Starting today, the $25 billion Robo-Signing (or Foreclosure) settlement will begin to go into effect. The settlement, put together between the US government and five major banks (Ally Financial Inc/GMAC Mortgage, Bank of America, Citigroup, JP Morgan Chase and Wells Fargo), is designed to help relieve many borrowers who are either struggling to make payments, owe more than their home is worth or have already lost their home to foreclosure.
But how do you take advantage of this new settlement if you’re a Realtor? If you’re working with a new homebuyer who is just starting to look for a home, this settlement will encourage banks to deal with the delayed foreclosures they’ve been sitting on lately, and eventually speed up the foreclosure process.
As these foreclosures go through, there will be an increasingly large amount of available properties to be sold, all at extremely low prices, creating a great opportunity for new homebuyers and real estate agents alike to get homes at great deals!
Foreclosure homes come in many different forms, from the well maintained home to the abandoned boarded up home. A great financing option for the later is FHA’s 203(k) program, which allows for home buyers to obtain additional funds at closing to rehabilitate and repair single family properties.
These loans have a maximum loan amount of $271,500 (in and around Houston) and often allow for up to $35,000 in rehab costs. Streamline 203(k) loan funds can be used for cosmetic upgrades like painting, updating kitchens and renovating bathrooms. The Standard 203(k) program will allow for structural rehabilitation, knocking down walls or even adding square footage!
Suggesting a 203(k) loan and showing them a vision of what the home could become could turn a foreclosed home into the perfect home for your buyers!
If you or your clients want more information about the settlement or how they can take advantage of the 203(k) loan program, please contact me!
Nick Marascia is the branch manager for Guaranteed Rate in Dallas. He can be reached at: