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Four Part Series : Real Estate Short Sales

Part 3:   How is a Short Sale Seller's Credit Affected?
 
 
Whereas a short sale involves offering the home for sale, generally listed through MLS. Potential home buyers will make appointments to view the home, some will make lowball offers, agents might hold open houses and, in general, a seller's life will be disrupted, all in the hopes that a buyer will buy the home.
 
 
Basics of a Short Sale
 
Short sales happen when a lender agrees to accept less than the amount owed against the home because there is not enough equity to sell and pay all costs of sale. Not all lenders will negotiate a short sale, and that is why a real estate agent or a lawyer can be a tremendous help by contacting the lender's loss mitigation department to find out.
You can't just wake up one morning and decide you're going to sell your home at a loss by asking for a short sale. It used to be that lenders wouldn't even consider a short sale if your payments are current, but that has changed. However, realize that lenders will be more agreeable to negotiation if your payments are in arrears. Plus, if you have cash assets, the lender might try to tap those accounts.
 
How is a Short Sale Seller's Credit Affected?
 
Fair Isaac released a report that says credit scores are affected about the same, whether a seller does a short sale or foreclosure. Fair Issac says the average points lost on a FICO score are as follows:
 
30 days late: 40 to 110 points
90 days late: 70 to 135 points
Foreclosure, short sale or deed-in-lieu: 85 to 160
Bankruptcy: 130 to 240
 
Foreclosure or Deed-in-Lieu of Foreclosure
Both of these solutions affect credit the same, says David Steep of Vitek Mortgage. Sellers will take a hit of 200 to 300 points, depending on overall condition of credit. This means if a seller's FICO score before foreclosure was 680, it could dip as low as 380.
 
Short Sale
Steep maintains that the effect of a short sale (providing the sellers are more than 59 days late) on a seller's credit report is identical to that of a foreclosure. The ding on credit will show up as a pre-foreclosure in redemption status, Steep says, which will result in a loss of 200 to 300 points. This means a short sale seller with a previous FICO of 720 could see it fall from 520 to 420.
 
My personal experience has been somewhat different. I completed a short sale for a Sacramento seller who was 90 days behind on her mortgage. A few months after her short sale closed, she checked her credit report and found her FICO fell by only 100 points to 671. I suspect every seller's situation varies.
Catherine Coy, a mortgage broker in southern California, agrees with Steep. "The effect on a consumer's credit report -- foreclosure vs. short sale -- is the difference between being hit by a train or a bus," says Coy, speaking about borrowers who are a few months in arrears.
 
Waiting Period Before Buying Another Home
 
 
Foreclosure or Deed-in-Lieu of Foreclosure
Steep says a seller who wants to buy another home after foreclosure will end up waiting about 24 to 72 months before a lender will offer any kind of interest rate that makes sense.
Coy says, "The good news is a short sale will allow the consumer to obtain an institutional loan for a new home within two years".
For more information, see the Fannie Mae Selling Guide online. Click on the PDF link in the yellow box and see page 75.
 
Short Sale
Some agents say the good news for short sale sellers is the wait is much shorter before buying another home, and Fannie Mae guidelines in 2008 adopted new procedures.
Can a seller buy again in less than two years? Not really, says Coy, "It's an utter myth that a consumer 'can buy again in about 18 months at a good interest rate.' However, Fannie Mae guidelines now require only 24 months' seasoning, and that's good news for agents who specialize in short sales."
FHA adopted guidelines in 2010 that say a seller who is current and does a short sale may qualify to immediately buy another home. Lenders aren't so quick to follow those guidelines. However, Flagstar Bank gave an Elk Grove short sale seller a new loan within 2 months of closing his short sale, and that seller was current at the time.
Note that Fannie Mae guidelines allow a seller to immediately apply for a new loan to buy another home if that seller kept the payments current, had no delinquencies exceeding 30 days and did not agree to repay the debt relief. Moreover, it's the late payments that dramatically affect your credit report, not the short sale.
 
Foreclosure or Short Sale Decision
If you're a seller trying to decide whether to let a home go through foreclosure versus attempting a short sale, salvaging your credit may not be an advantage to doing a short sale, says Coy. She reports that according to "Score Factor Code #22, there's no credit score advantage for a delinquent borrower on a short sale over a foreclosure."
I have my doubts about that, though. From what I've seen, there is less damage to a credit report after a short sale involving late pays than a foreclosure. Moreover, another advantage for those with delinquencies on their credit is the ability to buy another home within 2 years over the 5- to 7-year period required for foreclosures. And there are other short sale advantages over a foreclosure. But seek legal and tax advice before making that decision.
 
 
POST YOUR OPINION:  www.TheOpinionPoll.com
 
ABOUT.COM
 
http://homebuying.about.com/od/4closureshortsale

Court: Ariz. citizenship proof law illegal

 

 

The Supreme Court ruled Monday that states cannot require would-be voters to prove they are U.S. citizens before using a federal registration system designed to make signing up easier.

The justices voted 7-2 to throw out Arizona's voter-approved requirement that prospective voters document their U.S. citizenship in order to use a registration form produced under the federal "Motor Voter" voter registration law.

Federal law "precludes Arizona from requiring a federal form applicant to submit information beyond that required by the form itself," Justice Antonia Scalia wrote for the court's majority.

The court was considering the legality of Arizona's requirement that prospective voters document their U.S. citizenship in order to use a registration form produced under the federal "motor voter" registration law. The 9th U.S. Circuit Court of Appeals said that the National Voter Registration Act of 1993, which doesn't require such documentation, trumps Arizona's Proposition 200 passed in 2004.

Arizona appealed that decision to the Supreme Court.

The case focuses on Arizona, which has tangled frequently with the federal government over immigration issues involving the Mexican border. But it has broader implications because four other states - Alabama, Georgia, Kansas and Tennessee - have similar requirements, and 12 other states are contemplating such legislation.

Justices Clarence Thomas and Samuel Alito dissented from the court's ruling.

The Constitution "authorizes states to determine the qualifications of voters in federal elections, which necessarily includes the related power to determine whether those qualifications are satisfied," Thomas said in his dissent.

Opponents of Arizona's law see it as an attack on vulnerable voter groups such as minorities, immigrants and the elderly. They say they've counted more than 31,000 potentially legal voters in Arizona who easily could have registered before Proposition 200 but were blocked initially by the law in the 20 months after it passed in 2004. They say about 20 percent of those thwarted were Latino.

But Arizona officials say they should be able to pass laws to stop illegal immigrants and other noncitizens from getting on their voting rolls. The Arizona voting law was part of a package that also denied some government benefits to illegal immigrants and required Arizonans to show identification before voting.

The federal "motor voter" law, enacted in 1993 to expand voter registration, requires states to offer voter registration when a resident applies for a driver's license or certain benefits. Another provision of that law - the one at issue before the court - requires states to allow would-be voters to fill out mail-in registration cards and swear they are citizens under penalty of perjury, but it doesn't require them to show proof. Under Proposition 200, Arizona officials require an Arizona driver's license issued after 1996, a U.S. birth certificate, a passport or other similar document, or the state will reject the federal registration application form.

Arizona can ask the federal government to include the extra documents as a state-specific requirement, Scalia said, and take any decision made by the government on that request back to court.

The case is 12-71, Arizona v. Inter Tribal Council of Arizona, Inc.

 

 

POST YOUR OPINION: www.TheOpinionPoll.com

 

KXNET.COM

 

http://www.kxnet.com/story/22609910/court-ariz-citizenship-proof-law-illegal

CNN Poll: Obama approval falls amid controversies

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Washington (CNN) –President Barack Obama's approval rating dropped eight percentage points over the past month, to 45%, the president's lowest rating in more than a year and a half, according to a new national poll.

The CNN/ORC International survey released Monday morning comes as the White House has been reacting to controversies over a massive U.S. government surveillance program; the Internal Revenue Service's targeting of tea party and other conservative groups who applied for tax-exempt status; the administration's handling of last September's attack in Benghazi that left the U.S. ambassador to Libya and three other Americans dead; and the Justice Department's secret collection of journalists' phone records as part of a government investigation into classified leaks.

The poll indicates that for the first time in Obama’s presidency, half of the public says they don't believe he is honest and trustworthy. And Americans are split on the controversial National Security Agency anti-terrorism program to record metadata on U.S. phone calls, but they support the NSA program that targets records of Internet usage by people in other countries. That doesn't mean they necessarily like what is going on: Just over six in 10 believe that government is so large and powerful that it threatens the rights and freedoms of ordinary Americans.

A slight majority of those questioned in the poll, which was conducted Tuesday through Thursday of last week, disapprove of the actions of the man who leaked sensitive information about the NSA program. A similar number say Edward Snowden, who fled to Hong Kong, should be brought back to the United States and prosecuted.

The president's approval rating stands at 45%, down from 53% in mid-May. And 54% say they disapprove of how Obama's handling his job, up nine points from last month. It's the first time in CNN polling since November 2011 that a majority of Americans have had a negative view of the president.

"The drop in Obama's support is fueled by a dramatic 17-point decline over the past month among people under 30, who, along with black Americans, had been the most loyal part of the Obama coalition," says CNN Polling Director Keating Holland.

The president also dropped 10 points among independent voters, from 47% last month to 37% now, with Obama's disapproval among independents jumping 12 points to 61%.

What's behind the drop?

"It is clear that revelations about NSA surveillance programs have damaged Obama's standing with the public, although older controversies like the IRS matter may have begun to take their toll as well," adds Holland.

Six in 10 disapprove of how Obama is handling government surveillance of U.S. citizens, which is higher than the 52% who disapproved of George W. Bush on the same issue in 2006, when government surveillance was also in the headlines.

Obama's approval rating on terrorism, although still above 50%, has taken a 13-point hit since mid-May. By contrast, his approval rating on domestic issues such as the economy, immigration and the deficit only dropped by two to four points, within the poll's sampling error.

Views of Obama's personal characteristics have also declined.

The number of Americans who think he is honest has dropped nine points over the past month, to 49%. Fifty-seven percent of those questioned say they disagree with the president's views on the size and power of the federal government, and 53% say he cannot manage the government effectively. Fifty-two percent say the president is a strong and decisive leader. That's still a majority, but it's down six points from last month.

Forty-three percent of the public says that the Obama administration has gone too far in restricting civil liberties to fight terrorism, with 38% saying the administration has been about right and 17% saying it has not gone far enough.

"That's roughly the same reaction that the public had to the Bush administration in 2006 when the details of a similar program to gather phone records were made public," says Holland.

Fifty-one percent say the current NSA program to gather phone records is the right thing to do. By comparison, 54% felt that way about the Bush-era program back in 2006. Two thirds say they feel that the current NSA program on Internet usage is right.

More than six in 10 say the government has collected their phone or Internet data. What is the government doing with all of this information?

Just 8% of all Americans think the government has collected their personal data and is using it to investigate them. Just over half say they think the government has collected their data and stored it somewhere without analyzing it, and one third say they believe that government has not collected and stored any of their personal phone or Internet records.

As for Snowden, 52% disapprove of his actions, with 44% saying they approve of the leaks by the former government contractor. Fifty-four percent say the government should attempt to bring Snowden back to the U.S. and prosecute him for his actions.

Documents Snowden provided to journalists revealed the existence of the secret NSA programs to collect records of domestic telephone calls in the United States and the Internet activity of overseas residents. Snowden, who fled to Hong Kong, was fired from his position at the consulting firm Booz Allen Hamilton earlier this month. The FBI is investigating the leaks.

The poll was conducted for CNN by ORC International June 11 to 13, with 1,014 adults nationwide questioned by telephone. The survey's overall sampling error is plus or minus three percentage points.

POLITICALTICKER.COM

http://politicalticker.blogs.cnn.com/2013/06/17/cnn-poll-obama-approval-falls-amid-controversies/?hpt=hp_c2

 

Esther Cepeda: Rubio and Cruz, Latino superstars with far different agendas

http://www.beinglatino.us/wp-content/uploads/2013/02/Rubio-Cruz.jpg

It’s fascinating that two Latino men — both of whom are farther to the right of where most Latinos stand on immigration — are at the epicenter of the current reform debate.

Both Cuban-Americans, Sens. Marco Rubio, R-Fla., and Ted Cruz, R-Texas, represent the young, multicultural new face of what could someday become a diverse and welcoming Republican Party.

Until then, they’ll be two of the most important Hispanic political players that many Latinos don’t much care for.

As an architect of the Senate’s compromise bill, Rubio — who in February graced the cover of Time magazine as “The Republican Savior” and “the new voice of the GOP” — would probably emerge unscathed if the reform measure fails in the Senate.

Oh sure, there were mini-freakouts recently when some liberal commentators — who had up to then expressed only an increasing admiration for Rubio’s evolving leadership on immigration — began to worry that Rubio would come out against his own bill.

And liberal Latinos had already started pitching fits when he began talking about not voting for his own bill unless more border security measures were included. The complaints started building when Rubio announced he’d be submitting an amendment requiring immigrants to prove they could read, write and speak English before earning a green card.

Yet Rubio — who fits a comforting narrative of charming, bilingual, pulled-himself-up-by-his-bootstraps son of immigrants — enjoys a benefit of the doubt that will keep him in the good graces of both the general public and the Republican Party.

Ted Cruz? Not so much.

Aside from tea partiers who just couldn’t be happier to have a Latino in their ranks who’s as passionate about abolishing the IRS and repealing Obamacare as they are — Tea Party Nation recently proclaimed Cruz “an absolute American Hero” — the junior senator from the Lone Star State seems to turn people off wherever he goes.

Many Hispanics — even independent and moderate Republican ones — are horrified by him. Cruz gets slammed not only for his ultra-conservative political views and his inability to speak Spanish, but particularly for his belief that current and former immigrants living in the U.S. illegally should not be eligible for citizenship.

A recent Latino Decisions poll found that 69 percent of Hispanic voters view Rubio more favorably for stating that the 11 million unauthorized immigrants deserve compassion. Only 28 percent view Cruz more favorably in light of his anti-citizenship stance.

Personality matters in politics. If Cruz were more convivial — like, say, former Florida governor Jeb Bush, who holds much the same views on granting citizenship — it would be easier for Cruz to get away with sticking to his convictions. But the self-promoting, outspoken — some say arrogant — Cruz doesn’t have that kind of wiggle room.

Seen as a politically expedient figure, Cruz ticked off fellow Republican senators by openly criticizing them for their behind-the-scenes complaints of his strident anti-gun-control stance and filibuster threats in the weeks before the bill on background checks failed in the Senate.

Most of all, Cruz fails on that ever-important Republican stumbling block of tone. He seems constantly scowling and mad as hell, etc., etc.

Hey, some people like that. At times, it’s even warranted, but it’s hard to warm to.

Not that Cruz needs any warmth from the likes of moderates; he’s got plenty of gushing fans. Regardless of how much anyone dislikes his tone or apparent lack of esteem for his political elders, Cruz — like Rubio — conspicuously represents a community that so far has not been able to rise to superstar status as issue-movers or potential presidential candidates in the Democratic Party.

In this spotlight, Cruz and Rubio represent two fundamental truths: Republicans, like Hispanics, are an ideologically diverse bunch. And, no matter the outcome of this immigration reform battle, the profile of Latinos in American politics has been elevated.

DALLASNEWS.COM

http://www.dallasnews.com/opinion/latest-columns/20130616-esther-cepeda-rubio-and-cruz-latino-superstars-with-far-different-agendas.ece

 

Mexico: 5.8 Magnitude Earthquake Strikes

 
A 5.8 magnitude earthquake has struck Mexico with tremors felt in the captial Mexico City, says the US Geological Survey.
There were no immediate reports of damage or casualties but power was lost in some areas of Mexico City.
Mexico City mayor Miguel Angel Mancera said on Twitter although the quake was felt strongly in the capital, "in the preliminary report, Mexico City was not damaged".
A witness said buildings, which were evacuated as a precautionary measure, also shuddered in the capital.
The epicentre of the quake was 14 miles (22km) west of the town of Jolalpan and had a depth of 33 miles (54km).
The USGS downgraded its initial measurement of the quake from 6.0 to 5.8.
An 8.1 magnitude earthquake on September 19, 1985 destroyed part of the city and killed 3,700 people, according to official figures.
Civil groups put the death toll from that powerful quake even higher, at around 20,000 people.
 
ORANGE.COM
 
http://web.orange.co.uk/article/news/strong_5_8_magnitude_earthquake_hits_mexico
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