Attention Homeowners: A government assistance plan that might actually help!!!!

We can hardly believe it...but the new government plan to assist homeowners  refinance their mortgages might actually be a real help to Floridians.

Many Floridian homeowners have been unable to take advantage of historically low interest rates because the value of their homes have fallen and cannot meet the collateral requirements of the lending institution to refinance their existing loans.

 Perhaps they purchased a home for $280,000, obtained a loan for $240,000, but their home value is now $150,000.  So, they are unable to refinance a loan of $240,000 with a home value of $150,000 under conventional lending practices.

But....the new government program or "HARP" to be introduced next week gives broader guidelines so that some homeowners can refinance to take advantage of today's lower rates..... even if their home value does not meet the conventional loan-to-value ratios.

Other traditional mortgage requirements do remain however.  You must be current on your mortgage over the last 6 months and have no more than one late payment in the last 12 months. And, you must meet income requirements, etc.  

So, if you know someone who has been faithfully paying their mortgage, but has been unable to refinance to take advantage of the lower rates because of the fallen value of their home, encourage them to look at the possibility of refinancing now under the new HARP program.  Their monthly payments could be substantially reduced. 

Finally, a government program that might help !

Banks offering cash for short sales?

Those homeowners behind in their mortgage may now be eligible for cash from their mortgagor to facilitate a short sale according to the Palm Beach Post.

Apparently, banks have discovered that the foreclosure process is long and that the condition of the home often suffers as the foreclosure process drags out.

So apparently in the state of Florida, Bank of America will offer "cash for keys" in some cases to encourage an owner under default to pursue a short sale. 

Other banks may also be considering this option.

So if you know someone who unfortunately is going through the painful foreclosure process, let them know this might be an option. 

More foreclosures to come ????

The Sarasota market is benefiting from very few bank-owned properties.

The unknown, however, are the possibility of foreclosures to come. 

Realty Trac gives some helpful information in this regard.

Realty Trac reports defaults in Sarasota County total 2385 properties.  These are properties that could be reinstated by the mortgagee, sold as a short sale, or eventually foreclosed.

Properties that have made it to auction and could become bank-owned total 639 properties. 

Sarasota County properties owned by banks total 1293.

Currently, Sarasota County has 5094 active listings. 

So it looks like the foreclosure activity will remain an overhang on Sarasota County property for sometime to come.

 But the foreclosure activity varies significantly by location and price, so generalizations are not very helpful in predicting the impact on property values.

But what can be said is that Sarasota County will be dealing with defaults for some time to come.