Good Neighbor Next Door Mortgages 07/27/2011
The National Servicing Center (NSC) in Tulsa monitors the servicing of Good Neighbor Next Door (GNND) loans after closing. The Good Neighbor Sales program allows eligible full-time law enforcement officers, teachers, and firefighters/emergency responders to participate. This page describes GNND participant responsibilities according to program regulations. If you have any questions about your GNND mortgage, please click here for information about how to contact HUD's loan servicing contractor, C&L Service Corporation (CLS). Annual Certifications When participants purchase properties under the GNND program they agree to own and live in the property for a three-year period as their sole residence. Participants are required to certify every year that they are living in the property. The annual certification is mailed to participants, ready for signature, around the anniversary of the purchase. Participants should sign, date, and return the form to the address specified in the letter. If they fail to return the first letter, a follow-up letter is sent one month later. At times, their return letter and our follow-up letter cross in the mail. If this happens, participants can either contact our servicer to determine if the first certification was received and logged in or they can sign and return the second certification. If participants fail to return at least one annual certification per year, NSC refers the case for investigation. An investigator will then make an on-site visit to verify the occupancy of the property. Further, the investigator will ask the participant to sign the annual certification in their presence. In the event that investigation fails to verify occupancy, the participant will be turned over to the Office of Inspector General for further investigation and possible prosecution. To avoid noncompliance, complete and return the annual certification forms promptly and honestly. Falsifying information on this certification is a felony. HUD will prosecute false claims and statements. Conviction may result in criminal and/or civil penalties. (18 USC 1001, 1010, 1012 3559, 3571; 31 USC 3729, 3802). Military Duty Participants who are called to active military duty are provided clemency in regards to the owner occupancy requirements of the program for the timeframe that they are on active duty. Participants on active military duty are not required to occupy the property and are allowed to rent the property (only while on active duty) if necessary to minimize potential vandalism. However, the NSC needs to be aware of those participants who are on active military duty and are not occupying their property. Participants must notify the NSC according to the Military Duty Instructions. Print out the information and instructions and comply with the instructions so that you will not be referred for investigation during your military duty. Subordinations When participants close on their home, they sign a note and a mortgage. The mortgage is filed right after the first (primary) mortgage, making it a second mortgage. When participants pay off their first mortgage (usually done by refinancing), HUD's mortgage moves into first position. If a participant is attempting to refinance their first mortgage, the lender will want its new loan to be in first position. In order to accomplish this, HUD must be willing to subordinate its position to the new first mortgage. HUD has certain rules and procedures regarding subordinating. The rules are that HUD will consent to refinancing (1) for the purpose of obtaining an FHA 203(k) rehabilitation loan or (2) for the purpose of obtaining a lower mortgage interest rate or change in the term of the loan and (3) to prevent the participant from defaulting on the first mortgage. The 203(k) loan is a rehabilitation loan in which necessary property improvements are financed into a new loan. The closing (or title) agent handling the closing of the new loan should handle the paperwork and details to obtain the HUD subordination. Participants can refer the closing company to this page or they can print the Subordination Information sheet and take it to the closing company. Read the linked information then mail or fax the subordination request to HUD's servicing contractor, C&L Service Corporation (CLS). Pay Offs If a participant needs to dispose of the property before expiration of the three-year occupancy period (for job relocation, family composition changes, or refinance), HUD's servicing contractor, C&L Service Corporation (CLS), processes those payoffs. Fax the request for the payoff with the following information: participant's name, full property address, estimated closing date, company requesting the payoff, company address, company telephone number, return fax number, and signed permission of the participant to collect the data. All of this information may be mailed or faxed to CLS. Payoff requests are usually processed and faxed out within 2 business days of receipt. Releases At the end of the required three-year occupancy period, HUD's second mortgage will be released provided (1) the participant has completed and returned the required annual certifications, (2) is not currently under investigation by the Office of Inspector General, and (3) is in compliance with all GNND regulations. A mortgage satisfaction will be filed with the participant's local county recorder's office. After the release is filed, a copy will be mailed to the property address. Thereafter, HUD's second mortgage will not show up on the title to your property. After release, there is no further obligation to or restrictions imposed by the Department of Housing and Urban Development. Releases are mailed to the county recorder for filing no later than thirty days after the end of the required occupancy period. However, some counties have a filing backlog, over which HUD has no control. Releases are prepared and filed by HUD's loan servicing contractor, CLS. Add Comment About Good Neighbor Next Door Law enforcement officers, pre-Kindergarten through 12th grade teachers and firefighters/emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD's Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home. In return you must commit to live in the property for 36 months as your sole residence. How the Program Works Eligible Single Family homes located in revitalization areas are listed exclusively for sales through the Good Neighbor Next Door Sales program. Properties are available for purchase through the program for five days. How to Participate in Good Neighbor Next Door Check the listings for your state. Follow the instructions to submit your interest in purchasing a specific home. If more than one person submits on a single home a selection will be made by random lottery. You must meet the requirements for a law enforcement officer, teacher, firefighter or emergency medical technician and comply with HUD's regulations for the program. HUD requires that you sign a second mortgage and note for the discount amount. No interest or payments are required on this "silent second" provided that you fulfill the three-year occupancy requirement. The number of properties available is limited and the list of available properties changes weekly. To learn more, please see Good Neighbor Sales Frequently Asked Questions! Call for Action: Loan limits may decrease. Respond now! FHA and Conforming loan limits will drop dramatically on September 30. Bank of America has already lowered their loan limits for new loans, and others will follow suit. We need Congress to take action now and extend the loan limits prior to them leaving for their August recess. Early next week the U.S. Senate will consider amending the Military Construction Appropriations bill to maintain the current loan limits for at least another year. C.A.R. and NAR support this effort, and we need your help. Please respond to this Call for Action now to urge both Senators to work to maintain the current loan limits through this amendment or some other means. Respond now: https://realtorparty.realtoractioncenter.com/site/Advocacy?cmd=display&page=UserAction&id=1653 While every investors situation is different, there are certain scenarios and factors that typically pre-dispose owners one way or the other. The following questions are designed to help you determine if you should consider hiring a property manager. 1. How far do you live from your rental property and how frequently can you visit the property on a regular basis? If you are close you may be able to make the regular visits required for maintenance, inspections, collections, etc., otherwise the further you live the higher your travel time and expenses will be. The larger the distance the more temptation there is to not keep a close eye on things, and that can be a recipe for disaster. You should plan making monthly scheduled visits and there is always the potential for a middle of the night emergency call that requires your immediate attention. In the long run, is this feasible for you? 2. How do you deal with stress? Do you consider yourself to be a tolerant person? This is a tough one. We all like to think of ourselves as level-headed and even-keeled, but at the end of the day it takes a special kind of person to deal with the ups and downs of property management. Behind the seemingly simple task of collecting rent every month lie a number of unpredictable problems can push people to their limits. Ask yourself how you would react in the unfortunate event that tenants:
4. How many rental properties or units do you have? As your portfolio grows so do the management challenges, and it becomes easier for things to fall through the cracks. Investors with large portfolios stand to reap significant benefit by leveraging the efficiencies a property manager can provide. Size can also constrain investors' ability to consider purchasing new properties if they're already maxed out managing their current holdings. 5. How much experience do you have with maintenance and repairs? If you can't do it yourself, do you know who to call? Finding reliable handymen and contractors can take a while and in the mean time you may unknowingly hire people that are unethical, uninsured, do poor quality work, over charge etc. Maintenance and repairs are a significant component of land lording and if you question your ability to ensure the work is done well and in a timely manner, you might want to consider hiring a property management company. 6. How quickly are you able to get your unit rented? Advertising, fielding calls, and showing the unit can take a considerable amount of time, but are critical tasks as vacancies will quickly eat into your profit margins. If you question whether you have the skills or the time to make this happen, OR if you have historically had an unacceptably high vacancy rate, you may want to consider hiring a property management company. 7. Are you capable of handling the accounting and record keeping for your property? From profit and loss statements to tax deductions, this area needs special attention and becomes an increasingly larger burden for larger portfolios. Some owners (especially those with a back ground in finance) will do just fine, others may opt to hire an accountant to help with the book keeping. If you feel like this might be a weak point you might want to consider hiring a property management company. 8. Are you willing to be on call 24/7/365? Its important to answer this question honestly, because when an emergency happens at your property you can't ignore it. Your special event, important meeting, vacation, or personal crisis doesn't relieve you of your obligation to your tenant. These emergencies don’t happen all the time, but when they do you have to be willing to handle them immediately. Can you handle being called at 2 in the morning to fix someone's overflowing toilet? 9. Are you willing to confront tenants about late payments and if need be evict them from the property? Many new owners dislike feeling like the bad guy and try to be understanding by making exceptions. The problem is that this only invites additional abuses and excuses by tenants. Late payments must be dealt with immediately, and while sometimes a friendly reminder is all that’s needed, other times, it can be a very confrontational process ending in eviction. Unlike running a charity, running a successful rental business means enforcing the rules even it means evicting a single mother who lost her job and won’t be able to pay rent anytime soon. 10. How well do you understand the laws governing land lording? Ensuring the property is run in accordance with the law is critical in both preventing lawsuits and shielding yourself from liability if you are sued. Familiarity with contracts is also very important as your rental agreement is the only binding agreement between you and the tenant. 11. From a financial standpoint, is managing your property the best use of your time? Ultimately, your decision to hire or not hire a management company should hinge on whether or not it is a good fit with your lifestyle and makes sense financially. Individual investors will have to assess the opportunity cost of both options based on their unique circumstances. A competent property manager can add significant value to your investment, which is why many seasoned real estate investors will tell you that a good management company is worth their weight in gold. Here are a few ways that a good property manager earns their keep: Higher Quality Tenants Think of tenant screening as the moat and draw bridge around your castle. It is certainly possible to get a bad tenant out of your home once they are in, but it’s a real hassle and you are so much better off never accepting them in the first place. A thorough screening process results in reliable tenants that:
Fewer costly and time consuming legal problems Veteran landlords know it only takes one troublesome tenant to cause significant legal and financial headaches. A good property manager is armed with the knowledge of the latest landlord-tenant laws and will ensure that you are not leaving yourself vulnerable to a potential law suit. Each state and municipality have their own laws, these plus federal law cover a number of areas including but not limited to:
Shorter vacancy cycles A property manager will help you perform three critical tasks that affect how long it takes to fill your vacancies:
A good property management company will have a time-tested tenant retention policy that ensures happy tenants with lengthy stays in your properties. These kinds of programs require a consistent, systematic approach, which is where a good property management company will shine. Tighter rent collection process The way you handle rent collection and late payments can be the difference between success and failure as a landlord. Collecting rent on time every month is the only way to maintain consistent cash-flow, and your tenants need to understand this is not negotiable. By hiring a property manager, you put a buffer between yourself and the tenant, and allow them to be the bad guy who has to listen to excuses, chase down rent, and when necessary, evict the person living in your property. If you let them, your tenants will walk all over you. They have to be trained to follow every part of the lease or deal with the consequences. Property managers have an advantage because tenants realize that they, unlike the owner, are only doing their job and are obligated to enforce the lease terms. Many property managers will tell you that it is considerably easier to manage other people's units rather than their own for this reason. Regarding evictions, there are strict laws concerning the eviction process, and doing it wrong, or trying to evict a "professional tenant" can be a MAJOR fiasco. A good property management firm knows the law and has a good process for obtaining the best possible outcome given the circumstances. Never having to handle another eviction can be a compelling reason to consider hiring a property management company. Assistance with taxes A property management company can help you understand which deductions you can claim, as well as organize the necessary forms and documentation to make those claims. Additionally, the property management fees themselves are also tax deductible. Lower maintenance and repair costs Good maintenance and repairs keep tenants happy and preserve the value of your investment which make them a very important part of land-lording. By hiring a management firm you gain access to both their in-house maintenance staff, as well as their network of licensed, bonded and insured contractors who have already been vetted for good pricing and quality work. This can translate into significant savings compared to going through the yellow pages and hiring a handyman yourself. Not only is the firm able to get volume discounts on the work, they also know the contractors and understand maintenance issues such that they are capable of intelligently supervising the work. Increase the value of the investment Preventative maintenance is achieved through putting systems in place that catch and deal with maintenance and repair issues early on, before they grow into larger more costly problems. This requires a written maintenance check program, detailed maintenance documentation and regular maintenance visits. The management firm can also offer you suggestions and feedback on upgrades and modifications, both how they will affect the rent you can charge, as well as their impact on maintenance and insurance. Personal benefits for owners
On June 9, the United States Supreme Court refused to hear the case of Glenmont Hills Assoc vs. Montgomery County, Maryland, a case that addressed whether state and local governments have the authority to mandate participation in the Section 8 Housing Choice Voucher even though it is voluntary under federal law. As a result, the lower court ruling will stand. The findings in that case concluded that Montgomery County's ordinance was not preempted by federal law and that the landlord had violated the ordinance by refusing to participate in the Section 8 program. The California Apartment Association has filed a motion to file an amicus brief in the Supreme Court case. So what does this mean for California? Currently, California state law does not specifically mandate rental property owners' participation in the Section 8 program. California's definition of "source of income" contains language that is intended to exclude Section 8 vouchers, so that the program remains voluntary for landlords. The law provides: "Source of income" is defined as "lawful, verifiable income paid directly to a tenant or paid to a representative of a tenant. For purposes of this section, a landlord is not considered a representative of a tenant." (Government Code Section 12955 (p)(1)) California's Department of Fair Employment and Housing agrees that the Section 8 program's rent subsidies are not included in California's definition of source of income. According to the Department, "Source of income is defined in the law as 'lawful verifiable income paid directly to a tenant or a representative of a tenant.' Section 8 is a federal program providing rental subsidies for individuals who meet certain financial criteria paid directly to a landlord and, as such, it is not included in the definition of source of income." Alternatively, some cities in California do prohibit owners from discriminating against individuals who hold Section 8 vouchers. None of these local laws, however, have been tested as to their conflict with California state law. Protecting Tenants at Foreclosure Act (PTFA) 06/06/2010
The NARPM® Government Affairs Committee has prepared the following summary of the Protecting Tenants at Foreclosure Act of 2009 to help educate NARPM® members about this new law. This is not a legal interpretation of the Act, but rather a general guide to help you understand more about how the law protects tenants when a property owner falls into foreclosure. The Act was designed to be silent on several issues which means you will need to refer to your state law for further clarification. We highly encourage you to consult an attorney if you have any questions. If you are working with a tenant who is facing a foreclosure situation, we suggest you encourage them to speak with a HUD-approved housing counselor. These counselors are trained to provide helpful advice at no cost and can be located on HUD's website by clicking here. The “Helping Families Save Their Home Act of 2009” (S.896) went into effect on May 20, 2009, and included the “Protecting Tenants at Foreclosure Act” (PTFA), as well as amendments to Section 8 of the “United States Housing Act of 1937.” Both portions of the bill establish new Federal protections for tenants living in properties that go into foreclosure. This law preempts current state laws except where a state’s law provides stronger protections for the tenant. The PTFA included a sunset clause which scheduled this law to expire on December 31, 2012. Effective May 20th, tenants with a “bona fide” lease that was entered into before notice of foreclosure can remain in a foreclosed home until the end of their lease, unless the bank sells the property to someone who intends to make it his/her primary residence. If the new owner intends to occupy the home, they are still required to give 90-days notice to the tenant prior to eviction. If the tenant does not have a lease (month-to-month) or current state law allows the lease to be terminated at will, there is still a 90-day notice requirement prior to eviction. Notice must be provided by the “immediate successor in interest” which, in most cases, would be the bank or the new owner. A “bona fide” lease is defined in the law as one that:
Maytag, Jenn-Air, Amana, Admiral, Crosley, Magic Chef, and Performa by Maytag Dishwasher Recall, 2010 Information for Canadian visitors: English | Francais WASHINGTON, D.C. - The U.S. Consumer Safety Commission and Health Canada, in cooperation with the firm named below, today announced a voluntary recall of the following products.Consumers should stop using products immediately unless otherwise instructed. Name of Product: Dishwashers Units: 1.7 million in the United States and 160,000 in Canada. Manufacturer: Maytag Corp. of Newton, Iowa or Maytag Corp. of Benton Harbor, Mich. Hazard: An electrical failure in the dishwasher's heating element can pose a serious fire hazard. Incidents/Injuries: Maytag has received 12 reports of dishwasher heating element failures that resulted in fires and dishwasher damage, including one report of extensive kitchen damage from a fire. No injuries have been reported. Description: The recall includes Maytag®, Amana®, Jenn-Air®, Admiral®, Magic Chef®, Performa by Maytag® and Crosley® brand dishwashers with plastic tubs and certain serial numbers. The affected dishwashers were manufactured with black, bisque, white, silver and stainless steel front panels. The brand name is printed on the front of the dishwasher. The model and serial numbers are printed on a label located inside the plastic tub on a tag near the left side of the door opening. Serial numbers will start or end with one of the following sequences: SERIAL number STARTING with OR SERIAL number ENDING with NW39, NW40, NW41, NW42, NW43, NW44, NW45, NW46, NW47, NW48, NW49, NW50, NW51, NW52, NY01, NY02, NY03, NY04, NY05, NY06, NY07, NY08, NY09, NY10, NY11, NY12, NY13, NY14, NY15, NY16, NY17, NY18, NY19 JC, JE, JG, JJ, JL, JN, JP, JR, JT, JV, JX, LA, LC, LE, LG, LJ, LL, LN, LP, LR, LT, LV, LX, NA, NC, NE, NG, NJ, NL, NN, NP, NR Click here to check if your appliance is affected and schedule a repair or request a rebate Download high-res image Download high-res image Where to find the model and serial numbers on your Dishwasher: Download high-res image Click here for a video showing how to locate your serial number Sold at: Department and appliance stores and by homebuilders nationwide from February 2006 through April 2010 for between $250 and $900. Manufactured in: United States Remedy: Consumers should immediately stop using the recalled dishwashers, disconnect the electric supply by shutting off the fuse or circuit breaker controlling it, inform all users of the dishwasher about the risk of fire and contact Maytag to verify if their dishwasher is included in the recall. If the dishwasher is included in the recall, consumers can either schedule a free in-home repair or receive a rebate following the purchase of certain new Maytag brand stainless-steel tub dishwashers. The rebate is $150 if the consumer purchases new dishwasher models MDB7759, MDB7609 or MDBH979; or $250 if the consumer purchases new dishwasher models MDB8959, MDB8859, MDB7809 or MDB7709. Consumers should not return the recalled dishwashers to the retailer where purchased as retailers are not prepared to take the units back. Consumer Contact: For additional information, contact Maytag at (800) 544-5513 anytime, or visit the firm's website at www.repair.maytag.com. CPSC is still interested in receiving incident or injury reports that are either directly related to this product recall or involve a different hazard with the same product.Please tell us about it by visiting https://www.cpsc.gov/cgibin/incident.aspx. If you selected the rebate option : Click here to check your rebate status New federal lead paint removal regulations 04/10/2010
New federal lead paint removal regulations that go into effect this month could be catching some contractors and apartment owners by surprise. The Environmental Protection Agency's Renovation, Repair and Painting Rule will take effect April 22. Contractors who work on homes, schools, and day-care centers built before 1978 and who perform work that disturbs painted surfaces will need to get EPA certification for lead paint removal by that date or face fines of up to $32,500 per day. The legal liabilities of a property manager that hires an unlicensed repair person will be huge. Projects less than 6 square feet inside a building and 20 square feet outside a building are exempt. There are also record-keeping and information- distributing requirements. A handbook on the regulations can be found at http://www.epa. gov/lead/ pubs/sbcomplianc eguide.pdf. | AuthorWelcome to Nationwide Realty Management (Dream Home Realty), your source for Bakersfield Real Estate. We are a full Realty Company that specialized in Sales, Relocation Rental and Property Management. Call Today to Have Your Home Rented Fast! ArchivesJuly 2011 CategoriesAll |
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