Eliminating Capital Gain on Real Estate Owned by Married Couples: A Simple, Yet Critical Strategy By Brian Qualls, Esq.

 

California Home Strategies is happy to bring you the first in our series of featured business partners. Brian Qualls, Esq. is an attorney who specializes in Estate Planning. What he has brought to California home strategies is invaluable information. Enjoy the first in the series of many great guests to come.

How do you hold title to your home? Odds are, if you are married and purchased real estate with your spouse, you elected to hold the property as Joint Tenants. This has been the common practice recommended by many real estate agents, lenders, and attorneys for quite some time. The advantage to holding property in Joint Tenancy is that when the first spouse passes away, the deceased spouse’s one-half interest in the property automatically passes to the surviving spouse with little to no transfer cost. Provided that such a transfer of ownership was the couples’ objective upon the first spouse’s death, holding property as Joint Tenants seems like a no brainer.

Here’s the downside: If you hold real estate in Joint Tenancy with your spouse, you are missing out on significant tax benefits that are available under another method of holding title (which has all of the benefits of Joint Tenancy discussed above) that we’ll discuss in just a moment. First however, we need to understand the basics of calculating capital gain for tax purposes under the traditional Joint Tenancy method. Here’s how it works … when the first spouse passes away, the surviving spouse receives a “step up” in cost basis equal to 50% of the market value of the property at the time of the first spouse’s death (cost basis is, essentially, what you paid to purchase the property). The remaining 50% of the property retains the surviving spouse’s original basis. This concept is best illustrated through an example:

Max and Marge bought a house and took title as Joint Tenants. They paid $200,000 for the home (their cost basis for the purposes of calculating capital gain is therefore $200,000). Thirty years later, Max passes away. At the time of Max’s death, the property has increased in value to $1,150,000 (this assumes an annual appreciation of 6% over a 30 year period). Since Marge gets a “step up” in cost basis to 50% of that amount ($575,000), her new cost basis is $775,000 (her initial basis of $200,000 + Max’s stepped up basis of $575,000). Assuming that Marge chooses to downsize and sell the family home immediately, she will have capital gain in the amount of $375,000 ($1,150,000 sales price – her new $775,000 cost basis). At best (assuming Marge had lived in the home for 2 out of the last 5 years), she will have $250,000 of that $375,000 exempt from capital gains tax. But she’s still left subject to capital gains tax on $125,000 when she sells. This will result in a pretty hefty tax bill.

Fortunately, there is a better option. Since July 1, 2001, married couples have been able to take title to real estate as Community Property with Right of Survivorship. The “Community Property” designation will entitle the surviving spouse to a “double step up” in cost basis equal to 100% of the market value of the property at the time of the first spouse’s death. Therefore, in the example above, Marge’s new cost basis will be the full market value of $1,150,000, and she will be able to sell the property for zero capital gain. Moreover, if she chooses to remain in the residence (or even rent it out for a few years), she will still be able to rack up an additional $250,000 in appreciation and sell it tax free down the line.

It is important to note the significance adding the of the “with Right of Survivorship” language to the Community Property designation. That is what enables the surviving spouse to automatically inherit the deceased spouse’s one-half interest in the property with little to no transfer cost (the same benefit of Joint Tenancy that is often so appealing to married couples). If the property were only taken as Community Property without the “with Right of Survivorship” language, a court process would be required to transfer the deceased spouse’s one-half interest over to the surviving spouse. Therefore, if the couples’ objective is for the survivor to receive full ownership and control over property, opting for the “with Right of Survivorship” designation makes perfect sense.

If you are buying a new home or refinancing and would like to take advantage of taking title as Community Property with Right of Survivorship, it is as simple as checking the appropriate box in your closing documents. If you already own a home in Joint Tenancy and would like to change how you hold title, no problem. You can simply sign a new deed transferring your property from yourselves as Joint Tenants, to yourselves as Community Property with Right of Survivorship. Ask your title company or a competent attorney to assist you.

 

About the Author:

 

Brian Qualls is an estate planning and trust attorney who assists families throughout California in protecting their loved ones (and their hard earned assets) through well designed estate plans that work. He firmly believes that everyone should at least have a basic plan in place, and therefore guarantees that every client who consults with his firm will walk away equipped with a simple will, power of attorney for finances, and advance health care directive for a nominal consultation fee. The fee itself is refundable at the end of the consultation in the event the client is not fully satisfied with the experience. If more comprehensive planning is requested by the client, the consultation fee is applied accordingly. Brian can be reached by email at

Brian@BrianQualls.net, and his educational blog is available for the public at www.PlanYourEstate.net.

 

Mortgage Definitions: Lock In and Lock In Period

It is common to hear the terms Lock In or Lock In Period associated with your new home purchase. The terms are very important to your financing and it is important to have an understanding of them.

Lock In – An agreement in which the lender guarantees a specified interest rate for a certain amount of time at a certain cost.

Lock In Period – The time period during which the lender has guaranteed an interest rate to a borrower.

Previously, we examined different costs associated in Free Mortgage Step Right Up! These costs are either in rate and offered by the wholesaler via yield spread premium or they are paid upfront as pre-paid interest also known as discount. Each morning the investor sets the rates they are willing to sell on the open market based on their risk tolerance. They will set what they determine to be the par rate of the day and build the pricing off that rate. Par rate is generally represented with a 30 day lock defined as the lock in period.

Lock in Periods  are important because they are the time that you are given to execute the funding of your loan at the rate and the cost that you “Locked In” at. The shorter the period of the lock the cheaper the costs for the rate that you are locking in.

For Example: If you were locking the rate 4.75% today on a 15 day  lock the cost would have been .125% discount. The same rate locked for a 30 day period would have cost .250% discount. To give yourself an additional 15 days to get your laon closed it would have cost an additonal .125% of the loan amount. (this example is for illustrative purposes only and may not represent your borrowing position. Rates were on a 30 year conforming fixed rate mortgage with 740 fico, full doc on a single family residence purchase. Please consult your professional regarding your loan specifically.)

The constant change in the market require the investors to at times make midday chnages to the pricing. The imrovements can be for the better or for the worse. There are cases when more than one change can occur in a given day. If you have locked prior to the change you are safe from the change. If the rates have gotten better you are not allowed to get the better rate or pricing that it changes to. On the other hand if the pricing deteriorates you are locked in at the pricing prior to the deterioration. Pricing is time stamped so it is imperative when making a decision you are decisive. See Don’t bend over picking up pennies while dollar bills fly over you head  ! Indecision can prove to be a costly mistake.

For More Reading on Rate Locks, Lock In or Lock in Period you can also read:

Mortgage Locks: Certainly Uncertain! 3 tips to locking your mortgage.

Mortgage Rates Locking or Floating part 2 of 2 by Jeffrey Belonger

As always thank you for reading,

Matt Freeman

Flyer Boxes and Riders: Effective Marketing?

This question has been on my mind for quite some time. In my Neighborhood there are 2 homes that have been on the market forever.

House #1 – Beautiful home with a huge Backyard. 4000 square feet with a price point that is for middle to upper income buyers. So what is the problem? This particular home is on the second Real Estate Agent to list the property. Reputable company and a reputable Real Estate agent. However, the sign leaves a lot to be determined. The sign is equipped with a flyer box and a rider. The rider says huge backyard!Once you go in the home and look at the color choices that the previous homeowner make you think HGTV, “Color Correction.”I live right near the home so I have to look at the house everyday at least twice a day. Over the last 9 months that the home has been on the market only three times totaling three months or so have I actually seen a flyer in the box.

What the rider tells me every-time that I look at is: “major yard-work!”

What about the flyers?

Question #1 – If there is a flyer box don’t you think that there should be flyers?To me it is like the “Just reduced or price reduced” riders. They don’t make the property more attractive they make it seem like the seller is desperate. This is just my opinion. It also blends in with the sign.　If it were bright pink I would have to look every-time. If I was not in Real Estate I would never look twice at this house.

Question #2 – To be effective shouldn’t the riders excite a consumer?

 

House #2 -Beautiful home on a corner lot with a great Backyard and fully done inside. Again, in the same Income Category. Another Reputable company with the listing and in this case I do not know the Real Estate Agent that has the listing. This home has been listed for over a year with the same agent and the same sign.

This home has no rider and no flyer box.There has never been a flyer for this property. There has also never been one change to the sign except for when it was blown down by the wind. This is very forgettable and rather dull.

Question #1 – Aside from calling the agent how would anyone know the price?There is no website, virtual tour, flyer, rider or anything. It is the mysterious house. There has never been an open house. It has been over a year. Do you want to sell the place?

 

Question #2 – What exactly is selling this home?

What I want to know from Realtors is:

1) Are flyer boxes and riders effective? If so, what should they say and how often do you refill the box and change the flyer?

2) If you have a flyer box that is always empty is it a disadvantage? (like a web-page that does not load quickly.)

3) What does an effective rider say?

I feel that each of these homes are at a disadvantage for different reasons. If you have a flyer box make sure that it is filled. If you have a rider make sure that it communicates effectively what you are hoping. Ask the neighbors what they think. After all we do see it everyday.

If you have no flyer box and no descriptive riders can you at least have a website to go to or an 800 number?As always thank you for reading.

What do all of you think?

 

Matt Freeman

 

　

Wow that was Easy! FHA Streamline Refinance designed specifically for the consumer.

 

 

 

 

 

 

 

 

 

 

Confused Homeowner

 

Dear Confused Homeowner,

 First of all you are not alone. The FHA Streamline is a terrific loan and it is rather simple. Contrary to the media reports on lending. The FHA Streamline is designed to be simple and low cost. Many times the cost to close is simply the amount of the mortgage payment you would have made. Instead of paying your mortgage to your servicer you make that payment to the Escrow Company at close. Wholesalers have reduced their fees on these transactions and the many escrow companies have compatible rate programs. As is the case with every loan program each wholesaler has their own overlays or qualifications if you will. It is common to see a 620 credit score minimum, some require employment and others do not, no income and no assets are many times the case. Consult your professional to speak directly about your situation.

How the loan is set up and how the loan amount is determined is based on how long you have had your current mortgage. Based on the time that you have had the loan you receive a refund on the last upfront mortgage insurance premium you financed or paid for. For example: If you have had the loan 6 months you will receive 70% of the amount you paid. If you financed $3500 in upfront mortgage insurance premium you will be refunded $2450 applied to the payoff or closing costs. You will then have a new upfront mortgage insurance premium of 1.5% of the new base loan amount. There are a few ways to calculate your new base loan amount based on how long you have been in the current mortgage as well.

Here is a grid of the Upfront Mortgage Insurance Refund:

 

Upfront Mortgage Insurance Premium Refund Percentages
	Month of Year
Year	1	2	3	4	5	6	7	8	9	10	11	12
1	80	78	76	74	72	70	68	66	64	62	60	58
2	56	54	52	50	48	46	44	42	40	38	36	34
3	32	30	28	26	24	22	20	18	16	14	12	10

 

 

The bottom line is if you have an FHA Insured Mortgage currently and your rate is 6% or higher than it would be to your benefit to give your Mortgage Professional a call.

Matt Freeman

 

 

 

　

　

California Home Strategies Officially Launches!

I am excited to announce that California Home Strategies is officially launched. It has been a collaborative effort to bring to you “Real Estate Strategies We All Can Understand.”

California Home Strategies will provide the most current mortgage news and finance tips. I will deliver the how to’s of mortgage finance, definitions, product announcements and just straight forward information you can count on.

I am also pleased to let you know that California Home Strategies has lined up several guest bloggers and interviews with supporting business owners. Over the next several months you will find information on the following and much more:

Tax Tips regarding how title is held for married couples in  California

Simple Credit Tips to Manage your FICO score

Common short-sale mistakes and tips to a successful short sale

Tax ramifications on a foreclosure or short sale

Landscape secrets to keep your yard looking fresh

How to balance work and life so that you can enjoy your Home

How to add hours to your day

Strategies for the Real Estate Investor

I will also have free newsletters, e-books, guides to your purchase or refinance , checklists,  market navigation techniques, local statistics, video tips, video tutorials and more. You will not want to miss all the awesome content that will hit this site. Before you leave to day make sure that you sign up for RSS news alerts. You will be notified when new material is published so you don’t miss out.

The lineup of guests is unreal. I have been very fortunate to have some of the industries best agree to contribute and share some of their secrets. We will also have contributors to help you build and maintain your wealth and preserve the equity in your home. College Funding advisors, Financial Planners, Life Insurance, down to your home and auto. I care about much more than just your mortgage. Networking tips and opportunities for you to increase your own business will also be published as my colleagues share their success stories. How they got their business to where it is at today.

I want to take a brief moment to thank Sierra Friend for her instrumental help in the development of this blog from concept to creation to a moving work in progress. I highly recommend checking  her out if you are considering a blog or are looking to take your business to the next level.

Thank you for stopping by today and getting a taste of what California Home Strategies is going to bring to you. Remember, to subscribe before you leave. You will be happy that you did that is my promise and commitment.

Perfectly Packaged Presentation, It’s the Difference!

How many times have you chosen to to buy something based on the way that it was presented? How many times have you turned away from buying something because it was disgusting looking?

Bear with me for a moment: You have just went out to your favorite restaurant and had the meal of your life. There is a little left over so you get a to go box. You bring home the meal and what do you put it into:

a) Tightly sealed ziploc container

b) Plastic wrap

Yes, that is correct you generally will put it into the tightly sealed ziploc container. The reason that would do this is simple. We want to do the very best to preserve the integrity of the food so that we may eat it another day.

One more quick example: Imagine that you are shipping an ancient vase to your relative across the country. Are you going to

a) throw it in a box

b) Tightly wrap in bubble wrap and put it in a box with styrofoam peanuts to protect it.

You may be beginning to wonder what any of this has to do with loans. The answer may not come as a surprise either. Perfectly Packaged Presentation, It’s the Difference between whether or not your loan will be Approved.

The biggest item that separates one Loan Officer from the next is their ability to package a loan. A loan that is packaged and presented well can fly right through the system. It will make the experience seem seamless.  I qoute from a previous customer “I’m still amazed how easy the whole process was.” This qoute had very little to do with me and a ton to do with the customer being so well prepared.  It was also because all of the legwork was done up front. This customer currently owned a home with little to no equity and was buying a new home. Anyone that is in the industry will tell you that this is more difficult than it sounds. It came down to the “Motivation” of a client to buy a new home. In this case there was recently a new job acquired and both were commuting. The location of the new home was closer to the new job. We prepared a letter explaining this in full detail so that when the underwirter received the file there was little left to explain. There were a few other caveats to this file but as the customer said, “it was rather easy.”

Underwirting - When you are preparing a package to go to the wholesaler to be underwritten it is simply not enough to throw the basics of the file together and hope to send the rest after the approval. Loan Officers rush and are rushed to get to certain stages of a transaction and will often times submit a package before it is ready. This is disastrous. The result is an underwriter that will have to look at the file more than once. Taking an underwriter out of rhythm and given them less than your best will lead to a denial.

Let’s put this into perspective and ask ourselves the following questions: 1) Can I or should I make a life changing decision without all the facts? 2)When given only part of a story and it smells like fish am I likely to say yes? 3) If I open up a package and everything falls to the floor and it is not in a clear concise order am I likely to be excited to proceed with the rest of the file? 4) If I was asked out on a date and my date arrived to the house with a stained white shirt with holes, pants no belt and two different shoes would I be excited to go to dinner?

All of these questions are designed to encourage you to say no. The same thing that an Underwirter is going to do when they look at a file that is incomplete.

Underwriters are human and they are in the job because they like to help homeowners obtain financing. Beleive it or not they are simply there to take the package that we deliver with an approval and verify the supporting documentation has been provided. When a file is in doubt or may contain a few nuances it is the job of the Loan Officer to tell the story as to why this file should be a go. Give them all the detail of the file in a clear concise manner. Tell a story that makes the Underwriter sympathetic or even empathetic to the situation. They do want to approve files.

Loan Officers are separated by this ability to package and present. You can make a name for your self that is of high quality or of poor quality. We all have equal access to the money you desire to buy a home. However, it is in the relationships and more importantly in the packaging of the loan that makes your experience. I have closed several loans that were declined elsewhere over the years. Many times I was asked what was my trick. The trick is in the packaging. The trick is in the Presentation. It’s the difference between the approval and the denial.

Massive Referrals Built Well: Roseville Business Network

*******Update********** Since the time of this post Kevin Nakano and I both decided that the time constraints on our businesses right now required us to make some tough decisions. These decisions required us to take a look at all the activities in our schedule and eliminate something. By deafult of being one of the newer ventures we had taken on Roseville Business Network was put on Hold.

However, I do encourage anyone that would like to utilize the model not to let our decision stop you. The group was a total success. I was introduced to a few great people and one of the members Johnny Kovalek and I are in the process of starting a new gropup of power partners. Stay tuned as we are looking for a few members in a related industry to create a powerful team. Thanks for visiting and sorry for the news.

_________________________________________

I think that many of you who are reading this post have been part of a Business Network. Many of the common groups such as BNI, Letip, and National Business Exchange are excellent groups. These groups have been around for a long time and they have proven track records. I have been a part of these organizations in the past and I have had a great level of success from them. Some of my best business partners today grew from a relationship established from one of these groups. (my intent is not to knock any of these groups but merely offer an alternative. Any material within is purely my opinion and not that of Kevin Nakano.)

The Problem-Inability to choose who you get to work with and referral quotas-Every one of these groups has a process in place for new member enrollment. You have to go before a panel to see if you would be a good fit for the group. Naturally many of the business owners enter the group with previously established relationships that they have had over many years. When the panel accepts a new member of a certain trade often it is not unanimous. Common trades include: Financial Planning, Insurance, Mortgage Lending and Real Estate. Each of these trades require a great deal of trust for both the referrer and the consumer. When you enter a group it may be hard for other members to refer the business to you but that is the foundation of the group itself. It is a referral network designed to exchange business between members.

Another downside is that there are costs and quotas that must be met to maintain a membership. In order to meet a quota I think that many times members refer an extremely cold lead. If you get in the habit of submitting bad referrals for the sake of meeting a quota that will also defeat the purpose and the level of trust amongst members.

The Solution-Roseville Business Network- Kevin Nakano, Nakano Realty andNakano Consulting, is known in the Sacramento area for his Networking prowess. I met Kevin through an associate I had met in one of these groups. Kevin and I hit it off and we had a lot of similar ideas. Kevin had started a group,  Elk Grove Hub, and that group was doing really well. He asked if I would like to co-chair a group in Roseville. This was the beginning to the Roseville Business Network. Roseville Business Network is a non-exclusive, free networking group that meets once a month. The frequency of once a month versus once a week is designed to allow time to meet offline, if you will, and develop the one on one relationships deeper. The fact that we are non-exclusive gives business owners the ability to develop a relationship with those that they connect with instead of being forced to use who is there. The guidelines to membership are simple and we do run a tight agenda. Another reason for the frequency is that many of the past groups felt rushed and it felt as though the members were not present. This was because the time commitment was too much to maintain. As small business owners we are the business and we cannot be away that long. The reason that we do not require a fee is simple. Everything costs and it is not necessary. Relationships cultivate business and they should not have a price tag. One would argue that a small fee helps to maintain the commitment. If you need to spend money to commit to something then you are not the partner we would be looking for. Our goal is to foster relationships that lead to increased business. It is that simple.

Summary-Supplement not Supplant- The networking groups that I have mentioned are meant to supplement your current groups not supplant them. We both are strong advocates for the traditional networking groups and are actively involved in such groups. Kevin has also founded Referral Partners International which is an exclusive Networking group. There are opportunities to start a chapter on his site.

I encourage you to check us out. Visit the site, Roseville Business Network and Elk Grove Hub and give us a call.

If you’d like to attend one of the meetings the times are posted on the site and where to RSVP. Other related sites to check out:

Nakano Realty

California Home Strategies

Referral Partners International

Pre-approval Letters Devalue like the Dollar

The following post is an older post that I had written on Active Rain. Although some of the content is dated the overall theme of the post exists today and is getting worse. Since the time of the original post REO’s and Short Sales are beginning to ask for Direct Lender aka Bank approval. We as a Broker have lost all credibility in one part of the market! Please enjoy the following information:

As the value of the dollar continues to crumble so too does the value of the pre-approval letter. For a long time we wrote, as Brokers, a pre-qualification letter and we gave that to the consumer. This letter was the letter that they would show to their Real Estate agent and it would accompany the offer. Then the boom came and Real Estate agents were swamped and so were we so the need for a PRE-APPROVAL letter became the dominant force.

Let me pause for a moment and explain the difference. A pre-qualification letter can be given to any walking soul that states they have a job, decent credit, and some money in the bank. It is generally issued based on a conversation versus documentation. Pre-approval letter’s are issued after the loan officer has taken a full application and reviewed the credit report, income documentation and assets. A pre-approval letter is a further form that may even involve an automated approval prior to writing them. (This is what I do in the current market).

So, what I was saying was Pre-approval letters used to mean something when the offer was written. The dollar used to be a force among all currencies also. The dollar has been smacked and the value is much less. In fact that is the conundrum a weak dollar while inflation is an issue. I once called it a double edge sword. I can now say that I feel the same about the pre-approval letter. With the emergence of REO’s in the market place it is very common that the bank request a pre-approval letter from their institution. My approval letter has lost all credibility. What I have been doing is I send my approval letter and my findings (automated approval) and most institutions have used this to write a letter for me.

However, I am not always so lucky. As we fight for the deals that are on the table I have had banks want all the information that I used to get the automated approval in their attempt to borrow my borrower. To put this in perspective getting automated findings is like getting a listing appointment, meeting with the consumer, filling out all the paperwork and when you get back to the office handing to another agent for them to do. It is not all the work but it is the hardest work of the process. If everyone could get clients easily everyone would be in Real Estate. It has been my fortune that my clients want to work with me so this is less of a problem.

Pre-approval letters are now virtually meaningless if the property is bank owned. The Broker has lost credibility. Everyone is afraid that the deal will fall through. Honestly, I understand the fear of a deal falling through. Deals have not all fallen through because of Broker misrepresentation. Washington Mutual shut down their wholesale division. If I had my client approved through Washington Mutual, we were in contract moving forward and the bank closes shop unexpectedly whose fault is it? It could happen no matter who writes the pre-approval letter.

In conclusion, just like the dollar has lost value in the market place so has the pre-approval letter. It is the result of a mess of things that are out of our control. I have learned to deal with it but it still bothers me. I am in the business still because I am good at my job. I have a good reputation when it comes to my clients and the people that I work with. I certainly have my faults but overall I am here and closing deals. I am eager to get back to a point where my word has some substance. The same world that my dollar actually affords me a good meal and more than a 1/4 gallon of gas.

Happy Easter! 1/4 of the Year has passed.

April 12th, 2009 Easter Day is here.

Today is Easter and as I sit in front of my computer my family is all around me doing all different things. My grandmother is deciding what croissant she should eat. My Mother-in-Law is cooking our Easter feast. My Uncle is going to color my wife’s hair so he is getting the foils ready to go. My Father-in-law is all over the place trying to be all things to all people. “Get the coffee made I am trying to blog!”Ahh, thanks Dad. My brother-in-law is playing with his niece and nephew. My daughter is married to the Nintendo DS, yes she is 7. My son is watching three ninjas. My youngest is walking around trying to figure out what she wants to do in life. Internet Marketer, Blogger, or Toymaker who knows she is not even three yet.

My hope is that all of you are with family enjoying this holiday. Taking the time to diffuse from what we do all the time. Taking the time to take it all in. There is significant meaning to the Easter holiday and I think that it is very important to take the time to recognize it.

Through the first quarter of the year I have to say that I am very happy and blessed at where my business is at. I owe that to you. I am very excited to say that through Twitter and Facebook I have been blessed with many new friends. The Tweetups have been amazing. I look forward to the next quarter of the year.

Happy Easter! May you have a wonderfully blessed day!

Breaking News: Fannie Mae and Freddie Mac to the Rescue?

This week in response to the Homeowner Affordability and Stability Plan (HARP) both Fannie Mae and Freddie Mac have released their own versions of Refinance programs. Fannie Mae’s DU Refi Plus and Freddie Mac’s Relief Refinance Mortgage. The programs are geared to help homeowners that are underwater on their house refinance. This will allow consumers to capitalize on the low rates that are available today.

The Program – Both programs will allow consumers to refinance their first mortgage up to 105% of the value of their home currently. Any second lien holder can be subordinated to an unlimited CLTV. The program is not restricted to a primary residence.  If your current loan does not have Mortgage Insurance it will not be required on the new loan. If you have Mortgage Insurance currently your Mortgage Insurance provider will have to agree to modify which they may not be willing to do. There are no minimum credit scores but there are adjustments for the lower scores on the Fannie Mae Program. So far each wholesaler is a little different in their offering of the product. This is due to their own internal risk tolerance. Some will offer the High Balance temporary loan limits and others have restricted it to 417K.

The Catch – Your loan has to be owned or serviced by Fannie Mae or Freddie Mac. To determine if you are eligible for the program you have to visit:

Freddie Mac at http://www.freddiemac.com/avoidforeclosure/ and click on “Does Freddie Mac Own Your Mortgage?”

Fannie Mae at http://www.fanniemae.com/index.jhtml and click on “does Fannie Mae own your Mortgage?”

With limited information they will tell you if they own or service your Mortgage. If they do then you have the first major step done on your journey.

The program itself is not very complicated but due to the fact that every institution will have their own overlays on the product it will be best to consult your Mortgage Professional for your individual situation.

All information in this post has been taken from a variety of my sources and from a variety of wholesale channels. Please keep in mind that this is a very new program and with that patience will be an extreme virtue.

As always I thank you for reading,

“You will always get the facts here!”

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