Archive for May, 2011

Had a call Friday and Agent says the seller’s lender will approve the short sale but will not allow any payment from Seller to bring the delinquent Homeowners Association dues current. The responsibility would fall on the buyer to do so. QUESTION: Can the Buyer come out of pocket to pay the seller’s HOA arrears so the deal can close?
ANSWER: Yes, the buyer may provide additional funds to bring the HOA current, through escrow. This must also be disclosed on the purchase contract (and, of course, the HUD-1 Settlement Statement).

For more short sale tips

http://www.slideboom.com/presentations/353269/14-Short-Sale-Tips-For-Homebuyers

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If the mortgage the Veteran was foreclosed on was a non-VA loan (e.g. FHA, CONV etc) then he/she is eligible for VA financing after 2 yrs. However if the loan that was foreclosed on was a VA loan, some restrictions come into play.
The Dept of VA is going to assess how much their $ loss was through that foreclosure. If the loss from the previous VA loan foreclosure has not been repaid, then there may not be enough entitlement remaining to allow the Veteran to borrow 100% of the purchase price on the new home being purchased. Here’s an example of how the figures may look: The following example shows how a foreclosure on a VA loan and failure by the Veteran who experienced foreclosure to repay the losses to the VA, can detrimentally affect his/her ability to fully enjoy the VA benefit:

A veteran has used $36,000 of his basic entitlement on a VA loan that was foreclosed. The loss was not repaid. It’s been two years since foreclosure and the borrower would like to purchase another home using the Program. The loan amount will be $300,000 where the county limit is $417,000.

$417,000 x 25% = $104,250 maximum guaranty with full entitlement
$104,250 – $36,000 (not restored) = $68,250 entitlement available
$68,250/ $300,000 = 22.75% is the max allowed VA Guaranty on this loan

In other words, the typical 25% VA Guaranty is not in play in this scenario, forcing the Veteran to come in with cash downpayment.($27,000)

For complete VA homebuyer information visit the Youtube Channel at www.youtube.com/user/thezerodownloan

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A client called today, anxious since he had read online that cosignors don’t take title to the home they are helping the Buyer/borrower purchase.
Technically this is accurate, but not the entire story.
Over the years FHA has made a distinction between non occupant CO-BORROWERS and non-occupant COSIGNORS.

In fact my research shows that the only FHA programs that allow Non occupant CO-SIGNORS that are not considered CO-BORROWERS are refinance programs. And in my 15 yrs of doing this, I don’t remember the last time I saw a file with a Co-Signor as opposed to a Co-Borrower.
Here’s how it works:

NON OCCUPANT- CO-BORROWERS
• Must take title to the property (ie when Seller signs Grant deed, your parents names’ will need to be on there)
• Must sign the Promissory Note
• Must sign the security interest which in CA is known as the Deed of Trust and many other States known as the ‘Mortgage’ (see page 79 and 80 of the FHA 4155 handbook_

NON OCCUPANT COSIGNORS
• Do not need to take title to the home
• Must sign the promissory Note
• Do not need to sign the security interest which in CA is known as the Deed of Trust.

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