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Sales of existing homes rose again last month, lending support to economists who argue the economic recovery is on the way.

FHA is tightening up their rules. The policy changes are designed to shore up the FHA's capital reserves. "These changes, while serious, are reasonable," say the FHA top dogs. Credit back to buyer for closing costs will be lower to 3% from the more generous 6% which was the norm until now. Some buyers will have to have more money to close the deal and or get a lesser home. Further damage will be done as they increase the mortgage insurance as well to a 2.25%. Buyers in the entry level market will be feeling the pinch in the months to come.

Banks want to ease the short sale process and move them on faster!..

Bank of America, known for being one of the most difficult banks to deal with in a short sale, has said that it has eased its policy related to short sales to facilitate more of them, instead of letting properties slip into foreclosure, according to a report in American Banker. Previously, this bank required that 10 percent of the proceeds from a property’s selling price go towards paying a second or an equity line, however, now they will accept a 5% of the net proceeds in a short sale. Short sales contracts, while not all that attractive either, can result in losses to a bank of 30% less than in foreclosures.

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