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Useful information regarding recent $25 billion foreclosure settlement:

a) Settlement only applies to Bank of America, JPMorgan Chase, Wells Fargo, Ally/GMAC and Citi.

b) Bank of America loan modifications hotline is 877.488.7814. Settlement designate one single point of contact. If given a run around - call Washington state's foreclosure prevention hotline: 877.488.7814.

c) Free housing counselor at 877.894.4663. Homeowners who are current and are seeking loan modification must be evaluated by the servicer to determine risk of imminent default.

d) Details settlement can be found here.

1. Home short sold cannot be a FHA loan
2. Must have been current on mortgage at time of sale
3. Sold home must not require deficiency payment for the difference
4. 620 minimum credit score
5. 3.5% down payment
6. Short sale caused by extenuating circumstances and not just a person trying to take advantage of the market (by selling short and buying same type home at half the price)

The last requirement of extenuating circumstances is where it gets cloudy. An extenuating circumstance, according to FHA is one of the following:

1. Job loss or loss of income
2. Sickness or illness of the borrower
3. Death of a wage earner
4. Circumstances beyond your control

If you don't meet the above criteria; here are the time frames you have to wait before purchasing again:

-Fannie Mae Conventional 2 years with 20 percent down payment
-FHA- 3 years from time of sell

Fannie, and Freddie Mac will start offering forbearance for homeowners who lost their job. Forbearance means that a lender or mortgage servicing company will either suspend, cut the mortgage payment to zero or reduce required monthly payments for a specific period of time. Forbearance is not forgiveness or reduction of the principal balance on the mortgage. Upon securing another job, homeowners are expected to pay the regular mortgage payment and to pay back the deferred amounts in affordable increments. To qualify for the program, property must be primary residence, not financed by USDA rural financing, housing ratio greater than 31% excluding unemployment benefits. Homeowners must not have any reserve greater than 12 months in PITI. Under the new rule, servicers can grant a 6 months of reduced or suspended payments without getting special permission in advance. If unemployment continues beyond six months, and if the service thinks additional forbearance for up to another six months would be appropriate it can ask Fannie or Freddie for approval to do so. During the forbearance period, borrowers will not be subject to foreclosure, even if they had fallen behind on payments before the forbearance began. Fannie Mae's policy becomes mandatory for all loan servicers March 1. Freddie Mac's policy takes effect Feb. 1.  FHA has it's own program back in July of 2011.

Fix health and safety problems first. We will require repairs such as rickety railings, broken windows, loose steps, expose electrical wiring to be corrected prior to closing. All utilities must be working properly during inspection.   

Tidy up. Items not attached to the house - say, clothes scattered on the kids' bedroom floor aren't supposed to count. But clutter obscures the structure and creates a bad impression.

Don't kill yourself cleaning. You want it clean, but this isn't a white-glove inspection. Appraisers understand homes are meant to be lived in.

Grasp the mindset. An appraiser will try to see your home through the eyes of a potential buyer, even if you're only refinancing.

Maximize views. Remove ivy, weeds and overgrown landscaping that obscure a view. If you've got it, flaunt it.

Mow the lawn, trim the hedges. A property that looks good will develop  a 'what else is right?' attitude.

Keep up with general maintenance. In a glutted market, buyers will choose the spiffiest properties.

Don't over-improve. The neighborhood establishes the value. If your home is already valued in the top 10 percent for your area, forgo the upgrades and focus on maintenance.

Remodel strategically. Don't make the mistake of the guy who tried to upgrade his small, 1940s home by adding a giant picture window -- forgetting that the house sat right next to a gas station.

Don't expect miracles from a single upgrade.

Kitchens upgrades usually bring the best return (but not always). Tour new homes in your area to see what materials and amenities they include. Builders know what sells.

Choose neutral (or at least tasteful) colors.

Get money in the bag before you launch a remodel. Once the house is gutted, you're stuck, because appraisers look at current value, not projected value.

Share the history. Tell the appraiser what you've done to the house, when it was done and how much was it cost. You may not get full credit but it doesn't hurt to note it.

Point out red herrings. With the implementation of recent Home Valuation Code of Conduct, lenders are not allowed to contact appraisers anymore. However, agents and potential homeowners can provide the appraiser your own comps of similar size properties, condition and amenity levels in your immediate market area. If a neighbor recently unloaded a house in a distress sale, explain the circumstances so their low-ball price such as divorce, financial distress or heavy concessions can be pointed to the appraiser so it doesn't get factored into the "comps" against which your home will be judged.

Know your market. A four-bedroom home is usually worth more than a two-bedroom (in general).

Top appraisers often carry the "SRA" senior residential appraiser designation and can be found at the nonprofit Appraisal Institute.

If you find serious mistakes and the appraiser refuses to to make corrections, appeal directly to the lender. If the lender stonewalls and the deal falls apart - consider filing a complaint to the the state appraisal board.