Random thoughts, photos and rants woven together make a fine tapestry or so I'd like to think.. a blog. I've been selling real estate in Colorado long enough it is a strong part of me. Sharing knowledge about my trade along with the beauty of Colorado through photos is my way of attracting those who appreciate the same things. I enjoy sharing, hopefully that joy shines through.Mortgage Modification Program
HOPE NOW is a private sector alliance of mortgage servicers, non-profits, counselors, and investors that have assisted many homeowners avoid foreclosure. They have developed a new program in conjunction with the U.S. Treasury, the Federal Housing Finance Authority, Fannie Mae, Freddie Mac and other mortgage loan servicers for “at-risk” homeowners.
The plan will go into effect on December 15, 2008.
The plan helps modify existing mortgages in an effort to keep homeowners in their home. The homeowner must be in arrears 90 days or more. The mortgages must be held by Freddie Mac, FNMA or other participating lenders/servicers.
How Does the Streamlined Modification Plan Work?
Upon obtaining homeowners detailed information, the plan will reduces the homeowner’s monthly payment to 38% of the borrower’s monthly income. The process could include all or some of the following to accomplish the reduction:
- Extend the term of the loan
- Interest rate reduction
- Principal forbearance
If the above procedures do not work, the plan offers alternative case by case review to determine what options are necessary to avoid foreclosure.
HOPE NOW
The HOPE NOW alliance has proven success this year in contacting distressed home owners to encourage them to work things out. They offer a toll-free hot line at NO COST to callers in need of advice. To learn more about HOPE NOW visit the website,
Smart Money Magazine Shines on Denver
In an article focusing on the best real estate markets in the country, Smart Money magazine had some very favorable 
things to say about the Denver metro real estate market.
Denver’s overall outlook is sunnier than for most western cities because neither inventory nor prices spiraled out of control during the boom. Dinged by a telecom bust earlier in the decade that cost the city 5 percent of its jobs, the local economy wasn’t primed for irrational exuberance. Now with six months’ worth of homes in inventory-the level most experts judge to be roughly in balance-the city offers considerable upside.
This is necessary news to us. We have known our market experienced only mild appreciation while areas like California, Arizona, Nevada and Florida were skyrocketing. Now they are paying the price. Unfortunately, the national news tends to focus on the WORST CASES rather than looking at the whole picture.
The magazine quotes David Berson of PMI,
David Berson, chief economist with mortgage insurance firm The PMI Group, says that if hard-hit states like California, Arizona, Nevada and Florida are taken out of the statistical mix, the picture is much more promising. According to PMI’s “risk index,” which estimates the odds of prices falling in a given market, at least 65 percent of the nation’s 386 metro areas have less than a 10 percent chance of seeing lower prices two years from now. What’s more, the government’s sweeping bailout of the financial sector could boost the housing market by making borrowing easier for buyers.
Is the glass half empty or half full?
I guess that depends on where you live. I contend if the media would stop pounding on problems, exaggerating them to the point the negative is only what we see, we might find a way out of this situation. Consumer confidence is low. Each day Colorado Realtors combat the tide of negativity with the facts. It’s hard to fight when you are just one person up against greater odds.
But the facts must get out!
I love when magazines like Smart Money focus on the good markets. Recognition of the truth and the potential of the future real estate market in Denver is very satisfying.
Other Cities Posed for Growth
In addition to Denver other cities cited by Smart Money are:
- Seattle
- Des Moines
- Raleigh
- Salt Lake City
- Philadelphia
- Birmingham
If you would like to read the entire article, you may find it here. Home Prices: Now for the Good News
Denver Real Estate Outlook
November statistics show the average and median price for single family homes continues to drop. The explanation is very evident, 75% of the sales closed are under $300,000. A year ago only 69% of residential sales closed under $300,000.
In 2007 only a 8.5% of the sales closed in October were under $110,000, this year the number has increased to 18%!
This huge increase is a reflection of what I’ve been reporting for months, the market is great for first time home buyers and investors.
The question on the minds of many who are still standing by, “When will we hit bottom?”
The answer is Past Tense Folks!
We hit bottom last April/May. The Denver real estate market (in general) is on the way up. Our market would be in much better shape if the financial market would loosen up funds.
Average days on market for homes under $200,000 continues to drop. What we are seeing here is a SELLER’S Market.
As prices increase the days on market also increases. Homes priced over $500,000 are lingering on the market longer as time passes. This is a result of the changes in lending requirements. Buyers now need to have a down payment, so naturally the higher the price the higher the down payment. The upper end of our market is slow, very slow. Here is were we find a BUYER’S Market.
What I’m Seeing in The Denver Real Estate Market
Cash is king and there seems to be a lot of it being spent on real estate. A couple weeks ago an associate of mine wrote a full price, no contingency offer to close within a month on a nice older home. They were astounded to learn they were beat out by a cash offer.
Typically cash is not a common way to purchase real estate. 98% of the time buyers use some sort of financing. Now that the stock market is iffy and interest rates are low, buyers are using their cash for real estate.
It only makes sense. Buy low sell high, who said it first? I don’t know, but he certainly was talking about the current Denver real estate market.
The window is closing.
Relocating to Denver?
Relocating to Denver?
Denver is nick named The Mile High City for a reason, it is 5280 feet above sea level. The ‘burbs are even higher in altitude. Many people who fly into to the city find they don’t physically feel very good for a day or two. Headaches and fatigue are usually the worse symptoms. This is not uncommon and with some preparation, can be avoided completely.
Prevention is the key!
Altitude illness is usually preventable if ascent to altitude is slow. Symptoms can range anywhere from annoyance to life threatening. Unlike many thing, being in excellent physical condition has no bearing on one’s ability to acclimate to altitude.
* Relax, take it easy! Don’t overdo it the first day or two. That could ruin the rest of your week. Stop early when you start to feel fatigue or any prolonged breathlessness. Just relax and don’t rush it.
* Drink Lots of Fluids…especially water!
* Avoid Alcohol, tranquilizers and sleeping pills for the first two nights if possible. All of these things slow your body’s adjustment to higher elevations. This is critical if you exhibit any of the symptoms.
* Take Medication that’s available to prevent altitude illness, its symptoms and to speed acclimation. There is prescription medication which helps prevent and treat symptoms associated with altitude illness and speeds up elevation acclimation.
The Reality is…most people fly into Denver and expect to spend the rest of the day looking at houses. While that may be a good plan for getting more done in a short amount of time, it doesn’t always work. The first day house shopping is stressful enough on its own. The best plan here is to take it slow so you don’t end up with a stress headache that takes you out for another day. Save the big day for Day 2 when you have had time to acclimate.
Taking this advice will assure you are relaxed and ready to make good decisions in your home purchase.
Need I say more?
Just Do It.
Facing Foreclosure? Don’t Walk!
In troubled times homeowners sometimes go into denial, thinking if the situation is ignored, it will go away. The fact is, if you are having trouble making your
mortgage payment sooner or later you will have to face up to the situation. It’s best you face up to it as soon as possible.
Consulting a real estate professional is a good place to start. Perhaps with some help and planning you can get your home sold and avoid a foreclosure and further negative remarks on your credit report.
How can a REALTOR help?
If you have equity in your home (the difference between your loan balance and your “net” after sale), an agent may be able to sell your home. If you are “upside down” on your loan, meaning you owe more than it is worth, you may qualify for a “short sale” with your lender.
What is a “short sale?”
A short sale is generally defined as a sale in which the lender permits the property to be sold for less than what is owed on it. Short sales are another form of pre-foreclosure sales. The purchaser on a short sale gets the property for a lesser amount than the seller’s mortgage. The buyer finances the home however he chooses much like any other real estate transaction.
Who can qualify for a short sale? It is up to the lender to decide if a borrower is eligible for a short sale. There are many factors the lender considers some of these factors are: The borrowers overall financial condition The cost to get the property into resale condition The property’s value…repaired The properties “as is” value The cost of marketing and selling the property
Homeowner Hardship Test Any homeowner who wants the help of a short sale in lieu of foreclosure will have to pass the lender’s hardship test. Tests vary according to lender, but the borrower must be experiencing some of the following:
Illness of the borrower or immediate family, causing havoc on family finances.
Death of a spouse, with financial implications rendering inability to make mortgage payments
Transfer out of area without being able to sell home
Active duty personnel without income to make payments Borrower experiences a disability, rendering work impossible
Unemployment of borrower with no foreseeable employment future due to local economic conditions
Insolvent borrower
Be prepared to present documentation Borrowers will be required to provide the lender information for consideration of a short sale.
- A hardship letter defining what the issues are to prove the claim.
- A financial worksheet of net income & expenses
- Copies of 2 years Federal Tax returns
- Copies of last 2 months payroll stubs
- Copies of last 2 months bank statements for all accounts
- A copy of the signed sales contract Net sheet showing breakdown of all projected costs, including Realtor commissions.
After completing and submitting the above documentation to the lender, it could take 1 to 6 months for approval (timing is dependent on the lender). Being proactive and getting an early start is critical to the success of a short sale. The lender is in total control, the proof is up to the homeowner. Cooperation, honesty and communication are basic elements for completing a short sale.
What is a “deed in lieu of foreclosure?”
On occasion a lender will offer a homeowner a “deed in lieu of foreclosure” on a mortgage that is in default. This situation is often times more cost efficient as opposed to going through a foreclosure. The advantages to doing a deed in lieu of foreclosure (at least in Colorado) is the amount of time it takes to complete. Colorado foreclosure laws have statutory time lines, whereas “deed in lieu of foreclosure” can be accomplished much quicker, as both parties agree to the timing. For the homeowner it is more private, no public notices are published in the newspapers.
An important fact to remember, if the homeowner is successful in obtaining a short sale or a deed in lieu of foreclosure, these are a taxable event in the eyes of the IRS. The homeowner may still have a tax obligation, it is wise to consult a tax professional to determine the amount of tax due.
The next step…
If you or someone you know needs assistance with the sale of a home facing foreclosure or a short sale, please feel free to call me for a free consultation.
I welcome your call.
Kristal Kraft sells Denver Real Estate in and around the metro area.
The above information is to be used as a general guide and is by no means to be used as legal advice.
Light Rail Rocks Solid for Home Values Along the Line
Two years after the opening of the Southeast Line of RTD’s Light-rail home values are higher than those that are not close to the line.
Reported today in the Denver Post by Margaret Jackson,
The closer a home is to the station, the more its value increases, according to the Your Castle analysis. Homes less than a half-mile from a station increased an average of 17.6 percent, while those 1 1/2 to 2 miles away increased just 0.1 percent on average. The data varied widely among stations, however.
Seeing stronger values along the Light Rail line is not unique to Denver. Other markets have experienced the same appreciation, ranging anywhere from a mere 2% in San Diego to a whopping 32% in St. Louis.
Considering all the benefits of living along the line it makes sense to change from relying completely on personal transportation. The Light Rail offers convenience of relaxing to and from work, provides a very green alternative and fits well into the lives of so many who enjoy using public transportation.
RTD also partners with various governmental groups to offer discounted rides to frequent users. In south metro Denver, programs like TripToWork.com provide 50% discounts to those working in the southeast Urban Corridor.
Urban Centers along the line are affectionately referred to as TOD’s (Transit Oriented Developments). If you haven’t heard this term before, remember what it stands for, because you will be hearing more about TOD’s in and around the Denver Metro Area.
Tricks to Make Life Sweet!
Image by bethography - melting mama via Flickr
Selling your home can be a tough ordeal if one doesn’t properly prepare for the home inspection. Today’s buyers are come more educated than ever before to the closing table. They have researched neighborhoods, home values, schools, days on market, construction techniques, crime rates, sex offenders and everything else you can so easily find online.
When the buyers gets to a seller’s home, they know as a matter of fact they will have the home inspected by a home inspector, a professional who makes it his/her business to find something wrong with your house.
So how should today’s home owner deal with this? Prepare, plan ahead, if it’s broke fix it!
Here’s a list from a home inspection company offering their suggestions:
- Confirm water, electric and gas service are on, with gas lights burning
- Ensure pets won’t hinder the inspection. Ideally, they should be removed from premises or secured outside.
- Replace burned out bulbs to avoid a “Light is inoperable” report that may suggest an electrical problem.
- Test smoke and carbon Monoxide detectors, and replace dead batteries
- Clean or replace dirty HVAC air filters.
- Remove stored items, debris and wood from foundation. These may be cited as “conductive conditions” for termites and other critters.
- Remove items blocking access to HVAC equipment, electric service panels, water heaters, attics and crawl spaces
- Unlock areas the inspector must access - attic doors or hatches, electric service panels, closets, fence gates and crawl spaces
- Trim tree limbs to 10′ from the roof and shrubs from the house to allow access
- Attend to broken or missing items like doorknobs, locks and latches, windowpanes, screens and locks, gutters, downspouts and chimney caps.
Checking and complying with all these items will ensure a speedy, successful inspection and a very happy closing.
If you would like to read more about Selling Your Denver Home, please visit my website!
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Spine Tingling Showings
Image via Wikipedia
Halloween is a time to tell scary stories around the virtual campfire (aka blog!).
Once upon a time I received a call from a gentleman who wanted to meet me at a house. He said he owned the house and wanted to sell it, could I please come over. Anxious to ad a nice new listing to my inventory, I went to the house but no one ever answered the door. I had the creepy feeling I was being watched. When I got back to the office I checked to see if the man’s name was the same name on the tax records. It wasn’t. Guess I got lucky that time. (P.S. I NEVER go on appointments anymore without checking ownership.)
Another time I was showing a couple a home. We were in the basement where there was a door to a storage room. I opened it and at the same time all three of us screamed and jumped backwards. There was a body laying naked on the shelf! Of course it was just a life-size store maniquein. It curled the hair on our necks!
My favorite story occurred when I was showing a home to a prospective purchaser. It was an awful REO that had a huge, wet basement. I warned the buyer the basement was very wet, so please be careful. I took him down there knowing I could stand on the steps while he looked around. Instead the buyer decided to walk the perimeter of the basement. Each step he took, he sunk deeper into the mud. I watched him, my mouth hanging in amazement at how far he was sinking. Finally he finished with mud up to his knee caps! He acted like it was all in a day’s work. I didn’t say, “I told you so” even though I wanted too! BTW he didn’t buy the house, years later he became a home inspector. He remains my most favorite home inspector. We never talk of the mud. 
My nose remembers another nasty REO where I had to have the locksmith break into the home because the homeowners had abandoned it. I took my contractor and the locksmith, because I always fear finding a dead body in a closet. Well this time we found a freezer (unplugged) full of formerly frozen game meat. It had been decaying for who knows how long! My contractor picked up the freezer intact and disposed of it. We didn’t dare open it again for the odor nearly killed us.
Once on holiday in Las Vegas a Realtor friend took us out to preview his inventory. I slipped away to use the bathroom while they were looking at the house. The home was obviously build by a budget builder, because the lock to the bathroom door broke, leaving me trapped inside. Luckily I’m not afraid of small spaces, but just the same I was annoyed at how long it took before they missed me!
Spooky stories are always more fun when they are told in past tense. What spooky stories do you have?
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Mortgage Fraud Sucks
Image via Wikipedia
The long arm of the Colorado Real Estate Commission reached out and smacked 20 real estate agents recently, who allegedly were involved in kickback schemes involving 105 home sales.
These brokers from the dark side scammed mortgage companies by selling homes to members of a group called Synergy 2002 REI. Properties were sold at inflated prices with checks at closing being given to third parties for (bogus) home repairs.
It was reported that $8,000,000 was kicked back to buyers and brokers for sales that occurred in 2006.
How does this work? It takes a group of scammers to pull it off. All with greedy out stretched hands that lie, steal and look the other way when the transaction is happening.
In the end the profit made from transferring the home is far more than the profit from a normal sale. The mortgage on the home eventually goes into default, but the “homeowner” probably rents it out to milk even more profit from it as they skim the equity.
In the end the mortgage company forecloses. The neighborhood is devalued and the innocent suffer.
The Colorado Real Estate Commission can only impose fines and sanctions on the guilty. The courts will bring criminal charges.
When all is said and done, hopefully the court will sent the offenders off for a nice long vacation, all expenses paid (including clothing) to a nice gated facility down south, perhaps Canon City?
People who cheat make it hard for the people that don’t cheat to do business.
There are times when it is necessary to have the title company hold funds for repairs to be completed after closing. In fact I’m doing that on one of my transactions right now. We are doing it right. The funds will be placed in escrow until the roofing repairs are complete. At that time the funds are released directly to the vendor who did the repairs, not some bogus bidder who pretended to do work.
My clients are willing to allow the escrow because it allows them to move into the home on schedule, rather than have to delay all their plans.
I worry that someday soon, we will have yet more legislation (thanks to the scummy scammers) that will “protect” us from the deeds these people have committed.
It is impossible to legislate common sense, but until people live their life with their moral compass pointing in the right direction, we will have to continue passing laws that effect the innocent.
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This site brought to you by Kristal Kraft, a licensed Colorado Real Estate Broker
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