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This is a hot topic but the media is not really telling what is happening in the mortgage place:

1. The majority of foreclosures could be prevented if the lien holders would modify the loans to the price they end up listing the foreclosures for sale for.

2. Foreclosed/REO homes are less expensive than short sales and less hassle.

3. Short sale lien holders are turning down offers for more money than they end up listing the property for after foreclosure. Contact me if you want specific examples in Jacksonville, FL. bkgravitt@comcast.net

4. REO companies marketing foreclosures are giving the buyer only 5 calendar days for inspections and 15 days to close if a cash transaction. If it is a financed transaction they are only giving 14 days for loan approval. Most mortgage companies can not get a loan approval in 14 days, especially if the buyer is using down payment assistance. Therefore, the buyer is at risk of losing their binder deposit.

5. With down payment assistance the process works like this: once you have a fully executed contract the appraisal is ordered and takes about 7 days to get the written report, then the appraisal is given to the H2H inspector and he takes another 7 days to file a report. During this time the WDO inspection and the home warranty inspection must be completed and paid for by the buyer. At this point the buyer will have almost $1000.00 invested in inspections and $1000 for their binder deposit, all of which the buyer is at risk of losing if the deal does not close.

6. It takes a minimum of 45 days to close a loan with down payment assistance if everything works like clock work, which it usually doesn't.

7. If you are a first time home buyer you must close on your new home by Nov 30, 2009 or you will not be eligible for the IRS tax credit of up to $8000.00.

Advise: Before you select a home have your loan company send your application through their underwriting department, Not just a pre-approval. This means that all documents like employment verifications, bank verifications, etc. are ordered and sent with your package through underwriting.

Don't bother with short sales unless you have a lot of time and are prepared for disappointment. If your offer is not within 80% of the sellers loan amount, then you are wasting everyone's time.

Be prepared to make any repairs required by your lender out of your own pocket before closing without causing your loan application to be jeopardized.

Ask for the seller to pay up to 6% of the purchase price for buyers closing costs, prepaids, and discount if you are getting an FHA loan or 3% if you are getting a conventional loan. Even if you have to raise the sales price to do this.

For more assistance if you are planning to purchase a home in Jacksonville, FL contact Brenda Gravitt CRS, GRI at bkgravitt@comcast.net

Mortgage guidelines have tightened and purchasers need a credit score of at least 620 to get approved for a loan.

The $8000 tax credit can not be used to satisfy the 3.5% down payment required by FHA but it can be used for closing costs and down payment over the 3.5% required.

I advise to get qualified for a mortgage before looking for a home so you will know that you qualify for the homes you are looking at.

Brenda Gravitt CRS, GRI

bkgravitt@comcast.net