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The NAAR Mission Statement: The Association shall provide beneficial and meaningful member services while promoting Professionalism & Ethics in our ever-changing Real Estate Industry. |
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The NAAR NEWSLETTER |
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Contribute - Change - Challenge |
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“Best Prepared with the Highest Standards” |
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July 12, 2009 |
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The Northern Arizona Association of REALTORS® 1515 East Cedar Ave. Suite C-4 Flagstaff, AZ 86004 928 779-4303 Contact us |
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Links and News you can use... |
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The Department of Real Estate has instituted new user fees. Click here for details. New law requires licensing agencies to obtain proof of license applicant's legal presence in the United States. More on this subject by clicking here. Please follow this link to read the new ADRE’s Home Buyers’ Bill of Rights. (This page is also a permanent Education link on page three.) The Bothands Programs information can be found here. The Leadership Program Application can be here. NAAR 2009 Luncheon Schedule here Arizona Daily Sun special REALTOR® pricing here Supra eKey/Smartphone compatibility chart here |
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Good Real Estate News
Like everyone else, I’m frustrated with the difficulties in fixing the mess that the economy is in. Today, I’d like to share some great news, they are doing some things right. The Government took over Fannie Mae and Freddie Mac in late 2008 and placed them under conservatorship protection. Fannie Mae and Freddie Mac own or guarantee almost 31 million mortgages, about 58% of all single family mortgages. Now the Obama administration has developed a plan to allow homeowners who are having financial difficulties (with certain conditions) to modify those loans with streamlined terms. They have established a step by step process to bring down the payments on these modified loans to VERY affordable terms. This program has a very good chance of helping homeowners in trouble free up money being spent on payments to allow more money to be spent in the consumer economy.
The Home Affordable Loan Modification Program
Here’s an example. You have a $300,000 mortgage at 7%. Payments not including Taxes, HOA fees, Insurance and Private Mortgage Insurance is $1984.33. If you make $60,000 per year family income, the goal of the program is to make this loan payment no more than $1,550 or 31% of your income. This is NOT a refinance and there are no costs other than some minor fees for your loan servicer to prepare and record the documents. If you make your payments on time in the future, your principal balance will be reduced by $1,000 per year for 5 years.
This is the government remember, so let’s look at the steps you need to take to see if you qualify.
Is your loan owned by Fannie Mae or Freddie Mac? This is not obvious. You pay your payments to a loan servicer who in turn handles the payments in such a way that taxes and insurance are paid (for many loans) and the principal and interest payments go to Fannie or Freddie. Here’s how you check; Call the Servicing Company that you send your payments to. Call this number to see if your loan is owned by Fannie Mae 1-800-7FANNIE (from 8am to 8pm Eastern Time) 732-6643 Go Online at www.fanniemae.com/homeaffordable Call here to see if your loan is owned by Freddie Mac 1-800-FREDDIE 373-3343 Go Online at www.freddiemac.com/avoidforeclosure
2. Is your home owner occupied? 3. If you purchased the home as an owner occupant, but have had to rent it out, you will not qualify. They are not changing the characteristics of the loan program. 4. Now the lender/servicer will ask for financial details to help determine if you are at financial risk due to loss of job, hardships or impending rate increases in the loan payments (Due to adjustable loans etc.) 5. If you meet the lender/servicers qualifications, now the servicer attempts to bring that payment down to 31% of your income. How do they do this? 6. STEP 1. The servicer reduces your interest rate by as much as 2% per year for up to 5 Years 7. STEP 2. If more reductions are needed to achieve the goal, the servicer can extend the loan to up to 40 years 8. STEP 3 If more reductions are needed, the servicer can FOREBEAR * temporarily, principal on the loan. This means that the loan will be based on a smaller principal balance, but you may have to pay back the extra if you sell your home. The program also allows Forgiveness of a portion of the loan, but does not require it. This program is ONLY available from the servicer of your loan. No other lenders can make this type of loan
*(Forbearance means TEMPORARY forgiveness of some of the loan principal balance)
The loan modification provides incentives to make it work for all parties. There is a 10 Billion dollar insurance fund to help prevent foreclosures from harming the investors who own the modified mortgages. The loan servicers get paid $1,000 up front for every qualified loan modification they accomplish. If the modified loans stay current, the servicer receives up to $1,000 per year for 3 years. To get servicers in ”Hurry Up” mode, they will receive an extra $500 and the mortgage owners will receive an extra $1,500 if the at risk loans are modified BEFORE they become delinquent. This program will end on December 12, 2012.
The Home Affordable Refinance Program
There is also a Home Affordable REFINANCE program available to homeowner-occupants and INVESTORS who are current in their payments. If the new loan amount is at least 80% but no more that 105% of the current value of your home (or duplex all the way up to fourplexes), you may qualify for a streamlined refinance at today’s low rates. For this program you must pay lender fees but these loans will be 15 or 30 year fixed without any prepayment penalties or balloon payments. In this program, you do not have to show any hardship, but you cannot take additional cash out of the property. You must refinance for the amount of the loan plus any lender required fees. This loan refinance program is available through any lender as long as your existing mortgage is owned by Fannie Mae of Freddie Mac. This program will end in June 2010
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Some very timely and informative information provided to us by our President Elect, Jim Snook Please read and pass along to your fellow agents….
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Affiliate Spotlight
Scott Lee and Jason Walthour are the owners of Southwest Premier Painting LLC. They are native residence of Flagstaff, AZ and have founded their business based on old hometown values. Their focus is always on the customer and paying close attention to detail. They have over 15 years of hands on painting experience. They specialize in residential interior / exterior repaints, new construction, commercial buildings, faux finishing effects, garage epoxy floor coverings and business graffiti proofing. They have painted many homes in Forest Highlands, Pine Canyon, Flagstaff Ranch, Amber Wood and many other neighborhoods throughout Flagstaff. They have also repainted many of the APS building throughout Northern Arizona. If you are looking for a quality local painting contractor with hands on experience, Southwest Premier Painting is the company for you. Call 928-600-5853 or 928-707-0330 for a free estimate. Southwest Premier Painting LLC Click on the link below to access the newsletter.
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