Effective 8/20/11 Fannie Mae is making changes to the Cash-out Rules but the new rules are pretty specific, so please read carefully and let me know if you have any questions.

 

Previously, if you purchased a house for cash, you would have to wait for 6 months before you could do a cash-out loan on the property…. And if you owned MORE than 4 properties with mortgages, you were not allowed to do a cash-out at all on any investment property you owned.

 

Fannie has recognized that people paying cash are probably buying houses that need major repair and they will now allow a cash-out refinance of homes that were purchased less than 6 months FOR CASH.

 

Here is where the rules are specific and EACH RULE APPLIES:

1)       The house must have been purchased using CASH (NO LIEN on the property).

2)      The loan to Value will be based on PURCHASE price (NOT market value and NOT including any upgrade/repair costs)

3)      The purchase was an arms-length transaction (ie, you didn’t buy from a relative)

4)      The purchase can be documented with a HUD-1 settlement statement confirming there was no financing

5)      You must provide bank statements at the time of purchase to prove you had and used your own money for the purchase.

6)      And lastly… this is the wonderful part…  we can do this transaction if you own more than 4 financed properties. 

 

DO UNDERSTAND however, that if you purchased a property for cash MORE than 6 months ago AND you currently have 4+ properties with mortgages already, this new change does NOT apply.  I know it does not seem fair, but they drew a line in the sand and this is what we have to work with going forward.

 

Please contact me if you have any questions about this change.  juliecnichols@gmc-inc.com

 

 

The Obama administration said on Wednesday that it was soliciting ideas on how to turn the federal government’s inventory of foreclosed houses into rental properties that could be managed by private enterprises or sold in bulk.

The goal, the administration said, is to stabilize neighborhoods where large supplies of empty, foreclosed properties have hurt property values. In addition, the plan is an effort to clear the nation’s balance sheet of real estate holdings that, because they have been difficult to sell individually, have hung over the housing market and stunted sales of existing homes and new construction.

Read More:  http://www.nytimes.com/2011/08/11/business/us-seeks-to-rent-out-its-foreclosures.html?_r=3

Against the worst national economy in more than 60 years, the Austin area stands out as the best market in the nation.

That's the bottom line from Mark Sprague, an expert who follows the economy and housing markets both locally and nationally.

Read More: http://www.statesman.com/business/economist-austin-economy-keeps-outperforming-nations-as-a-1696191.html

If you take mortgage interest tax deductions, the next 100 days could have significant financial implications for you, thanks to Congress’s new federal debt ceiling plan.

The compromise legislation created an unusual mechanism — an evenly split, 12-member bipartisan supercommittee — that could call for major cutbacks on real estate write-offs by Thanksgiving.

Read More: http://www.washingtonpost.com/realestate/mortgage-tax-deductions-may-soon-be-in-play/2011/08/08/gIQARA60AJ_story.html

Appraisals are supposed to be unbiased assessments of a property's value. The housing bubble that burst a few years ago was inflated, in part, by overly generous appraisals. Now, lenders are pressuring appraisers to come in with lower estimates, some real-estate professionals say. Banks also are using less-experienced appraisers, who often don't appreciate factors that make a home worth more, they say. And valuations are being heavily influenced by distressed sales priced at a discount to the rest of the market.

Read More: http://online.wsj.com/article/SB10001424053111904006104576500170808091148.html?mod=googlenews_wsj

The Dallas Federal Reserve notes that Texas entered the Great Recession late and came out of it early, with 2-percent job growth in 2010 and an expected 3 to 4 percent for 2011.

Of the 496,000 jobs added to the U.S. economy between fall 2009 and spring 2011, more than half of that job growth came from Texas – a finding Perry has bragged about recently.

Read More: http://elpasoinc.com/readArticle.aspx?issueid=350&xrec=6707

Analysis of available law enforcement and industry data indicates the top states for known or suspected mortgage fraud activity during 2010 were California, Florida, New York, Illinois, Nevada, Arizona, Michigan, Texas, Georgia, Maryland, and New Jersey; reflecting the same demographic market affected by mortgage fraud in 2009.

Read More: http://www.fbi.gov/stats-services/publications/mortgage-fraud-2010/2010-mortgage-fraud-report

On the heels of the Federal Reserve  announcement that interest rates would remain exceptionally low for at least two more years, mortgage rates fell to new lows this week.

Freddie Mac says a 30-year fixed-rate mortgage fell to an average of 4.32 percent in the week ending Aug. 11, the lowest level of the year. Fifteen-year fixed-rate mortgages fell to an average of 3.5 percent, the lowest since Freddie Mac has been keeping track.

Read More: http://www.bizjournals.com/seattle/news/2011/08/12/mortgage-rates-hit-new-lows.html