49		16			94%		183	34
	Active		$125-$225	$225-$325	$325-$425		$425-$525			$525- $625		$625 & up	Total
	5/1/10		117	81	66		28			10		19	321

This report came out a little jumbled as I am still learning the in and outs of moving information into my blog page. If you have any questions about this report or would like the full version sent to you in a PDF format, call or email me. I would be glad to send one over to you.

Wow how the mighty have fallen….Great Deal Near Drake Park....

This home just hit the Bend market it sold in October of 2006 for $1,475,000, today it is bank owned and offered at $600,000. This four bedroom home with 2.5 bathrooms is located near Drake Park and is situated close to all that makes Bend so special. If this is something that piques your interest call me to arrange a showing.

Yikes, since I posted this earlier today there are seven offers on this property. Moral of the story if you find something you like and it is an outstanding value be prepared to step up to the plate and make an offer quickly!

Could this be a step in the right direction….

Bank of America announced a new program that will forgive up to 30% of the principal for those owing more than 120% of the value of their home. The program is slated to start this May is in response to a settlement reached with the commonwealth of Massachusetts regarding the type of loan modifications Bank of America could make on their Countrywide portfolio. And it may be a preemptive move to the Washington State suit that Bank of America is not doing enough to modify underwater loans.


While principal reduction has been practiced sparingly on a case to case basis by other large lenders, the Bank of America program will be more wide spread, yet focused to one group of its client base. Applying to only borrowers who have loans generated by Countrywide Financial will be eligible. Of those borrowers only the riskiest loans will be considered. You know the breed; option adjustable-rate, subprime and prime loans with a low initial fixed rate then annual increases. Bank representatives say there are approximately 45,000 loans in the portfolio that qualify. The average reduction will be in the $62,000 range.

Other qualifications are similar to those for a standard loan modification, you also must have missed at least two consecutive payments and be able to demonstrate that you are in financial hardship. Ones loan must have a balance of 120% of the estimated home value.

Once you qualify the program will reduce the principal balance and place the determined amount in an interest free account. For every five year period that you make your payments the bank will forgive a little more of the principal balance until the balance has reached the 100% loan to value ratio. To protect Bank of Americas interests should the homes price recover in the fourth or fifth year to the loan balance the forgiveness to the interest free account would stop and would have to be paid off when the home is sold or the home is refinanced.

Now before you run out and call your Bank of America representative you should know that it will be Bank of America that will reach out to you should you qualify for this program. While this is not ideal it could be a step in the right direction in providing relief that makes sense.

Will your lender be seeking a deficiency judgment against you ….

The other day I was interviewing with a prospective client about their distressed property and the options available to them. After researching their options on the internet they were confused about whether a lender has the right to pursue a deficiency judgment against them if they were to short sell their home. Not wanting to go through the ordeal of selling their home only to have the unresolved debt stall their fresh start they asked for my take on the subject.


The first recommendation was that they seek professional counsel from a qualified real estate attorney and CPA. I then shared some of the research that the Oregon Realtors legal hotline had recently provided its members. The hotline offered that currently in Oregon since the short sale of a property is a voluntary modification of terms of the loan agreement, the new agreement can contain any terms the parties agree to. In a voluntary modification like a short sale the deficiency is the unpaid balance of the note. A note holder can sue in court for the unpaid balance of the note unless the maker of the note bargains for and gets “full satisfaction” of the note. Should the borrower get only the note holders verbal agreement to waive their lien and not foreclose that would leave the borrower exposed for the unpaid balance.

To get “full satisfaction” the borrower needs to ask for it!! Otherwise the lender is allowed to waive their lien on the property, forego foreclosure and continue to hold the note as an unsecured debt. Since the note is no longer secured by the property and has become a personal debt, the lender is no longer bound by the foreclosure laws of Oregon. The lender is now free to pursue a judicial judgment for the unsecured debt. In Oregon the statue of limitations for pursuing a judgment is ten years, with the possibility of an extension for another ten years. Just when you thought you would be rebuilding your credit in the next two to four years this dog could be following you around for the next ten years if you do not ask for and receive in writing “full satisfaction” to your lien.

You like the home but wish it had newer kitchen, larger bedrooms or a newer roof….

You have been searching and have found a property you really like but it needs a little love or maybe the rooms are too small and you want to expand them to make it the home you desire. Since 1978 HUD has provide a program design specifically for the buyer who is has found a home they like but needs some immediate attention. The program is designed to help provide a loan package for you to purchase and rehabilitate a home that has been completed for at least one year. The beauty of the program is that it rolls both the purchase price and renovation costs into one loan with a down payment as low as 3.5%.


There are two versions of this program available 203(k) and the 203(k) streamline. Both offer a loan to value rate maximum of 96.5% on the purchase and 110% on the renovation. The streamline program offers fewer restrictions, in this program there is no minimum renovation expense but it does have a capped at $35,000. All properties must be appraised prior to the loan and a value must be determined for the work to be performed. All work done must start within thirty days of closing and be completed within six months of closing. If you can keep your costs down to $15,000 no inspection of the completed work is required.

There are limits to the scope of work that can performed, slab granite counter tops won’t make the grade but a new roof, new appliances, upgrades to heating/cooling systems, flooring, new windows and much more are acceptable.

Ask your mortgage broker to explain the full benefits of how this program can benefit you! If your broker is unfamiliar with the program contact me and I would be glad refer you to a mortgage specialist who is familiar with all aspects of this great program.

Up Coming Dates to Consider

Larry Wallace over at True North Mortgage sent out an email this morning highlighting some important dates some important dates for homebuyers.

March 31st: The Fed is scheduled to stop subsidizing home loan interest rates.
It is entirely possible that they will extend the subsidy, should they choose not to extend look for higher interest rates and higher monthly payments.

April 30th: Tax credit for purchasing a home. The home has to be “in contract”, (i.e. accept offer to purchase) or lose the credit.

June 31st: Tax credit for home purchase must close escrow or lose the credit.

Spring/Summer: FHA mortgage insurance will become more expensive. The effective date is still pending.

Spring/Summer: FHA to reduce allowed seller paid closing costs from 6% to 3%. This will mean the buyer needs to provide more cash at closing. The effective date is still pending.

Missing these dates will make a home purchase much more expensive, it could even leave priced out of buying a home!!

You can contact Larry at larryw@bendbroadband.com or at his office 541-323-8783