BPO Definition: BPO is an acronym for a "Broker Price Opinion." A lender, bank or loss mitigation company my have homeowners with delinquent mortgage payments. In the period before foreclosure, the lender will pay a real estate broker to complete a BPO on the property. Usually the lender has specific forms and criteria for how the valuation will be verified.  Typically, we’ll find 3 active listings of comparable homes, and 3 sold listings within the last 12 months.  Recent activity within 3-6 months are preferred.  While we do CMA's, or Comparative Market Analysis, for our real estate clients, BPO's are different.  A BPO is more extensive, a type of “mini appraisal” or opinion of the properties market value.  We also will conduct a “drive by” of the property to determine exterior condit... 12/26/2008

  BPO Colorado Style!   How a single BPO turned into a scenic drive through the Colorado Rocky Mountain Front Range…   I had a BPO that I accepted on 22Dec08, with a due date of 26Dec08…plenty of time, but I sort of forgot Christmas right in the middle of this week!   So, short story long, after the family had opened presents Christmas morning, I headed out for a “quick” BPO tour of a property located in Black Hawk, Colorado.  It was a beautiful day for a mountain drive, clear sky’s, lots of snow on the ground, temperatures in the mid 30’s.  Lots of families out hiking and walking, enjoying the nice temperatures and a chance to be out on Christmas day.   Here's what you'll see over the next 4 or 5 posts: Golden Gate Canyon Park: Meadowlake Subdivision: Rollinsville Nederland Boulder Fal... 12/25/2008

Colorado Christmas Eve Merry Christmas eve from Louisville, Colorado!   Louisville, Colorado is a great city located in an awesome state!  Our tree is up and decorated, presents are starting to pile up, and the kids are getting amped up in anticpation of the big day tomorrow.  I hope all is well with you and yours!  Best wishes and Merry Christmas... 12/23/2008

Hello  Real Estate Investors!Come and have some fun and learn something at the same time by joining us to play Robert Kiyosaki's Rich Dad Poor Dad CASHFLOW 101 game.  It's like Monopoly on steroids!  Go to www.RobKellyColorado.com for more info.The Louisville Cashflow 101 Game Night was established to provide a casual environment for both the seasoned real estate investor and those who are simply curious; to develop knowledge required to establish long term passive income and financial freedom.When: Wednesday December 16   6-9PMWhere: Downtown Louisville-Email for invitation and addressFor this event we will be running 4 games in parallel, with up to 6 people per game.  There is therefore a limit of 24 people for this event, so please book early to avoid disappointment!Please send me an... 12/16/2008

If you or someone you know is having trouble paying the mortgage, here are a few programs that may help prevent foreclosure.   FHA Secure Overseer (FHA) How it works:   Replaces a non-FHA loan with an FHA insured loan.  Must be your primary residence, must be an adjustable rate mortgage and not FHA insured.  Your loan status can be current or delinquent.  Contact your loan servicer or any FHA approved Lender Hope for Homeowners Sponsor (FHA, FDIC, Treasury Department and Federal Reserve) How it works:  Replaces existing mortgage with new 30 or 40 year fixed rate mortgage insured by FHA.  Must be your primary residence.  Loan must have been originated on or before Jan 1, 2008 and you must be in financial distress (unable to pay without assistance).  Contact your loan servicer.   Streamli... 12/15/2008

  We had a team from Japan's NHK (National Public Broadcasting) on board.  The Japanese are in the U.S for two weeks documenting the state of the U.S. Economy.  They will be compiling a New Years eve special on the  U.S Housing Market, Energy, and National Security. 26 potential buyers joined us for this tour of North Denver Metro bank owned and HUD homes.   Most were investors, but we had a few first time home buyers who were looking to buy in this under value market. We had the U.S Public Broadcasting show "Weekend America" call in on the tour and interview the Japanese producer while we were touring foreclosed homes.  Interesting interview, it really shows how much Japan is interested in and affected by the turmoil in the U.S. economy. To paraphrase our Japanese producer, Yasue Drabb... 12/15/2008

Loan Considerations for Buy and Hold InvestorsAs far as investment loans, little or no money down loans are impossible.  However, lenders do permit the use of Home Equity Lines of Credit or second mortgages from other properties owned by the borrower as a source of down payment.  Or, self-employed borrowers are using funds from business lines of credit to fund down payments or renovations (please note: there are asset seasoning guidelines for doing so and the debt incurred by accessing other credit lines must be accounted for against the borrower’s debt-to-income ratio). Thus, we have clients leveraging themselves with other homes they own in order to get in with little or nothing down.  There are exceptions, but practically every lender requires Full Income Documentation on any investm... 12/15/2008

Loan Considerations for Fix & Flip / Short-Term InvestorsSecuring conventional financing on a fix & flip or short-term loan is not recommended.  Most conventional lenders sell off their mortgages to investors on the secondary market.  If the loan is paid off early (before six payments are made), the investor has not recovered their initial investment.  The investor will attempt to recover their loss from the lender, who will ultimately come after the loan originator.  The loan originator would then be obligated to pay back any premium paid out by the lender.  If such activity becomes habitual with the loan officer, the lender can cease doing business with them and their firm.Furthermore, conventional loans require conventional appraisals.  The lender will require that the home is a) hab... 12/15/2008

Loan Considerations for Jumbo MortgagesFor the Greater Metro Denver area, any loan amount greater than $417,000 is considered a jumbo loan.  Fannie Mae and Freddie Mac assign different thresholds for various regions across the country.  For instance, $417,000 is not considered a jumbo loan in a high cost city like San Francisco, yet there will still be higher rates for going above $417K.  Due to the size of jumbo loans, they are considered greater risk for lenders, resulting in higher rates.  Rates have fluctuated greatly over the past few years on jumbos.  As of today, a 30 year fixed could range from 7% - 8%; a full point higher than the prime rate below a loan amount of $417,000.  Five year ARMs are popular on jumbo loans, as they typically price out a half point lower than fixed pro... 12/15/2008

We had a great turnout for our second Denver Foreclosure Tour.   We had a team from Japan's NHK (National Public Broadcasting) on board.  The Japanese are in the U.S for two weeks documenting the state of the U.S. Economy.  They will be compiling a New Years eve special on the  U.S Housing Market, Energy, and National Security. 26 potential buyers joined us for this tour of North Denver Metro bank owned and HUD homes.  We were also intercepted by a news crew from CBS Channel 4 in Denver.  You can watch the news clip here: http://www.youtube.com/watch?v=w2HMMl8KBnY   It seemed like a fair and balanced coverage of our Foreclosure Tour, and the local foreclosure market here in the Denver Metro Area,   Rob Kelly www.RobKellyColorado.com www.DenverForeclosureTour.com Twitter:RobKellyCo   12/15/2008

Loan Considerations for Loan Amounts Between $200K - $417KWith all the doom and gloom publications that are mostly exaggerated, many potential borrowers believe that home mortgage lending options have dried up.  While underwriters and investors are scrutinizing files more closely, attractive rates and terms still exist for owner occupied purchasers seeking a conforming loan limit (under $417,000).  FHA and VA can still lend up to 100% LTV and conventional permits up to 97% LTV.  There are certain guidelines to meet when going to these high LTVs, but they are not impossible to surmount.Every home buyer should first ask themselves what payment they feel comfortable in committing to on a monthly basis.  Too many buyers over-extended themselves in recent years on homes they simply could not... 12/15/2008

FHA First-Time Buyer Tax CreditIn an effort to boost the sagging real estate market and overall economy, first-time home buyers are being offered a limited time tax credit when purchasing a primary residence.  The highlights of the tax credit are:•    The tax credit is available for first-time home buyers only. •    The maximum credit amount is $7,500. •    The credit is available for homes purchased on or after April 9, 2008 and beforeJuly 1, 2009. •    Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit. •    The tax credit works like an interest-free loan and must be repaid over a 15-year period. Due to the volume of questions that can be generated with the above, I would recommend clicking on the below link for ... 12/15/2008

Loan considerations for a first time buyerLending guidelines are changing on a daily basis for every type of loan: conventional, FHA, VA & commercial.  Nevertheless, there are still very attractive first-time home buyer options available.   If you are or will be a first-time buyer, it is critical to speak with a loan officer before looking at homes.  It is a crushing feeling to view a home, picture making it your own and then find out that you cannot qualify to purchase it.  A loan officer will pull credit, analyze debt-to-income ratios, review assets and income and determine what you can afford.  Presuming a pre-qualification occurs, the loan officer will then be able to provide an array of loan options.  Presently, FHA loans are the predominant loan for first-time home buyers as they ... 12/15/2008

How can you improve your FICO score?To improve one’s credit score, it’s critical to understand the factors influencing a credit score.  The factors that contribute to a FICO score and the weighted percentages for each are as follows:•    35% — timeliness of payments •    30% — the ratio of used debt to allowable debt for consumer credit •    15% — length of credit history (the more credit history and showing proof of consistent timely payment, the better the score) •    10% — types of credit used  •    10% — recent credit inquiries and recent new credit The greatest driver behind a score is making timely payments on all accounts.  Scores will be adversely affected for any payment that is 30 days late or more.  Being late on a mortgage payment will not only crush one’s score, but will al... 12/15/2008

How does your FICO score impact your interest rate on your loan?Low credit scores are deemed greater risk for lenders since the likelihood for defaulting on the loan increases.  As such, lower FICO scores translate into higher interest rates.  Mortgage lenders will group credit scores in a range, usually in 20 or 40 point increments, with interest rates progressively getting better for each higher interval.  For example, a borrower with a middle credit score between 660 – 680 will have a higher interest rate (presuming all other variables being equal) compared to one with a 680 – 700 score.  Typically, when a borrower has a 750+ credit, they will be able to secure the best possible rate, assuming their income, assets, collateral and down payment are acceptable.For qualifying, underwrite... 12/15/2008

What is a FICO score?FICO stands for Fair Isaac Corporation, a company that created the most used credit scoring model in the United States.  An individual’s credit score is calculated through a statistical algorithm and is used as a factor in determining the likelihood of a borrower defaulting on a loan.  FICO scores are generally used for obtaining mortgages, car loans or consumer credit.  The scores are provided from the three major credit reporting agencies: Equifax, Experian and Transunion.  Typically, there is a variance amongst the scores since each agency has a slightly different scoring formula.  FICO scores range from 300 – 850, with higher scores being considered less risky.  For mortgage lending purposes, any score over a 680 is considered good and above a 750 is considered ... 12/15/2008

There are some signs of strengthening in our Denver market.  The metro area's inventory of available resale housing decreased 20% to 23,120 units in October from October 2007.  Some of this reduced inventory is attributed to homeowners taking their properties off the market in frustration because their property is not selling, but lower inventory implies a strengthening market.  Remember, the Denver area had housing inventory of 31,989 units in July 2006. Home sales rose 14% to 4,265 in September compared to the same month last year.  This is due almost entirely to the lower-end of the market (under $180K) selling like hotcakes. October's median selling price for single-family homes decreased 12% to $206,000 from the same month of '07, and was down 4.7% from September's median of $216,1... 12/15/2008

I was reading some more depressing drivel in the national press, and got to thinking ( i know, that's an oxymoron for a Realtor)   Well, those of us in the Real Estate industry should be proud, we are on the front lines of helping to get the American (and world) economy moving...   It's commonly accepted that the housing industry is one of the key underpinnings of our economy.   When housing falters, so does everything else.  In addition, empty homes do no one any good.   Here are some of the benefits of helping owners and investor buy empty bank owned and foreclosed properties:   Taxes are paid Crime is reduced Neighborhoods are stabilized Quality of life improves Housing is provided for renters & foreclosure victims Real estate commissions are generated Title, Insurance, County revenu... 12/11/2008

Here are some positive reports for Colorado's future:Home-price index 'positive' for Denver area: Home values in the Denver area dipped 5.4 percent in the year ending in September, far better than the 17.4 percent drop for the 20 cities tracked in the closely monitored S&P/Case-Shiller Home Price Indices released on Tuesday. "I think Denver is going to lead (the nation) out of the doldrums," said Jack O'Connor, principal of the Prestige Real Estate Group in Denver. http://www.rockymountainnews.com/news/2008/nov/26/index-positive-for-city/Colorado Ranked #4 by The Beacon Hill Institute: The Beacon Hill Institute at Suffolk University is pleased to release its Eighth Annual State Competitiveness Report. In this report which ranks all states, Colorado came in at #4. “A state is competitive... 12/09/2008

  If you've got clients or are in a situation where you have used a short sale, loan modification or have been foreclosed, you will want to read and understand the following.   Certain protections have been initiated, but it would be wise to consult your CPA or tax expert to determine the impact on your finances and tax situation. Rob RobKellyColorado.com       The Mortgage Forgiveness Debt Relief Act of 2007 was enacted on December 20, 2007 (see News Release IR-2008-17). Generally, the Act allows exclusion of income realized as a result of modification of the terms of the mortgage, or foreclosure on your principal residence. What does that mean? Usually, debt that is forgiven or cancelled by a lender must be included as income on your tax return and is taxable. The Mortgage Forgivenes... 12/08/2008