Much of that ‘bait and switch’ game is now over, thanks to the efforts of HUD (Department of Housing and Urban Development). Effective January 1, 2010, a standardized Good Faith Estimate (GFE) must be used by all lenders and provided within 72 hours after prospective borrowers apply for a loan. Establishing a uniform GFE will allow consumers to compare quotes easily from various lenders. Borrowers will now be able to assess the impact of a lower interest rate and higher upfront fees and vice versa.

Lenders are required by law to give mortgage applicants a copy of the final settlement costs (known as the HUD-1), at least one day before the closing. However, in the past, borrowers often found substantial cost increases in the HUD-1 compared to the GFE. The new HUD rules will make it much more difficult for lenders to change costs. The HUD-1 format will also be changed to include a line-by-line comparison to the new GFE, making it easy to identify any changes in costs.

Lenders are now prohibited from increasing costs they control, such as origination and processing fees. Costs from third-party services, such as appraisals and title insurance, can increase no more than 10% over the GFE, as long as the borrowers use providers selected by the lender. The limit does not apply if borrowers select their own third-party providers.

HUD has published a guide for home buyers, “Shopping For Your Home Loan: HUD’s Settlement Cost Booklet.” The booklet contains completed examples of both the GFE and the HUD-1 forms and is a great tool to prepare buyers and sellers for the closing. How about a high-five for HUD!

• First,  Congress recently voted to extend two home buyer tax credits: the $8,000 credit for first-time home buyers under contract by April 30, 2010, and a credit for repeat buyers who have lived in one residence for five consecutive years of the past eight.
• Second, interest rates on thirty-year home mortgages have recently fallen to below 5%, a rate not seen for over fifty years.
• Third,  banks continue to put newly foreclosed homes on the market, and there will be a good supply of foreclosed homes on the market for some time.

If you’re a buyer, use the Private Sale Partners website as your first source for homes that have been well-priced and well-prepared by our well-educated sellers! Use the search tool to define whether or not you’ll search for a foreclosed property. If you are looking at a foreclosed property listing, scan the listing details for the agent’s contact information. You’ll need to contact the agent by email to view the property, as foreclosed property listings don’t have access to the PSP Home Sales Hotline to take buyer calls.

Unfortunately, it is rare for a lending institution to notify Private Sale Partners when the property has been sold, so you may find that a foreclosed property you’re looking at has already sold, but keep at it! A good buy is worth some extra digging.

If you don’t find anything in your desired neighborhood on our site, then you may want to enlist the services of a professional agent in your search, usually at no cost, since sellers normally pay the agent’s commission. We hope you’ll contact one of the thousands of agents in the PSP agent network to help you in the search. They work with the well-regarded national agencies of:

• Better Homes and Gardens® Real Estate
• Century21®
• Coldwell Banker®
• ERA®
• Sotheby’s International Realty®

If it’s a foreclosed property you’re looking for, ask if there’s an agent in your local office who specializes in foreclosed homes. Our experienced mortgage bankers can also help you find the right broker and the right financing.

An FHA mortgage remains the best option for most home buyers. An FHA buyer must live in the home purchased, so you may qualify for a great deal on a foreclosure while an investor would not. Not only do FHA mortgages offer great rates and small down payments, FHA also provides additional loans under the 203K program which provide money for the fixing up that foreclosed homes often require.

Since late fall of 2009, investors have been aggressively bidding for foreclosed homes, driving prices up slightly. In the short term, prices are likely to come down again as more homes are foreclosed and the supply of homes increases.

If you’re a seller, this is also a great time to have your home on the market. Buyers will be out in force scouting for a good deal. You’ve got to price aggressively to compete with foreclosures on the market. But you’ll have an edge over most foreclosed homes, and you’ll be able to command a higher price if your home is well-prepared and it is obvious to a buyer that it will take less time and money to make it move-in ready.

If you are looking to buy or sell a home, the first quarter of 2010 may well be the best time ever to do so. Happy house selling or buying!

She went on to report that they were getting a great deal on the house, and that their offer had been accepted over several other much higher offers because they were renting and would be able to move into the home within 30 days.

This says a lot about the cost to banks of keeping foreclosed properties on their books and just how willing they are to negotiate price if it means getting out of the real estate business. It also tells me that there are some great opportunities out there for renters looking to become owners!

Are you renting and looking to own your next home?  You, too, could own your home if you’re ready to move quickly! Zero in on foreclosure listings in your area with our search tool! And if you need help knowing what kind of mortgage you’d qualify for, be sure to visit our mortgage partner!

Fortunately there is one major exception. FHA mortgages are still readily available and at or near historically low rates. These loans require full documentation of both income and assets, but if a borrower has a good credit history and a steady income, qualifying for an FHA mortgage is without question the way to go. Those looking to  buy a home should contact a competent mortgage banker who is authorized to offer FHA mortgages. They only get paid if a borrower secures a loan, so it is in their interest to do everything possible to make sure that loans close and that borrowers receives their loans. Choose the right mortgage banker, and they will surely act as your advocate through the entire mortgage process.

With the Fed funds rate near zero, banks are able to maintain healthy profit margins and still offer very compelling mortgage rates. And with the economy still quite weak and the government needing to maintain economic stimulus through low interest rates, it is hard believe that rates will be going signifcantly higher over the short term.

That being said, however, it appears to this writer that there is little chance for a substantial drop in mortgage rates, and that over the long term, rates are likely to move higher. Coupled with the lowest housing prices in over a decade, available low interest rates provide a rare opportunity for those looking to buy a home to do so at a cost that will, in most cases, be less than renting an equivalent home. All in all, this is the perfect time to buy a home.