Tip 25-2011: July 4th Holiday

(July 4th Holiday) 

Happy Birthday USA!!  All of the Clerk’s Offices and Lenders will be closed Monday, July 4th, 2011.  Closings which needs to be completed and recorded before the Holiday weekend should probably start on Thursday, June 30th.

If the closing must wait until Friday, July 1st, make sure it’s scheduled as early as possible.  Remember, most Clerk’s Offices stop recording around 4:00 PM Friday.

Have a safe, enjoyable 4th of July!!

Please contact our firm if you have questions or need legal advice.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
www.TGBLaw.com

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Tip 24-2011: Short Sales Last Minute Issues

(Short Sales Last Minute Issues) 

There are already enough problems with obtaining a successful short sale.  Some of the issues are convincing the short sale lender that the contract price is acceptable based on an unrealistic BPO, keeping the purchaser interested during the unreasonable time required to negotiate a short sale and dealing with the actual investor or MI company and their demands for additional contributions.

Now there seems to be a group of new problems which can occur during the actual closing.  The Short Sale Approval letter normally requires a final HUD to be reviewed and approved prior to the actual settlement.  The short sale lender always reserves the right in their approval letter to change their mind and revise the actual expenses allowed from the sales proceeds.

This final HUD approval can sometimes take 48 hours or more.  When the approval comes, the short sale lender could say they are not going to pay the prorated real estate taxes or termite bill, which have been previously allowed.  All of a sudden, at the last minute, there is a $350 expense which needs to be paid by the Seller (who unfortunately has no money).

The best advice is for everyone involved with the short sale (both realtors and the Purchaser) to be prepared to assist with these last minute changes.  The Purchasers needs to be reminded to be flexible as they may need to contribute some additional money to finalize a successful short sale (and presumably an excellent deal.)

Unfortunately these last minute changes are just part of a short sale and should be anticipated.  A short sale without any last minute issues is rare.  Remember, we all need to be flexible and understanding as a successful short sale is a benefit for the entire Central Virginia real estate community.

Please contact our firm if you have questions or need legal advice.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
www.TGBLaw.com

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Tip 23-2011: Reverse Mortgage Purchases

(Reverse Mortgage Purchases)   

Reverse mortgages have over the years received some “bad press.”  It’s true they may not be a good product for certain seniors.  But there are numerous instances where reverse mortgages make good sense for a particular situation.

A new product, the Reverse Mortgage Purchase, does in certain situations offer a great opportunity for the senior citizen (at least 62 years old) who is buying a new home for their primary residence.  Normally the Senior Purchaser would pay a 20% down payment and get an 80% conventional loan with monthly payments for thirty years.  With a Reverse Mortgage Purchase, this Senior Purchaser could increase the down payment to qualify for a Reverse Mortgage and never make another monthly mortgage payment.

In one specific example, a Senior Purchaser increased the down payment from 20% to 30% and qualified for a Reverse Mortgage.  By paying an additional $20,000 down payment, the Purchaser was able to get a $140,000 Reverse Mortgage to purchase a $200,000 home.  Obviously the facts described in the example are illustrative of that particular transaction (appraisal of house, age of borrower, etc), but they are representative of the possible benefits.

Remember, Reverse Mortgages are not for everyone.  They are slightly more expensive than a conventional mortgage.  Also, at the termination of the Reverse Mortgage (the death of the owner or the vacating of the house for more than a year, ex. moving into a nursing home) the Reverse Mortgage has to be paid if the heirs want to keep the property.  If they do not keep the house, there is no liability owed to the bank.  But in more and more circumstances, these issues are far outweighed by the advantages.  The best advice is to consult with an experienced Reverse Mortgage loan officer to see if this product may benefit the Senior Purchaser.

Please contact our firm if you have questions or need legal advice.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
www.TGBLaw.com

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