Short sales

[Flynn]

For those of you who don't know me (I don't post too often anymore) here's a bit of background:

We ended training in 06 and took our first job. Job wasn't all that it was cracked up to be so we moved and decided to rent (even though we DID sell our house) in 2010. During the year we rented, we were involved in three failed negotiations to buy a house. We DID find a house we love which ended up being a foreclosure and a great deal so our house journey ended well!

The houses we bid on but were turned away after several rounds all went "short sale" routes in the last few months. They sold for 200,000 less than we offered and 400,000 to 500,000 dollars less than they paid 6 to 8 years ago. WOW.

[Ladybug]

You know they are soooooo kicking themselves. Ouch.

My sister is a first time home buyer in CA right now. They are waiting on a bank to bless their offer. The owner is short selling too. I told her she's so lucky to be a first time buyer in this market with no house to sell.

If we sold right now it would definitely be a short sell, however it's a much smaller loss than we could gain by buying more larger, more favorably-located house right now. I'm personally hoping the market stays down for a few more years because we haven't made a "big home" purchase yet.

When the market starts to eeking up again I'm definitely going to need to make the home jump. I hope we have a few more years to get ready.

[SuzySunshine]

Wow is right. On some level I'm with Annie because we were able to sell our training house and I'm hopeful that we'll be able get a deal on our next, larger, house. That sucks though that you had to go through so much to finally get the right one.

[Pollyanna]

My dad always said, "your first offer will be your best offer". People always think a better offer is around the corner and in this market one offer might be your only one for months or years. We will likely being going to a smaller house than we have now in an effort to boost retirement and help pay for the kiddos college. Plus, with medicine reimbursements in flux I don't want to be in a large home with a large mortgage and see our income cut in half, that scares the hell out of me.

[Chrisada]

We have friends finishing up their surgery residency and selling their house through a short sale. They bought right before the big tank here in MI. I would love for us to stay here and live in this house why we negotiate buying a short sale or foreclosure. The deals here are unbelievable.

[Sheherezade]

Wow! They are kicking themselves. Hard.

I'm with you Tara. We are already thinking we missed the boat on the "big house" thing. We should have bit the bullet and bought big right out of training. Instead, we went conservative and thought we could scale up when we were more established. Now, 6 years out, with my last kid getting closer to high school, it hardly seems necessary for 6 more years of "full house" time- or financially sound. I guess I can start dreaming about a glossy, empty-nester co-op in the city instead of the sprawling farm house for all the kids.

[houseelf]

This is such a sad state of affairs.

On our fellowship house, we took a large loss on paper and an actual cash outlay. It felt like we paid someone to take our house off of us. Yes, I'm still salty about it. The good news is that we have one helluva good deal on our current house.

I just heard a radio commercial here in Ohio for something like House Depreciation Insurance. I almost started a conversation about it here, but I don't have enough information about it. (But really folks, the economy has recovered! There is no threat of deflation!)

In sunnier news, we are trying to refi for a 15 year at almost 2 percentage points than what we currently have.

It is a wild time out there.

[diggitydot]

We're actively house-hunting since this is our last year of training. We're not really looking to buy our "dream house", but something about the same size with nicer finishes/higher quality.

Our current area didn't have a huge price bubble, so there wasn't a giant bust. Homes in our area, and particularly our neighborhood, are selling so long as owners do a little updating of fixtures and lighting. 80's brass doesn't sell, but switching out to brushed nickel changes the game substantially.

Several of our friends have sold very quickly and a few of those received full-priced offers. I'm not greedy. If we sell quickly and make nothing on the sale, but don't have to bring any money to the closing, I'll be ecstatic.

[GrayMatterWife]

I deal with a lot of short sales in my line of work. The only thing I would note is that they often take a very long time to close (4 to 6 months is common).

[MarissaNicole]

It really bothers me that mortgage rates are half what student loan rates are. But at the same time that allows us to own, while our student debt multiplies.

[diggitydot]

I never understood why they were called "short sales". There is NOTHING short in that route.

[SuzySunshine]

I never understood why they were called "short sales". There is NOTHING short in that route.

I agree!

[scrub-jay]

It really bothers me that mortgage rates are half what student loan rates are. But at the same time that allows us to own, while our student debt multiplies.

Tangent, but THIS.

[DCJenn]

Mortgage rates are determined completely differently than other loans. See the highlighted areas:


Determining National Mortgage Rates

When your lender approves you for a mortgage loan, that loan is usually sold to someone else. These loans might be bought by Fannie Mae or Freddie Mac, or by other mortgage servicers and investors. Fannie Mae and Freddie Mac together account for a large amount of the mortgage loans out there, since they are among the largest and most influential mortgage investors around. Their entire purpose, as GSEs (government sponsored enterprises), is to help keep the mortgage market moving efficiently. One way they do that is by purchasing home loans from lenders.

Mortgage investors either keep the loans in their own portfolios, or the loans are bundled together into securities that can be traded on the market in a manner similar to (but not exactly like) bonds and Treasury securities. Some of these mortgage-backed securities are included in mutual funds and hedge funds. Collectively, the financial investors that have an interest in making money in the secondary market are the ones who actually influence the mortgage rate on your home loan.Just as returns in the stock market fluctuate, the returns from the secondary market move up and down. When investors want higher yields (such as when the economy is in good shape), mortgage rates move higher. When demand for these assets is down (such as when the market is in a downcycle), the yields drop.

Also affecting mortgage rates is consumer demand. When the economy is down, and consumer demand for loans is low, mortgage rates are lower in order to attract more borrowers.

It is worth noting that 10-year Treasury notes are often considered indicators of where interest rates on mortgages are headed. Generally, when bond prices go up, yields (and mortgage rates) go down. If Treasury yields are increasing, the inverse relationship between Treasury bond prices and yields mean that bond prices are decreasing – and that home loan rates are likely to begin moving higher.

Many lenders look at the national average mortgage rate, and use that as the best rate for home loans. If you have good credit, you can get the best rate ― if you have less than good credit, the lender may adjust the rate higher to reflect the greater risk.



Read more: http://www.banks.com/mortgage/how-mo...#ixzz1buqY35VN