How to buy a bank owned property

November 22, 2009

This was so popular, I am posting again

http://www.youtube.com/watch?v=SM7oWKgCVo4&feature=player_embedded

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Real Estate 101 Glossary N-O

November 22, 2009

Let’s take a bite out of the N’s and the O’s.

NATIONAL ASSOCIATION OF MASTER APPRAISERS (NAMA)  A non profit professional association organized in 1982, dedicated to the advancement of professionalism in real estate appraisal.

National Association of Realtors (NAR) A non-profit professional association for real estate agents.  Not all agents are Realtors. Realtors follow a code of ethics. and promotes professionalism within the association

NATIONAL SOCIETY OF REAL ESTATE APPRAISERS  An organization founded in 1956 which promotes standards of professionalism in its members.

NATURAL VACANCY RATE  The percentage of vacant properties in a given area that is the result of natural turnover and market forces

. NEGATIVE AMORTIZATION  When the balance of a loan increases instead of decreases. Usually due to a borrower making a minimum payment on an Adjustable Rate Mortgage during a period when the rate fluctuates to a high enough point that the minimum payment does not cover all of the interest.

NEIGHBORHOOD LIFE-CYCLE The evolution of neighborhood use and demographics over time. Economic fluctuations, municipal zoning changes and population shifts can effect the life cycle.

NEIGHBORHOOD  A subsection of a municipality that has been designated by a developer, economic forces or physical formations.

NET LEASABLE AREA  The space in a development, outside of the common areas, that can be rented to tenants.

NEW ENGLAND COLONIAL  An architectural style dating from early American history typified by a two-story building with clapboard siding.

NO-COST LOAN  Many lenders offer loans that you can obtain at “no cost.” You should inquire whether this means there are no “lender” costs associated with the loan, or if it also covers the other costs you would normally have in a purchase or refinance transactions, such as title insurance, escrow fees, settlement fees, appraisal, recording fees, notary fees, and others. These are fees and costs which may be associated with buying a home or obtaining a loan, but not charged directly by the lender. Keep in mind that, like a “no-point” loan, the interest rate will be higher than if you obtain a loan that has costs associated with it.

 NO-POINT LOAN  A loan with no “points”. The interest rate on such a loan will be higher than a loan with points paid. Also sometimes refers to a refinance loan where closing costs are included in the loan.

NON-CONFORMING USE  The use of land for purposes contrary to the applicable municipal zoning specifications. Often occurs when zoning changes after a property is in use.

NONLIQUID ASSET  Any asset which can not be quickly converted into cash at little or no cost.

 NOTE  A legal document that obligates a borrower to repay a mortgage loan at a stated interest rate during a specified period of time.

NOTE RATE  The interest rate stated on a mortgage note.

 NOTICE OF DEFAULT  Formal written notice from a lender to a borrower that default has occurred.

 OBSOLESCENCE  The process of an assets value diminishing due to the development of more desirable alternatives or because of the degradation of its capabilities.

OCCUPANCY A physical presence within and control of a property.

OCCUPANCY RATE  The percentage of properties in a given area that are occupied.

OCTOPUS RECEPTACLE  An outlet with too many devices plugged into it, using a power strip or other device to multiply the outlets.

 OFF-SITE IMPROVEMENTS  Buildings, structures or other amenities which are not located on a piece of property, but are necessary to maximize the use of the property or in some way contribute to the value of the property.

OFF-STREET PARKING  Designated parking spaces associated with a particular building or other structure which are not located on public streets.

OLD TERMITE ACTIVITY  Where no termites are currently active, but indications of past activity can be seen.

ON-SITE IMPROVEMENTS  Buildings, structures or other amenities that are erected on a piece of property and contribute to its value.

OPEN SPACE  Any land which has not had any significant buildings or structures erected on it. Most often used to describe desirable neighborhood features like parks.

OPEN SPLICE An uncovered electrical connection.

ORIGINAL EQUITY  The amount of cash a home buyer initially invests in the home.

 ORIGINAL PRINCIPAL BALANCE  The total amount of principal owed on a mortgage loan at the time of closing.

ORIGINATION FEE  Refers to the total number of points paid by a borrower at closing.

 OWNER FINANCING  A transaction where the property owner provides all or part of the financing.

 OWNER OCCUPIED  The state of property wherein the owner occupies at least some portion of the property.

Real Estate 101 glossary L-M

November 13, 2009

Here is “l” and “m”,  couldn’t think of anything with a ‘k”.

 

LALLY COLUMN  A concrete filled steel pipe used to support beams.

 LATE CHARGE  An extra charge, or penalty added to a regular mortgage payment when the payment is made late by an amount of time specified in the original loan document.

LATENT DEFECTS Any defect in a piece of property which is not readily apparent, but which has an impact of the value. Structural damage or termite infestation would be examples of latent defects.

 LEASE Lola and mea REMAX logo A contract between a property owner and a tenant specifying the payment amount, terms and conditions, as well as the length of time the contract will be in force.

 LEASEHOLD ESTATE  A type of property ”ownership” where the buyer actually has a long-term lease on the property.

LEASE OPTION  A lease agreement that gives the tenant an option to buy the property. Usually, a portion of the regular monthly rent payment will be applied towards the down payment.

LEGAL DESCRIPTION  The description of a piece of property, identifying its specific location in terms established by the municipality or other jurisdiction in which the property resides. Often related in specific distances from a known landmark or intersection.

 LENDER  The person or entity who loans funds to a buyer. In return, the lender will receive periodic payments, including principal and interest amounts.

 LIABILITIES  A person’s outstanding debt obligations.

 LIABILITY INSURANCE  Insurance that covers against potential lawsuit brought against a property owner for alleged negligence resulting in damage to another party.

LIEN  Any claim against a piece of property resulting from a debt or other obligation.

 LIFE CAP  A limit on how far the interest rate can move for an Adjustable Rate Mortgage.

 LIKE-KIND PROPERTY  Any property which is substantially similar to another property.

LINE OF CREDIT  An extension of credit for a certain amount for a specific amount of time. To be used by the borrower at his discretion.

LIQUID ASSET  Any asset which can be quickly converted into cash at little or no cost, or cash itself.

 LOAN Money borrowed, to be repaid with interest, according to the specific terms and conditions of the loan.

 LOAN OFFICER  A person that “sells” loans, representing the lender to the borrower, and the borrower to the lender.

LOAN ORIGINATION  How a lender refers to the process of writing new loans.

LOAN SERVICING  The processing of payments, mailing of monthly statements, management and disbursement of escrow funds etc Typically carried out by the company you make payments to.

LOAN-TO-VALUE RATIO (LTV)  The comparison of the amount owed on a mortgaged property to its fair market value.

LOCK-IN  An agreement between a lender and a borrower, guaranteeing an interest rate for a loan if the loan is closed within a certain amount of time.

 LOCK-IN PERIOD  The amount of time the lender has guaranteed an interest rate to a borrower.

MAJOR DEFICIENCY  A deficiency that strongly impacts the usability and habitability of a house. Or a deficiency that may be very expensive to repair.

MANUFACTURED HOUSING  Once known as ”mobile homes,” manufactured housing is any building which has been constructed off site, then moved onto a piece of real property.

MARGIN  The difference between the interest rate and the index on an adjustable rate mortgage.

MARGINAL LAND  Land whose value has been diminished due to some internal defect or external condition. In most cases, the cost to correct the flaw or condition is as much or more than the expected return from the property.

MASTER ASSOCIATION  An umbrella organization that is made up of multiple, smaller home owner’s associations. Often found in very large developments or condominium projects.

MATURITY   The date on which the principal balance of a financial instrument becomes due and payable.

 MERGED CREDIT REPORT    A credit report derived from data obtained from multiple credit agencies.

METES AND BOUNDS   A traditional way of describing property, generally expressed in terms of distance from a known landmark or intersection, and then following the boundaries of the property back to its origin.

METROPOLITAN AREA  The accumulated land in and around a city or other municipality which falls under the political and economic influence of that entity.

MINERAL RIGHTS  The legal right to exploit and enjoy the benefits of any minerals located below the surface of a parcel of land.

MISREPRESENTATION  A statement by one party in a transaction that is incorrect or misleading. Most misrepresentations are deemed to be intentional and thus may constitute fraud. Others, however, some are rendered through simple mistakes, oversights or negligence.

 MORTGAGE  A financial arrangement wherein an individual borrows money to purchase real property and secures the loan with the property as collateral.

MORTGAGE BANKER  A financial institution that provides primary and secondary mortgages to home buyers.

MORTGAGE BROKER  A person or organization that serves as a middleman to facilitate the mortgage process. Brokers often represent multiple mortgage bankers and offer the most appropriate deal to each buyer.

MORTGAGEE  The entity that lends money in a real estate transaction. 

MORTGAGE INSURANCE  A policy that fulfills those obligations of a mortgage when the policy holder defaults or is no longer able to make payments.

 MORTGAGE INSURANCE PREMIUM (MIP)  A fee that is often included in mortgage payments that pays for mortgage insurance coverage.

MORTGAGE LIFE INSURANCE  A policy that fulfills the obligations of a mortgage when the policy holder dies.

MORTGAGOR  The entity that borrows money in a real estate transaction.

MULTI-FAMILY PROPERTIES  Any collection of buildings that are designed and built to support the habitation of more than four families.

Real Estatte 101 Glossary “I, & J'”

November 8, 2009

Lola and me

Been in LaJolla for Tom Ferry seminar.

Enjoy the I’s and J’s.

IMPROVED LAND   Any parcel of land which has been changed from its natural state through the creation of roads, buildings or other structures.

IMPROVEMENTS   
Any item added to vacant land with the intent of increasing its value or usability.

IMPROVEMENT RATIO   The comparative value of an improved piece of land to its natural, unaltered state.

INCOME APPROACH   The process of estimating the value of property by considering the present value of a stream of income generated by the property.

INCOME PROPERTY   A piece of property whose highest and best use is the generation of income through rents or other sources.

INDEPENDENT APPRAISAL   An estimation of value created by a professional, certified appraiser with no vested interest in the value of the property.

INSPECTION   The examination of a piece of property, its buildings or other amenities.

INSURABLE TITLE   The title to property which has been sufficiently reviewed by a title insurance company, such that they are willing to insure it as free and clear.

INTEREST RATE   A percentage of a loan or mortgage value that is paid to the lender as compensation for loaning funds.

INVESTMENT PROPERTY   Any piece of property that is expected to generate a financial return. This may come as the result of periodic rents or through appreciation of the property value over time.

JAMB   The side of a door frame.

JOINT TENANCY   A situation where two or more parties own a piece of property together. Each of the owners has an equal share, and may not dispose of or alter that share without the consent of the other owners.

JOISTS   Horizontal beams laid on edge to support flooring or a ceiling.

JUDGMENT   An official court decision. If the judgment requires payment from one party to another, the court may put a lien against the payee’s property as collateral.

JUDICIAL FORECLOSURE   A type of foreclosure conducted as a civil suit in a court of law.

JUMBO LOAN   A mortgage loan for an amount greater than the limits set by Fannie Mae and Freddie Mac. Often called non-conforming loans.a REMAX logo

Real Estate 101 Glossary “G & H”

November 2, 2009

Lola and me!cid_image6I am combining these two today.  Enjoy

GABLE ROOF   A steeply angled, triangular roof.

GALVANIZED PIPE  Iron pipe with a galvanized (zinc) coating.

GAMBREL ROOF  A ”barn-like” roof, where the upper portion of the roof is less-steeply angled than the lower part.

GENERAL LIEN  A broad-based claim against several properties owned by a defaulting party.

GEORGIAN   A classic, English-style hose characterized by simple rectangular shape and multiple stories.

GFI   Ground Fault Interrupter. A type of circuit breaker required in areas where water is present.

GINNIE MAE   A wholly owned corporation created in 1968 within the U.S. Department of Housing and Urban Development to serve low-to moderate-income homebuyers.

GIRDER   A main supporting beam.

GOVERNMENT MORTGAGE  
Any mortgage insured by a government agency, such as the FHA or VA.

GRADE   The slope of land around a building. Also ground level.

GRANTEE   Any person who is given ownership of a piece of property.

GRANTOR   Any person who gives away ownership of a piece of property.

GROSS AREA   
The sum total of all floor space, including areas such as stairways and closet space. Often measured based on external wall lengths.

GROUTING   Material used around ceramic tile.

GUTTER The trough around the edge of the roof that catches and diverts rain.

HALF-SECTION   320 acres.

HAZARD INSURANCE   
Insurance covering damage to a property caused by hazards such as fire, wind and accident.

HEADER   
The framing elements above an opening such as a window or door.

HEARTH   
The floor of a fireplace or the area immediately in front of it.

HEIGHT ZONING   A municipal restriction on the maximum height of any building or other structure.

HIDDEN AMENITIES   
Assets of a property which contribute to its value, but are not readily apparent. Examples might include upgraded or premium building materials.

HIGHEST AND BEST USE   The most profitable and likely use of a property. Selected from reasonably probable and legal alternative uses, which are found to be physically possible, appropriately supported and financially feasible to result in the highest possible land value.

HOME EQUITY CONVERSION MORTGAGE (HECM)   
Also known as a reverse annuity mortgage. It allows home owners (usually older) to convert equity in the home into cash. Normally paid by the lender in monthly payments. HECM’s typically do not have to be repaid until the borrower is no longer occupying the home.

HOME EQUITY LINE OF CREDIT   
A type of mortgage loan that allows the borrower to draw cash against the equity in his home.

HOME INSPECTION   
A complete examination of a building to determine its structural integrity and uncover any defects in materials or workmanship which may adversely affect the property or decrease its value.

HOME INSPECTOR   A person who performs professional home inspections. Usually, with an extensive knowledge of house construction methods, common house problems, how to identify those problems and how to correct them.

HOMEOWNER’S ASSOCIATION   
An organization of home owners in a particular neighborhood or development formed to facilitate the maintenance of common areas and to enforce any building restrictions or covenants.

HOMEOWNER’S INSURANCE   
A policy which covers a home owner for any loss of property due to accident, intrusion or hazard.

HOMEOWNER’S WARRANTY   
An insurance policy covering the repair of systems and appliances within the home for the coverage period.

HUD MEDIAN INCOME   
Median family income for a particular county or metropolitan statistical area (MSA), as estimated by the Department of Housing and Urban Development (HUD).

HUD-1 STATEMENT   A standardized, itemized list, published by the U.S. Department of Housing and Urban Development (HUD), of all anticipated CLOSING COSTS connected with a particular property purchase.

How to buy a bank owned Foreclosure (REO)

October 29, 2009

http://www.youtube.com/watch?v=SM7oWKgCVo4&feature=player_embedded

 

 

 

Tax Credit Extended

October 29, 2009

Lola and meYeah

a REMAX logo Senators agreed Wednesday to extend a popular tax credit for first-time homebuyers and to offer a reduced credit to some repeat buyers. The tax credit provides up to $8,000 to first-time homebuyers but is set to expire at the end of November. The Commerce Department said Wednesday that new home sales fell 3.6 percent in September, and some industry representatives blamed uncertainty about the tax credit. Senators agreed to extend the existing tax credit for first-time homebuyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev. The tax credits would be available to homebuyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, according to a summary of the legislation being circulated among lawmakers. House leaders have said they support extending the tax credit for homebuyers. Sen. Chris Dodd, D-Conn., has been negotiating for several weeks with Sen. Johnny Isakson, R-Ga., to craft an extended tax credit for homebuyers that would pass the Senate. Lawmakers didn’t release a cost estimate for extending the tax credit, though similar proposals were projected to cost about $10 billion. Industry representatives said uncertainty about the tax credit is hurting new home sales. September’s decline was the first since March. It takes 45 days to 60 days to close on a house, making it unlikely a sale made today would be consummated by the end of November, said Lucien Salvant, spokesman for the National Association of Realtors. “Buyers right now have an incentive to hold off, not knowing whether the credit will be extended,” Salvant said. About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.

Real Estate 101 Glossary “F”

October 25, 2009

Lola and mea REMAX logoToday I will tackle “F”.

FACADE   
The front exposure of any building. Often used to describe an artificial or false front which is not consistent with the construction of the rest of the building.

FAIR CREDIT REPORTING ACT   
A federal law regulating the way credit agencies disclose consumer credit reports and the remedies available to consumers for disputing and correcting mistakes on their credit history.

FAIR MARKET VALUE  
The price at which two unrelated parties, under no duress, are willing to transact business.

FANNIE MAE   
A private, shareholder-owned company that works to make sure mortgage money is available for people to purchase homes. Created by Congress in 1938, Fannie Mae is the nation’s largest source of financing for home mortgages.

FASCIA   
The boards that enclose the eaves.

FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC)   
The U.S. Government agency created in 1933 which maintains the stability of and public confidence in the nation’s financial system by insuring deposits and promoting safe and sound banking practices.

FEDERAL HOUSING ADMINISTRATION (FHA)   
A sub-agency of the U.S. Department of Housing and Urban Development created in the 1930’s to facilitate the purchase of homes by low-income, first-time home buyers. It currently provides federally-subsidized mortgage insurance for private lenders.

FEE APPRAISER   
A certified, professional appraiser who forms an opinion of the fair market value of property and receives a set fee in exchange.

FEE SIMPLE   
A complete, unencumbered ownership right in a piece of property.

FEE SIMPLE ESTATE   
A form or ownership, or holding title to real estate. It is the most complete form of title, having an unconditional and unlimited interest of perpetual duration.

FHA MORTGAGE  
A mortgage that is insured by the Federal Housing Administration (FHA).

FINAL VALUE ESTIMATE   
The opinion of value of a piece of property resulting from an appraisal following the USPAP guidelines.

FIRST MORTGAGE   
The primary loan or mortgage secured by a piece of property.

FIXED-RATE MORTGAGE (FRM)   
A mortgage which has a fixed rate of interest over the life of the loan.

FIXTURE   
Any piece of personal property which becomes permanently affixed to a piece of real property.

FLASHING   
The metal used around the base of roof mounted equipment, or at the junction of angles used to prevent leaking.

FLOOD INSURANCE   
Supplemental insurance which covers a home owner for any loss due to water damage from a flood. Often required by lenders for homes located in FEMA-designated flood zones.

FLOOR PLAN   
The representation of a building which shows the basic outline of the structure, as well as detailed information about the positioning of rooms, hallways, doors, stairs and other features. Often includes detailed information about other fixtures and amenities.

FLUE   
The furnace exhaust pipe, usually going through the roof.

FLUSH VALVE   

The valve between the toilet bowl and the tank.

FOOTING   
The partially buried support for a vertical structural member such as a post.

FORECLOSURE   
The process whereby a lender can claim the property used by a borrower to secure a mortgage and sell the property to meet the obligations of the loan.

FORFEITURE   

The loss of property or money due to the failure to meet the obligations of a mortgage or loan secured by that property.

FOUNDATION  
The solid structural element upon which a structure is built.

FRONTAGE   
The segment of a property that runs along a point of access, such as a street or water front.

FUNCTIONAL OBSOLESCENCE  
A decrease in the value of property due to a feature or lack thereof which renders the property undesirable. Functional obsolescence can also occur when the surrounding area changes, rendering the property unusable for its originally intended purpose.

Real Estate 101 Glossary

October 21, 2009

Lola and mea REMAX logo

Give me an “E”

EARNEST MONEY DEPOSIT  A cash deposit made to a home seller to secure an offer to buy the property. This amount is often forfeited if the buyer decides to withdraw his offer, after contingencies are removed.

EASEMENT  The right of a non-owner of property to exert control over a portion or all of the property. For example, power companies often own an easement over residential properties for access to their power lines.

EAVE  The part of the roof that extends beyond the exterior wall.

ECONOMIC DEPRECIATION  The decline in property value caused by external forces, such as neighborhood blight or adverse development.

ECONOMIC LIFE The amount of time which any income-producing property is able to provide benefits to its owner.

EFFECTIVE AGE  The subjective, estimated age of a property based on its condition, rather than the actual time since it was built. Excessive wear and tear can cause a property’s effective age to be greater than its actual age.

 EMINENT DOMAIN The legal process whereby a government can take ownership of a piece of property in order to convert it to public use. Often, the property owner is paid fair-market value for the property.

ENCROACHMENT  A building or other improvement on one property which invades another property or restricts its usage.

ENCUMBRANCE  A claim against a property. Examples are mortgages, liens and easements.

 ENERGY EFFICIENCY RATIO  An efficiency rating system for air conditioning units that corresponds to the number of BTU’s output per watt of electricity used.

EQUAL CREDIT OPPORTUNITY ACT (ECOA)  U.S. federal law requiring that lenders afford people equal chance of getting credit without discrimination based on race, religion, age, sex etc.

EQUITY  The difference between the fair market value of a property and that amount an owner owes on any mortgages or loans secured by the property.

EQUITY BUILDUP  The natural increase in the amount of equity an owner has in a property, accumulated through market appreciation and debt repayment.

ERRORS AND OMISSIONS INSURANCE  (E & O) An insurance policy taken out by appraisers to cover their liability for any mistakes made during the appraisal process.  Other’s,  such as real estate agents, mortgage brokers, ect. pay for  E and O insurance

ESCROW  An amount retained by a third party in a trust to meet a future obligation. Often used in the payment of annual taxes or insurance for real property.  Also, the independent third party that exchanges the buyer’s money for the seller’s deed in the sale of real property.

ESCROW ACCOUNT  An account setup by a mortgage servicing company to hold funds with which to pay expenses such as homeowners insurance and property taxes. An extra amount is paid with regular principal and interest payments that go into the escrow account each month.

ESCROW ANALYSIS  An analysis performed by the lender usually once each year to see that the amount of money going into the escrow account each month is correct for the forecasted expenses.

ESCROW DISBURSEMENTS  The payout of funds from an escrow account to pay property expenses such as taxes and insurance.

ESTATE  The total of all property and assets owned by an individual.

EXAMINATION OF TITLE  The report on the title of a property from the public records or an abstract of the title.

EXCLUSIVE LISTING  An agreement between the owner of a property and a real estate broker giving the broker exclusive right to sell the property. 

EXECUTOR  The person named in a will to administer the estate.

Real Estate 101 Glossary

October 18, 2009

Lola and mea REMAX logoAre you ready for “D” Day?

 

DATE OF APPRAISAL The specific point in time as of which an appraiser designates the value of a home. Often stipulated as the date of inspection.

DEBT  An obligation to repay some amount owed. This may or may not be monetary.

 DEBT EQUITY RATIO The ratio of the amount a mortgagor still owes on a property to the amount of equity they have in the home. Equity is calculated at the fair-market value of the home, less any outstanding mortgage debt.

DEED  A document indicating the ownership of a property.

DEED-IN-LIEU (OF FORECLOSURE)  A document given by a borrower to a lender, transferring title of the property. Often used to avoid credit-damaging foreclosure procedures. DEED OF TRUST  A document which transfers title in a property to a trustee, whose obligations and powers are stipulated. Often used in mortgage transactions.

DEED OF RECONVEYANCE  A document which transfers ownership of a property from a Trustee back to a borrower who has fulfilled the obligations of a mortgage.

DEED OF RELEASE  A document which dismisses a lien or other claim on a property.

 DEED OF SURRENDER  A document used to surrender any claim a person has to a property.

 DEFAULT   The condition in which a borrower has failed to meet the obligations of a loan or mortgage.

DELINQUENCY  The state in which a borrow has failed to meet payment obligations on time.

DEPOSIT  Cash given along with an offer to purchase property, Also called EARNEST MONEY.

 DEPRECIATION  The natural decline in property value due to market forces or depletion of resources.

DETACHED SINGLE-FAMILY HOME  A single building improvement intended to serve as a home for one family.

DISCOUNT POINTS  Points paid in addition to the loan origination fee to get a lower interest rate. One point is equal to one percent of the loan amount.

DISTRESSED PROPERTY A mortgaged property which has been foreclosed on.

DOWN PAYMENT  An amount paid in cash for a property, with the intent to mortgage the remaining amount due.

DOWNSPOUT  The pipe that water moves through to reach the ground from the rain gutter.

DUE-ON-SALE PROVISION  A clause in a mortgage giving the lender the right to demand payment of the full balance when the borrower sells the property.

DUPLEX  A single-building improvement which is divided and provides two units which serve as homes to two families.

 DWELLING A house or other building which serves as a home.