Archive for December, 2011

QUESTION: From Guy D.,

Recently a Section 8 person moved in and we noticed some hallway fires being set by her kid. He set a paper sign on fire but it didn’t do any real damage and we couldn’t prove it was him. However on Christmas Eve, this tenant broke our rules and left a box of clothes in the hallway and then someone put a cigarette butt into the clothes and it started a hallway fire and did a lot of damage and smoke and the fire department had to be called. This tenant is leaving now voluntarily, but should we report her to section 8 and risk having to spend money fighting her to evict her in court or should we just let her leave and report her later to section 8 after she is not an additional expense to us? We are afraid that the cost to evict her will not be paid by Section 8 and that we can’t make fire claims against Section 8. Is there any type of Claims we can make against Section 8 to pay for the Fire Damage, etc.?

Thanks Mike

Guy in D.C.

 

ANSWER:

Recently we rented to a Section 8 person Family on Section 8 moved in and we noticed some hallway fires being set by her kid.

How?, Photos? statements? What is your proof?

 

He set a paper sign on fire but it didn’t do any real damage and we couldn’t prove it was him.

Then you can’t say “He set a paper sign on fire”.

 

 However on Christmas Eve, this tenant broke our rules

“our rules?” is the “our rules” spelled out clearly in your… Click Here for Full Video/Article (Members Only)

John Schaub Webinar Replay

 

Only $549

or
2 For $950

http://bit.ly/JohnSchaubSeminar

Just in case you have not heard about it, the new federal law scheduled to outlaw 100 watt light bulbs has been shot down.

Before being shot down, this new federal law scheduled to take effect in January 2012, outlawed 100 watt incandescent light bulbs. Edison would roll over.

Stay tuned for the fantastic educational video on lighting from Peter Konopka (this training was done before they shot down the new federal law)

This is a WHOPPER!

I just got this in the mail from my state’s Realtor Association

Please Pay Close Attention – Don’t Allow Yourself To Get In This Trick Bag

This is a very powerful “eye-opener” for the licensed agent, real estate investor, who is GREEDY and tries to play both ends against the middle.

If you have your license as an agent or broker, and you wish to make money representing buyers and sellers, then wear this hat professionally for the best interest of your client(s).

If you are licensed as an agent or broker, and want to use these resources to buy and sell for your real estate investing business, then follow the law and rules properly.

It all boils down to good old fashion doing business the right way and with 100% full disclosure and document your disclosures.

Read this one and enjoy

==============================================================

Agent buys house from under client’s nose Lawsuit leads to out-of-court settlement

In a recent column, we asked if a person who serves homebuyers and sellers for a living should be held to different guidelines if they are competing to purchase a property.

For example, should the listing be exposed to the market for a certain amount of time (perhaps 48 hours) before a licensed agent can buy a home that somebody else is ready, willing and able to buy?

The question came in light of new research that revealed nearly 43 percent of all members of the National Association of REALTORS® owned at least one rental property.

The responses fell into two main pots:

  1. Readers said agents should be allowed to buy if it was in the best interest of the seller.
  2. Others who responded thought that agents should be allowed to purchase a property as soon as it is listed provided they knowingly had no other active clients who wanted the same home.

A recent Washington state case that was settled out of court (and whose financial terms remain confidential) contained that second caveat. The interesting, complicated affair included a short sale Click Here for Full Video/Article (Members Only)

December 12th, 2011

The FHA has established minimum credit score requirements in order to be eligible for FHA financing.

The FHA guidelines specifically exclude from eligibility any borrower with a FICO score below 500.  Theoretically, any borrower with a credit score above 500 can be approved for an FHA loan but realistically, the lower the credit score, the more difficult it becomes to actually obtain FHA loan approval.

Borrowers with a FICO score between 500 to 579 are eligible for FHA-insured mortgage financing but are required to make a 10% downpayment and be able to verify sufficient income.  There are actually very few borrowers that wind up obtaining an FHA mortgage under these requirements.  A low credit score is indicative of a high level of mismatch between a borrower’s debt obligations and income, resulting in late or defaulted loan payments.  Under these circumstances, it is highly unlikely that a potential borrower would be able to accumulate a 10% downpayment.

Borrowers with credit scores above 580 are eligible for maximum FHA financing and are required to make only a 3.5% downpayment.  From a practical standpoint, however, it has become extremely difficult to obtain FHA loan approval unless the borrower’s credit score is above 620.  This is due to the fact that FHA lenders have established their own credit criteria for loan approval which exceeds the FHA guidelines.  Most of the largest banks that make mortgage loans under the FHA lending program require a minimum FICO score of 640.

The FHA and the banking industry have dramatically tightened underwriting criteria for loan approval due to the collapse of housing values and the large number of mortgage defaults. A borrower applying for an FHA mortgage today with a FICO score below 620 has a very low chance of being approved.

At the peak of the housing bubble in 2007, a huge 45% of FHA loans were approved for borrowers with credit scores below 620.  In 2008, the number declined to 33%, in 2009 to 14% and in 2010 to only 4%.  The number of borrowers approved for FHA insured mortgage loans with a credit score below 620 declined to 3% in 2011.

Borrowers with a credit score above 660 have the best chance of being approved for FHA financing as can be seen in the graph below.  In 2011, 70% of all FHA mortgage loans were given to borrowers with a credit score of 660 or higher.

 

from FHA website

WITH most lenders requiring home buyers to put down at least 20 percent — and sometimes, with more expensive properties, an even greater amount — the best gift some people might receive would be help with the down payment.

Under federal tax law, each individual is permitted to give away money or valuables worth up to $13,000 to a single recipient in a calendar year. A married couple could jointly bestow up to $26,000 a year per recipient.

“It really can be $52,000” if the recipient also has a partner, said Mike Maye, the owner of MJM Financial, a financial planning firm in Berkeley Heights, N.J.

And if the gift-givers wanted to spread even more good cheer into the next calendar year — perhaps distributing some future Click Here for Full Video/Article (Members Only)