Keller Williams Realty Atlanta – Peachtree Road

Real Estate Legal Tip

Presented By:

Flood Insurance Is Not Always Available

Purchasers who are trying to meet the June 30, 2010, closing deadline to qualify for the first-time homebuyer credit or move-up homebuyer credit should probably look at properties that do not need flood insurance.
 
The National Flood Insurance Program (NFIP), which is the federal program that funds almost all flood insurance claims, has actually expired twice already in 2010.  Although the program has now been extended to May 31, 2010, (retroactive to the last expiration) there have been weeks in 2010 when flood insurance was not available, and many closings had to be postponed.  The most recent extension was approved on April 15, 2010, in the same bill that extended some jobless benefits.
 
Although flood insurance is bought through local insurance companies, the NFIP is the ultimate provider of the policy (similar to FHA underwriting of loans made by banks and mortgage companies).  Devastating floods and claims have depleted the cash available in the NFIP.
 
Flood insurance through the NFIP is not the same as federal flood assistance, which can be a government grant or a loan based on a specific flood crisis.  Any community that participates in the NFIP is eligible to purchase flood insurance.
 
Flood Insurance Limits for a residence:
$250,000 for the dwelling             $100,000 for contents
 
Presented by Leigh Clack, Attorney
Neel & Robinson Attorneys at Law, LLC
22 Lenox Pointe, Atlanta, GA 30324
lenox@neelandrobinson.com   404-705-3690   fax 404-705-3697

More Real Estate Legal Tips:

 Deadlines and Issues for the 2nd Quarter

Make Sure You Know Who Owns The Property!

Quit Claim Deeds & Owner Title Insurance 

Choosing A Settlement Agent When Buying A Fannie Mae Property

KW Atlanta Legal Tip: Georgia 2010 Filing Deadlines Coming Soon!

Due Diligence When Buying a Condo, Townhome or In a Planned Community

 Try To Avoid Credits & Allowances!

Special Issues with Buying/Selling Condominiums

 First-Time Home Buyer’s Tax Credit – Don’t Wait Till The Last Minute!

 Buying Property From The Bank: Tips For Buyers

Waiting Periods Required Under New Truth in Lending Law

  Termite Letters – Still a Good Idea

Keller Williams Realty Voted ‘”Highest Satisfaction For Home Buyers Among National Full Service Real Estate Firms, Two Years in a Row!” By J.D. Power & Associates

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KW Atlanta Peachtree Road Office Real Estate Legal Tip:

New HAFA program for Short Sales

HAMP:  Home Affordable Modification Program (for refinances)
      -    for borrowers trying to modify their current loan and stay in their home
 
HAFA:  Home Affordable Foreclosure Alternatives program (for short sales)
-         for borrowers who may qualify for HAMP but still need to sell their home
-         goes into effect on April 5, 2010 (some lenders may implement sooner)
 
Guidelines for each program vary based on the type of loan and investor (Fannie Mae, Freddie Mac, or other).
 
Basic eligibility requirements:
 
1.Principal residence
2.First lien (mortgage) originated before 2009
3.Mortgage delinquent or default is reasonably foreseeable
4.Unpaid principal balance no more than $729,750 5.Borrower’s current total monthly payment exceeds 31% of gross income

Important factors considered by lender:

1.Severity of the loss
2.Local market conditions
3.The timing of pending foreclosure actions
4.Borrower motivation and cooperation

Benefits:

1.Provides process for short sale pre-approval prior to listing or contract
2.Lender can not foreclose during HAFA process
3.May allow seller to receive some proceeds for moving (up to $1,500)
4.Allows small allocation to subordinate loan payoffs (up to $3,000)
5.Borrowers are fully released from future liability on the first mortgage (no note or deficiency judgment)
6.Protects realtor commissions up to 6% as shown in listing agreement

CONSULT YOUR LENDER TO SEE IF YOUR SELLER QUALIFIES

 Presented by Leigh Clack, Attorney
Neel & Robinson, Attorneys at Law LLC
lenox@neelandrobinson.com
404-705-3690         fax 404-705-3697
22 Lenox Pointe, Atlanta, GA 30324

 
More Legal Tips From Neel and Robinson:

Due Diligence When Buying a Condo, Townhome or In a Planned Community

 Try To Avoid Credits & Allowances!

Special Issues with Buying/Selling Condominiums

 First-Time Home Buyer’s Tax Credit – Don’t Wait Till The Last Minute!

 Buying Property From The Bank: Tips For Buyers

Waiting Periods Required Under New Truth in Lending Law

  Termite Letters – Still a Good Idea