During these difficult times many homeowners aren’t paying HOA fees. No one wants to enforce other neighbors to pay past fees, but it’s essential for a community to stay on top of this. The reality is when one homeowner isn’t paying their share of the HOA the others have to pick up the slack. A bad misconception many home owners have is the HOA is a profit center for the community. It isn’t by a long shot. Just a few homeowners who stop making HOA payments cut into an association’s budget quickly.

Nationwide, non-payment of HOA fees is among the top problems facing condo and single family homes says Thomas M. Skiba, chief office of Community Associations Institute in Alexandria, VA. When too many homeowners stop paying lenders may become unwilling to make mortgages or refinance properties in the community. Fannie May, for example, won’t guarantee loans in condominiums where more than 15% of the homeowners are 30 days or more overdue on HOA fees.

HOA committees must act fast to collect overdue HOA fees. Work with distressed homeowners with a payment plan. Seek help from experts about your collection options as your bylaws may govern. Consider taking any community privileges away like, fitness, pool and tennis. If a proper lease is in place you can make the renters pay the HOA direct once it becomes delinquent. Last but not least put a lien on a home that’s delinquent.

It’s now required for a bank or lending institute to pay HOA fees from the day of foreclosure to the day it re-sales. Any prior fees owned are not collectable from the bank or lending institute. However, the HOA can peruse the old homeowner for any delinquent HOA fees as a personal debt. Depending on your bylaws HOA’s may be able to garnish wages or sell back HOA fees to collection agencies.

In this state when you have a mandatory HOA it should be disclosured in the Purchase and Sale Agreement Exhibt Community Association Disclosure and or Sellers Disclosure. Every buyer signs documents at closing acknowledging they know of the mandatory HOA fees and agree to abide by its bylaws. HOA committees have no choice but to enforce them. This helps assure a stable community in many ways.

More than 20% of Americans do at least some of their work at home, so home offices are an attractive feature for many homebuyers.

If you’re one of the more than 20% of Americans who do some or all of their work at home, a comfortable, functional home office is a must-have. And it’s a feature that’s growing in popularity: When the National Association of Home Builders asked builders, manufacturers, and marketing experts what features would be important to future home buyers, 94% said a home office would be “critical” or “very critical.”

Still, when it comes to adding value, a home office ranks last among the 21 midrange projects analyzed in Remodeling Magazine’s annual Cost vs. Value report. Converting a 12-by-12-foot bedroom into an office costs a national average of $28,375 and recoups $13,648 at resale, for a 48% return on investment, according to the 2009-2010 report. Construction costs include custom cabinetry and work surface, wall-mounted storage, a wiring upgrade, and new floor and wall finishes.

Regionally, returns varied only slightly, with the highest rate of return, 56%, in the Pacific region, and the lowest, 41%, in the upper Midwest.

National average cost to convert an existing 12 x 12 room into a home office:

Job cost: $28,375

Resale value: $13,648

Cost recoup: 48.1%

Regional info: South Atlantic

Lots of changes were announced this week in regards to FHA Mortgages.

FHA is changing the upfront funding fee from 1.75% to 2.25%. You’ll still be allowed to add the funding fee to your mortgage. This will not affect the buyer’s monthly payments very much at all.

Credit scores less than a 580 will now be require to have a minimum of 10% down, this is up from 3.5%. Not really a big change as most banks currently require a minimum of a 640 score, so this shouldn’t be that big of a problem.

FHA has changed the seller’s contribution for buyers closing cost and prepaid’s. Now the seller’s contribution cannot exceed 3% of sales price, it was 6%. The closing cost is usually about 3% of the mortgage amount. Buyers will now have to fund the prepaid’s which are approximately 1% of the purchase price. This change shouldn’t have little effect on the market.

A major change is FHA will no longer do spot approvals for condos. This is a major problem for the condo market. Many condo buildings/communities are not currently FHA approved. We used to be able to get a spot approval. If the community met the FHA approval guidelines then it was spot approved. This procedure will no longer be allowed. The big picture for condos isn’t looking good right now. Today any condo purchase that’s mortgage is headed to Freddie Mac and Fannie Mae now requires a minimum of a 20% down payment. FHA is the only program with a minimum of 3.5% down payment. This is going to have a major impact on condos. We’re hoping FHA changes their policy in regards to this new ruling.

The condo market in Atlanta has been very tough the last few years. The new lending guidelines is going to create a lot more problems. Many condo owners don’t have the option to rent due to HOA rules. Condo HOA’s can cap the rentals to as little as 15% of the total units. Lenders will not lend money if the total rental to owner occupancy ratio is great than 30%. I feel you’re going to see more distressed condo situations in the coming year as money tightens for a potential buyer.

I want to be sure people understand that townhomes are not affected by the FHA changes the same as condos. If you don’t know the differences between a condo or townhome give me a call. I also have access to the FHA Condo Approval website. Call me if you want to know if your condo is currently FHA approved.

On Wednesday, October 21st, the National Association of Mortgage Brokers used this petition hvccpetition.com to help convince the House Financial Services Committee to pass an amendment that will finally put an end the mess that HVCC has been making of the real estate and lending industries. More than the 102,000 signatures on the petition, it was the pace at which the petition is growing and the HVCC horror stories signers included with their electronic signatures. Now more than ever we need everyone to rally behind this cause to make absolutely certain it continues to gain the momentum necessary to make it through the House and Senate votes that are forthcoming. Please, please, Please, sign this petition if you haven’t done so already and more importantly, send it to everyone you know in any sector of the real estate and lending industry as well as to all the current, past and future clients in your database. The new petition website makes it abundantly clear how all homeowners are losing equity and being harmed directly by HVCC as well as how it is blocking any chance at the real estate recovery our economy needs so desperately. Everyone you send to hvccpetition.com will be indebted to you for looking out for their best interest. We won the first of three battles which is more than anybody thought could happen and if we get serious and rally together now for one last massive push we should be able to put HVCC behind us forever. Thank you for your time, effort and support.

We now have new rules for appraisals effective May 1st 2009 for all conventional, single-family homes that’s destiny is Freddy Mac or Fannie Mae. In effort to curb fraud, padded or wink-wink appraisals we now have HVCC (Home Value Code of Conduct).
Trying to build to a firewall between appraisers and loan offices, many banks have formed AMC’s (Appraisal Management Companies). AMC’s are essentially booking agencies ordering lenders appraisals. AMC”s orders the appraisals from a pool of appraisers that’s rotated in an effort to curb any business relationship between the mortgage brokers or loan officers. Sounds good so far doesn’t it? Should protect you and the banks financial position? Well it’s not by a long shot!!

The problem is the new appraisal guidelines. They are killing home values. AMC’s are also taking a big chunk of the appraisal fee. The reality is only about 50% of what the bank is charging on the HUD is being paid to the appraiser. Good appraisers are leaving the business or not working for AMC’s. With this happening we are now seeing the AMC’s recruiting new or inexperienced appraisers. We’re seeing appraisers from other counties driving over an hour, hired to determine the value and market conditions for homes and areas they’ve never seen the likes of. It’s starting to be a mess and deals are dying that shouldn’t be. I recently had an appraisal come in real low. The appraiser was from Stone Mountain and used comps that weren’t apples to apples by a long shot. One of his comps was over 20 years older than the subject property. In fairness to many appraisers I believe they’re simply using the guidelines provided by the HVCC. But those guidelines to me just do not make since nor are they accurate in regards to the true value of a property. Foreclosures are a major problem for appraisals right now and at least one of them will be used in all appraisals if they’re in your community.

I understand what the lenders are trying to do, but as a broker from North Carolina put it, “It appears to be a horse put together by a committee and the result is a camel”. The new HVCC guidelines are so difficult to understand that Fannie Mae produced eight pages of frequently asked questions; Freddie Mac recently published help guidance also. Obliviously there is confusion!

With the decline in home values the lending industry needs to be sure they’re sending the best qualified appraiser to that property and pay them a fair appraisal fee. This will do more to protect the integrity of the property’s current and future value which they hold a financial position in. Low and inaccurate appraisals can hold the housing recovery back even when we’re seeing stronger demand.

There seems to be fee greed on the AMC’s part, paid for by consumers that aren’t getting what they’ve paying for in many cases. Many AMC’s are owned by banks trying to increase their bottom line and not truly watching out for the customer!! You know the ones that bailed them out!!

Short Sales are when a lender or lenders accept the sale of a property that nets less than the payoff amount. The main three things an owner has to show is a hardship, behind in payments and a monthly P & L showing all your bills are more than what you make. A few common hardships are health, lose of job or income, relocation due to job or family illness. Naturally there can be other hardships, and they are each weighed individually. Any home that cannot go through a judicial foreclosure is a great candidate for a short sale. I had one of these in the Above The Four Seasons Hotel condos. It’s not at all easy to get the bank to except short sales. Do not just stop paying your monthly payments thinking you can get a short sale approved. Banks will first try to do loan mortifications before they will open a short sale file for consideration.

I’m a Loss Mitigation Certified Agent! I’ve been involved with shorts sales for over 2 years and it’s a very fast changing business day to day. It’s not for the average agent and it’s not for buyers that have to close by a certain date. Some banks are much faster than others in accepting or countering short sale offers. I currently have one that’s been before the bank since April 24th and seems to be in nowhere land. Recently another was countered in seven days. Naturally all short sale sellers are expecting the bank to forgive the balance, but banks do have the right to ask for a promissory note for any short fall. You will also receive a 1099 tax form on the short fall as income. It is possible to get the 1099 waived with the right circumstances.

In the last few weeks things have really changed and I foresee short sales becoming a bit hard to get approval. FHA has new guide lines that will limit shorts sales for that type of mortgage. Fannie Mae the largest mortgage holder released guidelines in the last few weeks that will also change things.

If you want to know more about short sales please contact me. I’m a qualified agent and that can answer your questions and pre-qualify you for a short sale. I want to warn you there are agents leading people down the wrong path. Keep in mind you have to have a documented hardship to even get past go!!