Reno Lending Disclosure Step Back, but for How Long?
Reno Nevada real estate lending guidelines are about to take a step back and gain clarity … well sort of. The Federal Reserve had been planning changes to Regulation Z of the Truth in Lending Act. This was meant to bring additional disclosures to Reno home owners who were considering home equity lines of credit or HELOC’s on their Reno homes.
The federal government wanted to further regulate the stack of documents you have to sign when securing a closed end mortgage. I have no problem with disclosures and protecting the Reno home consumer with oversight. But if you have ever signed loan documents the simple fact of the matter is the vast majority of the paperwork you sign with all these important federal disclosures are never read and if they are, they are rarely understood.
Federal officials are starting to understand the root of the problem. It is not lack of disclosures it is the way to many for Reno home owners to digest and in the end becomes completely useless. They have decided against further disclosing requirements to ensure they do not burden the purchase of Reno real estate with even more discloses. But for how long?
What really needs to be done to actually protect and effectively inform the Reno home owner is start from scratch when it comes to the disclosure process. The current mass of paperwork needs to be whittled down to no more than 5 pages with 16 point font and spelt out in bullets that can be easily read and digested with a loan officer, title officer and Reno Realtor breathing down your neck. The Reno real estate market could be improved greatly by just following this theme when it comes to purchasing Reno homes.
So applaud the Federal government taking the first steps to stemming the shear mass of paperwork required to purchase or refinancing Reno real estate but we need to make sure this trend continues.
Reno Real Estate and HAMP
HAMP or the Home Affordable Modification Program is starting to reach underwater Reno home owners. The Reno real estate market has seen an unprecedented decline in home values and in turn most Reno real estate home owners have found themselves upside down with their mortgages.
The U.S. Treasury and HUD recently released new metrics outlining the points, both strong and week of the HAMP program. These numbers were released to adhere to the Dodd Frank Wall street reform act designed to ensure as much transparency as possible for the giant government bailout initiatives.
The average loan balance for participating homeowners nationwide is $232,000 while in the local Reno real estate market this average is much higher. Reno home owners found that 18% of the HAMP participants are underwater. Reno home owners found that 60.2% of HAMP modifications were due to loss of income, 11.6% were due to Excessive obligation and 2.6% were due to the borrower’s illness.
In December 30,030 trial HAMP modifications were converted to permanent modifications and a HUD study shows that 85% of permanent HAMP modifications stay current after the first 12 month period. The Reno real estate market could benefit from these numbers by stabilizing local Reno home prices.
Unfortunately the study also shows that just over half of the trial period HAMP modifications do end up re-defaulting and the Reno home owners has to explore the short sale options. However owners of Reno real estate who have gone through the HAMP process unsuccessfully can be easily transferred into the HAFA program which deals exclusively with Reno realtors and the short sale process and even offers owners $3,000 cash for relocation assistance to short sale their underwater Reno real estate.
While the HAMP program is not a perfect home modification program by any means it is by far the best option for Reno home owners if they want to explore options to help them save their home.
Reno Real Estate and Fannie Mae
Reno real estate news has been recently dominated by talk of the federally propped up Fannie and Freddie mortgage giants. The Reno real estate market has endured a direct hit from the Reno Foreclosures controlled by these mortgage lenders.
So who are these companies? Private free market corporations or federally funded wings of government. Well to start President Roosevelt’s new deal established Fannie Mae in 1938. The aim was to create stability and affordability to the mortgage markets. In 1968 Congress converted Fannie to a publicly held corporation to help balance the federal budget. As Fannie Mae dominance in the secondary mortgage market grew congress chartered Freddie mac as a public corporation in the early 1970’s.
During the Reno real estate melt down in the latter part of 2007 and culminating in fall of 2008 the US government rescued Fannie Mae and Freddie Mac from economic failure and placed them in a conservatorship governed by the Federal Housing Finance Agency.
The move to conservatorship by the government can be compared to a crew on a World War II aircraft carrier trying to save a listing ship just after ferocious Japanese zero attack.
The Reno real estate markets foreclosure activity has been heavy with foreclosures controlled by Fannie Mae, my office alone has seen a 200% increase in Fannie Mae foreclosure listings over the past six months.
A treasury department report will be delivered to Congress in mid-February and may contain the framework for disbanding these mortgage giants or at least return them to their natural habitat, the private sector.
Unfortunately for may Reno home owners the collapse of the Reno real estate market has meant the depletion of savings accounts, followed by staggering credit card debt and the ultimate loss of their Reno home.
Foreclosures and Reno Real Estate
So you are thinking about buying a foreclosure in the Reno real estate market. Well according to www.Trulia.com there are 4 tricks and traps Reno Foreclosure buyers need to know. First, as-is means as is. Second, the bank speaks no evil. Third, the contract terms, they are a changing and fourth expect the unexpected. Let take a look on how this really will affect Reno home buyers when purchasing Reno Real Estate.
First Trulia states as is means as is. Well that is not entirely true. Yes when you make the offer with your Reno realtor you will sign a clause stating you understand the Reno Real Estate is being purchased in as is condition. However once you have your offer accepted and you complete your inspections on the home if you find anything of grave concern (not like a sticky door or leaky sink) but if the foundation is cracked, slipping or another serious structural issue you can certainly ask the bank to make the repairs necessary to your own lenders financing. The banks understand in most cases their buyers will need to get financing on the Reno real estate from an outside institution and if the property will not pass inspection financing is not a viable option.
Second, the banks speak no evil. This is completely true especially in the Reno real estate market. Typically when you purchase a home in the state of Nevada the Reno homeowner is required to give you a document called the sellers real property disclosure. This is where the sellers must disclosure any material defects with the property to the best of their knowledge. Reno real estate agents will refer to this document ad the SRPD. However when you purchase Reno real estate from a bank (foreclosure) you will not receive this document, in lieu you will receive a waiver of NRS113 which explains the bank is not required to supply you with the SRPD and will only tell you to purchase the Reno real estate at your own risk.
Third, the contract terms, they are a changing. Reno real estate agents know as well as any in the country this simple fact is undeniable. When you make the offer on the Reno real estate you will initially submit the offer on the typical Reno Sparks association of realtor’s documents. However once the bank gives your Reno Realtor the verbal acceptance they will also ask them to present the bank addendum to the buyers for signatures as well. This is more of a new contract then addendum. Basically every bank addendum is unique and will require your Reno Realtor to read it line by line, I would also suggest you read this document line by line. You will almost be assured there will be changes that affect you financially in every bank addendum. It could be as small as the bank not paying for a twenty five dollar recording fee on the Reno real estate or something more formidable like the bank not paying for the transfer tax on the Reno real estate. Currently it is $4.10 per $1,000 of Reno real estate sold.
Forth, expect the unexpected. Again Reno real estate agents know this truth all too well. When purchase the Reno real estate you will run into all kind of potential issues that can cause delays. For example, utilities turned off to the property the day before your inspections, unexpected charges on your HUD-1, poor communication and so on.
All of this might sound a bit challenging but as long as you hire an experienced agent to help you guide you through the purchase of the Reno real estate even the most difficult escrows can be dealt with and keep your stress level low. Foreclosures in the Reno real estate market can be a great way to find your next home. If you have the right Reno realtor, stay flexible and keep your eye on the prize you might actually enjoy the journey through the escrow.
Reno Homeowners may be able to take advantage of FDIC’s warnings.
Reno Homeowners may be able to take advantage of FDIC’s chairman Sheila Bair’s warnings to mortgage bankers. “Failure to take immediate and decisive action to deal with the foreclosure crisis and breakdowns in servicing procedures will trigger a double-dip in US housing markets”
Basically Bair’s warnings outline the experience of anyone who owns Reno real estate and has tried to complete a loan modification on their own accord. To get your Reno real estate’s note modified you must endure months and months of dead ends. Unfortunately, the vast majorities of Reno home owners are frustrated by the process and seek other avenues halfway through the process. This typically means larger losses for the note holder and ends in either short sale or foreclosure for the Reno real estate.
Bair states that if the process to modify loans is not expedited and bottle necks not dealt with that the US may face another slowdown in the already weak housing market and could force us into another landslide of price reductions, Reno real estate not excluded.
If Bair’s warnings are taking to heart by industry leaders Reno residents who own Reno real estate may see a streamed lined process and a better path towards home retention.
If procedures do start to change, and Reno real estate professionals on the front lines do already sense change, we may have a comprehensive over-hall of the loan modification and short sale systems by summer 2011. Krch Realty’s escrow processing department has cut the average time to process Reno real estate short sale’s from five months to only four.
It appears the nation’s largest servicers are starting to catch up to the fact that a loan modification or short sale for their Reno real estate are really the best profit saving tools they have while some Reno home owners have been able to preserve the “American Dream” and maintain their households.
