May 11, 2009 Newsletter

The annual Colony Title Tennis Tournament for the benefit of Shock Trauma is June 5 at Hobbits Glen Racquet Club. For info call or email me, 410 884 1160 x 3007 or tee.tillman@colonytitle.com.

The market has markedly improved over the last 30 days. In conversations with realtors and lenders, both are having the most activity in the last 18 months. Homes offered for sale that are priced right are receiving multiple offers. Many buyers who are trying to make low offers are discovering to their chagrin that a higher offer has been made and accepted. This bodes well for sellers preparing to put their homes on the market.

Many purchases are still under the control of the lender, because the seller is selling the home for less than is owed on the outstanding mortgage (short sale). Before the lender will approve a short sale, the realtors have the title company prepare a HUD 1 outlining all expenses the seller will incur, and the lender, after reviewing the HUD makes an informed decision on whether to accept the offer. In advising our buyer clients in writing their purchase contracts, we have told them to request in the offering that the seller pay for a one year home warranty. That charge will be on the HUD submitted for approval. Realistically most short sales are going to be “as is” sales because the seller has no cash to pay for repairs to the home. Once the lender says they are willing to accept the price and terms, there is no money left for the buyer to request repairs to the property. The one year home warranty runs between $350.00-500.00. For the home buyer, their only obligation is to pay for the service call, and all other expenses are paid by the warranty company.

Credit scores are dominant factors in both refinancing and purchases. While the companies tout “free credit report” you are entitled to one anyway, you just need to work a little harder to contact all three. If you are contemplating either a purchase or refinance checking your credit first will tell you of any flaws in your score. Look at the entire report and if any black marks are inaccurate, write the party in question. They must respond within thirty days or by law remove the black mark.

Rates remain steady in the 4.75- 5.0 range for 30 year fixed with a minimum of lender fees. Rates remaining consistent are good for both the purchase and refi market. We have closed 15 year loans as low as 4.25% with 1.0-2.0 points paid to the lender. Jumbo rates are still much higher. The best advice for refinancing a jumbo is to take a conforming first mortgage and obtain a home equity loan to complete the refi. Home equity loans are typically tied to prime and are very attractive right now.

We want to be your title company and law firm. Call or email me at the above contact numbers with any questions or needs.