DATE: June 3, 2011

Bank Of America Raided By Deputies To Seize Homeowners Property

DATE: May 27, 2011

Memorial Day Recipes

Memorial Day is the day we join together as nation to remember all those who gave their lives defending our nation. It's also a day that many families travel from far and wide to get together and enjoy good company and good food.

Here are some tried and true Memorial Day recipes that are sure to please the crew.

For starters, serve a festive blue punch!

Blue Punch

1 package blue kool-aid
1 (64 fluid ounce) bottle white cranberry juice
1 (2 liter) bottle lemon-lime soda
8 scoops vanilla ice cream
3/4 cup white sugar

To mix this simple punch, combine all ingredients except ice cream in a large punch bowl. When you are ready to serve, add in the ice cream. You can also substitute other blue drinks for the kool-aid, such as Hawaiian punch. And of course, you can add your choice of alcoholic drink to the mix to liven up your party.

Red, White, and Blue Ambrosia

This is a great make-ahead dish, since its ingredients work best when they've had time to marry.

1 pint heavy cream
1 tablespoon confectioners' sugar
2 cups sour cream
1.5 cups flaked coconut
1 pint strawberries, sliced
1 (20 ounce) can crushed pineapple, drained
1 pint fresh blueberries
3 cups miniature marshmallows

First, combine the heavy cream and confectioners' sugar. Whip until creamy and then add the sour cream. Fold in flaked coconut, berries, and marshmallow. Cover and chill before serving.

Barbecue Beef

Memorial Day wouldn't be complete without barbeque. It's practically the national summer food of the United States! This great recipe comes from the Food Network's own Sandra Lee and her show "Semi-Homemade Cooking"

1 rack beef back ribs (about 3 pounds total), cut in 1/2
1 teaspoon seasoning salt
1 cup vegetable broth
1 cup apple juice
2 cups store-bought BBQ sauce
2 tablespoons apple cider vinegar
1 teaspoon molasses
1 teaspoon instant espresso or 2 tablespoons strong brewed coffee
Sliced green apple, to garnish

The key to ribs is patience. First, place the ribs in a large pot. Add seasoning, broth, and apple juice to cover the meat. If you need a little extra liquid, add some water. Bring this mixture to a boil. Reduce heat and simmer until the meat is tender (about 1 hour). Using tongs, remove the rib rack. Now, cut between the bones, forming individual ribs.

The next step is to grill! Mix your sauce in a medium bowl by combining the BBQ sauce, molasses, and coffee. Brush this mixture onto the ribs and then grill them until brown. You can turn them occasionally adding more sauce. Grill time should be about 10 minutes.

Enjoy these quick and easy recipes and have a safe Memorial Day!

DATE: May 20, 2011

POSITIVE SIGNS FOR CENTRAL OHIO

The number of homes listed for sale this year is lower than the previous year suggesting the central Ohio housing market is continuing its steady recovery. The 3,940 homes added to the market in April represent a 15.1 decrease compared to April of 2010 and the 3,886 new listings in March were almost 22 percent lower than the previous year according to the Columbus Board of REALTORS.

The number of new listings January through April (13,247) is almost 20 percent lower than the same period last year. Sales prices have reflected the surplus inventory on the market for the last few years, says Rick Benjamin, 2011 President of the Columbus Board of REALTORS®. And housing follows the basic economic principal of supply and demand. When there are more homes on the market than buyers, the price of the home may have to drop to compete.

However, if inventory levels continue to drop, we'll see the price of homes begin to rise again. For instance, the median price of homes added to the market last month - $157,900 – is 5.3 percent higher than inventory added in April of 2010.

Currently, there are approximately 15,146 residential homes available for sale in the central Ohio area – 12,322 single family homes and 2,824 condominiums. Home sales in April were 8.9 percent ahead of the month prior (1,487); but trailed last year by 25.9 percent. Year to date sales (January through April) are 13.2 percent lower than the same period last year.

We didn't expect April sales to come close to that of last year, offers Benjamin. Last year, the home buyer tax credit deadline was April 30 so buyers were breaking down the doors to get an approved contract.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 4.84 percent in April which is the same rate as March; the rate was 5.10 percent in April 2010.

DATE: May 13, 2011

BUYERS ARE INTERESTED IN FORECLOSURES

A new study conducted by Trulia and RealtyTrac found that 56 percent of U.S. renters and 47 percent of current homeowners are at least somewhat likely to purchase a foreclosed home.

Along with having some concerns about hidden costs, a risky buying process, and still-declining home values, many potential buyers expect to save money if they buy a foreclosure. In fact, the companies' survey found that on average, respondents expect to pay 38 percent less for a foreclosed home than a similar home that was not in foreclosure.

RealtyTrac says their expectations are not too far above the average discount of 36 percent it's currently seeing on sales of bank-owned REO homes.

Ken Shuman, a spokesperson for Trulia, said, According to our latest data, it is more affordable to buy a home than to rent in 78 percent of major U.S. cities. With concerns of rising inflation and the potential for rising interest rates, now is a good time for people to buy and we may not be in this environment for much longer.

The Trulia-RealtyTrac survey also polled respondents on the federal government's efforts to help struggling homeowners. Forty-five percent of those surveyed said the government is not doing enough to prevent foreclosures. Only 17 percent say too much is being done, while 16 percent say they are doing the right amount and 22 percent were undecided.

The widespread prevalence of distressed homeowners facing foreclosures in today's market is one reason why negative sentiment toward the government may be so high, according to the companies' report.

Almost 30 percent of homeowners said they themselves have, or they know someone who has experienced trouble with their mortgage situation and applied for a loan modification, stopped making their payments, been foreclosed on, simply walked away, or sold their home through a short sale transaction.

As more cities across the nation experience double dips in home prices, more than half (54 percent) of those surveyed believe recovery in the housing market will not happen until 2014 or later.

In a previous survey conducted six months ago, 42 percent of American adults said they thought the market would turn around by 2012 or had already turned around. Now, only 23 percent continue to hold this sentiment.

Most Americans, as our latest survey revealed, overestimated how quickly the housing market would bounce back, but when it does, it will likely be a long and gradual process, said Pete Flint, co-founder and CEO of Trulia. Looking at the recent double dips in home prices, I expect the rest of 2011 to be volatile for real estate….In my eyes, we have another 18 months until we start to see signs of price stability in the housing market.

Trulia and RealtyTrac have regularly conducted these surveys since 2008 to track consumers' attitudes toward foreclosed homes and the housing market recovery.

Our survey reflects a growing perception among potential homebuyers that the housing recovery is still a long way off, commented Rick Sharga, RealtyTrac SVP. Demand remains weak, loans are increasingly difficult to qualify for, and the shadow inventory of several million distressed properties is weighing down the market. All of these things need to improve before housing can recover.

DATE: May 6, 2011

Foreclosures Remain Focal Point

Foreclosures are still big news in real estate across the country. Most homeowners are looking forward to a day when foreclosures make up a much smaller share of the market. For now, however, 1 in 119 homes are in foreclosure. One in every 577 housing units received a foreclosure filing in the month of February. These stats come from Realty Trac, who monitors the state of foreclosures. They report that California was leading the pack in the number of foreclosed homes in Feburary. The figure was over 56,000.

What homes are most affected by this trend? It appears that modestly sized homes in the 1200 to 1399 square foot range carry the largest percentage of foreclosures. This trend was also high, however, in homes greater than 2600 square feet.

Investors all across the nation are taking advantage of foreclosure pricing, which is as much as 39 percent less than comparables in parts of the Northeast. Virginia saw the largest price difference between regular residential sale and foreclosure pricing. There was an average savings of $93,552.

Nationwide, home values are on the downtrend. According to Zillow.com, February saw monthly home value depreciation at -1.1 percent. Annualized depreciation increased from -7.4 percent to - 8.2 percent.

Zillow notes, "We believe that we will see continuing improvement in monthly depreciation rates for the balance of the year with improvement possibly slowing or stagnating in the fall, but continuing thereafter. At this pace, that would place a bottom in national home values in the Q4 2011 or Q1 2012 time frame. Here, a bottom is defined as an end to consistent monthly declines in home values."

The most recent Federal Reserve Beige Book (April 2011) reports that residential real estate activity has increased in most Districts. Let's take a look at the latest trends:

First off, sluggish sales were experienced in New York, Kansas City, Dallas, and San Francisco for their high end homes.

In spending and retail sales, we saw only modest gains in February. According to the Commerce Department, total retail sales are up 0.4 percent, and while this is the smallest gain in nine months, it is movement in the right direction. Influencing this statistic was gasoline sales, accounting for 10.7 percent of all retail sales and increasing 2.6 percent in February. Economists expect gas pricing to continue to slow the economic recovery.

DATE: April 29, 2011

Home Inspections 101

What does your home inspection cover? And who is liable if a problem develops down the road? We'll answer these questions in today's column.

You need an inspection on any property you are buying, regardless if it's old or new construction. An inspection is like a check-up for your house. What repairs will need to addressed now and what might need to be addressed later down the road? This is what you have answered during an inspection. Having an inspection done prior to signing a contract allows you to negotiate your findings into the deal. Does the roof need replaced? The seller may give an allowance to pay for the repairs. If you don't ask, you'll never know!

Perhaps you've fallen in love with a fixer-upper and are dreaming of doing the repairs yourself. If the inspection discovers hidden damage and costs, you'll be given the option to keep looking for a more suitable house. Keep in mind, however, that simply because a house needs repairs doesn't mean you shouldn't purchase it. Nearly every house will have a list of repairs that need to be done to get it "shipshape." It is your decision to choose how much you are willing to spend and how much work you are willing to do.

A home inspection varies depending on what type of property you are interested in.

According to the American Society of Home Inspectors (ASHI), "the standard home inspector’s report will cover the condition of the home’s heating system; central air conditioning system (temperature permitting); interior plumbing and electrical systems; the roof, attic and visible insulation; walls, ceilings, floors, windows and doors; the foundation, basement and structural components."

There are limits, however, to what a home inspection will cover. They aren't required to identify conditions that are concealed or are considered latent defects. That means if personal property, plants, snow, or debris is covering an issue, the home inspector isn't require to move those items to inspect it and isn't liable if he misses it. They aren't require to make determinations on systems that aren't readily accessible.

And they aren't required to note the presence of potentially hazardous plants and animals. That includes "wood destroying organisms" or even molds.

This means you should find a home inspector that you trust. The ASHI recommends you choose from their list of licensed professionals. "ASHI members know houses, ensuring that you can find a home inspector. They are trained to objectively communicate to you, the home inspection buyer, what the house has to say. ASHI members have demonstrated technical proficiency and report-writing skills, and they have committed to continuing education in order to achieve and maintain their member status."

Having a trusted inspector means that most every problem that can be identified, will be. And inspection is about peace of mind, and a good inspector gives you that.

DATE: April 22, 2011

Existing-Home Sales Rise in March

The latest report from the National Association of Realtors shows that the sale of existing-homes was on the rise in March. This figure was up 3.7 percent from the month prior, but was still 6.3 percent below the pace seen in March 2010.

Lawrence Yun, NAR chief economist, expects the improving sales pattern to continue. Existing-home sales have risen in six of the past eight months, so we're clearly on a recovery path, he said. With rising jobs and excellent affordability conditions, we project moderate improvements into 2012, but not every month will show a gain - primarily because some buyers are finding it too difficult to obtain a mortgage. For those fortunate enough to qualify for financing, monthly mortgage payments as a percent of income have been at record lows.

According to a parallel NAR practitioner survey, First-time buyers purchased 33 percent of homes in March, compared with 34 percent of homes in February; they were 44 percent in March 2010. Last year's figure was most likely elevated thanks to the first-time home buyer tax credit.

The NAR also reports that all-cash sales were at a record market share of 35 percent in March, up from 33 percent in February; they were 27 percent in March 2010.

And no news to most, distressed property sales made up 40 percent of the market, up from last year's 35 percent, and up even further from the normal average of 20 percent.

DATE: April 15, 2011

Unemployed Loan Program Now Available

It's here. Unemployed homeowners can now receive loans that will help them avoid foreclosure, thanks to a new program by the Obama administration.

After delays and efforts to terminate the program, the $1 billion Emergency Homeowners' Loan Program–established when the Dodd-Frank financial overhaul bill was enacted in the summer of 2010–is now ready to help unemployed homeowners to continue to make their mortgage payments.

The program will allow qualified unemployed homeowners to receive zero-interest loans of up to $50,000 and for up to two years. The loan can be forgiven if the homeowner stay in the house five years. Requirements include being at least three months behind on your payments but also having a reasonable ability to resume payments within the two-year period. Additionally, homeowners have to have had a 15% decrease in income. However, they must have been able to pay for their mortgage prior to the income drop. They can't own a second home and the property has to be their primary residence.

DATE: April 8, 2011

The Numbers on Buying a House

It can be a tricky question. How much home can you really afford? From employment status, to savings, downpayment, and even spending habits, there are a myriad of factors that come into play.

Here is a list of items to consider before settling on a budget.

1. Monthly Payment: Conventional wisdom tells us that your mortgage payment should be no more than 28 of your gross monthly income. This means that if you make $50,000 a year, the maximum amount you would safely want to pay each month is $1,166. How do you figure this for you own salary? Take ___ (salary) x .28 = total dollar amount for year. Then divide the total dollar amount by 12 (months in the year) and there you have it!

The National Association of Realtors also gives this simple equation for renters to use to figure out how much they can afford. Multiply your rent by 1.32 and that will equal your affordable mortgage payment.

2. Job Security: Have you just switched jobs? Is your company experiencing layoffs? In times of economic uncertainty, you may find it best to stay put. This is why many economic analysts keep saying that a housing recovery is dependent on a jobs recovery. When jobs return, so will the buyers.

3. Savings: The state of American savings is scary. According to Visual Economics.com, the average family has $117,951 worth of debt and only $3,800 in savings.

And a quarter of Americans have no savings at all! Half have nothing saved for retirement. Talk about crossing your fingers that social security will hold out for a while.

New grads are encountering an even scarier situation. The average college graduate has well over $20,000 in student loans to repay, and according to the New York Times, "Paying back student loans is likely to be especially difficult for recent graduates ... because the unemployment rate for college graduates ages 20 to 24 was 8.7 percent in 2009 — the highest annual rate on record and a substantial rise from 5.8 percent in 2008."

How does your debt-to-income ratio stack up? The Federal Reserve thinks debt adding up to more than 40% of your gross income could indicate financial distress.

The U.S. savings rate has risen steadily since the recession hit. It is now at 5.8 percent (American Express Spending & Saving Tracker). Hopefully, this rate will continue to be a trend.

4. Emergency Fund: Before you even begin to think about buying a house or moving, you must have an 8-month emergency fund in the bank. This means you need to add up your living expenses for a month. Include all the necessities and things that must be paid (rent or mortgage, car payments, insurance, food, gas money, electric, phone, tuition, day care, etc). Then multiply this number by 8. You must have this in case you or your spouse loses your job, gets sicks, or some other disaster hits your family.

5. Downpayment: This is savings in addition to your 8-month emergency fund. And a downpayment should be at least 20 percent of your purchase amount.

Look at it this way. If your monthly expenses are $2,000 a month and you want to buy a $200,000 house, you'll need a bare minimum of $36,000 in the bank to truly afford this move. That doesn't include cash needed for closing costs, repairs, moving expenses, and renovation.

6. Lifestyle and Extraneous Factors: Everyone has different wants and needs. You may be fine spending a little more for the house of your dreams in exchange for taking fewer vacations. Others abhor the statement, "house rich, cash poor," and instead would rather have funds for shopping, dining out, and travel. And don't forget about extraneous factors, such as aging parents, car repairs and maintenance. Things may come out of nowhere!

Buying a house is a fulfilling experience, but it comes with a lot of financial responsibility that shouldn't be taken lightly. Be sure to mull these items over when considering a buy.

DATE: April 1, 2011

Appraisal's April Fool's

It's amazing. If you don't like appraisal results, if you want home prices to be higher, then just change appraisal rules.

That's the theory behind a new legislative drive now taking place in several states.

The Appraisal Institute reports that four states — Illinois, Maryland, Missouri and Nevada — are considering legislation that would prohibit or restrict the use of distressed sales, such as foreclosures and short sales, as comparable sales as a part of a residential real estate appraisal.

Homebuilders and real estate sales agents are concerned that the prevalence of distressed sales, and their subsequent use as comparables, is resulting in the appraised value of residential properties not matching the contract sales price, or in the case of new construction, the cost to build.

This is a joke, right? Something set for April Fool's Day.

Appraisals are supposed to provide home buyers with an independent and experienced view of real estate values. Licensed appraisers are NOT paid for hitting a particular number, but for providing the fair market value of a property at a particular moment in time, a valuation generally based on the recent sale of like properties nearby.

To say that distressed and foreclosed homes and short sales should not be counted when valuing local real estate makes about as much sense as refusing to include touchdown passes from left-handed quarterbacks in final scores.

The stupidity of this idea is just overwhelming. Does anyone seriously believe that potential home buyers will not notice abandoned homes across the street or down the block?

And what about local property taxes? Will assessors raise home values by not including distressed properties? Higher assessments are one path to higher property taxes.

Nevada

Think how well the concept of appraisal fiction might work in Nevada, a state where legislation to fabricate appraisals has been introduced. According to RealtyTrac, Las Vegas-Paradise continued to post the nation's highest metro foreclosure rate, with one in every 9 housing units (10.88 percent) receiving a foreclosure filing in 2010 — nearly five times the national average. A total of 88,198 Las Vegas-area properties received a foreclosure filing in 2010, a decrease of 7 percent from 2009 but still up 31 percent from 2008.

If you were buying a home in Nevada do you think such information might impact the price you were willing to pay for real estate? Or would you just ignore the foreclosure carnage?

And what about the profession of appraising? Why would any sane person or institution hire an appraiser who delivers anything less than a fair market valuation based on what's actually happening in the local marketplace?

Legal or Not Legal

The Appraisal Institute explains that if these bills were enacted into law, appraisers would be put in the difficult position of having to choose which law to violate. Appraisers are required to adhere to comply with the Uniform Standards of Professional Appraisal Practice in federally related transactions. The standard mandates that appraisers must analyze such comparables sales as are available.' Further, the standard cannot be voided by a state or local government.

DATE: March 25, 2011

Unemployed Loan Program Now Available

It's here. Unemployed homeowners can now receive loans that will help them avoid foreclosure, thanks to a new program by the Obama administration.

After delays and efforts to terminate the program, the $1 billion Emergency Homeowners' Loan Program–established when the Dodd-Frank financial overhaul bill was enacted in the summer of 2010–is now ready to help unemployed homeowners to continue to make their mortgage payments.

The program will allow qualified unemployed homeowners to receive zero-interest loans of up to $50,000 and for up to two years. The loan can be forgiven if the homeowner stay in the house five years. Requirements include being at least three months behind on your payments but also having a reasonable ability to resume payments within the two-year period. Additionally, homeowners have to have had a 15% decrease in income. However, they must have been able to pay for their mortgage prior to the income drop. They can't own a second home and the property has to be their primary residence.

Coming soon, nonprofit NeighborWorks America, is providing federal funding for loans in 27 other states that don't have a similar program. The Department of Housing and Urban Development expects some 30,000 homeowners to participate.

States such as California, Nevada, Michigan, and a few more are expecting to receive some aid through the Treasury Department, which has allotted $7.6 billion in assistance for hard-hit states.

Meanwhile, housing-market analysts are saying that for long-term real estate recovery to occur, live-in homebuyers are necessary. Experts acknowledge that markets such as Phoenix, Arizona were propped up by very low interest rates, investor demand, and some of the most affordable home prices ever seen.

But experts say that buyers who are purchasing to live in the home will help stimulate the housing recovery process. In some markets, like Phoenix, it's been a 50-50 split between live-ins and investors.

Some of the factors holding back traditional buyers from dominating the market are, of course, stricter requirements for lending, unemployment, or lack of sufficient work, and uncertain financial times.

Live-in homebuyers tend to come from one of two groups: first-time or move-up buyers. With the recent marketplace and economic conditions being so unstable, and a decline in home value, the move-up buyers have not been very active. But some real estate experts are seeing an emergence of a new buyer group: lower-income residents. This group can now afford to buy because the home prices, in some areas, have declined significantly. However, in many areas, home investors are vying for those same properties, creating competition.

In a perhaps surprising move, some home auctions, where investors can typically scoop up a great deal, are now excluding investors. A California-based firm is helping to get rid of all foreclosed Arizona homes for which the previous owners had U.S. Federal Housing Administration-backed loans. The U.S. Department of Housing and Urban Development's policy gives traditional buyers at least 30 days to bid on new listings first. Then the properties may be opened up to investors.

For more information ask me and I'll be happy to help.

DATE: March 11, 2011

Dream Home Wish List

There are millions of homes for sale across the country. How do you know which is the right one for you?

The key to getting just the right fit is to develop a wish list. From the lifestyle you want to live to the style of home that best fits your needs, a wish list is a great way for you and your real estate agent to be clear on your objectives.

  1. Fixer-upper vs. Move-in ready: Many buyers look at homeownership as a way to make their mark on a property. They are confident in their renovating skills, or are eager to hone them. Part of the appeal may also be that many fixer-upper homes cost considerably less than comparables which are move-in ready. Be sure to sit down and consider what you want homeownership to mean for you.

  2. Location: Are you needing to be near public transportation, rail lines, and subways? Keep in mind that in larger metro areas, close proximity to transit can send prices sky high. You'll also want to think about entertainment, restaurants, and night life. Is it important to be near the hustle and bustle, or away from it?

  3. Schools: It's no secret. The quality of various public and private schools range widely. Be sure to research school districts before starting your home search.

  4. Architectural Style: Some people are drawn to the clean lines and light and bright spaces of a modern design, while others enjoy the cozy charm of a Victorian home. Leaf through magazines, do searches online, and read up in architectural books to decide on what style of home best fits your aesthetic.

  5. Upgrades: Are you geared towards granite? Do you marvel at marble? There are certain upgrades that buyers covet. Make a list of what upgrades you would most like to see in your dream home. This can include professional-grade appliances, luxury tiles, or energy efficient upgrades.

  6. Interior Styling: If you have allergies, then you may abhor carpet. And while replacing flooring isn't a budget breaker for some, it can be for others. Interior stylings can be changed, but time and money are always a factor. By having in mind the type of interior you most desire, you can cut out homes that will be too much work.

  7. Great Yard Expectations: For some buyers, the perfect yard is one that requires zero maintenance (hello, condo owners). For others, however, the ideal yard is large, private, and landscaped. Be sure to contemplate on what best fits your lifestyle.

  8. Old vs. New: Old homes can carry a lot of charm, but they can also require hefty maintenance. New homes are not maintenance free, but they may come with certain warranties from the builder to protect you for a few years down the road.

  9. To Garage or Not Garage: Do you want a detached or attached garage? Detached garages are perfect for homeowners who work on noisy or smelly projects. This way the house maintains a distance. Other buyers prefer to have a warm walk from the kitchen to their car each morning. What works best for your lifestyle?

  10. Detached or Attached: Single-family detached, condo, or income property? There are many choices when it comes to homes. Condo owners love the ease and convenience of living in a community with extra amenities. Single-family dwellers love the privacy and space their homes provide. And income property owners love having a renter that helps pay part of their mortgage.

It's important to remember that chances are you won't get all of the items on your wish list, but having a solid list written out will help guide you in the right direction during the search for your dream home.

DATE: February 25, 2011

Don't Be Mystified By The Mortgage Maze

Years after the housing market tanked and sank the economy, more than 70 percent of Americans say getting a mortgage today is a serious national problem, according to a new study by MortgageMatch.com, a home loan and information site operated by Move, Inc.

According to the MortgageMatch.com survey, today's lending environment is so confusing many borrowers are experiencing high levels of stress and frustration.

More than one in five recent home buyers (20.9 percent) told MortgageMatch.com, waiting to hear if they were approved for a mortgage was more stressful than waiting to hear if they got a job.

MortgageMatch.com says home buyers can significantly improve their chances of getting a mortgage application approved on the best possible terms in today's tough lending marketplace by taking the following steps.

DATE: February 11, 2011

Homeownership and Taxes

Homeownership comes with a wonderful host of benefits. But did you know that it can also save you money on your taxes?

According to the National Association of Realtors, numerous deductions and credits are available for homeowners. These include capital gains and mortgage interest deductions, as well as credits for energy-efficienct upgrades.

To get the latest information on energy credits for this year's tax return, visit EnergyStar.gov. You may be able to deduct portions of improvements on everything from windows and doors to water heaters.

Why do homeowners get such special treatment? For starters, the NAR reports that home owners pay 80-90 percent of all U.S. federal income taxes.

And the credits and deductions don't just benefit wealthy homeowners.

Ninety-one percent of home owners who claim the mortgage interest deduction earn less than $200,000 a year, and the ability to deduct the interest paid on a mortgage can mean significant savings at tax time. For example, a family who bought a home in 2010 with a $200,000, 30-year, fixed-rate mortgage, assuming an interest rate of 4.5 percent, could save nearly $3,500 in federal taxes when they file this year. (NAR)

NAR President Ron Phipps says that homeownership has many positive impacts. Recent proposals to reduce or eliminate the mortgage interest deduction and remove government support of the housing finance market could have disastrous consequences for the economy, not to mention making it harder or nearly impossible for millions of families to own their own homes. We believe America must continue to invest in home ownership, for the future of our families and our nation.”

Need some tips for this tax season? Take a trip over to houselogic.com, a free source of information from NAR, for the latest tips.

DATE: January 28, 2011

What You Should Know About Credit Scores

Too many consumers are confused about credit scores. Most did not know who makes credit scores available, what is a strong score, nor the financial cost of a poor score.

The Consumer Federation of America (CFA) and VantageScore Solutions say on 22 credit score questions administered by Opinion Research Corp. to over 1,000 consumers late last month, on average, consumers answered only 60 percent correctly.

The good news is that a large majority of consumers know the key factors used to calculate scores and the creditors who use these scores, said CFA Executive Director Stephen Brobeck.

Your credit score is a numerical rendition of your creditworthiness. It indicates how well or how poorly you'll repay a debt. The higher the number, the more likely you'll repay on time.

Credit scores are important, influencing whether consumers can purchase a wide range of important services and at what price, including mortgages.

What the survey found a majority consumers know is what all consumers should know.

DATE: January 7, 2011

A Quick Look In To The Future

While credit remains tight as we move forward into 2011, top economists expect that if the job market revives this year, and interest rates rise only moderately, the housing market could experience a boost.

Pending homes sales are already on the rise. The National Association of Realtors' Pending Home Sales Index reports that pending homes sales rose in November by 3.5 percent.

Lawrence Yun, NAR chief economist, said historically high housing affordability is boosting sales activity. In addition to exceptional affordability conditions, steady improvements in the economy are helping bring buyers into the market, he said. But further gains are needed to reach normal levels of sales activity.

Across the nation, we see regionally diverse markets, however. The Northeast saw pending home sales rise by 1.8 percent, but this figure is still 6.2 percent below November 2009. The West also saw a stunning 18.2 percent jump. This jump leaves it within 0.4 percent of year ago levels.

Both the Midwest and South saw declines, though, in pending sales. The Midwest declined 4.2 percent and is still 7.7 percent below year ago levels. The South fell only 1.8 percent.

As we gradually work off the excess housing inventory, supply levels will eventually come more in-line with historic averages, and could allow home prices to rise modestly in the range of 2 to 3 percent in 2012, Yun said.

For now, the 30-year fixed rate mortgage remains in the low five percent range, which is near a historical low. The extension of Bush-era tax credits, as well as renewed hopes of job growth could very easily translate into more sales on the housing market horizon.

DATE: December 24, 2010

The Strangest Secret

In 1956 a young radio broadcaster by the name of Earl Nightingale wrote and recorded a message which became known as "The Strangest Secret". It quickly went on to sell millions of copies without advertising and limited marketing. Today, more than 50 years later, Nightingales secret remains a top seller in the personal development market and has earned the distinction of becoming the largest selling non-entertainment recording in the industry.

Obviously Nightingale's secret was more than mere hype; it has withstood the test of time and become the foundation of an entire information empire due to a few simple to apply strategies that work in nearly any field or endeavor....including short sales and real estate investing.

The Problem

The basis of Nightingale's work came about through a simple observation: Most people fail despite an early belief in their own success. If you take 100 people who start out with a strong belief in their own success at the age of 25, then follow them until the age of 65, the majority will be broke. One will be rich, four will be financially independent, five will still be working and the remaining 54 will be dependent upon others for the basic necessities of life.

The Goal

Nightingale set out to learn the secret behind the success of that one in every twenty persons; what made them different than the rest? Not only did he discover this secret but he learned how to systematically apply it in his own life and help others reach their own goals. It's a lesson that is as easily implemented today as it was 50 years ago...perhaps even easier thanks to modern technology. Today we are going to outline the most essential steps.

The Lessons

1. The first lesson is to actually define what success means to you. According to Nightingale, success is the "progressive realization of a worthy ideal". Notice the detailed yet flexible nature of this definition; not only is it highly individualized but it is also systematic and well defined. Take a few moments to reflect upon each word in order to allow the full understanding to reach your mind and comprehension.

2. Stop blaming circumstances - start doing. Much has been written in psychology texts and self-help books since The Secret was originally published but the concept remains the same; whether you call it an internal/external loci of control, conformity or something else entirely the message is clear...start acting upon what you want to become. To put it another way, people reap what they sow. It requires doing and the first stage in doing anything is to have clearly delineated goals. You must know and understand where you are going and why in order to make progress. Nightingale advocated writing down goals, making them as specific as possible. Review it repeatedly each and every day.

3. You become what you think about. According to Nightingale his secret wasn't much of a secret at all but rather an ancient idea that was clearly known and understood in ancient times. From biblical proverbs to roman emperors, the idea that a man's life is what is thoughts make of it is a well known concept. Unfortunately today's modern society makes it difficult to focus for ten minutes much less dedicate one's life to deliberate thought. Distractions, entertainment, family and even fun events all compete for our attention at nearly every waking moment of the day.

Still, research and history are both replete with examples of men and women that became a success or defied the odds simply by changing their way of thinking. Have you set aside time to consider the impact of your thought upon the productivity of your life...including goals for real estate and short sales? Do you do it daily? If not, it is time to take control and begin implementing a daily course of action that literally provides "food for thought".

This was such a critical cornerstone that Nightingale established a prescribed routine of studying for one hour per day whenever embarking on a new endeavor. Thanks to the advent of the Internet, that one hour can now be productive time in what was otherwise non-productive time such as during a daily commute. It is also possible to increase the productivity by constant contact with professionals and mentors in the desired area even if you live hundreds or even thousands of miles away. Are you spending one hour per day working toward your goal? If not now then when?

DATE: December 17, 2010

Investors are not the bad guys

"They have surpassed lawyers and repo-men as the most vilified professionals on the planet. Thanks to the unprecedented real estate crash, 'investors' are now the bad guys. During the housing boom, they canoodled with lenders to lever themselves to the hilt, and consequently fueled home prices to levels so unsustainable that the market came crashing down. Never does the President, the Treasury secretary, or the HUD secretary announce a new element to the Administration's multi-billion dollar housing bailout, without making clear that investors need not apply. Get over it. That's all I, and plenty of qualified real estate investors, have to say. That was then; this is now, and real estate investors may be our only ticket out of the housing crisis. 'If you want to stabilize the housing market, you have to encourage investors,' says hedge fund manager Aaron Edelheit. 'The quicker you can end the foreclosures and the short sales, the quicker you're going to have a turnaround in the economy and the housing market.'

Edelheit has invested over $10 million in foreclosed homes. He's not looking to flip them for a profit; he's in this for the long-term gain. He doesn't buy up bulk condos, as many institutional investors are now doing, and which he admits is much easier. He buys single family homes with the sole intention of renting them out to families. No, he's not a do-gooder. He's making around an 8 percent profit after expenses. Think of it this way. At the height of the housing boom, the home ownership rate was at 69 percent. It's now down to 66.9 percent and dropping. Historically it's around 62-64 percent. 'You have five to seven percent of the nation who needs a place to live, and they would prefer single family homes,' notes Edelheit.

Today's jobs report proves that this is going to be a slow economic recovery, which means the pool of potential home buyers will remain small for quite some time. We have already seen apartment rents rise on higher demand. This in the face of a serious oversupply of homes for sale and a shadow inventory of, by some estimates, up to 7 million foreclosed properties. 'There aren't the natural buyers to buy these excess homes, but there are the families to live in them, so if you had long term capital to incentivize investors like me, we would go in, buy homes, fix them up and rent them to families,' says Edelheit. But there's the problem. Gun-shy banks and government-owned Fannie Mae and Freddie Mac are being very stingy with credit to investors, capping them at very few loans.

Fannie Mae allows ten loans to each individual investor, but investors tell me it's more like four when you talk to the banks. A Fannie Mae spokesperson adds, 'Lenders may have their own overlays or added fees.' They've thrown the baby out with the bathwater. I'm not suggesting we return to the heady days of lending to any Joe with a pen to sign on the dotted line. I am suggesting we stop demonizing investors and instead offer low-cost credit to those with worthy balance sheets who are willing to put significant down payments on the properties. And yes, underwrite them conscientiously. It may be our best exit from a too-slow recovery. Investors like Edelheit are waiting in the wings. 'I think that if the government were to encourage investors, they would swoop in and buy homes, and you'd very quickly not have an excess amount of housing.'"

DATE: December 10, 2010

Remeber Madoff

Madoff, 72, pleaded guilty in March 2009 to 11 counts related to running the largest Ponzi scheme in history and was sentenced to 150 years. He is incarcerated at a medium security federal prison in Butner, N.C. Using his investment firm as a front, Madoff claimed to be investing his clients' money. He kept the fraud going by using deposits from new clients to provide so-called returns to more mature clients. But in reality, he was stealing the money and there were no returns. Trustee Irving Picard said he brought 40 lawsuits on Friday in U.S. Bankruptcy Court in Manhattan. He filed 22 suits against relatives of Bernie Madoff and his wife, Ruth. The other 18 cases were filed against former employees of Madoff's company.

The defendants had among them 66 accounts through which the $69 million was allegedly diverted to Madoff and others, according to Picard. "The [lawsuits] are a continuation of our recovery efforts against the Madoff relatives and employees who were closest to the center of the fraud and who were, in many cases, among those who benefited most from the Ponzi scheme," said Picard. Earlier last week, Picard sued UBS AG for $2 billion, accusing the Swiss financial firm of participating in Madoff's Ponzi scheme. As of Nov. 19, in the most recent tally available, the trustee had approved a total of 2,305 claims from victims, totaling nearly $5.8 billion in damages.

DATE: December 6, 2010

Freddie Mac's delinquencies climb

Freddie Mac's 90-plus day delinquency rate increased for the first time since February, according to the government sponsored enterprise's monthly summary. The delinquency rate for single-family residences was 3.82% in October, up from 3.8% in September. The delinquency rate for multifamily properties also increased, up to 0.44% in October from 0.35%; however, this is the second consecutive monthly increase in delinquencies on this type of property. One year ago, the delinquency rate for single-family residences backed by Freddie Mac was 3.65% and 0.18% for multifamily properties. That constitutes a 4.6% yearly increase in single-family delinquencies from 2009 and a 144.4% yearly increase in multifamily delinquencies. The 2007 vintage accounts for the most delinquencies, as 0.64% of these loans are between 60- and 90-days delinquent and 0.95% are more than 90-days delinquent. A total of 12,763 loans originated in 2007 are delinquent on Freddie Mac's books. Freddie Mac's weekly mortgage rate survey indicated the rate for a 30-year fixed-mortgage rate increased for the first time in two months, up to 4.39%.

DATE: December 3, 2010

Fed predicts weak recovery for years to come

According to minutes from the Fed's November 3 meeting, more than half of the central bank's policymakers thought it would take about five or six years for unemployment, growth and inflation to return to more normal levels. Other Fed members warned the full recovery could take even longer than that. The much weaker forecast is the major reason that policymakers decided earlier this month to announce a plan to try and jumpstart growth by pumping an additional $600 billion into the economy through the purchase of long-term bonds. That plan, known as quantitative easing, has been criticized by several economists, politicians and foreign central bank officials. The Fed now expects the economy to grow between 2.4% to 2.5% this year, compared to an earlier forecast of growth between 3.0% and 3.5%. The Fed also trimmed its 2011 forecast to growth of between 3% and 3.6%. Its earlier estimate was for growth of 3.5% to 4.2%.

And the Fed now forecasts unemployment will only fall to between 8.9% to 9.1% in 2011, well above the 8.3% to 8.7% unemployment rate it previously predicted for 2011. The Fed also indicated it expects unemployment to only drop to between 6.9% to 7.4% by 2013. To put that into context, the unemployment rate was 4.6% in 2007, the last year before the recession. The central bank also maintained that inflation should not be a problem for the foreseeable future. Prices for consumer goods are expected to rise a little faster than in the Fed's previous estimate, but still well less than 2% through at least 2012. The Fed stated that price increases are now judged to be too low to maintain its goal of price stability, but some policymakers at the Fed have expressed concern that the steps the central bank is taking to stimulate growth could lead to higher inflation down the road.

DATE: 11-26-10

Mortgage market too tight or just right?

The message from the National Association of Realtors, or at least from its chief economist as he released lackluster sales results for October, is that the mortgage market is now largely to blame for the lack of a real recovery in housing. 'What is important is the access to credit. We believe that many qualified home buyers that want to stay well within their budget are being denied credit because of the overly stringent underwriting standards of today's market,' said Lawrence Yun in our usual post-news release interview. Yun is right that the leaders of Fannie, Freddie and the FHA are touting the quality of their most recent books of mortgage business. FHA Commissioner David Stevens even said it in an interview with me last week that 'the 2010 book is the best book in FHA history.' He is clearly quite proud of that; Yun claims that's the problem. It's a bold assertion, I have to admit. Lax underwriting is almost entirely to blame for the biggest housing crash in U.S. history and for the ensuing crash in the greater economy and banking sector. Banks gave away mortgages like toasters with very few questions asked. Fannie, Freddie and FHA played in that to a degree as well, as they tried to keep up with private-sector competition. Everyone has already admitted it over and over.

Now, barely a few years later, and as reform of the mortgage market is still in the works, the realtors are saying the market has gone too far; the fact that the last two years of mortgages are performing better than ever means that lenders have become 'overly stringent.' Yun claims there are plenty of responsible potential borrowers out there, ready to eat up all that bloated inventory—but they can't get loans, so they're out.

He also points to a statistic in today's report that 29% of all buyers in October used all cash. That is historically very high. I would also point out that nearly 20% of buyers were investors, who are all working in cash today because if it's hard to get a mortgage on your first home, it's next to impossible to get loans for multiple investment properties. So here I sit, trying to determine if what Yun is saying is totally outrageous in this day and age of licking our wounds, or if he has a point. Are mortgage lenders throwing the baby out with the bathwater? Have they made underwriting suffocatingly stringent to the detriment of recovery? Or is this exactly what we need today to stabilize the housing market, minimize new loan delinquencies and bring investor confidence back to the mortgage market?

DATE: November 19, 2010

Home Owner Associaitions in Trouble

Forty-five percent of Home Owner Association managers say their associations face "serious" financial issues as a result of the housing and economic downturn, while 9 percent describe the impact as "severe."

More than 60 million Americans live in homeowners associations, condominium communities and residential cooperatives. More than half of community managers say at least 3 percent of the homes in their communities are vacant, with 25 percent reporting vacancy rates above 5 percent. When homes are vacant, whether due to foreclosure or the inability of non-resident owners to sell or rent their properties, associations are often unable to collect fees, or assessments, that are used to fund services such as utilities, trash pickup, snow removal, road and building maintenance and landscaping.

The survey shows that assessment delinquency rates in associations have more than doubled since 2005. Today, 65 percent of associations have delinquency rates exceeding 5 percent, with more than 30 percent reporting rates of more than 10 percent. For one in 10 associations--or close to 30,000 associations--the delinquency rate is more than 20 percent. A second survey shows that associations are not receiving timely assessment payments on 70 percent of the bank-owned properties in their communities.

"This can put an enormous strain on both associations and the homeowners who are paying their fair share," says Thomas M. Skiba, chief executive officer of Community Associations Institute (CAI).Associations are responding by borrowing, reducing the money that needs to be set aside for major maintenance and repairs, postponing capital improvement projects and levying special assessments.

Many associations, Skiba says, are also forced to curtail services, which can further depress property values.Skiba points out that the mortgage foreclosure crisis adds urgency to CAI's efforts to convince the Federal Housing Finance Agency (FHFA) to nix its recent proposal to ban community association transfer fees--dollars that have been used for years to help many associations fund reserve accounts and community improvement projects. CAI estimates that as many as 11 million homeowners would find it difficult to sell their homes if the government moves forward with plans to ban these fees.

"Association boards strive to maintain the nature and character of their communities and meet the established expectations of all homeowners, but that's a daunting task in this kind of environment," Skiba adds. "They are making difficult choices because they have few alternatives. But they are managing the equivalent of a business and businesses must pay their bills."

DATE: November 12, 2010

Robo-signed document not enough to reverse foreclosure

Miami,FL -- Homeowners hoping to win back their foreclosed properties because of the robo-signer ruckus suffered a setback with a Fourth District Court of Appeal ruling in West Palm Beach.

The decision, stemming from a 2008 Miami foreclosure, said a document signed by a robo-signer was not enough to reverse a foreclosure judgment and was not fraudulent in the specific case under review.

Robo-signing became an issue this fall when bank employees revealed they swore to having personal knowledge of foreclosure cases they signed off on, when they actually did not know the details of the case.

But attorney Tom Ice of Ice Legal in Royal Palm Beach said the ruling is not a "death knell" for foreclosure defense because the case had two basic flaws; the deposition used to prove the robo-signing was taken in a separate case, and the questionable document was not brought to the court's attention until after a judgment had been made.

Before Wednesday's ruling in the case -- Veldrin D. Freemon vs. Deutsche Bank -- the papers could have been deemed inadmissible. After the ruling the defense had to prove fraud.

"The homeowner was coming back from a default, and that means there are higher standards for everyone," said Ice, who was not involved in the case but read the decision.

"We attorneys will have to work harder to bring the fraud to the court."

The homeowner, according to the court ruling, did not answer the initial complaint. After judgment was entered in October 2008, but before the foreclosure sale, Freemon filed a motion for relief. The court canceled the foreclosure sale, but it was eventually sold to the bank at auction in September 2009.

Under deposition in another case, a Litton Loan Servicing employee who signed Freemon's papers said she did not have personal knowledge of amounts of indebtedness on foreclosure cases she signed off on, and the point was raised to the court in the Freemon case.

The Fourth DCA said that admission was not enough to reverse the Freemon foreclosure.

DATE: November 5, 2010

Wells Fargo to Refile 55k Cases

Wells Fargo said Wednesday that it had made paperwork mistakes and it plans to refile foreclosure documents in 55,000 cases by mid-November, but the company said the mistakes were technical and it doesn’t plan to halt foreclosures.

Unlike other major lenders, Wells Fargo had previously refused to suspend foreclosures. It continued to maintain that the errors were inconsequential. "We don't believe that there are instances in which the foreclosures would not have occurred otherwise," said Teri Schrettenbrunner, a Wells Fargo spokeswoman.

In depositions, two Wells Fargo employees have said they signed large numbers of documents daily without verifying their accuracy.

DATE: October 29, 2010

Who Wants to Be a Millionaire?

Dream of becoming a millionaire? Perhaps you are already well on your way. Whatever your current economic status, real estate has traditionally been one of the most sure-fire ways to reach the millionaire status...but it's not the only one. In fact, there are several ways to become a millionaire - each with its own pro's and con's. Today we are going to examine each in order to decide if real estate, or perhaps another method, is the best route to riches for your individual situation.

The Number ONE Way to Become a Millionaire

There is actually a faster and easier way to become a millionaire that does NOT include real estate investing but rather a heavy reliance upon national banking. Take for instance this little recognized fact; in recent years, the nation with the highest percentage of millionaires was actually Zimbabwe. Yes, you read that right...the poverty stricken nation became the home to the largest percentage of "millionaires" thanks to hyperinflation and a corresponding currency collapse. Unfortunately, many economic experts predict heavy inflation in the United States which could certainly lead to a large number of "millionaires" here at home; sadly, when everyone else is in the same boat and the currency is worthless, the status simply doesn't have the same meaning.

The Number Two Way to Become a Millionaire

Okay, so if you have dismissed the idea of becoming a "paper" millionaire due to hyper-inflation , the next most reliable method of becoming wealthy is via real estate investing. Not only has it held true throughout the history of this nation, but even other countries (including Zimbabwe) have a strong correlation between real wealth and the ownership of land rights. Of course, there are numerous ways to invest in real estate including flipping, rentals, leasing, owner financing, REIT's and many others. The common ingredient is the value of land and property including real assets.

The Number Three Way to Become a Millionaire

The third most effective way to become a millionaire is via ownership of a small business. While "virtual" properties and websites or software applications have become very popular in recent years, the tried and true method of building a business placed a heavy emphasis on productivity and real assets....including real estate, plant and other property. Farm land, manufacturing, service sector rentals, retail and other endeavors were all heavily reliant upon a good location and the better the location, the better the business. While the Internet has resulted in some changes in the importance of location among many business entities, it still remains a cornerstone of success. Even more telling, a quick glance at the books of many major corporations (and small business owners) throughout the United States shows an interesting point...much of the wealth or assets of the company is held in the form of real estate!

Bottom Line - Real estate is the road to riches during good times and bad.

DATE: October 15, 2010

Lawsuits Start To Fly In Foreclosure Cases

Although mortgage giants Jp Morgan, Ally Financial, and Bank of America have all agree to delay their foreclosure procedures due to the recent fiasco caused by false affidavits, these companies are still very likely to receive great challenges from state Attorney generals.

For the past week, many attorney generals have issued requests to these companies to halt foreclosure processes in different states where it is believed that such false affidavits have caused unnecessary and unjustified foreclosures.

According to state officials and legal experts, authorities in at least seven states are investigating whether lender's actions in the use of false documents and signatures to justify numerous foreclosures.

In Ohio, attorney General Richard Cordray said in an interview: "You're going to see a tremendous amount of activity with all the AGs in the U.S," "We have a high degree of skepticism that the corners that were cut are truly legal."

Just today, Cordray announced that he even filed a lawsuit against Ally in state court already, arguing that this company committed fraud and violated state consumer law by filing false affidavits that led to foreclosure actions.

Presenting this kind of allegations against mortgage companies could bring about many challenges for them. For example, according to state law enforcement officials, penalties in the state of Ohio include fines of up to $25,000 per violation (each false affidavit or document is considered a violation), and fines could be even larger in other states. In Iowa for example, fines rise to a maximum of $40,000 for each violation.

Furthermore, North Carolina attorney General Roy Cooper is giving Bank of America until Friday to halt foreclosure proceedings in the state. This would make the state part of the list of 23 states where Bank of America has suspended foreclosures already.

"If Bank of America has halted foreclosure proceedings in other states due to flaws in its affidavit process, we do not understand why Bank of America should routinely continue with foreclosures with the same flaws in North Carolina," Cooper's office wrote.

Cooper explains that in North Carolina, the foreclosure process also requires a quasi-judicial process in which clerks of court frequently review affidavits submitted by banks. Because of this, the attorney general wants the bank's foreclosures suspended until it shows its processes are legal.

"We don't want to stop foreclosures that are legitimate and need to happen," he said. "We want to make sure that homeowners are getting a fair shot at keeping their homes and the process has been done legally."

DATE: October 8, 2010

11.5 Million More Homes Could Be Lost To Foreclosure

According to Amherst Securities Group LP, one of the most respected and leading mortgage analyst, an alarming 11 million homes will be lost to default if things continue to move the way they are moving now.

In an interview with Javier Zelaya, CEO of corporate Realty Services, he pointed to the fact that something needs to be done in order to alleviate the problems caused by this mortgage crisis. He believes that this forecast by Amherst definitely serves as a cry for help issued towards the government and any other entity with the power to fix or attempt to improve the housing market situation.

The forecast, which was released in October 1 says that "the death spiral of lower home prices, more borrowers underwater, higher transition rates (to default), more distressed sales and lower home prices must be arrested."

The report also explains that although there have been recent talk about improvement in mortgage performance, "this 'improvement' simply reflects large scale modification activity having served to artificially lower the delinquency rate," the report said.

As far as the fate for defaulting properties, Javier Zelaya explains that the numbers provided by the report are not promising at all, especially for severe negative equity properties.

According to the report, nineteen percent of properties with a loan-to-value of 120% or greater are defaulting every year.

Amherst report also says that possible solutions to this imminent problem could include mandatory principal reductions, looser underwriting of new mortgage loans, leveraged capital pools for investors, and penalties for defaulting homeowners. According to Amherst, a family who defaults can live rent-free for 20 months on average. Therefore, Amherst proposes that missed mortgage payments, including property taxes and insurance, be counted as W2 income.

Javier Zelaya agrees with Amherst statement that there are also other factors that need to be taken into consideration when studying the market situation. There have been recent signs of distress in the market which include two recent record-low readings of existing home sales and the increased measures for underwriting standards at Fannie and Freddie. Back in 2006, bad-credit borrowers represented about 20% of borrowers, today only 2% of Freddie purchases are bad-credit borrowers.

To fix this problem, one of the more desperate measures suggested by the authors of Amherst report is to create a new mortgage for those homeowners who are now behind in their payments. "This (default) can be fixed by re-qualifying borrowers who are in a home they can’t afford into one they can afford," the report explains.

Although many attempts can and have been made to alleviate the mortgage crisis, "If government policy does not change, over 11.5 million borrowers will be in danger of losing their home," the report said.

DATE: October 1, 2010

ROBO Signers. . . Halt Foreclosures in 23 States

In the newest twist on the ever-growing foreclosure crisis, up to 23 states are either in the process of - or considering - suspending foreclosure evictions and sales due to "procedural errors" associated with Robo-signers.

Defining a Robo-Signer

Large mortgage lenders with tens of thousands of defaulted loans to deal with have been turning to "Robo-signers" to help with the backlog. Basically it works like this...every home that is in a state of foreclosure is supposed to have a professional review the documents for accuracy including whether or not the bank actually owned the property, foreclosure affidavits and other documents. Not only was each property portfolio to be reviewed and signed off on in the presence of a notary public, but without proper documentation, lenders do not have legal standing to foreclose.

A Big Problem

The problem is a big one. According to GMAC (a subsidiary of Ally Financial which is now 56% owned by the U.S. Treasury), just one of their Robo-signers has processed in excess of 10,000 foreclosures a month - or an estimated 120,000 per year. GMAC has currently stopped foreclosures in judicial states where procedural errors may prove to have significant repercussions. Attorneys representing homeowners and former homeowners are already contemplating mass action litigation due to the potential widespread abuse of the system which may have led to thousands or even tens of thousands being evicted and foreclosed upon erroneously. GMAC is not the only lender to engage in Robo-Signers; JPMorgan Chase is also under scrutiny as a former Robo-Signer reports having signed off on up to 18,000 foreclosures in one month. According to recent testimony from ex-employees, it wasn't unusual to sign-off on up 750 foreclosure related documents each week. With a standard work week that would represent roughly 30 seconds per document with some of the most notorious robo signers putting in far less time per document. Concerns over the quality of review and evaluation are expected to further contribute to the questionable practices and documentation errors plaguing the industry. What's the likely outcome for real estate investors? Long, slow processing times.

Unanticipated Fall-Out

Just when you thought it couldn't get any worse comes the news that robo signers may have inadvertently cost many homebuyers to lose their tax credits just days before the deadline due to the suspension in foreclosure sales. Ally Financial (aka GMAC) has eventually stopped foreclosures in roughly half the states due to robo-signing irregularities. Meanwhile, the extension for tax credits expired as of Sept 30th, costing buyers between $6,500 and $8,000 in tax credits.

On the Horizon

As news of the robo-signers continues to escalate, politicians and legal professionals alike are calling for further investigations. California Attorney General Edmund Brown is demanding that JPMorgan prove they are able to comply with state law or cease foreclosures. Senator Al Franken is asking regulators to investigate Ally/GMAC foreclosures both present and past. Massachusetts Attorney General Coakley has called on BoA and other lenders to halt all foreclosures until investigations are performed. Rep Alan Grayson seems to be using it as part of his platform rally and the banks...well, the banks just keep telling everyone it will be okay since it is unlikely to have significant impact on business. Hmmm.....where have we heard that before?

Potential Fall-Out

The ramifications of this ongoing turn is expected to have profound impact.

Investors - Expect a dramatic slowing of properties as legal eagles and politicians alike closely scrutinize records of all current transactions.

Lenders - potential for litigation increases but perhaps of even more concern is the threat of having to reveal all pending and/or "off the books" properties in the shadow inventory. Keep a close eye on the financials of these banks as the story unfolds.

Title Insurance Woes - Old Republic, a national insurance underwriter, has already directed agents to stop writing policies on GMAC foreclosed properties...a position which will immediately halt the sales of impacted properties. Other title insurance providers are expected to follow. A precursory examination of Florida titles has already indicated up to 75% contain material irregularities, prompting officials to proclaim the problem will have far reaching implications for at least the next decade.

DATE: September 24, 2010

Bank Repos Set New Record

"The nation's banks repossessed a record number of homes in August, according to industry sources. RealtyTrac will release its monthly numbers on Thursday, but sources there confirm the number of repossessions will come in just shy of 100,000 for the month. That is the highest since the site began tracking in 2005. July's repossession number was the second highest on record. The last highest was 93,777 in May of 2010. Notices of Default, which are the first step in the foreclosure process, are up slightly but mostly thanks to a jump in California, where the numbers had been artificially low of late, as banks tried to modify borrowers. "With respect to the NOD increase, I think it is the modification redefault wave beginning to build and new modifications slowing to a trickle, indicating banks have lost their primary borrower re-leveraging tool," says mortgage industry consultant Mark Hanson.

Yesterday J.P. Morgan Chase cited the "shadow inventory" of foreclosed properties as one of their primary reasons for pushing back their expectations for a housing recovery as far as 2014. No question, a growing supply of repossessed properties will put further downward pressure on home prices, especially given the current 12.5 month supply of existing homes already for sale. The question now is: Where does the government go from here? Some argue that housing needs to correct on its own, without artificial stimulus, as painful as it will be, in order to recover fully. What the Obama Administration has to decide is, will that correction, involving millions of foreclosures, take too large a toll on the greater economy?"

DATE: September 17, 2010

Wall Street Journal - 10 reasons to own a house

Wall Street Journal - 10 reasons to own a house

1. You can get a good deal. Especially if you play hardball. This is a buyer's market. Most of the other buyers have now vanished, as the tax credits on purchases have just expired.

2. Mortgages are cheap. You can get a 30-year loan for around 4.3%. What's not to like? These are the lowest rates on record.

3. You'll save on taxes. You can deduct the mortgage interest from your income taxes. You can deduct your real estate taxes. And you'll get a tax break on capital gains—if any—when you sell.

4. It'll be yours. You can have the kitchen and bathrooms you want. You can move the walls, build an extension—zoning permitted—or paint everything bright orange.

5. You'll get a better home. In many parts of the country it can be really hard to find a good rental. All the best places are sold as condos.

6. It offers some inflation protection. No, it's not perfect. But studies by Professor Karl "Chip" Case (of Case-Shiller), and others, suggest that over the long-term housing has tended to beat inflation by a couple of percentage points a year.

7. It's risk capital. No, your home isn't the stock market and you shouldn't view it as the way to get rich. But if the economy does surprise us all and start booming, sooner or later real estate prices will head up again, too.

8. It's forced savings. If you can rent an apartment for $2,000 month instead of buying one for $2,400 a month, renting may make sense. But will you save that $400 for your future? A lot of people won't. Most, I dare say.

9. There is a lot to choose from. There is a glut of homes in most of the country. The National Association of Realtors puts the current inventory at around 4 million homes.

10. Sooner or later, the market will clear. Demand and supply will meet. The population is forecast to grow by more than 100 million people over the next 40 years. That means maybe 40 million new households looking for homes.

DATE: September 10, 2010

Rembering 911

Remembering 911, 4th grade student Hannah Schoechert wrote the following poem.

We're Still Standing

By Hannah Schoechert

Those twin towers

Standing tall with pride,

Fell with grieving hearts.

Stunned, America cried.

But we're still standing.

Bin Laden tried

To crush our land,

But we stood our ground

With our flag in hand

And we're still standing.

Red for the valor

And the blood that fell.

White for the purity

Our heroes tell.

Blue for the justice

That will be done,

Proving once more

These colors don't run

And we're still standing.

DATE: September 3, 2010

Real Estate Outlook: Mixed Figures

With sharp drops in sales of existing and new homes plastered over the front pages and leading the nightly newscasts, it's no wonder the real estate doomsayers on Wall Street have been working overtime. And there's no minimizing the bad numbers we've been seeing: A surprising 27 percent decline in resales from June to July, and a 12 percent drop in sales of newly-built houses during the same period.

Yes, most economists predicted that the months following the tax credits' expiration would be negative, so we were forewarned. But let's not get caught in a Chicken Little economic trap here. Hidden among the recent negative numbers have been some positives that aren't getting much attention.

Start with home values. If families are going to buy houses, they've got to have confidence that the property will at least maintain market value and ideally gain a little over time. Well, every major index put out recently by government agencies and private researchers has found home prices stable or appreciating in most areas of the country.

The Federal Housing Finance Agency's index, released last week, found home values up by about one percent during the second quarter of this year over the first quarter. The National Association of Realtors' sales report for July found median prices up by seven tenths of one percent on average from the prior month - not a big deal for sure, but on the plus side, not negative.

Affordability is another key area where things have been slowly improving with little attention. The Wells Fargo-National Association of Home Builders housing opportunity index -- which looks at home prices, mortgage rates and what median-income families can afford to buy -- is at a near record high point.

Thanks to 30-year mortgage rates in the mid-four percent range, 72 .3 percent of median-income American families can now afford to buy the median-priced house. Historically that number has stayed in the low 60 percent range, and sometimes slipped below 50 percent.

That's great, you might say, but those families have not been buying lately even though they can afford to. Why? Every consumer poll has the same conclusion: People are worried about unemployment -- potentially their own. But now there might just be some modest good news just around the corner on jobs. Last week's new filings for unemployment benefits dropped by 6 percent - far beyond what most economists predicted and the first decline in weeks.

Bottom line: Don't be rattled by the rough patch of bad housing news we've been seeing. The fundamentals are in place for improvement once the economy begins generating new jobs again.

DATE: August 27, 2010

July Existing-Home Sales Fall, But Prices Rise

Existing-home sales were sharply lower in July following expiration of the home buyer tax credit but home prices continued to gain, according to the National Association of REALTORS.

Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums, and co-ops, dropped 27.2 percent to a seasonally adjusted annual rate of 3.83 million units in July from a downwardly revised 5.26 million in June, and are 25.5 percent below the 5.14 million-unit level in July 2009. Sales are at the lowest level since the total existing-home sales series launched in 1999, and single family sales – accounting for the bulk of transactions – are at the lowest level since May of 1995.

Lawrence Yun, NAR chief economist, said a soft sales pace likely will continue for a few additional months. Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired. Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September, he said. However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs.

Even with sales pausing for a few months, annual sales are expected to reach 5 million in 2010 because of healthy activity in the first half of the year. To place in perspective, annual sales averaged 4.9 million in the past 20 years, and 4.4 million over the past 30 years, Yun added.

Mortgage Rates Dip
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.56 percent in July from 4.74 percent in June; the rate was 5.22 percent in July 2009. Last week, Freddie Mac reported the 30-year fixed was down to 4.42 percent.

The national median existing-home price for all housing types was $182,600 in July, up 0.7 percent from a year ago. Distressed home sales are unchanged from June, accounting for 32 percent of transactions in July; they were 31 percent in July 2009.

Thanks to the home buyer tax credit, home values have been stable for the past 18 months despite heavy job losses, Yun said. Over the short term, high supply in relation to demand clearly favors buyers. However, given that home values are back in line relative to income, and from very low new-home construction, there is not likely to be any measurable change in home prices going forward.

A parallel NAR practitioner survey shows first-time buyers purchased 38 percent of homes in July, down from 43 percent in June. Investors accounted for 19 percent of sales in July, up from 13 percent in June; the balance were to repeat buyers. All-cash sales rose to 30 percent in July from 24 percent in June.

Breakdown of the Numbers

DATE: August 24, 2010

How to Price a Rental Right

How much to charge for a rental property?

The Wall Street Journal’s real estate columnist June Fletcher suggests 1.1 percent of the home’s value up to about $100,000 or about $1,100 a month. After that demand and what the market will bear will affect values.

She points to rental sites as a good clue for someone setting prices, particularly VRBO.com, Flipkey.com and Craigslist. She also recommends Rentometer.com, which compares proposed rent with comparable rentals nearby.

For help calculating return on investment, try Rentalsonline.com.

DATE: August 20, 2010

Mortgage Rate Falls Under 4.5 %

Freddie Mac reports that long-term mortgage rates moved south again this week.

Interest on 30-year fixed loans hit a new low of 4.49 percent, compared to 4.54 percent last week and 5.22 percent a year ago; and the 15-year mortgage landed at 3.95 percent, down from 4 percent last week and 4.63 percent a year ago.

Five-year adjustable-rate mortgages reached a new low of 3.63 percent, down from 3.76 percent last week and 4.73 percent a year ago; while one-year ARMs fell to 3.55 percent from 3.64 percent last week and 4.78 percent a year ago.

DATE: August 13, 2010

Five Surprising Reasons to Buy a Home Now

Here are five good reasons why now is a great time to buy a house:

Low mortgage rates serve as an equity shock absorber. When buyers borrow at today's record-low rates, they start building equity as soon as they close. That means they can absorb a few ups and downs as the still-recovering housing market gains traction.

Houses are in move-in condition. Home owners have continued to spend on maintenance and repair, according to the Harvard Joint Center on Housing. As these houses enter the market, they are in marked contrast to tattered foreclosures.

Terrific houses are coming on the market. Foreclosures are finally starting to clear the system, and they are being replaced by some very attractive properties.

Appraisal regulations are finally aligned with market realities. Fannie Mae has adjusted its appraisal guidelines, giving appraisers more flexibility to set values that reflect the current market.

Plenty of programs. Many programs that encourage middle-class families to buy homes continue to exist, despite market downturns. Buyers who qualify can get a big boost by combining one of these programs with today's low mortgage rates.

DATE: August 6, 2010

Fannie Mae: No More Overly Easy Loans

Fannie Mae CEO Michael Williams said Wednesday that Fannie’s current book of business is its strongest in 10 years.

In a speech to the group Women in Housing and Finance, Williams said Fannie is emphasizing long-term, fixed-rate loans based on more accurate appraisals to borrowers with higher credit ratings who can thoroughly document their income.

Williams called the tougher standards the new realism in the housing market that will make owning a home more challenging.

Step-by-step, we are putting in place a new foundation for our industry, he said. It's a foundation based on the right lending standards and on a broad re-examination of what constitutes sensible risk.

DATE: July 29, 2010

Homeownership Falls to Lowest Level Since 1999

The homeownership rate fell to 66.9 percent in the second quarter, down from 67.1 percent in the first quarter, according to the U.S. Census Bureau. This was the lowest level since 1999.

The homeownership rate reached a record high of 69.2 percent in the second and fourth quarters of 2004.

Rising foreclosures are driving the decline. A record 4.6 percent of U.S. mortgages were in foreclosure in the first three months of 2010, the Mortgage Bankers Association reported in May.

DATE: July 16, 2010

Sales Slow But Remain Above Last Year

With the scheduled closing deadline for the home buyer tax credits, existing-home sales slowed in June but remained at relatively elevated levels, according to the National Association of REALTORS.

Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, fell 5.1 percent to a seasonally adjusted annual rate of 5.37 million units in June from 5.66 million in May, but are 9.8 percent higher than the 4.89 million-unit pace in June 2009.

Lawrence Yun, NAR chief economist, said the market shows uncharacteristic yet understandable swings as buyers responded to the tax credits. June home sales still reflect a tax credit impact with some sales not closed due to delays, which will show up in the next two months, he said. Broadly speaking, sales closed after the home buyer tax credit will be significantly lower compared to the credit-induced spring surge. Only when jobs are created at a sufficient pace will home sales return to sustainable healthy levels.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.74 percent in June from 4.89 percent in May; the rate was 5.42 percent in June 2009.

The national median existing-home price for all housing types was $183,700 in June, which is 1.0 percent higher than a year ago. Distressed homes were at 32 percent of sales last month, compared with 31 percent in May; it was also 31 percent in June 2009.

NAR President Vicki Cox Golder said softer home sales expected this summer don’t tell the whole story. Despite these market swings, total annual home sales are rising above 2009 and we’re looking for overall gains again this year as well as in 2011, she said. Conditions have become more balanced in much of the country, which is good for both buyers and sellers. However, consumers find it even more challenging to navigate the transaction process, especially for distressed properties, which only underscores the value REALTORS bring to buyers and sellers in this market.

A parallel NAR practitioner survey shows first-time buyers purchased 43 percent of homes in June, down from 46 percent in May. Investors accounted for 13 percent of sales in June, little changed from 14 percent in May; the remaining purchases were by repeat buyers. All-cash sales were at 24 percent in June compared with 25 percent in May.

Total housing inventory at the end of June rose 2.5 percent to 3.99 million existing homes available for sale, which represents an 8.9-month supply at the current sales pace, up from an 8.3-month supply in May.

DATE: July 1, 2010

Tax Credit and Flood Insurance Extended

The National Association of Realtors commended Congress for timely passage of two bills to extend the home buyer tax credit closing deadline and reauthorize the National Flood Insurance Program. Both bills, strongly supported by NAR, had cleared the House earlier and were passed by the Senate as well. They now head to the president for his signature.

The tax credit closing deadline and the NFIP reauthorization were extended to September 30. NAR worked closely with congressional leaders on both sides of the aisle to enact these important pieces of legislation. Extending the tax credit closing and flood insurance deadlines will help provide additional stability to real estate markets across the nation, NAR said.

What a great way to begin celebrating our nation's most patriotic holiday by opening the door to the American dream of homeownership to thousands of home buyers who would have been shut out of the homes of their dreams through no fault of their own, said NAR President Vicki Cox Golder, owner of Vicki L. Cox Real Estate in Tucson, Ariz.

We know that up to 180,000 home buyers eligible for the tax credit are rejoicing this morning. And we all thank both houses of Congress for their work to ensure passage of both bills, Golder said. She singled out Senate Majority Leader Harry Reid (D-Nev.), Senate Minority Leader Mitch McConnell (R-Ky.), Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.), Senator Johnny Isakson (R-Ga.), House Majority Leader Steny Hoyer (D-Md.), Congresswoman Shelley Berkley (D-Nev.) and Congressman Joe Courtney (D-Conn.) for their efforts to extend the tax credit closing deadline.

The passage of H.R. 5623, the Home Buyer Assistance and Improvement Act, applies the home buyer tax credit closing deadline extension only to home buyers who have ratified contracts in place as of April 30, 2010, but could not close before June 30. The legislation is designed to create a seamless extension of the new closing deadline for eligible transactions to September 30. There will be no gap between June 30 and the date the president signs the bill into law.

Senate passage of the National Flood Insurance Program Extension Act of 2010 (H.R. 5569), reauthorizes extension the NFIP until September 30, allowing currently stalled transactions to move forward. The bill is retroactive and covers the lapsed period from June 1, 2010, to the date of enactment of the extension. Any new policy applications or renewals that were signed and submitted during the lapsed period will be effective from the date of application. In the case of waiting periods, the waiting period will start from the date of application.

We know that thousands of property owners seeking flood insurance policies will now be able to close transactions. NAR appreciates the extraordinary efforts in both houses of Congress to end the lapse in flood insurance, Golder said. She singled out Senate Majority Leader Reid, Senate Minority Leader McConnell, Senate Banking Committee Chairman Dodd, Senator David Vitter (R-La.), House Financial Services Committee Chairman Barney Frank (D-Mass.) and Congresswoman Maxine Waters (D-Calif.) for their efforts on NFIP reauthorization.

DATE: June 25, 2010

Rules Change for Getting Home Loans

J.P. Morgan Chase is planning to hire 1,200 loan officers, according to CNNMoney.com. Christine Holevas, a spokesperson for the bank said, We may not be inundated with applications tomorrow, but we are confident the need will be there. Despite any slight downturns, expected increases in the mortgage business are estimated to go from $725 billion in 2010 to $916 billion by 2013, according to the Mortgage Bankers Association.

If you're looking to get a home loan here are a few things you should consider. If you're self-employed the rules have changed considerably and not just for mortgages but also personal loans too. Some lending institutions are now requiring self-employed borrowers to provide documentation from assets to income and the documented income is then checked with IRS records. It used to be nobody checked your IRS records, says one source in the mortgage industry who agreed to be interviewed about the inside changes but could not be named.

Another big change has to do with what borrowers may have done in the past. When Fannie Mae and Freddie Mac discover loans where the borrowers misrepresented their income, the agencies are requiring the lenders to repurchase the loan from Fannie Mae and Freddie Mac. In turn the lenders then have the option to go after the borrowers in the form of foreclosure-even if the loan is not delinquent, says the source. There's no statute of limitation for fraud. The source says, normally, if the loan is current, they won't pursue the borrower. One major lending institution hired a company to go through all its stated-income loans looking to see if there was fraud. At first they started with all the delinquent loans and then they moved into performing loans. Then they started requiring lenders to buy back all these loans which put lenders out of business. That closed down some shops, the industry expert told me.

The problem that many self-employed borrowers have today is that they need to be able to show that their business is legitimate in order to get the loan. The typical documentation includes, but is not limited to, a Web site, CPA letter, 411 listing, and business license. And if you're not self-employed, the rules for loans are tight as well-bigger down payments and better documentation are a must. While some lenders will allow as little as 5 percent down, most are looking for more than that. Everything you submit to a lender is now being double-checked.

Doing your part to make sure that your finances are in order prior to applying for a loan ensures a smoother process. Here are just a few helpful tips:

1. Make no major purchases such as a car prior to applying for a loan
2. Have complete documentation of your income
3. Check and clean up your credit before attempting to borrow
4. Reduce the number of outstanding credit options: close unused credit cards
5. Remain current on all your loans
For more information on protecting yourself when applying for a loan talk to your REALTOR.

DATE: June 18, 2010

Real Estate Outlook: After the Credits

The Federal Reserve's latest region-by-region analysis of the national economy, the so-called Beige Book released last week, has an important message for anyone interested in real estate: It's a gradual recovery out there, but it's for real and it should prove durable.

The Fed's report, which is based on detailed assessments from 12 member banks spread around the country, noted that the home purchase tax credits have stimulated sales as they were intended to do.

But what happens when they're gone? Most economists in the Federal Reserve System think that low interest rates and fairly low prices will continue to make the (housing) market attractive for prospective buyers, says the report.

Some dramatic pickups in local sales this spring were highlighted by the Fed -- the state of Maine, for instance, saw a 63 percent year over year jump in the latest month, Rhode Island sales were up by 26 percent and New York 20 percent.

The Fed didn't mention them by name, but there are dozens of other metropolitan markets that have racked up hefty gains as well: hard-hit Miami saw house and condo sales jump 31 percent in April over the same month the year before.

Now, no one is predicting a break-out of big-time home price appreciation across the country anytime soon. But the IAS numbers suggest that home buyers and owners can at least be confident that we've reached or passed the bottom in most areas.

Nationwide, the index found prices in April were up by almost one percent.

Of course there are still some major roadblocks in the way of any full economic and housing market recovery. Tops on the list: the naggingly high and persistent unemployment numbers.

Although the latest federal jobs report looked good at first glance -- a net 431,000 gain and a decline in the unemployment rate to 9.7 percent from 9.9 -- most of those came from temporary Census-taker hirings.

So, as usual, the picture is complicated. But overall, we think the Federal Reserve probably has the outlook pegged about right.

DATE: June 11, 2010

Homebuyers could get more time for tax credit

First-time homebuyers looking to land an $8,000 federal income tax credit may have a little more time to close on their purchases if a Senate amendment unveiled Thursday makes it into law. As it stands now, homebuyers must have signed contracts by April 30 and must close the deal by June 30. They could be eligible for an $8,000 tax credit if they are first-time buyers or a $6,500 credit if they owned and lived in their previous home for five of the last eight years. The closing deadline, however, could be pushed back to Sept. 30 under an amendment offered by Senate Majority Leader Harry Reid, D-Nev., Sen. Johnny Isakson, R-Ga., and Sen. Chris Dodd, D-Conn. The senators said they want to make sure banks have time to process the transactions -- especially short-sales, which is a more involved process. It remains to be seen, however, whether the amendment will go anywhere. It is part of a controversial jobs and tax bill that may be radically changed before the Senate approves it.

Senator Reid's office said after the announcement their chief concern, especially in their home state of foreclosure-ridden Nevada, is timing to complete short sales. His office believes there will be a lot of homebuyers who will not be able to meet the June 30 deadline through no fault of their own.

There are a number of transactions that need to be closed which is overwhelming the system and many of the homes that are being bought are short sales. The financial institutions are taking a very long time to come to that decision and the home buyer is helpless to move the process along. This amendment gives those homebuyers an additional three months to close the transaction. Lawmakers are not scheduled to vote on the bill until next week at the earliest.

DATE: June 4, 2010

Loss Severity on Short Sales 13% Lower than REO

Over the past year, the mortgage risk analysis firm Clayton Holdings says it has witnessed an overall increase in short sale activity. Because of the growing emphasis on keeping borrowers out of foreclosure, servicers are becoming more inclined to employ alternative loss mitigation strategies. And Clayton says the added benefit to servicers is that loss severities for properties sold through short sale are 13 percent lower than loss severities for REO sales. The analysts at Clayton Holdings examined performance indicators across nine servicers' internal proprietary short sale programs, from October 2009 to March 2010. In addition, the data showed that short sales cost bondholders about half the amount in fees and advances as REO sales, saving roughly $16,000 per sale.

Clayton says servicers with the lowest loss severities for short sales employ a variety of strategies including outsourcing, utilizing dedicated short sale teams, working directly with local broker networks, and setting list prices based on historical and geographical REO net proceeds.

I have always felt short sales represented excellent bargains as most short sale homes still have their home owners living in the home. What this means is that the home is still being cared for, the utilities on and less vandalism. The best part is that you can normally buy these homes for the same or even less than what you could if they became a foreclosure which means most of the time they are way better deals because of their condition. The downside is that they may take 60 to 90 days longer to get closed so if you are in a hurry to buy and may not be able to wait then short sales may not be the best way to go.

DATE: May 28, 2010

House Passes FHA Reform Act

The House of Representatives passed House Resolution (HR) 5074, the FHA Reform Act,, which establishes a handful of new Federal Housing Administration (FHA) regulations and authorities. The bill will allow the agency to raise its annual premiums and help stabilize its finances. The FHA insures approved lenders against default-related losses on qualifying mortgages. In addition to strengthening the FHA's capital base by raising mortgage insurance premiums (PMI), the bill aims to crack down on FHA-approved lenders. For example, the bill grants FHA the authority to terminate a lender's approval on a national basis due to the performance of regional branches. Industry groups are already embracing the bill's aims to maintain the availability of financing in the mortgage market. Importantly, the bill also contains provisions to increase FHA's multifamily loan limits for elevator buildings and in extremely high cost areas.

One of MBA's top legislative priorities, increasing the multifamily limits in this way will help lenders finance the construction and refurbishment of much-needed affordable rental housing in many urban areas of this country, said Mortgage Bankers Association (MBA) chairman Robert Story Jr, in an e-mail.

DATE: May 21, 2010

How Home Inspections Can Help You Buy a Foreclosure

In today's tired housing market, a home inspection can wake up buyers to what as is really is and give them a negotiating edge that could lead to cash or repair concessions.

For sellers, a home inspection serves as an anti-haggling tool and keeps the dickering down to a roar.

An inspection is also for new homes, given new home defects aren't just incidental.

It's also a good tool to use to assess a home's integrity after a natural disaster, including flooding, an earthquake, a wind or rain storm.

Finally, a home inspection by home owners who aren't listing their home for sale can let them know every few years what maintenance or upgrades they need to perform.

It's always a good time for a home inspection.

For $350 to $500, a professional home inspector will review the major, visible and accessible components of the home and provide a detailed written report rating each element. Typically included are the heating system; central air conditioning system (climate permitting); interior plumbing and electrical systems; the roof, attic and visible insulation; walls, ceilings, floors, windows and doors; the foundation, basement and structural components.

The inspection isn't intrusive and it may not include swimming pools, septic tanks, and other systems that require an inspection by a specialist.

The objective report should include detailed information in a way that allows the customer to make informed decisions about the findings.

The inspection also can be a learning opportunity for the buyer or seller who should attend the inspection. The inspection is an opportunity to see the inspector demonstrate systems and to get acquainted with necessary maintenance chores.

The inspection also sees through the veil of misleading staging and other cover-ups and it can help buyers uncover building permit and code violations.

Sellers can likewise use the inspection to determine what they need to do to put the home in competitive shape or price it fairly to sell as-is.

While a home inspection, purchased by the buyer or seller or both, is more common than it's ever been, too many home buyers skip the process.

That's especially true for new homes, but they also need a once over. There could be subcontractor issues missed by the contractor as well items missed by the local jurisdiction's harried building inspector.

Studies have exposed newly built single family homes with construction problems related to the building envelope; framing and structural elements and in the plumbing and electrical systems.

As homes age, given the life expectancy of certain systems, the home inspection grows in importance.

Within 10 years, foundation settling could create drainage problems; by the age of 20, appliances are well outdated and the roof and wood components exposed the weather or moisture could need replacing; at 40 years the HVAC system will likely need replacement. Older historic or architecturally significant homes can develop structural problems and need restoration.

Safety hazards that crop up in older homes include old sliding glass windows that are not tempered safety glass, missing smoke alarms and missing pressure relief valves on water heaters.

Neglect plays a role too, as the lack of preventative maintenance takes it toll. Some homeowners take better care of their car than their biggest investment.

The American Society of Home Inspector's (ASHI) Virtual Home Inspection Tour online can give you a sense of what a professional inspector sees, what areas he or she can't see and won't inspect and what the inspector is likely to find and where.

DATE: May 14, 2010

Tips to Buying Foreclosure Properties

DATE: May 7, 2010

First-Time Home Buyer Tax Credit Extended For Armed Service Members

The expiration date of the $8,000 first-time home buyer may have already passed for most, but there are some potential homebuyers who can still take advantage of this great opportunity.

For those who are qualified service members, you have an extra year to cash in on the credit. Your new deadline is April 30, 2011. The government defines qualified service member as a member of the uniformed services of the U.S military, a member of the Foreign Service of the U.S., or an employee of the intelligence community.

The reasoning behind this extension is simple. National Association of Home Builders Chairman, Bob Jones, says, Congress recognized that many service members may have missed out on the home buyer tax credit due to being posted overseas. It is only fitting that they be given another year to take advantage of this opportunity in appreciation of the sacrifices they have made serving our country.

There has been another modification to the credit for members of the armed service. Currently, a buyer must repay the credit if they move out of their new home within three years. This particular contingency has been waived if the move is due to government ordered extended duty service.

Buyers must meet the other qualification for the credit, however, including the income limits. These limits are set at $125,000 for single taxpayers and $225,000 for married taxpayers filing joint returns.

You must be a first-time home buyer, which is defined as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.

If you don't fit under this definition, then be sure to check into the $6,500 repeat buyer tax credit.

To get the first-time home buyers credit, you will need to claim it on your federal income tax return. There is a specific form (IRS Form 5405) that helps you determine how much the credit will be. Be sure to talk to your tax professional about the credit to ensure it is submitted correctly.

For those interested in the credit, you can visit FederalHousingTaxCredit.com to find out more information.

DATE: April 30, 2010

Where is Real Estate Headed?

Many have watched the real estate market with bated breath, wondering what lies ahead. The Norris Group, a California-based company that produces an annual report on the state of real estate and predictions, provides some insight. The company recently released the Tip of the Iceberg report by Bruce Norris, an active investor, hard money lender, and real estate educator with 29 years of experience. Here's a look at what Norris is predicting in the coming eight years.

Real estate isn't even the first domino. Everything that happens in real estate can happen because of other things, Norris said at a conference earlier this year. In this report, I'm looking at all those other things and finally seeing that they play a big part, if not the biggest part, in how things work out, said Norris.

The report shows the various government programs for delinquent and financially challenged homeowners and reveals a disturbing fact. All the delinquency trends for all the types of loans are up, said Norris. It doesn't matter if it's prime or subprime. The national average is 13.2 percent for total non-current (both delinquencies and foreclosures). California ranks at 15 percent, Illinois at 14 percent, Pennsylvania at 10.7 percent, and Florida, the highest, at 23.5 percent. My friend Alex lives in Florida in Orlando and houses that were selling for $180,000 to $220,000, he's regularly buying for $20,000 to $22,000, said Norris.

The national average for the total non-current FHA loans (including delinquencies and foreclosures) is 17.4 percent. California is at 9.7 percent, Illinois at 21.3 percent, Pennsylvania at 15.3 percent, and Florida is at 23.8 percent.

Norris thinks this will provoke more usage of the 203(k) Mortgage by HUD (U.S. Department of Housing and Urban Development). The Streamline (K) Limited Repair Program permits homebuyers to finance an additional $35,000 into their mortgage to improve or upgrade their home before move-in. They'll actually loan you more than the house is worth, intentionally, said Norris. Right now it's only available for owner-occupants but I'm sure that's about to change, he said.

All of us who thought that we were going to see REOs (real estate owned by lending institutions) all over the place for the last few years are quite surprised, he said. It's because there was intervention. But how will that intervention and the aging population impact us? The report states that having a Federal debt that is trillions of dollars (and growing) and the size of the baby boomer generation will cause big changes that affect finances and real estate. You're going to expect higher taxes, he said. Norris predicts, maybe even up to 45 percent for top tax bracket in 2011 and possibly higher after that. If we're going to try to resolve some of our problems and pay for stuff that's gone on in the past, I think you're going to have to say 'We're going to have to pay some higher taxes.' Norris also predicts higher unemployment, aging consumers buying less and saving more which he says will mean more burden on the government due to fewer tax revenues and greater expense for government.

Perhaps the good news is the prediction for consistently low interest rates. This is one of the conclusions that I didn't think I was going to come up with. I really thought that we'd probably have some scary interest rates but I just don't think so. Without an overheated economy, I don't see the big inflation risk for the next period of time. I see the big picture that it could be very scary but for the length of time that I'm trying to cover in this report, I'm not as afraid of it as I thought I'd be, said Norris.

He thinks over the next eight years, interest rates will be under 8 percent and you may have times where they are as cheap as they are now. Norris anticipates milder price increases in real estate as well as a decline in ownership coupled with a constant inventory available. The report also points out something that buyers are already facing, regulation of finance markets might make it harder to get finance. He predicts the median price to increase for California to approximately $460,000 in the beginning of 2018 due to factors such as migration. And if the employment conditions improve in the state, Norris thinks migration numbers will do even better, helped in part due to retirees moving into the state. Norris expects more emphasis on housing for seniors, which seems to be a trend in many states.

I view the next eight years as a pivotal time for us, as a country, to make sure that we don't end with bigger problems than we've got, said Norris.

The good news is that Norris predicts less volatility in the real estate market and expects increases, albeit, not as drastic as in the past.

DATE: April 23, 2010

Home Sales Surge in March

Buyers responding to the home buyer tax credit and favorable affordability conditions boosted existing-home sales in March 2010, marking the beginning of an expected spring surge, according to the National Association of Realtors.

Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 6.8% to a seasonally adjusted annual rate of 5.35 million units in March from 5.01 million in February, and are 16.1% above the 4.61 million-unit level in March 2009.

Lawrence Yun, NAR chief economist, said it is encouraging to see a broad home sales recovery in nearly every part of the country, with two important underlying trends. Sales have been above year-ago levels for nine straight months, and inventory has trended down from year-ago levels for 20 months running, he said. The home buyer tax credit has been a resounding success as these underlying trends point to a broad stabilization in home prices. This is preserving perhaps $1 trillion in largely middle class housing wealth that may have been wiped out without the housing stimulus measure.

Foreclosures have been feeding into the inventory pipeline at a fairly steady pace and are being absorbed manageably, Yun said. In fact, foreclosures are selling quickly, especially in the lower price ranges that are attractive to first-time home buyers.

A parallel NAR practitioner survey shows first-time buyers purchased 44% of homes in March, up from 42% in February. Investors accounted for 19% of transactions in March, unchanged from February; the remaining sales were to repeat buyers. All-cash sales remain elevated at 27% in March, the same as in February.

The national median existing-home price for all housing types was $170,700 in March, up 0.4% from March 2009. Distressed homes, typically sold at a 15% discount, accounted for 35% of sales last month - unchanged from February.

With home values stabilizing, a revival in home buying confidence will likely help the housing market get back on its feet even as the tax credit impact disappears, Yun said.

With the fast approaching April 30 deadline to get a contract in place for the tax credit, Realtors are working harder than ever to negotiate transactions, arrange services and complete paperwork, Golder said. Because many repeat buyers need to sell their current home first, many will be purchasing later without the tax credit but now have the benefit of a more buoyant housing market.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage dipped to 4.97% in March from 4.99% in February; the rate was 5.00% in March 2009.

DATE: April 16, 2010

Foreclosure rates surge, biggest jump in 5 years

A record number of U.S. homes were lost to foreclosure in the first three months of this year, a sign banks are starting to wade through the backlog of troubled home loans at a faster pace, according to a new report.

RealtyTrac Inc. said Thursday that the number of U.S. homes taken over by banks jumped 35 percent in the first quarter from a year ago. In addition, households facing foreclosure grew 16 percent in the same period and 7 percent from the last three months of 2009.

More homes were taken over by banks and scheduled for a foreclosure sale than in any quarter going back to at least January 2005, when RealtyTrac began reporting the data, the firm said.

"We're right now on pace to see more than 1 million bank repossessions this year," said Rick Sharga, a RealtyTrac senior vice president.

Foreclosures began to ease last year as banks came under pressure from the Obama administration to modify home loans for troubled borrowers. In addition, some states enacted foreclosure moratoriums in hopes of giving homeowners behind in payments time to catch up. And in many cases, banks have had trouble coping with how to handle the glut of problem loans.

These factors have helped slow the pace of foreclosures, but now that trend appears to be reversing.

"We're finally seeing the banks start to process the inventory that has been in foreclosure, but delayed in processing," Sharga said. "We expect the pace to accelerate as the year goes on."

In all, more than 900,000 households, or one in every 138 homes, received a foreclosure-related notice, RealtyTrac said. The firm based in Irvine, Calif., tracks notices for defaults, scheduled home auctions and home repossessions.

Homeowners continue to fall behind on payments because they've lost their job or seen their mortgage payment rise due to an interest-rate reset. Many are unable to refinance because they now owe more on their loan than their home is worth.

The Obama administration's $75 billion foreclosure prevention program has only been able to help a small fraction of troubled homeowners.

About 231,000 homeowners have completed loan modifications as part of the Obama administration's flagship foreclosure prevention program through March. That's about 21 percent of the 1.2 million borrowers who began the program over the past year.

But another 158,000 homeowners who signed up have dropped out, either because they didn't make payments or failed to return the necessary documents. That's up from about 90,000 just a month earlier.

Last month, the administration expanded the program, launching a plan to reduce the amount some troubled borrowers owe on their home loans and give jobless homeowners a temporary break. But the details of those programs are expected to take months to work out.

The states with the highest foreclosure rates in the first quarter were Nevada, Arizona, Florida and California, with Nevada leading the pack, RealtyTrac said.

Rising home prices and speculation fueled a wave of home construction there during the housing boom. But now the state, particularly around the Las Vegas metropolitan area, is saddled with a glut of unsold homes.

Still, the number of homes in Nevada that received a foreclosure filing dropped 16 percent from the first quarter last year.

All told, one in every 33 homes in Nevada was facing foreclosure, more than four times the national average, RealtyTrac said.

Foreclosure filings rose on an annual and quarterly basis in Arizona, however.

One in every 49 homes there received a foreclosure-related notice during the quarter.

Florida, meanwhile, posted the third-highest foreclosure rate with one out of every 57 properties receiving a foreclosure filing.

California accounted for the biggest slice overall of homes facing foreclosure, roughly 23 percent of the nation's total. One in every 62 properties received a foreclosure filing in the first quarter.

DATE: April 9, 2010

Rates Head Up

Bond Yields Push 30-Year Mortgage Rates to Highest Level in Eight Months. Freddie Mac released the results of its Primary Mortgage Market Survey in which the 30-year fixed-rate mortgage averaged 5.21 percent with an average 0.6 point for the week ending April 8, 2010, up from last week when it averaged 5.08 percent. Last year at this time, the 30-year FRM averaged 4.87 percent. This is the highest the 30-year FRM has been since the week ending August 13, 2009 when it averaged 5.29 percent.

Once again, mortgage rates followed bond yields higher amid a positive March employment report, said Frank Nothaft, Freddie Mac vice president and chief economist. The economy added 162,000 jobs, which was the largest monthly gain over the past three years. In addition, revisions raised the January and February figures by a combined 61,000 workers. Excluding government employees, private payrolls rose for the third consecutive month and were the strongest increase since May 2007.

Following its extension in early November of last year, the homebuyer tax credit is showing some impact on housing market activity, mostly through the use of government-insured mortgages, which tend to be a favorite among first-time homebuyers. Compared to the week ending December 4, 2009, which was the first week after the original expiration date, mortgage applications for home purchases are up 17 percent for the first week in April of this year for government-insured loans. Pending existing home sales jumped 8.2 percent in February, well above the market consensus and represented the second largest increase since records began in 2001, the National Association of Realtors reported. Homebuyers must enter a housing contract by April 30th and close by June 30th in order to receive the tax credit.

DATE: April 2, 2010

Top 10 Home Buying Mistakes

Buying a home is perhaps the most arduous, expensive and, ultimately, valuable acquisition you'll ever complete

Just one mistake could mean disaster -- perhaps the worst mistake you'll ever make.

In order to avoid titanic trip ups during such a trying transaction, buyers should get to know the most common home buying blunders.

To know them is to avoid them.

Now that you have a better idea of the items you need to coinsider when buying a new home, go out and make the best deal possible. For more information give me a call and I'll be happy to help you out.

DATE: March 26, 2010

Credit Consequences of Home Loss

Financially distressed homeowners not only face painful personal circumstances, but also they must consider choices that have both tax and credit implications. While a variety of professionals may be able to explain taxation issues in these circumstances, not as much seems to be known about credit consequences -- other than that they are bad.

Recently, the legal department of the California Association of Realtors® (CAR) issued a memorandum titled "Credit After Foreclosure, Bankruptcy, or Short Sale." It is an extremely useful document for those who have questions about how credit is affected by the various ways in which one might lose his or her home.

In large part the memo is based on the 2008 update of Fannie Mae guidelines (Fannie Mae Announcement 08-16), so it should be clear that the explanations are not completely general or unqualified. When, for example, it is said that a person is not eligible to obtain a home loan for a certain number of years, that means that Fannie Mae won’t buy a home loan made to that person during that time. Granted, most lenders want to be able to sell their loans to Fannie Mae or Freddie Mac (whose rules tend to be similar), but there might be portfolio lenders or other institutions that would make such a loan.

That said, it is well worthwhile to review the contents of the memo.

Five years after a foreclosure, a consumer may be eligible to obtain a home loan. Of course, certain restrictions may apply. At least a ten percent down payment is required, and a minimum credit score of 680. Also, purchase of a second home or investment property is not permitted.

A consumer may be eligible three years after foreclosure if "extenuating circumstances" had led to the foreclosure. Extenuating circumstances are "nonrecurring events that are beyond the borrower’s control that result in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations."

Four years after giving a deed-in-lieu of foreclosure, a consumer may be eligible for a home loan. If there had been extenuating circumstances, that period is shortened to two years.

In the case of a short-sale, when the mortgage had been delinquent, a consumer may be eligible for a home loan two years after completion of the short sale. There are no exceptions due to extenuating circumstances.

If the consumer had executed a short sale, but had not been delinquent on his or her mortgage, then there is no two-year period applicable. To be eligible for a home loan, the borrower must not have had any mortgage delinquencies of sixty days or more during the past twelve months, and the borrower must not have "entered into any agreement with the short sale lender to repay any amounts associated with the short sale, including a deficiency judgment."

In the case of bankruptcies, other than Chapter 13, there is a four year period from the discharge or dismissal date of the bankruptcy before the consumer may be eligible to obtain a home loan. With a Chapter 13 bankruptcy, the period is two years.

It is frequently said that short sales have a less damaging effect on credit than do foreclosures. While this may be true with respect to the length of time before one can obtain a home loan again, it should also be noted that a short sale has no greater effect than a deed-in-lieu when there are extenuating circumstances. Moreover, it is certainly not true with respect to one’s FICO score. A deed-in-lieu, a foreclosure, or a short sale all have the same impact as far as FICO is concerned. Some people will not believe this. They should visit the FICO web site and look at the question regarding alternatives to foreclosure.

DATE: March 19, 2010

First-Timer's Guide To Mortgage Shopping

It's not everyday you go looking for a mortgage.

It's not a trip to the mall.

It's a methodical, step-by-step process requiring planning, time, effort and attention to details.

Here are some guidelines for beginners, especially first-time home buyers -- assuming you've already laid the groundwork by inspecting your credit report.

• Inspecting your credit report and getting it in the best shape possible is your first step to the best mortgage. In today's tight money world it behooves you to take the time necessary to carefully scrutinize your credit report and credit score to be prepared to explain to creditors any dings you can't fix.

• Shop around for a mortgage from a variety of sources to determine what's available. Shop mortgage brokers, mortgage lenders, banks and credit unions. Don't forget to examine your local and state mortgage programs as well as community service and housing agency mortgages and mortgage assistance programs.

• Obtain all loan cost information, not just the monthly mortgage payment and annual percentage rate (APR). Check the cost of points (in dollar amounts, not just number of points), broker fees, origination fees, underwriting fees, administrative costs, mortgage insurance, yield spread premiums, commissions, escrow and closing costs -- each and every cost associated with your mortgage. You need these numbers to make a fair comparison.

• Get an explanation for every fee you don't understand. Use the Federal Deposit Insurance Corporation's (FDIC) "Mortgage Shopping Worksheet" to help keep your costs in check.

• Check the loan terms for a variety of loans. Know what down payment you'll need, the term of the loan, whether the loan is a fixed rate mortgage (FRM) or an adjustable rate mortgage (ARM) and the specific terms of each. For ARMs, ask for the beginning rate, when and how often adjustments occur, how much adjustments could cost, and the ARM's ceiling rate.

• Be aggressive. Prepare to negotiate with the information you've gathered on the mortgage worksheet. The more information you have about each loan the more negotiating leverage you'll have. A pristine credit record can also give you an edge. Look particularly to quibble over points, yield spread premiums and other broker's fees or commissions. Don't be afraid to ask the lender or broker to waive or reduce one or more of its fees or to agree to a lower rate or fewer points. Make sure the lender or broker isn't just lowering one fee to raise another or lowering the rate to raise points. There's also no harm in asking lenders or brokers if they can give better terms than the original ones they quoted to you, especially if you've found better terms elsewhere.

• Once you are satisfied with the terms you have negotiated, consider a written lock-in from the lender or broker. The lock-in should include the rate that you have agreed upon, the period the lock-in lasts, the number of points to be paid and a lock on as many other costs and terms as possible.

• Also seek a written loan commitment that guarantees you the terms and costs you've locked. A loan commitment puts you ahead of the pack in the eyes of the home seller who wants to sell quickly.

DATE: March 12, 2010

Tighter Requirements for FHA Loans Loom

It's about to get tougher to qualify for a Federal Housing Administration (FHA) mortgage, often considered the replacement loan for the collapsed subprime market. Moving to head off the financial impact of defaulting borrowers, the FHA is adding more-stringent lending requirements and higher fees borrowers must pay to get the federally-insured loans. The announcement comes on the heels of an investigation into 15 FHA lenders with high incidences of FHA mortgage insurance claims. The same companies have reached out for government assistance -- money from taxpayers.

Mortgage insurance is paid by borrowers, typically when the down payment is lower than 20 percent. Borrowers pay, but the coverage protects lenders with cash benefits should the borrower default. When lenders foreclose against homeowners with the coverage, it triggers mortgage insurance benefits for lenders to help pay off the mortgage. Rick Sharga Vice President of ReatyTrac says foreclosures were up 21 percent from a year ago and 120 percent from two years ago and it could get worse. The FHA is more exposed to defaults than ever. By some estimates, as much as 50 percent of all purchase loans in some areas are FHA insured. Before the housing collapse, FHA wrote only 3 percent of all home loans.

After notice and comment periods, but beginning this spring, the FHA will raise mortgage insurance fees that borrowers must pay, cap the amount of cash that sellers can contribute for closing costs and require higher down payments for the borrowers with poor credit scores.

The value of the FHA's reserves, $3.6 billion is down from 3 percent a year ago and an amount that's far below the amount required by Congress. Late last year FHA proposed stiffer rules for lenders to also reduce its risk -- that lenders to have a net worth of at least $1 million in the first year and $2.5 million within three years, up from the original requirement of $250,000. The federal agency also wants tighter approval requirements and greater liability for lenders and mortgage brokers who want to originate, underwrite or service FHA.

Even with the higher fees, tougher underwriting, and lender crackdown, it's not going to be easy rebuilding reserves in a hung over housing market. The FHA's move could further exacerbate conditions for the housing market, by removing some low-down payment loans that were allowing new buyers to buy and others to refinance their way out of foreclosure.

And the waves of foreclosures are far from over. Sharga said over-priced homes and poor lending practices generated the first wave of foreclosures which helped trigger a recession. The recession left the nation with a 10 percent unemployment rate, which generated the second wave of foreclosures. The third wave, expected later this year will be triggered by so called Option-ARMs, adjustable rate mortgages that allow the borrower to pay less than the interest.

For many Option-ARM borrowers, with no market appreciation and no principal reduction, they have an upside down mortgage -- a loan that's bigger than the value of their home. When the Option-ARM adjusts and resets with a much higher rate and monthly payment, borrowers, unable to pay even the interest payment, certainly won't be able to afford the bigger payment.

"These borrowers won't qualify for HAMP (Home Affordable Modification Program) modifications, so if we are going to see the problem solved in 2010 it's going to have to be some kind of loan program that's not in the market yet," said Sharga.

DATE: March 5, 2010

Get Yourself in The Best Possible Position to Buy

One of the first steps to take as a potential home buyer is to get pre-qualified for a loan. This step helps both you and your lender learn just how much home you can afford. And you should begin this process before you even start looking for a home.

According to the Federal Housing Administration (FHA), their pre-qualification essentials include:

Other lenders' ideas regarding pre-qualification are all similar to those outlined above. A mortgage lender will look at your credit report, earnings, debts, and savings in order to see how much home you really can afford.

Why is this important? In recent years there has been a “mortgage crisis,” where the industry was rampant with fraud and with loans that put homeowners into situations they could not afford. As payments rose, homeowners found themselves unable to meet their monthly obligations. According to Realtytrac.com and their U.S. Foreclosure Market Report, in January 2010, one in every 409 households in the country had received a foreclosure filing.

Since pre-qualification for a home loan typically costs you nothing, but gives you both a goal of what homes are in your affordability range, as well as how much money you should look to have saved for a downpayment, you can hardly wait to take this step.

What if the home you want is out of your reach? Experts recommend reducing your debt and saving up a larger amount for your down payment. Let's say your dream home is $225,000, but you only qualify for a $180,000 loan. If you have a downpayment of $45,000, then you are ready to make a move!

During the pre-qualification process, you will be expected to provide the following information:

The lender will be looking to see that your debt to income is below about 40 percent, and the lower the better. So, if you are looking to buy in the near future, be sure to talk to your lender soon!

DATE: February 26, 2010

New Home Sales Plunge in January

Sales of new U.S. homes plunged 11.2% in January 2010 to the lowest rate on record dating back to 1963, the Commerce Department recently reported.

The third-straight drop in sales on a month-to-month basis was unexpected. The housing market remains very, very distressed. There may have been some weather-related issues playing havoc with the sales data but clearly, these results are extremely unnerving. There is nothing positive to glean from this report.

U.S. stock markets fell after release of the report, which coincided with release of congressional testimony by Federal Reserve Chairman Ben Bernanke, who said the economy remains fragile and needs low interest rates for an extended period of time.

With mortgage rates still very low and prices down, most analysts had concluded that the recent decline in sales was due to the impending expiration of the first-time home buyers' credit in November.

As it happened, Congress extended the tax credit through June and expanded it to include repeat buyers. But the tax credit didn't help sales in January. Sales of new homes are recorded once a sales contract is signed, not at closing. Some homes are sold before ground is broken on construction.

Home builders had been slashing their inventory of unsold homes for more than a year to a 38-year low before January's 1,000 increase. The number of homes for sale that are under construction fell to a record low of 100,000.

Builders have cut back on production of new homes, but they still face headwinds from unsold existing-homes as foreclosures continue to mount up. If a home isn't sold before it's finished, it's taking a record 14.2 months to sell it after completion-a reflection of the mismatch between more expensively priced homes in the inventory and lower-priced homes that have been selling.

DATE: February 19, 2010

New HUD Regulations could hurt Investors

Seller financing to buyers is an essential tool for many real estate investors, but proposed regulations from HUD could create big problems. That's the view of industry groups ranging from the National Association of Realtors to the National Real Estate Investors Association. The HUD proposal, which is open for public comment through March 5th, sets up standards for state laws regulating mortgage originators under the so-called "SAFE" Act, the Secure and Fair Enforcement Mortgage Licensing Act. Congress passed the law in 2008 and gave HUD authority to step in with its own rules when state laws are seen as too weak to properly regulate mortgage brokers and others.

In HUD's interpretation of who is, and who is not, a "mortgage originator," it exempts individuals who offer seller financing to homebuyers. However, the proposed regulation appears to limit the exemption to just one group -- people selling their own primary residences. That cuts out investors who offer seller financing on rental houses or second homes and condos. Under HUD's proposal, they'd have to go through the same registration, licensing, fingerprinting and other licensing hoops required of fulltime mortgage brokers. Such a rule not only would be overkill, say investor groups, but would be counterproductive in terms of stimulating real estate and the economy.

In a four page letter sent to HUD Secretary Shaun Donovan last week, the National Association of Realtors argued that seller financing of investor units "can be crucial in certain markets, especially in times of economic stress," when unsold inventories threaten to depress prices further. Most investors who provide notes to buyers are small scale -- not the sort of fulltime, commercial loan originators targeted by Congress for licensing and regulation.

Also last week, the National Real Estate Investors Association sent out an alert to its members urging them to write to HUD seeking a modification of its proposal. HUD's plan would "eliminate all seller-financiing" by investors, the group warned, no matter how few loans an investor made during a single year.

In its letter to Donovan, the National Association of Realtors mentioned what may prove to be an acceptable threshold: Investors who only "occasionally ... provide financing for property … should be exempt" from state registration. For example, sellers who provide financing for "five or ten" properties a year" should not be treated as mortgage originators under the SAFE Act rules, said Vicki Cox Golder, president of the National Association of Realtors.

HUD is expected to come out with final rules later this year. But so far it's giving no hints on how it plans to handle the investor seller financing issue.

DATE: February 12, 2010

Foreclosure Filings Surpass 300,000 For 11 Month in a Row

In January, foreclosure filings in the U.S have increased 15 percent and surpassed 300,000 for the 11th month straight.

RealtyTrac predicts REO's will increase to 3 million during 2010. According to the Treasury Department, 66,000 delinquent loans have been permanently modified under the President Barack Obama's 'Home Affordable Program.' More than 787,000 homeowners are in trial with the 'Home Affordable Program.'

'It's almost inevitable that modifications will fail,' Michelle Meyer, New York-based U.S. economist for Barclays Capital Inc., said in an interview. 'Over the next several months, we should see REOs increase at an accelerated pace.'

'If history repeats itself we will see a surge in the numbers over the next few months as lenders foreclose on delinquent loans where neither the existing loan modification programs or the new short sale and deed-in-lieu of foreclosure alternatives works,' James J. Saccacio, RealtyTrac chief executive officer, said in the statement.

Stan Humphries, chief economist at Zillow.com, reported unemployment and underwater mortgages will continue to add to the foreclosure total. According to Zillow.com more than 20 percent of U.S homeowners owe more on their properties than what the actual property is worth.

In January, the unemployment rate dropped to 9.7 percent, reported the Labor Department. Since the recession began in December of 2007 more than 8.4 million jobs have been lost. Since President Obama took office more than 4 million jobs have been cut.

According to RealtyTrac, January's total filings have dropped from July's peak.

For the 37th straight month Nevada has the highest foreclosure rate in all of U.S. In Nevada one in ever 95 household received a filing during January. With one in every 129 households receiving a filing in January, Arizona ranks the second highest foreclosure rate in the U.S. In Florida and California, one in 187 household receive a filing. Amongst the top ten of foreclosure rate are Georgia, Utah, Michigan, Oregon, Illinois, and Idaho.

DATE: February 5, 2010

HUD BUYER INCENTIVES DISCONTINUED

HUD recently announced as of February 12th they were going to end their incentive programs to help induce buyers to buy HUD owned foreclosure properties. The incentives consisted of allowing buyers who used FHA financing to buy a HUD owned foreclosure for $100 down and pay up to $2500 of the buyers closing cost.

For those who don't know, FHA and HUD are one in the same, they are government owned and operated offices that basically is spending our money as tax payers. The incentives were a good thing as they did entice buyers to buy up HUD owned foreclosure inventory. We have always known that HUD owned a lot more foreclosure properties than they had on the market.

For example, in Columbus, Ohio according the Franklin County auditor the 'Secretary of HUD' owns nearly 400 properties but until recently only had about 70 or 80 of those properties listed for sale. Notice I said until recently. . .this Friday morning HUD posted 128 properties on their web site for sale in Franklin County.

I suspect some federal employee has calculated that our government will save hundreds of million if not billions of dollars if they do away with the incentives. What they didn't calculate that there are 13,000 other properties currently on the market in Columbus and in all honesty are much easier to buy without all of the federal regulations, landmines and hoops.

The primary reason buyers were buying any of the HUD owned properties is because of the incentives. Do away with the incentives and buyers are bound to go somewhere else to buy and I expect for the HUD inventory levels to rise even higher as a result and as inventory rises prices will drop putting even more downward pressure on the markets average sales price which in the long run is good for buyers. . .but bad for our economy.

DATE: January 29, 2010

Potential Problems with new HUD 'Flip' rules

Foreclosure investors have begun taking a closer look at the Obama administration's recent loosening of rules on property 'flips'. . . And they're seeing some potential complications. The policy change allows investors to resell houses they've acquired and rehabbed in less than 90 days to buyers using low-downpayment FHA mortgage financing.

Most investors welcomed the loosening of the rules, but said there are snares for the unwary. For example, the program sets a 20 percent cap on the difference between an investor's acquisition cost of a foreclosure and the price paid by the new buyer.

Price gains in excess of 20 percent must be justified with extensive documentation of the improvements made and their impact on the property's valuation. 'Investors who can document how much legitimate value they added would still pass muster, but they're likely to face tough scrutiny from lenders. That's because most FHA lenders today are extremely nervous about getting sideways with FHA - which lately has been sanctioning lenders for rule violations and kicking some of them out of its programs altogether.

Bruce May, who runs Genequity Investment Group in Vista, California, says the 20 percent limit could be a tight squeeze for investors who make significant improvements to properties. 'I think 25 to 30 percent would have been better,' he said, but 20 percent works on properties 'where we know we can get in there, turn it around and get out' quickly at a moderate cost.

On the whole, though, May says, the FHA policy change 'is going to open up foreclosures to many more FHA buyers,' and should help put a lot of houses back into the marketplace faster than before.

DATE: January 22, 2010

Foreclosure Inventories Rise, Home Prices Fall

Foreclosure inventories are beginning to rise once again. Many of the Government backed agencies such as FHA, Fannie Mae and Freddie Mac had appeared to be holding back inventory to try and stabilize home prices. Foreclosures were coming on to the market at such a rapid pace that home prices were taking a nose dive so in order to try and stabilize the market these Government backed agencies withheld putting properties on to the market. For example in Columbus Ohio the Secretary of HUD has ownership of over 400 homes but only have about 70 of them on the market up until a couple of weeks ago. The same can be said of Fannie Mae and Freddie Mac.

At the beginning of the new year we noticed that inventory levels have been going up in the MLS which is not unusual but we are also noticing that HUD is also putting more properties on the market each week with as many as 120 properties. There could be a couple of reasons for this. First, recently HUD announce the temporary halt of their 90 day flip rule which prohibited sellers from acquiring a property and reselling it within 90 days to a who is using a FHA backed mortgage. Second, the market's natural tendency is to increase with home sells through the month of June and third, FHA has way to much inventory to keep off the market because as homes sit empty they start to deteriorate and are susceptible to vandalism.

So as we see more properties come on the market you should expect for home prices to drop some more which makes it a even better time to buy!

DATE: January 15, 2010

HUD TAKES ACTION TO SPEED RESALE OF FORECLOSED PROPERTIES

In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration commitment to addressing foreclosure. Recently, Secretary Donovan announced $2 billion in Neighborhood Stabilization Program grants to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes.

As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers, said Donovan. FHA has an unprecedented opportunity to fulfill its mission by helping many homebuyers find affordable housing while contributing to neighborhood stabilization.

With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties.

This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed, Donovan said.

In today's market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner.

DATE: January 8, 2010

Foreclosures jump 21% in 2009

The number of U.S. residential properties receiving at least one foreclosure filing jumped 21% in 2009 to a record 2.82 million, RealtyTrac recently reported.

The report also showed that 2.21% of all U.S. housing units (1 in 45) received at least one foreclosure filing during the year, up from 1.84% in 2008, 1.03% in 2007 and 0.58% in 2006.

Foreclosure filings peaked in July at 361,000, then declined for four months before rebounding in December. Short-term factors, including trial loan modifications, state legislation extending the foreclosure process and an overwhelming volume of inventory clogging the foreclosure pipeline contributed to the second-half declines.

In the long term, a massive supply of delinquent loans continues to loom over the housing market, and many of those delinquencies will end up in the foreclosure process in 2010 and beyond, as lenders gradually work their way through the backlog.

Just four states -- California, Florida, Arizona and Illinois -- accounted for more than half of the nation's 2009 total, with more than 1.4 million properties receiving a foreclosure filing.

A total of 632,573 California properties received a foreclosure filing in 2009, the nation's largest state foreclosure activity total, an increase of nearly 21% from 2008.

Vermont had by far the lowest foreclosure rate and the lowest absolute number of foreclosures, with only 143 filing reported, or 0.05% of its housing units. North Dakota was second best, with just 0.13% of its housing units receiving such a notice. West Virginia was the third best at 0.17%. South Dakota ranked fourth best, with 0.21%.

Another bright spot: Nine states -- Connecticut, Indiana, Massachusetts, Missouri, Nebraska, North Carolina, Ohio, Rhode Island and Tennessee -- and the District of Columbia managed to bring their foreclosure rates down from 2008.

DATE: December 26, 2009

Foreclosures Topped 1 Million in Third Quarter

Troubled home loans continued to mount in the nation's banks in the third quarter of 2009 as even once-solid borrowers increasingly fell behind on their mortgage payments.

For the first quarter ever, the number of homes in foreclosure with mortgages serviced by U.S. national banks and savings and loans topped the 1-million mark, as struggles spread to homeowners with prime loans and modified mortgage payments, according to new data released today by federal regulators.

In addition, holders of mortgages whose payments had been lowered through government or private modification plans re-defaulted at high rates. More than half of all homeowners with modified loans fell 60 days or more behind in their payments within six months of the modification taking place.

DATE: December 18, 2009

Citigroup to Suspend Foreclosures for the Holidays

The New York-based bank said its units CitiMorgage and CitiFinancial would exercise the suspension to help make the holidays "less stressful" for homeowners and will run it from December 18 through January 17.

The 30-day leeway will apply only to borrowers whose loans are owned by Citi, approximately 20 percent of the company's 746 billion dollar mortgage servicing and lending portfolio, the bank said.

Those who make payments to Citi but have loans owned by other investors are unable to take advantage of the banks generosity.

"We hope that with this suspension we can make the holidays a little less stressful for our customers who are going through a very difficult time," Sanjiv Das, president and chief executive of CitiMortgage, said in a statement.

During the same 30-day period, Citi will halt foreclosure sales and stop evicting homeowners from properties it has already seized, the bank added.

Citi has enrolled nearly 100,000 borrowers in the Obama Making Home Affordable program, but had made only about 270 of those modifications permanent as of the end of last month, according to a Treasury Department report.

DATE: December 11, 2009

Housing outlook for 2010

In a dour year for the economy, the housing market has offered some glimmers of hope. Home sales have improved, recently hitting their highest level in more than two years. There's been talk of bidding wars resuming in places like Silicon Valley and New York City. And cocktail party chatter everywhere has started to turn to talk of a bottom. So at least where housing's concerned, things are looking not so bad -- right?

If that's what you think, you may not want to invite Mark Zandi to your next cocktail party. The chief economist of Moody's Economy.com, Zandi has some sobering predictions: Home prices are going to fall 5% to 10% more -- and over 30% in places like Miami -- between now and this time next year. Then they might start turning around. (Emphasis on "might.")

At the top of Zandi's list of worries are foreclosures -- specifically, the millions of loans that are in foreclosure or headed there that can't or won't be modified. According to RealtyTrac, nearly 2 million housing units in the U.S. are in foreclosure or bank-owned, and millions more are likely to join them.

Zandi estimates that 2.4 million homes will find their way into foreclosure next year. He expects banks to start putting those properties on the market more aggressively during the first half of the year, resulting in a flood of cut-rate inventory that will drag prices down.

It would be one thing if banks could sell into a hungry real estate market. But that brings us to Zandi's second concern: skyhigh unemployment.

October's 10.2% figure was higher than what most economists forecast for the peak. A soft job market, especially one this soft, means potential buyers don't have money to pour into new homes or the confidence that they'll be able to hang on to their jobs and pay the mortgage on their existing home.

Another concern: Policymakers will pull their support from the market prematurely. Aggressive government moves, like the recently extended first-time-homebuyer tax credit and the Fed's purchase of mortgage-backed securities, have been propping up the market.

The purchase plan is set to expire in March, which Zandi says could bump mortgage rates up as much as a full point. "That raises the cost of buying a home, and in this fragile market people won't buy," he says. "And that's a problem."

All those factors are figured into Economy.com's housing price outlook for 2010 -- as are local figures for income, population, interest rates, and foreclosures.

The results are broken into 100 metropolitan areas. (Last year the projections were pretty accurate, forecasting a 14.5% decline in 2009; the actual figure is likely to come in around --13.2%.)

As the sea of red above shows, the numbers are negative across the country.

The weakest areas are Florida, California, Nevada, and Arizona -- what Zandi calls the "usual suspects" -- where foreclosures are highest and likely to rise. The worst market: Miami, where the 2009 median home price of $183,530 is expected to fall 33%.

If there's a bright spot, it's pockets of the Midwest -- states like the Dakotas, Kansas, and Nebraska, which have stronger economies based on agricultural and energy industries.

Then there's Pittsburgh, which didn't have much of a housing bubble to begin with and is the only market projected to grow next year, up 0.41%.

The good news? "It's clear we're closer to the end of this crash than the beginning," says Zandi. Housing is more affordable, and construction is still low, so sales will eat up excess inventory. "We're moving in the right direction, and that's reason for optimism," he says.

Another plus: He says there's almost zero possibility of another U.S. housing bubble anytime soon.

DATE: December 3, 2009

Drop in Unemployment Could Have Little Impact on Foreclosures

The unemployment rate dropped in November, the U.S. Labor Department reported Friday, as companies shed the fewest number of jobs since the recession kicked in two years ago. Government statistics show that last month, the jobless rate edged down to 10.0 percent, falling from the 26-year-high 10.2 percent hit in October.

Only 11,000 jobs were lost in November, the Labor Department said. Economists had forecast a loss of as much as 130,000, consistent with the average of 135,000 job cuts seen in the prior three months. The employment market still has a long way to go, though, to recover from the damage done since the start of the recession in December 2007, when the jobless rate was 4.9 percent.

The growing consensus within the mortgage industry is that unemployment is now the primary driver pushing delinquency numbers higher, so the upbeat November labor report is likely a hopeful sign that the pace of loan deterioration could subside sooner rather than later. But analysts at Amherst Securities Group say their research tells a different story.

The firm is a holding company for financial firms working with institutional investors of mortgage-related assets, and a study from its head of residential debt, Laurie Goodman, says borrowers who have been hit hard by falling home prices and owe more than their home is worth are more likely to fall behind on their mortgage payments than homeowners who lose their job.

In an analysis, Goodman compared default rates with unemployment and negative equity in various loan categories. She found that unemployment only became a factor when the homeowner’s outstanding mortgage was 20 percent more than the home’s value, an LTV ratio of 120 percent or more. For those homeowners who had positive equity in their home but lost their job, they still found a way to keep their payments current.

The findings of Goodman’s team could soon be put to the test – while home prices in some markets have begun to inch upward, most market analysts say there’s still farther to go before prices hit bottom.

DATE: November 27, 2009

Delinquencies Hit a Record in the Third Quarter 2009

Delinquency rates have slowed for the third consecutive quarter yet overall the increase in the rate people fall behind on their mortgage continues, according to a new report relesed by TransUnion.

At the end of the third quarter 2009, 6.25 percent of the country’s mortgage loans were at least 60 days or more delinquent TransUnion reported.

That number was an increase of 7.57 percent over the 5.81 percent national rate during the second quarter and has risen 58 percent from 3.96 percent in the same quarter last year.

The increasing delinquencies, however, are noticed more profoundly within the the last twenty-four months.

While the slowing growth rate is an optimistic indication for the housing market, the increase shows there's still a lot of problematic mortgages out there.

The company doesn't expect the figure to start declining until the middle of next year.

Two things must improve before mortgage delinquency rates start turning around, home values and unemployment.

Until we see improvement in both of those areas, it's possible that it will take longer for delinquency to improve.

TransUnion, one of the three major credit reporting agencies in the country, gather the statistics from 27 million individual consumer credit files.

Their records show that mortgage delinquencies continue to be highest in the four states hardest hit by the credit crisis.

In Nevada, the rate reached 14.5 percent, up from 7.7 percent a year ago, in Florida the rate was 13.3 percent, up from 7.8 percent last year.

Arizona’s rate hit 10.4 percent, up from 5.5 percent in 2008 and California’s rate leapt to 10.2 percent, from 5.8 percent in 2008.

North Dakota remained a part of those states that had on-time payments from mortgage holders, having the greatest increase in the delinquency rate, rising 16 percent since the previous quarter.

TransUnion expects delinquency to rise to just short of 7 percent by the year’s end, compared with 4.6 percent for the end of 2008.

The amount American's owed on their mortgages dropped from an average of $193,811 in the second quarter to $193.121 in the third, a decline of 0.36 percent.

This, however, is a .043 percent increase over the average mortgage debt of $192,287 last year.

"The economic peaks and valleys that we experienced during the quarter will most likely continue into the first half of 2010," Guarrera said.

The District of Columbia and California had the highest level of mortgage debt per borrower with averages over $350,000.

West Virginia came in with the lowest average mortgage debt per borrower at $97,265.

DATE: November 20, 2009

Existing Home Sales Record Another Big Gain

Driven by the first-time buyer tax credit, existing-home sales showed another big gain in October 2009 with a strong uptrend established over the past seven months, while inventories continue to decline, according to the National Association of Realtors.

Existing-home sales-including single-family, townhomes, condominiums and co-ops - surged 10.1% to a seasonally adjusted annual rate of 6.10 million units in October from a downwardly revised pace of 5.54 million in September, and are 23.5% above the 4.94 million-unit level in October 2008. Sales activity is at the highest pace since February 2007 when it hit 6.55 million.

Lawrence Yun, NAR chief economist, was surprised at the size of the gain. "Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November," he said. "With such a sale spike, a measurable decline should be anticipated in December and early next year before another surge in spring and early summer."

Now that the tax credit has been extended and expanded, potential buyers have until April 30 to have a contract in place. "There is still a large pent-up demand that can be tapped before the tax credit expires. Our recent consumer survey further shows that 13% of successful first-time buyers had a previous contract that was cancelled or fell through - there likely are many more buyers who were attempting to purchase but simply ran out of time," Yun said.

Historically low interest rates also are boosting the market. "Mortgage interest rates last month were the third lowest on record dating back to 1971," Yun noted. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 4.95% in October from 5.06% in September; the rate was 6.20% in October 2008. Last week, Freddie Mac reporter the 30-year rate dropped to 4.83%.

The national median existing-home price for all housing types was $173,100 in October, down 7.1% from October 2008. Distressed properties, which accounted for 30% of sales in October, continue to downwardly distort the median price because they usually sell at a discount relative to traditional homes in the same area.

DATE: November 13, 2009

5 Tips to Buying with the Tax Credit

Tips for buyers
Interested in buying a home and claiming the home-buyer tax credit? Below are five tips:

1. Don't procrastinate. Start searching for a home now. Getting an early start will give you a better chance of finding the right house before the credit deadline. Before you start house hunting, get preapproved for a mortgage, said Eddie Fadel, a Miami-based mortgage banker, and do a realistic assessment of what you can afford. Buyers who have to sell an existing home should price it aggressively from the beginning to drum up interest and get a buyer as soon as possible.

2. Don't count on another extension. The credit won't be available forever. If you want to take advantage, be sure to make that spring deadline.

"This is a medication for the housing crisis. Once the patient-which is the housing market-cures, there will be no medication needed."

3. Mind the interest rates. Mortgage interest rates are low right now, but will likely rise next year. Higher rates will affect your monthly mortgage payments, thus the affordability of the house you are buying. Average rates on the 30-year fixed-rate mortgage have been hovering around 5%, but when the government stops buying large amounts of mortgage-backed securities, rates could rise.

4. Communicate with your lender. Throughout the process, make sure you're communicating with your lender regularly; if there's a piece of documentation you're asked for, get it turned in as soon as possible. Good communication is important in making sure the loan closes on time. And think twice before pursuing a short sale if you want to make the credit deadline. That's where someone sells a home for less than what he or she owes on a mortgage, with permission of the lender. The process can be lengthy and unpredictable because the homeowner's lender has to approve any deal, and can be complicated when there is a second mortgage associated with the property.

5. Don't take shortcuts. Don't forgo any of the steps you would normally take just to make the tax credit deadline. Make sure the house is a good fit for your needs and get a home inspection. Skipping steps could cost you in the long run.

DATE: November 6, 2009

First Time Home Buyer Credit Extended

President Barack Obama has approved the first-time homebuyer tax credit extension which will extend the tax credit until April 30, 2010.

The extension is part of a $24 billion economic stimulus bill that will extend the $8,000 tax credit for homebuyers who are purchasing their first home from the current November 30 deadline and expands the program to offer a credit of $6,500 to homeowners who have lived in their current home for at least five years and are seeking to relocate.

The following details apply to the homebuyer tax credit expansion:

Who is Eligible

Income LimitsEffective Dates Types of Homes that QualifyTax Credit is Refundable Payback Provisions

The tax credit is a true credit. It does not have to be repaid unless the home owner sells or stops using the home as their principal residence within three years after the purchase.

DATE: October 30, 2009

Foreclosures Are in Every Neighborhood

The foreclosure crisis may be coming to a middle-class neighborhood near you. As joblessness continues to rise and as a person's unemployment lasts on average 6.5 months, roughly 3.4 million homes are expected to go into foreclosure by the end of 2009. That's up from 1.2 million homes in 2007.

The first wave of foreclosures was caused by bad loan products, while the second will be driven by unemployment. Right now, we're at the beginning of wave two. There are virtually no more foreclosures that are the result of subprime lending. The demographics of the foreclosure crisis are changing and affecting people who were blue collar and entry to midlevel white collar. We're now seeing foreclosures on properties with higher loan values. Probably the single best predictor of the areas hardest hit in next wave will be where you will see rising unemployment rates. The third wave is going to involve borrowers who had adjustable rate loans, in which they had the option of deciding what payment to make including interest-only payments. These loans are going to default at ridiculous rates, and that wave will go from the middle of next year until 2011.

We're already seeing some shifts. Four or five states—California, Nevada, Florida, and Arizona—will always be among the top in the foreclosure parade. They overbuilt and overpriced those homes and sold them with horrific loans. What's happening now is that you're seeing places like Michigan and Ohio that were devastated by unemployment have an increase. Those foreclosures are much harder to salvage because those people have no income.

But even as the numbers of foreclosures rise, the housing market seems to be stabilizing.We will see a L-shaped recovery in the housing market if this scenario plays out until 2013 and if the financial institutions meticulously manage the disposition of these properties. We won't see a huge dip in home prices, but you also won't have a huge run-up in the building part of the industry that contributed a fair number of jobs to the economy. The housing market will not feel healthy for a few years. This is not a short-lived recession.

What will this mean for the future of homeownership? We had sort of gotten to an illogical point with the high levels of homeownership. In practice, it turns out that not everyone can afford a house. I think there is more of a realization among potential homeowners that they won't do it until they can afford it.

DATE: October 23, 2009

Foreclosures on the rise in 2009

Home foreclosures increased 22.5% in third quarter 2009 vs. third quarter 2008.

While you may have heard that the Foreclosure rate is starting to slow, those who track foreclosures across the country are seeing an increase in foreclosures. Some are even predicting that there is a 2nd wave of foreclosures coming as the unemployment rate continues to climb and as the 5-1 ARM's continue to reset over the next year.

It doesn't appear to the latest data that foreclosures are going to slow anytime soon. The primary reason is the delay in getting properties to a "Sheriff Sale". From the time that the bank files it's foreclosure paperwork with the local court system it can take up to 15 months before the house comes on to the market. In other words if a bank were to file a foreclosure today on your home it may not be available to the buying public until early 2011. The foreclosures coming on to the market today were first filed on in mid to late 2008. As the trend of filings continues to rise we can expect to see more foreclosures hitting the market in the next year to year and a half.

DATE: October 16, 2009

Foreclosures are Still HOT!

The Foreclosure market is still running wild. In fact the foreclosure market is the one thing that continues to drive the real estate market. Just like 5 years ago when you could pretty much put any house on the market with blood red carpet, green flock wall paper and mirrors on the ceiling and then over price it by $25,000 and know the house will still sell, the foreclosure market is what is keeping the real estate market alive and well. As the Map below shows, just about every real estate market in the country is experiencing a foreclosure problem especially on the west and south coast.

Now is obviously a great time to buy as more foreclosures come on to the market. The problem you may start to see is that there are a lot of other buyers out there who are seeing the same thing and the competition to buy a foreclosure is increasing.

DATE: October 9, 2009

Debate Over Homebuyer Tax Credit Heats Up

If you're thinking of buying your first home, there are 8,000 good reasons to do it now.

As part of its effort to prop up the housing market, the federal government is offering an $8,000 tax credit to first-time buyers. But the offer is set to expire at the end of November.

All the first-time homebuyers that have been procrastinating basically have to have their home under contract in the next 10 days to make sure they can close by the end of November.

Rising Sales

Nationwide, pending home sales have been on the rise for seven months in a row, according to the National Association of Realtors. But just as auto sales dropped sharply once the government's Cash for Clunkers program ended, real estate pros are bracing for a letdown if the tax credit is allowed to sunset.

I've heard a few other agents kind of chuckle and say, It's going to be a cold, dark winter'.

But not if lawmakers like Sen. Johnny Isakson (R-GA) can help it. Isakson — a former real estate executive himself — wants to extend the tax credit, increase its size and make it more widely available. The National Association of Realtors is backing that idea.

We'd like to see it extended through 2010. In fact, we'd like to see it expanded to all buyers — not investors, not people buying second homes. But to people buying a home to live in, says NAR spokesman Walter Molony. Certainly there's a cost to the Treasury in offering this. But the economic benefit — it gives you a pretty good bang for the buck.

Doubts About The Credit

But some people think the tax credit is a dud.

Four out of 5 of the buyers were given $8,000 for doing something they were going to do anyway, says Andrew Jakabovics, associate director of housing and economics at the Center for American Progress, a Washington think tank closely aligned with the Obama administration. While there are stimulative effects, it's a very costly credit.

Asked this week about the president's position on extending the tax credit, White House spokesman Robert Gibbs was noncommittal. Jakabovics believes the government should continue to prop up the housing market, but thinks it could do so in a more targeted way.

That money could theoretically go towards foreclosure prevention and other housing market interventions that would be more effective, he says.

Even some real estate agents have doubts about just how long the government can keep giving handouts to every first-time homebuyer.

The cost, so far, tops $11 billion.

DATE: October 2, 2009

Why are most of the properties in poor condition?

You must be prepared to have vision when searching in the bottom of the pricing bracket. When homes are priced 30-50% below market, be prepared for needed work: carpet replacement, repainting, home maintenance items. The term “they took everything but the kitchen sink” can also be applied here as some previous homeowners take all appliances, lighting fixtures, ceiling fans, etc. Also note that when homeowners are not making their monthly payments they are not properly investing in the upkeep of their home. It is common to find exterior neglect (mold, wood rot, overflowing gutters, broken windows), un-serviced systems (HVAC) and sometimes just simple property disrespect (holes in walls, broken cabinetry).

For the most part there was a reason why the former home owner was not able to make their house payment and a lot of the time the former home owner left the house because they were forced to leave and as a result were not very happy. It is not to hard to imagine why the home owner did not take care of the house in their last couple of months of occupancy. Many foreclosure properties are left vacant for 10, 12, 15 months or longer as the house goes through the foreclosure process which leaves the house exposed to vandalism which also causes the value of the house to drop.

Yes you can get good deals on foreclosure properties, we have had many buyers purchase properties for $40,000, $50,000 and more off the former sales price, but these same properties also require work, sometimes lots of work but the return on your investment can be very good. We recently helped a buyer purchase a property for $86,000 that he later sold for $159,000 with an obvious healthy profit but the house needed a bunch of work including replacing the entire kitchen including cabinets.

One of the services we offer to our clients is to run a comprehensive comparartive market analysis that will tell you what we think the home will be worth once it is finished. This is a key to buying a foreclosure property. Many foreclosure buyers think because it is a foreclosure that they are getting a good deal. By having us run a CMA, you'll know for sure what you'll have when it is all said and done. For more information just give me a call and I'll be happy to walk you through the process.

DATE: September 25, 2009

Still Paying Less

Home buyers in much of the U.S. are still paying thousands of dollars below the home’s asking price, but had slightly less negotiating power in August 2009 than they did in July, according to the August Zillow Real Estate Market Reports. Buyers paid a median $6,525, or 3% less than the last listing price on homes bought in August, down from $7,018, or 3.3%, less for homes bought in July. Negotiating power peaked in January 2009, when buyers were paying 4.5% less than last listing price, a median of $10,096. Meanwhile, sellers continue to cut prices on unsold homes. One quarter (24.7%) of all homes listed for sale on Zillow had at least one listing price reduction as of Oct. 1, 2009. The median U.S. price reduction was 6.6% off the original listing price.

Negotiating power is a clear reflection of inventory levels, which dropped nationally in August. Tighter supply in some markets is translating into less of a discount off listing price, said Zillow Chief Economist Dr. Stan Humphries. Unfortunately, the brisk spring and summer home shopping season is drawing to a close now, and with foreclosures on the rise again, inventory levels will likely head back up in the coming months, leading buyers’ negotiating power to regain the ground it lost in August.

DATE: September 18, 2009

Who represents Who?

In a Real Estate transaction who represents who? It is really pretty simple answer, the Listing Agent will represent the Seller and the Buyer's Agent will represent the Buyer. In the state of Ohio one agent is allowed to represent both the buyer and the seller at the same time in what is called a 'Dual Agency'. Does 'Dual Agency' makes sense? Not really because by the same law that allows Real estate Agents to represent both sides also says the 'Dual Agent' can not be an advocate or give advice to either side and or give one side or the other an advantage. Can you imagine the same Attorney representing both sides in a trial, the Killer and the people who are trying to hang him? Can't really be done.

If for example you want to put a bid in on a home and ask the agent who is representing the seller and you as a 'Dual Agent' what price you should offer, by law the 'Dual Agent' cannot give you any advice. In other words you have to figure it out on your own. By law the 'Dual Agent' is not allowed to give you advice.

So why would you want to use the same Agent? Many buyers think they will get a better deal if they use the same agent representing the seller because they think the commission used to pay the buyer's agent will be deducted from the sales price. Wrong! The seller has already agreed to pay both the listing agent and the buyer agent a commission. If you use the listing agent to represent you as a buyer then the listing agent will get both commissions. You don't save any money and you don't have anyone looking out for you and your best interest.

If the listing agent is getting a bunch of listings from the same bank who do you think they are really going to represent, you or the Bank? You are much better off to use a professional Real estate Agent like me who specializes in helping buyers like you buy Foreclisure Properties. In fact me and the group of agents I work with have helped buyers just like you buy hundreds of Foreclosure properties. I'd be happy to help you avoid all of the problems when buying a Foreclosure property and to help walk you through the complicated process.

Give me a call today to talk more about how I will represent your best interest and save you a whole bunch of money.

DATE: September 11, 2009

What's a major misperception about buying a foreclosure property?

What's a major misperception about buying a foreclosure property? That you can go to a Web site somewhere that has a list of foreclosure properties and save 50 percent on your next house. Our group of agents have helped buyers buy hundreds of foreclosure properties and we have only seen several of our buyers save 50 percent only a few times. It's possible, but not probable.

Real estate transactions are complicated, and foreclosure transactions are more complicated. If you don't have the time to put into it, use a professional real estate agent like myself who is an expert in helping buyers like you. To go knock on somebody's door and buy the house directly, or go down to the courthouse steps as a home buyer — I don't think the rewards are worth the risks. We offer professional tools with really deep research and analysis capabilities, and we track the auction activity so we can show not only what went into foreclosure but also its current status and outcome.

What are some examples of the risks for novices.

One is buying a second mortgage at auction, or the fact you don't get to inspect the house when you buy at auction.

What's really being sold is the loan, not the home. If you go down and the auctioneer says This property is being sold subject to existing liens or encumbrances, if there are other loans that are senior to the one being sold, you still owe the balance on it. But if you are a newbie, you don't know what a lien or encumbrance is. It may result in a total loss for the buyer.

Our services are free to you as a buyer. You never pay to have us represent you to buy a foreclosure property or any home on the market.

DATE: September 4, 2009

Sorting through the foreclosure mess

The big picture is that we know we have an unprecedented portion of the population underwater in their homes. We have a ridiculously high number of folks who aren't making their payments, as reflected in the Mortgage Bankers Association delinquency data. We have a record number of homes in the foreclosure process, and we have relatively few foreclosures being finalized. So we know we have a foreclosure problem, but it's not necessarily resulting in the impact we would expect.

The big question remains, will we see a big wave of these things pushed through, or will it trickle out over time? I don't believe we have the political will to fix the negative equity problem. As a society, we're OK with giving billions of dollars to bail out GM, but we're not OK with giving thousands of dollars to bail out our neighbors. So I don't think we're going to directly fix the negative equity problem by reducing people's debt.

We've got all these folks in foreclosure, and in years past we would have just pushed them through the process. But we also don't have the political will to put that many people "on the street," to use the language of those against foreclosure. So given those two things, which are immutable, the answer is they will trickle out for years to come. Even if we see a wave, it will probably be short-lived because the government will intervene.

For example in September 2008 when Fannie and Freddie went into conservatorship the government slowed foreclosures. Then, former Treasury Secretary Henry Paulson announced the TARP program, which had two elements that affected foreclosures. Then in February 2009, Barney Frank (congressman from Massachusetts) asked the major lenders to forestall foreclosures until the Making Home Affordable loan modification program was put in place. That went into effect June 15, but it was a total red herring because it exempted all the banks that have loan modification programs, and all the major banks have them.

As for the Making Home Affordable program itself, it has a three-month trial period on the loan modifications. Borrowers stay in foreclosure during the trial period. As those trials end, which should begin to happen in the next 60 or 90 days, we should either see foreclosure cancellations go way up, or lots of foreclosure sales because they're not working.

DATE: August 28, 2009

HUD secretary says more homes being saved from foreclosure, but housing crisis continues

The head of the federal agency working to stabilize the nation's slumping housing market says more homes are being saved from foreclosure as lenders rework mortgages, but cautioned that the crisis is not over yet.

U.S. Housing and Urban Development Secretary Shaun Donovan said Monday that there are other signs of an improving housing market, such as the slowing decline in prices. He estimated that more than 500,000 homes will be saved from foreclosure this year.

I wish the administration preceding us had begun to address the problem before we began the process of having 3 million homeowners in foreclosure, Donovan said, testifying at a field hearing of the U.S. Senate's housing subcommittee in northern New Jersey. Residents in the area have been hit hard by job losses and home foreclosures.

We have not experienced anything like this since The Great Depression, said U.S. Sen. Robert Menendez, who chaired the hearing in his home state. He predicted that the full impact of the housing crisis won't be felt until homes are revalued. That process is likely to yield downward revisions that reduce government tax revenue.

Homeowners, counselors and lenders who spoke at the hearing said some lenders are reluctant to renegotiate mortgage terms to keep struggling families in their homes. Many banks continue to prefer foreclosure to renegotiation, they said.

Bryan Bolton, a senior vice president at CitiMortgage Inc., said his company believes that modifying loans is preferable to foreclosures in most cases.

But Phyllis Salowe-Kaye, executive director of the watchdog group New Jersey Citizen Action, said most mortgage lenders aren't as supportive of loan modifications. If the industry really believed this we wouldn't be here, Salowe-Kaye said. She said some lenders appear to be padding their numbers by directing refinancing offers to homeowners with solid finances instead of those in need of help, and then counting those deals as a home saved. She pleaded with Menendez and other lawmakers in Washington to do more to help struggling homeowners and to support a proposal from President Barack Obama for the creation of a consumer protection agency at the federal level.

We are not at the end of this, Salowe-Kaye said. We have not peaked. We are still in the middle of this crisis.

DATE: August 21, 2009

Wave of Foreclosures on the Way

According to some experts, there is a tsunami of foreclosures headed our way in 2010. Most of the foreclosures we have seen so far have been as a result of the 2 and 3 year ARM style loans that home owners opted in for. The real wave of foreclosures coming will be as a result of the 5 year ARM�s that are about to rest in 2010. Deutsche Bank estimates that as many as 25 million homes will be under water in 2010 as a result of these 5 year ARM's resetting.

In the video below Bill Burnett the President of Homestead Mortgage and head of the Virginia Associtaion of Mortgage Brokers recently appeared with Greta Van Susteren on Fox News to talk about the upcoming problems.

DATE: August 14, 2009

The Future of Fannie Mae and Freddie Mac

The White House confirmed that it is putting together overhaul plans to restructure Fannie and Freddie, and maybe strip away their money-losing toxic loan portfolios to create a single, new super mortgage source. The ailing giants still finance roughly six out of ten new home mortgages in the U.S.

How the plans develop over the coming weeks could prove crucially important for home buyers, sellers, builders and other realty professionals -- and could expand, or restrict, the types of mortgages available in the marketplace.

If, for instance, the replacement for Fannie and Freddie is confined solely to buying the safest, least-likely-to-default types of mortgages, the menu of loans available to buyers theoretically could be limited to fixed-rate 30 year and 15 loans with big downpayments and high credit scores.

Though the White House is mum on where it's headed, the National Economic Council last week formally took up the question of what to do with Fannie and Freddie.

The council reportedly is exploring what officials call a “bad bank-good bank” scenario.

Under such a plan, hundreds of billions of dollars of seriously delinquent and nonperforming mortgages currently held in the two companies' portfolios would be transferred to a new entity that would manage their accounts, collect payments, attempt modifications and workouts where possible, and ultimately own the proceeds from foreclosures or loan sales.

The “good” bank, on the other hand, would come to life with a totally clean slate, buy mortgages from originators nationwide, and would seek to be profitable by minimizing risks.

Though the Obama administration has not indicated its timetable on Fannie and Freddie's future, analysts expect the plan to be rolled out in time for Congress' consideration early next year.

DATE: August 6, 2009

Know Whose Name the Deed is in

One of the biggest problems buyers of foreclosure properties are currently facing is getting an accepted contract to closing on time. The problem is that a Bank cannot sell the foreclosed property to a new owner without having a deed to the home and what used to take about 2 weeks to get a deed issued is now taking as long as 12 to 15 weeks.

Not many home buyers are aware of a new state law that was passed last year that was supposedly meant to speed up the process of issuing the deed of a foreclosed home and getting that home to a closing. 2 problems have arisen, 1st, state law says you cannot put a home up for sale unless you are the owner, that is what the deed shows and Banks used to have to wait until the new deed was issued in their name before they could put the house on the market. The new law says the Bank can put the house on the market as soon as the Sheriff sale has been confirmed and do not need to wait until a deed is issued. The 2nd problem is that the Sheriff's office used to issue the deed but the new law requires a lawyer to now issue the deed and then be checked by the Sheriffs office. If there is a problem with the deed the Sheriff sends the deed back to the lawyer who then has to reissue the deed and be checked again. . . Can you see the problem here?

The fallout has been for those buyers with rate locks who cannot get their home closed before the rate lock runs out. Many times the new rate lock is at a higher rate and in some cases because the rate is higher the house payment is also higher which then may mean the new home buyer cannot afford the house anymore or will end up paying tens of thousands of dollars more over the life of the mortgage.

If you are buying a foreclosed property make sure you have your real estate agent look up and see whose name the deed is in. If the deed is still in the old owners name and not the banks name then ask your agent to see when the property went to Sheriff sale. It is very likely the new deed will not be issued for at least 10 to 12 weeks after the Sheriff sale and if you are in a hurry or need to buy before your rate lock runs out you'll have a much better idea about how long it is going to be.

DATE: July 30, 2009

Get Fresh Accurate Foreclosure Listings

Just about every web site our group of Foreclosure Agents have ever visited is outdated with old foreclosure listings that are either in contract or worse yet have been sold.

It's terrible of me to say this about my own industry but the worst offenders seem to be the largest real estate web sites. The largest web site of them all is REALTOR.com and it is one of the worst offenders for having outdated information about listings on it's web site. Because these super large web sites are pulling information from several hundred different MLS systems from around the country you can only imagine how much time it takes to download this information on a regular basis.

The next worst is Realty Trac, Craigs List, Zillow and so on. Again these web sites try to track such a large portion of the United States it makes it almost impossible to get fresh accurate information. In fact we get updated listings from all of these sources and I can personally tell you that we have seen listings come through from Realty Trac that are 2 to 3 months old, have gone in to contract and closed before we even get the notice they are available for sale. We have had many clients call us wanting to go see a listing they found on the internet somewhere only to find out that the house has been sold, that doesn't help anyone!

The one thing we know is the best houses that come on the market are the ones that are still selling fast. The houses that have been on the market for sometime are usually dogs that no one wants. Our whole web site is designed to get you the very latest foreclosure listings as quickly as possible. If you can get the listings quicker than the next buyer then you'll have better choice and a better chance to find the right foreclosure property.

To find out more give me a call or shoot me an email and I'll be happy to help.

DATE: July 24, 2009

Closing Cost, What to Look For

Fannie Mae, Freddie Mac and some Banks will not pay for your Title Insurance or any of the associated Title fees and cost like Home Warranties and Inspections. For a house that cost around $100,000 you could expect to pay an additional $1350 for Title Insurance and the associated fees such as transfer fees, binder fees, deed prep, closing fee, courier fees and many other fees. Make sure you know all of the cost associated with buying any house before you make an offer to buy so you are not surprised at the closing table with a bunch of fees you were not counting on to pay.

Although these companies and many Banks just like them will not pay for Title Insurance and associated fees, you can have these fees paid for through your closing cost, but you have to know how to ask for them. Typically your closing cost should never be more than about $2500 but you may need to ask for additional closing cost to be paid for by the seller so you can include these fees. I have the experience to keep you out of trouble and having to bring $1000's of dollars out of your pocket at closing when buying a foreclosed property.

DATE: July 16, 2009

Get Your Credit in Order

So you hear right now is a great time to buy a home that you can get really great deals on Foreclosure properties. . . That is true if you have the cash or the credit score to do so. I can't tell you how many buyers I talk to on a weekly basis who want to go and buy a Foreclosure property and as soon as we go to the bank to get the pre-approval letter there are 2 or 3 red flags on their credit report that is going to keep them from buying.

Not all is lost, in fact just a couple of years ago we use to joke that if you had a pulse we could get you financed and that is literally the problem that we are all facing right now with all of the Foreclosures on the market. Lots of people bought homes who really didn't have the credit scores to do so. Now the pendulum has swung to the opposite side of the table and your credit has to be just about perfect to get a loan. I have seen buyers get to a day or 2 before closing and when the banks underwriter re-ran their credit came up with something that prevented them from buying until they worked out the issue. Buyer's with 720+ credit scores can't buy because there is something on their credit report that popped up and needs to be taken care of.

Take every step possible to improve your credit score. The better your credit score the better your loan terms and likelihood of getting the loan. The Federal Trade Commission has made it mandatory that the 3 major credit reporting agencies provide you with a free credit report every 12 months. To get your free report(s) visit this Federally ran web site http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre34.shtm By going on line you will be able to download your credit report from each of the 3 credit reporting agencies immediately and for free. Make sure you inspect each report carefully for the following; addresses you never lived at, aliases you never used, multiple social security numbers, wrong birth date, credit cards you don't have, loans you never took out, unpaid bills you know were paid, delinquent bills you know never were, inquiries from companies you never did business with and anything else that looks unusual. What you don't want to have happen is something small pop up the day before closing, something you could have taken care of if you had known.

For more information about what to look for and how to help clean up your credit report I have a free eBook called How to Build a Better Credit Report that I would like to send you. Over in the left hand column of this web page click on the Free eBooks link and fill out the requested information and I’ll be happy to send it to you.

DATE: July 10, 2009

Making an Overbid on a HUD property

Let's say there is a really hot HUD foreclosure that just came on the market and you decide to make a bid on it but you want to make sure you buy it so you decide to offer more than the house is listed for. That's smart because we are seeing the really hot deals still sell fast and most of the time for more than what they are listed for. The catch is that most home buyers don’t know is if you are using FHA financing to buy your HUD owned foreclosure you will need to bring cash to the closing table to pay the difference between what you offered to pay for the property and the appraised value of the home. FHA will not allow you to finance more than the appraised value and will require you to bring the difference to closing in cash. On a HUD owned property the appraised value of the home is the 'As-Is' value that is stated on the HUD website.

Almost 100% of the time when a property is first listed on the HUD web site the price and the as-is value are exactly the same. When a property has been sitting for a while, typically 30 days, HUD will lower the price and you'll see the price is now lower than the as-is value. The problem that is happening right now is that there are more buyers in the market than there are HUD homes for sale and we are seeing just about every HUD home being over-bid as a result. So if a house comes on the market at say $50,000 and you decide you really want this house and over-bid the property by $5000 and offer $55,000 you will be required by FHA to bring the additional $5000 in cash to closing to make the deal work.

Many buyers and their agents don't know this when they make the bid on a HUD owned home and when they do find out a couple of weeks later when finalizing their financing package they have to kill the deal because they don't have $5000 to bring to closing. So how do you get around this? The best way is not to use FHA financing at all and use conventional financing along with your $8000 first time home buyer credit for your down payment and closing cost. There are many other ways to do it as well, just give me a call and I'll be happy to show you. The key to buying a foreclosure property is to get good information up front and not have to kill a deal 2 or 3 weeks later because you didn't know.

DATE: July 1, 2009

8 Quick Tips to Buying Foreclosure Properties

Lots of savvy home buyers want to hit the jackpot and buy that REO foreclosed home, many of which are often under-priced. When banks price REOs under the comparable sales, multiple offers are often the response. This means you could be up against stiff competition for that bank-owned home.

It's not unusual for some REO homes to receive 10 or more offers. Sometimes the bank will throw out all but two offers and then ask the selected buyers to resubmit what is called 'Highest and Best' offer. Sometimes the bank simply accepts the best offer at inception.

If you're wondering how you can make your offer shine above all the rest and be the winning offer, here are a few tips to help you select the right price and terms:

1) Get the Property History
Ask your buyer's agent to find out the bank's purchase price on the Trustee's Deed or Sheriff's Deed. Generally, it is noted on the document itself, which you can get from the tax rolls or a title company. Compare that price to the price the bank is asking.

Look at the amount of loans that were once secured to the property. Somewhere between the original mortgage balance(s) and the foreclosure sale price is the amount the bank will accept, if the home is under-priced.

2) Determine Comparable Sales
In many cases, the list price has little bearing on the value of the home. The market value carries the most weight. If you are up against competing offers, other buyers will offer more than list price.

3) Analyze Listing Agent's REO Solds
Most REO agents work for one or two banks. Some listing agents are exclusive listing agents for REOs, and they do not list any other type of property. Since REO agents deal in volume, they typically apply the same pricing principles to all their REO listings.

4) Ask About Number of Offers
If there are no offers on the REO home, you can probably offer less than list price and get your offer accepted. However, if there are more than two offers, you will most likely need to offer above the asking price.

If there are 10 offers, bear in mind that some of those offers might be all cash. Banks like all cash offers. If you are obtaining financing, then you may need to increase the price on your offer to be considered.

5) Submit Preapproval Letter
It goes without saying that you do not want a prequal letter. You want a preapproval letter. Get preapproved from your choice of lender in advance.

Moreover, get preapproved by the lender who owns the property. Do not expect to use this lender for your loan, but submit the prepproval letter from this lender, along with the letter from your own lender. Banks don't trust other lender preapprovals but trust their own departments.

6) Don't Ask for Repairs / Inspections
Sometimes banks will pay for repairs, but typically will not agree to do so at the offer stage. If there are problems found during a home inspection, renegotiate after your offer has been accepted.

7) Shorten the Inspection Period
If other buyers ask for 10 days, for example, to conduct inspections, and you ask for 7, you will be deemed the more serious buyer.

8) Offer to Split Fees
Some banks will not pay transfer fees, for example. If the buyer offers to split those fees, the bank will feel more amenable to accepting the offer. Same thing for escrow fees.

Many banks negotiate discount fees for title insurance. If the bank will pay for the owner's policy, the ALTA policy might cost a bit more. But it's still a good idea to let the bank choose title if you want your offer accepted.

Consider the Appraisal Consequences
If you offer over list price, bear in mind that the appraisal will need to substantiate that price. If you find yourself dealing with a low appraisal, you have options, so don't despair. Remember, the bank will most likely run into this problem with the next buyer who obtains financing.

DATE: June 24, 2009

Why Banks Many Not Sell You That Foreclosure Property

Buyers chasing after bank repos are sadly discovering that some REO lenders will not sell a bank repo to them, and they don't know why. The truth is banks can name the terms and conditions under which they will sell a bank-owned home. If buyers don't fit those qualifications, they are out of luck. You may wonder -- don't banks want to get rid their foreclosures? Aren't banks happy to get an offer, especially a full-price offer on a bank-owned home? The answer is maybe not.

Banks have learned that not every foreclosure buyer is committed. Some buyers make multiple offers or are not even Approved for their loan yet. Banks want the buyer to be committed to the purchase and follow through on closing. If the bank has reason to believe the buyer is playing games, the bank will reject the purchase offer. But there are other reasons banks won't sell bank repos to just any old Tom, Dick and Harry.

Reasons a Bank Might Not Sell That Bank Repo to You Bank repos homes are rarely in turnkey condition. Many have been stripped or vandalized, and some are victims of deferred maintenance.

DATE: June 18, 2009

June is National Home Ownership Month

June is National Home Ownership Month and today there are a growing number of obstacles for home buyers, including ahigher credit score standard and more restrictions on credit. It’s crucial that you have a thorough understanding of the changing market when shopping for a mortgage. Here are seven tips to help you do exactly that:

1. Learn about first-time home buyer programs. Consider taking a first-time home buyers course or visit with your local banker to find out about programs available to you, such as the new federal $8,000 first-time home buyer credit for 2009 home purchases.

2. Get pre-approved. Know the difference between pre-qualified and pre-approved. Getting pre-qualified is a casual process where the lender tells you how much you should be able to borrow based on how much money you make, how much debt you have and how much you have to put down on a house. Pre-approval occurs only after you actually apply for the loan and the lender gives you in writing the amount you can borrow. A buyer who is pre-approved is more attractive to sellers and their agents than one who is only pre-qualified. Once you find a mortgage that is best for you, get pre-approved before you start making offers on a home.

3. Be honest with the lender and yourself. You don’t want to borrow more than you can afford. Your bank can provide a calculator to determine if you can afford to borrow and if so, how much.

4. Look at the basics of the loan. Don’t get distracted by all the bells and whistles. Choose the type of loan that makes the most sense for you.

5. Know your credit situation. Obtain a copy of your credit report and FICO score. You will want to check your credit report for any errors and get them corrected as soon as possible. To obtain a free copy of your credit report, visit www.annualcreditreport.com.

6. Consider all the costs. A lender will review costs like fees, closing costs, points, homeowner insurance, and taxes. But consumers should also consider repairs and maintenance costs. As a homeowner, you are responsible for those additional costs - there won’t be a landlord to call.

7. Organize your finances before you go to the bank. While each bank may require different documentation, at a minimum you will need:
- Pay stubs.
- Tax returns.
- Financial statements (one that is less than 60 days old).
- Copies of additional monthly payments such as car loans, credit cards, student loans, etc.
- Any additional information (such as proof of additional income) that you think will help your banker to positively evaluate your credit request.

These seven steps will help you prepare to buy your next home. Of course if you have any other questions please feel free to give me a call.

DATE: June 12, 2009

Tips for Dealing With Earnest Money Deposits on Bank-Owned Homes

- Time Your Negotiations for Non-Refundable Earnest Money Deposits.

Some banks will make your earnest money deposit non-refundable so you will want to make the deposit contingent upon your home inspection being satisfactorily completed or you may run the risk of losing your deposit. If the bank will not allow that contingency then you will want to try and make have the deposit made within 72 hours of acceptance. This way you can go ahead and have your home inspection scheduled before you make your deposit and if problems come out of the home inspection you can then terminate your contact before making the non-refundable deposit. This will save you a lot of grief and worry if you know that you definitely want to proceed with the transaction before handing over the cash.

- Funds Must Be in the Buyer's Account to Cover the Check.

In one transaction, the bank insisted that the buyer deliver the check to escrow, and the buyer did. However, she forgot to transfer funds from her savings account to cover the check. It bounced.

The listing agent and asset manager insisted the buyer immediately wire funds. The buyer went to her bank on a Friday and wired the money, but the bank messed up and did not send out the wire. This buyer almost lost her bank-owned home because the bank wanted to cancel the deal. In desperation, she waived all her contract contingencies5 to save it, and the bank received the wire the following Monday.

- Prepare to Replace the Earnest Money Deposit with a Cashier's Check Upon Offer Acceptance.

Some banks will demand that the buyer replace the original earnest money check with a cashier's check. If your banking accounts are held at out-of-state institutions, you may be unable to obtain a cashier's check immediately.

- Be Ready to Immediately Overnight the Earnest Money Deposit to the Bank's Designated Title or Escrow Company.

Find out where the closest overnight carrier is located. Sometimes, escrow companies will let you use their account to send funds, so ask, but make sure those funds are sent overnight for next-day delivery. Get a receipt for tracking purposes in case the check doesn't show up on time.

- Negotiate Earnest Money Deposits Below the Maximum for Small Claims Court.

If the worst happens and you end up in court, it's generally faster to take your case to Small Claims Court. However, most Small Claims Courts impose limits on the amount for which you may file a case. If your earnest money deposit exceeds the maximum amount set by the court and you still want to pursue the action in Small Claims Court, you won't receive the entire balance even if you win.

DATE: June 5, 2009

Why are Interest Rates Going Up

Why are interest rates rising? I think the question has a couple of different answers. First let me explain that the interest rate that the Fed charges has nothing to do with what Banks charge for Mortgage rates. Mortgage rates are a pure function of supply and demand as a result of Bonds being bought on the open market. Normally when the Stock Market does bad people pull their money out of the stock market and put their money in to the bond market where they are guaranteed a certain return on their investment. The return in the bond market is normally not as high as it would be in the stock market but it is guaranteed and you pretty much can’t lose your money unless of course you bought bonds from Chrysler and General Motors in which the Federal Government has now told those bond holders your investment is pretty much worthless. That is issue number 1, what bonds are now safe from Government control? Number 2 is that the Chinese who have been big bond buyers are now starting to slow up their buying spree and 3rd the bond market is now starting to build in spread for the anticipated Inflationary cost that are expected to start to show up as a result of all the money our Government is printing right now. Long story short is that Interest Rates are going to rise so get with your lender and lock in your rates because I don’t see them going down in the near future.

DATE: May 29, 2009

HUD: Stimulus tax credit can be used on first-home purchase

First-time homebuyers can apply their tax credit of up to $8,000 under the federal stimulus program toward the purchase of an FHA-insured home through short-term loans. Under the American Recovery and Reinvestment Act of 2009, first-time homebuyers can qualify for the tax credit for purchasing their first home after filing their taxes of up to $8000 or 10% of the homes sales price whichever is less.

Under a new Federal Housing Administration program announced Friday, state housing finance agencies such as Ohio Housing Finance Administration (OHFA) and other nonprofit groups can advance money to homebuyers up to the full amount of their tax credit so the money can be used on a home purchase, either to pay closing costs or to add to a down payment.

Families will now be able to apply their anticipated tax credit toward their home purchase right away, Donovan said in the announcement. At the same time we are putting safeguards in place to ensure that consumers will be protected from unscrupulous lenders. What we're doing today will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing.

To find out more about how you can use the First Time Home Buyer tax credit of up to $8000 to help you purchase your new home just give me a call or drop me an email and I'd be happy to help explain everything to you.

DATE: May 22, 2009

Foreclosure Filings Are On The Rise

The National Short Sale Center has announced that the nation is on track to experience record setting amounts of foreclosures and bank-owned properties in the second quarter of 2009. After the first quarter of 2009 set a new record with 803,489 foreclosure filings, the company is predicting a first ever quarter with more than one million foreclosure filings. "We're returning to pre-moratorium percentages, with a rather large initial increase in the second quarter as properties that have been in the moratorium flood through," says Travis Hamel Olsen, president of National Short Sale Center. "From our data, we are forecasting more than one million foreclosure filings in the second quarter of 2009." After a 10% decrease in foreclosures for January, foreclosure activity across the nation increased 6%in February. The so called "Sand States" California, Florida, Nevada, and Arizona top the lists of foreclosure rates. "The dam is breaking for foreclosures and bank owned properties," added Olsen. "In the next three months, we are going to see more than one million foreclosures hit as the foreclosure moratorium is lifted." What does this mean for home owners? As more foreclosures are brought on to the market we will see prices continue to fall. The major players in the foreclosure market, HUD, Fannie Mae and Freddie Mac are all holding back foreclosure properties from the market. There are directives and memo's stating to hold back foreclosure properties from being put on the market to try and hold neighborhood values. The problem is that as more and more foreclosure properties build up behind the dam the less likely it will be to hold these properties off the market without the home deteriorating so much so that when it does come on the market the value will have deflated so much it will hurt the neighborhood even more. Hold on for a wild ride for the next year to year and a half as the Government thinks they are fixing a problem when in fact they are making the problem even worse.

DATE: May 13, 2009

What does 'As-Is" really mean?

What does the term 'As-Is' mean? Well most Bank owned foreclosed properties are sold 'As-Is' and many of the bank owned properties including Fannie Mae and Freddie Mac literally rewrite your purchase offer with their own addendums. Any offer you place with HUD will be made on HUD's own purchase contract obviously giving HUD every advantage in the home selling process. Fannie Mae, Freddie Mac and most every bank owned property will require you to sign an addendum to the purchase contract also giving the advantage to them. In fact Fannie Mae's addendum is 16 pages long and covers everything from the purchase price to title insurance to your deposit and the 'As-Is' clause. The 'As-Is' clause is really meant to give the seller some piece of mind that once the closing happens the buyer assumes all responsibility of the home. 99.9% of the time the seller has lived in the property so they do not know anything about the home and do want to get caught up in having to make repairs to a house after closing. Most of the time you can get a Home Warranty for the house but you will most likely have to pay for it yourself, probably not a bad investment considering all of the things that can wrong with a foreclosure home. The other way to protect yourself is to do a home inspection. Again it will cost you money to do one, but to have the knowledge of what is wrong or potentially wrong with the house before you actually buy it is worth the cost of the inspection times 10. I personally would never recommend anyone buy a foreclosed property without doing a home inspection. Stop back in a couple of days and I'll be posting a blog about home inspections but the bottom line here is an experience Foreclosure Specialist like myself will help get you through all these issues and make sure you understand exactly what you are buying before you buy.

DATE: May 7, 2009

How to Use Your Tax Credit to Help With Your Down Payment

One of the difficulties we have run in to here recently is being able to come up with enough money to make your down payment when buying your new home. A number of months ago FHA did away with the down payment assistance programs being provided by charity companies like Nehemiah and AmeriDream. The Ohio Housing Finance Agency (OHFA) has come up with an ingenious way to use your Tax Credit towards your down payment. As you may already know if you are a first time home buyer who qualifies you will get up to an $8000 tax credit when you buy a new home. I wrote about the tax credit below on February 27, 2009 that you can read more to understand how the tax credit works. What OFHA has put together is a program where you can borrow the down payment from them with no interest and no payment due until August of 2010. At anytime prior to August of 2010 when you get your tax return you can then pay off the loan or if you choose not to pay off the loan you can then start to make payments. It is really a great way to help first time home buyers who have little or no money to use their tax credit money right now to buy a home. To find out more just give me a call and I'd be happy to send you a informational sheet about the program and answer any questions you might have.

DATE: May 7, 2009

How to Use Your Tax Credit to Help With Your Down Payment

One of the difficulties we have run in to here recently is being able to come up with enough money to make your down payment when buying your new home. A number of months ago FHA did away with the down payment assistance programs being provided by charity companies like Nehemiah and AmeriDream. The Ohio Housing Finance Agency (OHFA) has come up with an ingenious way to use your Tax Credit towards your down payment. As you may already know if you are a first time home buyer who qualifies you will get up to an $8000 tax credit when you buy a new home. I wrote about the tax credit below on February 27, 2009 that you can read more to understand how the tax credit works. What OFHA has put together is a program where you can borrow the down payment from them with no interest and no payment due until August of 2010. At anytime prior to August of 2010 when you get your tax return you can then pay off the loan or if you choose not to pay off the loan you can then start to make payments. It is really a great way to help first time home buyers who have little or no money to use their tax credit money right now to buy a home. To find out more just give me a call and I'd be happy to send you a informational sheet about the program and answer any questions you might have.

DATE: April 30, 2009

Absolute VS Reserve Bid Auctions

As more and more homes go to auction to be sold we are finding more and more home buyers who don't understand all of the rules of buying real estate at auction. We recently had a buyer who went to a real estate auction at a 'Holiday Inn' type conference room that was totally packed with potential buyers. The buyer was the high bid but was called the next day by the bank’s representative to renegotiate the sales price telling the buyer they did not accept his bid price. Obviously the buyer was confused but in many states there are actually 2 kinds of public Auctions. One is 'Absolute' and the other is 'With Reserve'. All auctions are assumed With Reserve unless advertised as selling Absolute. In Reserved auctions, the seller retains the right to withdraw or remove any item if the minimum or reserve bid is not obtained. This reserved bid does not need to be advertised. So it is safe to assume that if you are attending an auction and there is no mention of items selling absolute, all items are selling with reserve. As the seller, you retain the right to protect the price you wish to receive. In most Real Estate auctions, you will see the term sold with owners confirmation or with reserve. This means the sellers have a minimum bid. By law in an advertised Absolute auction, once the bidding is opened, the item or parcel must sell to the highest bidder no matter the price. So if you are going to bid for real estate at Auction make sure you know and understand all of the rules or you might just get a phone call from the seller's representative wanting to renegotiate what you thought was the high bid price. To find out more don't hesitate to give me a call, I'd be happy to help or answer any questions you might have.

DATE: April 24, 2009

How to Buy a HUD Home

Foreclosure homes can be a terrific deal for just about anyone, but most especially the first-time home buyer. Why? Because many times you can buy a home for less than the true value of the home. But buying a HUD foreclosure can also be scary and potentially end up costing you thousands of dollars if you don′t know what you are doing. I know an agent in our group who recently helped an investor buy a Fannie Mae owned foreclosure for $80,000 that was in a neighborhood of $150,000+ homes. The property obviously had issues but no where near $70,000 worth of work. In fact the investor rehabbed the property and put it back on the market just 2 months after he had bought it at an asking price of $159,800. Just 2 weeks later he had it in contract and closed 4 weeks after that.

I don′t know all of the actual numbers but it is my understanding the investor put less than $20,000 of actual cash in to the property and after paying all the associated fees for selling the house he put over $40,000 back in to his pocket. Why am I telling you all this? To simply illustrate that there are deals out there if you have the right help finding them. This investor has his own real estate license but uses our agents to help him buy and sell because he knows that by using a foreclosure specialist like us he can and does get better deals on properties because while he is working on rehabbing a home we are out looking for more deals and when we find one that he likes we run a market analysis to see what the property is worth right now and what it could be worth after the work is done and only then does he make a decision to buy.

Do you want to know more, visit my free eBook section by clicking on the ″Free eBook″ link on the left hand side of this web page and request my eBook entitled ″How To Buy a HUD Home″. You′ll find tons of information about the process of buying a foreclosure property, things to look for and things to avoid and when you get ready to go look don′t forget to include a professional foreclosure specialist like me that will help you identify the best possible deal.

DATE: April 20, 2009

Foreclosures and Closing Cost

Every Bank has set up different procedures to deal with the massive number of foreclosure properties currently on the market. The major players in the game are HUD, Fannie Mae and Freddie Mac and each of them have their own set of rules. For example HUD will pay up to $2500 of your closing cost while Fannie Mae and Freddie Mac will not pay any of your closing cost, but both will allow you to add closing cost to the price of the home which will then be given back to you. Basically you are paying for your own closing cost but this way you are able to finance the ocst and spread the total over the length of your loan. Every Bank has their own set of rules that they follow, so one bank may do it one way while another bank may do it differently. We have seen Banks go from not paying any closing cost just a couple of years ago to now wanting to pay closing cost and even down payment assistance and with the right credit score they′ll even finance the deal for you at a better interest rate than what they may have on the street at the time. Want to know more then give me a call and I′ll be happy to discuss all the options available to you.

DATE: April 14, 2009

Be Aware of Hidden Fees and Traps

Fannie Mae, Freddie Mac and some Banks will not pay for your Title Insurance or any of the associated Title fees. For a house that cost around $100,000 you could expect to pay an additional $1350 for Title Insurance and the associated fees such as transfer fees, binder fees, deed prep, closing fee, courier fees and many others. Make sure you know all of the cost associated with buying any house before you make an offer to buy so you are not surprised at the closing table with a bunch of fees you were not counting on to pay.

Although these companies and many Banks just like them will not pay for Title Insurance and associated fees, you can have these fees paid for through your closing cost, but you have to know how to ask for them. Typically your lender closing cost should never be more than about $2500 but you may need to ask for additional closing cost to be paid for by the seller so you can include these fees. You can get a great deal when buying a foreclosure property if you have the experience to know what trap doors to look out for otherwise buying a foreclosure can also be one of the worst deals ever costing you thousands of dollars. The best advice I can give you is to simply ask someone with lots of experience to avoid these traps.

DATE: April 8, 2009

HUD is holding back listings

There are a bunch of Foreclosed properties that are currently owned by HUD but have not been listed anywhere yet. I think there are a couple of reasons that HUD is taking their time to bring foreclosed properties on to the market place. First I think HUD has seen so many homes come on to the market and as a result they have also seen the average sales price drop by 25, 35 and in some neighborhoods by as much as 50% of what they were selling for just a couple of years ago. So HUD is spacing the listings out and not just dumping a bunch of foreclosures on the market driving prices down even further. If you want to make sure you are one of the first to know about these hot deals when they come on to the market, make sure I have your current contact information like your cell phone and best email address. Normally the better homes come on to the market and are sold the same day or very shortly after. If you want the best deal possible make sure I have the best contact information for you! Use the link above called ″The Auto List″ to sign up and make sure I have your correct contact information.

DATE: April 6, 2009

Why are the prices of homes dropping substantially in today′s market?

Prices are dropping because of the anomaly that occurred during the market boom. Professor Karl Case of Wellesley College and contributing author of the Case-Schiller Home Prices Indices, a quarterly nominal housing price report, looked closely at the appreciation of median home value over five-year increments dating back to 1980. His research shows that home values appreciated 26.5 percent on average for the 20-year period from 1980 through 2000.

In the six years that followed, average appreciation was 89 percent. Prices are now adjusting to the inconsistent and unsustainable growth that occurred during the first six years of this decade. In other words, the market is not on the decline. Rather, it is moving toward stability, which will mean healthier markets in the future.

DATE: April 3, 2009

How do I determine the direction of prices in my market?

Although there are no steadfast rules to determine future pricing, months′ supply of inventory (total inventory divided by the number of houses sold per month) is a great guideline. A normalized or balanced market has five to six months of inventory. If 100 houses sell a month, there should be 500 to 600 houses in active inventory.

Based on this principle, if you have one to two months of inventory, double-digit appreciation is likely to occur. Lack of supply will cause potential buyers to clamor over the few homes that are for sale, which in turn drives prices higher. On the other end of the spectrum—where many markets are right now—there is a seven- to eight-month inventory. With this abundance of supply, there simply aren′t enough buyers to support the number of homes for sale.

Current economic conditions will also have an effect on the direction of pricing, as pricing is directly connected to average income. Traditionally, the national average sales price of a home is two-and-a-half times the average household income. Through the boom years of 2004, 2005, and even into 2006, that ratio was distorted, reaching up to four times the average income. We′re now getting much closer to the 2.5 ratio. However, with unemployment rising, prices may have to drop further to stay in line with the average American family income.

DATE: March 30, 2009

Why should I buy now?

Any investment consideration, whether it be real estate, gold, or fine art, follows a predictable cycle with nine stages. Let′s start with optimism, the period in which many people are excited about buying a home. When the market is strong, people′s purchases quickly increase in value, which leads to euphoria, which can lead to rash decision making.

From euphoria starts a downward cycle. As prices start to fall, buyers go into denial, with statements such as ″I′ll be in the house a few years, so this won′t be a challenge.″ After denial comes fear, as prices continue to fall, followed by panic, despondency, and depression. After depression comes hope and then optimism (back to stage one).

The point of maximum risk for any investment is during the euphoria stage. The point of maximum opportunity is at the lowest point, between despondency and depression. That′s exactly where we are in many real estate markets today. Clients who are motivated and qualified to buy will be able to look at the market cycle chart and understand why now is the best time to invest in real estate.

DATE: March 25, 2009

How can you tell a bad foreclosure from a good one?

Certainly there are great deals in many markets for both investors and buyers looking for a primary residence. But making a sound deal can be tricky. Buyers need to be wary of unpaid liens, including mortgage debt, taxes, construction loans, home equity lines of credit, and possibly a second or third mortgage. Any or all of these financial obligations could become your clients′ responsibility when they purchase a property in foreclosure. Unless the property goes through a foreclosure auction and becomes a bank-owned REO, the outstanding foreclosure liens and fees could be simply transferred to you as the new owner. Don′t fall into the same financial trap as the previous owner.

DATE: March 20, 2009

WOW! Mortgage rates have fallen to under 5% to 4.875% according to one of our leading lenders!

Now is a great time to buy that new home. I don′t mean to sound pushy, and believe me I am not, but we are seeing fewer homes coming on the market and the prices are still great! With the mortgage rates dropping to near historic levels, now is one of the best times ever to buy that new home.

If you have not already spoken with a lender or would like a recommendation of a good lender who can help you LOCK-IN a low rate, just let me know and I′d be happy to supply you with 2 or 3 great lenders I use on a regular basis.

Each Friday morning the new HUD Foreclosure list comes out with all of the new listings, relist and price reduced properties on it. If you have not already signed up to get your free list of homes each Friday morning you can do so by clicking on my link above called ′The Auto List′ and I will be happy to update you each Friday morning.

Bid deadlines are as early as the following Tuesday so if there are things on the list you would like to go see we can schedule time over the weekend, make your bid and find out the results fairly quick.

If you would like to update, add or delete your search criteria just send me back an email or give me a call and I′d be happy to take care of it for you or if you would like the names of a couple of good lenders I trust then just let me know.

DATE: March 16, 2009

Buy a HUD home for just $100 down

Did you know that you can buy a HUD owned Foreclosure for just $100 down? If you are a first time home buyer, actually if you haven′t bought a primary residence in the last 2 years, you may qualify to buy a HUD owned property for just $100 down. Now there are some other qualifications like income and credit scores but it really is a pretty good deal that you can buy a house for just $100 down and HUD will even pay your closing cost. Most lenders will charge you different fees in order to make you the loan including origination fees, survey, credit reports and so on. HUD will even give you the money to offset these cost. If you would like to learn more about how you can buy a HUD owned Foreclosure then give me a call to go over.

DATE: March 12, 2009

What are the costs of buying a foreclosure?

As the old saying goes, it takes money to make money. The best opportunities are for buyers with cash. If you are planning to rent out the property or even resell it for a quick profit, make sure they consider the carrying costs, including sales commissions, marketing costs, vacancies, taxes, insurance, and maintenance costs. Once you′ve calculated all the expenses, add on another 10 percent to 15 percent. If you don′t build in a ″surprise fund,″ you might be the next foreclosure statistic.

DATE March 6, 2009

How does choice of neighborhood affect foreclosure investments?

If you are looking for a good investment you should generally avoid neighborhoods overrun with foreclosures, particularly newer subdivisions in overbuilt areas. Investors will be tempted to buy foreclosures in these areas because they offer the steepest discounts - but they also carry the most risk of further depreciation. Look in well established neighborhoods with good schools and transportation. If you′re in a market where prices are still falling, encourage your clients to factor falling prices into any offer they submit on a foreclosed property.

DATE: February 27, 2009

First-time Homebuyer Tax Credit

In short, the tax credit was bumped up to $8,000 (from $7,500) and the recapture provision (a big impediment in the prior version) was removed.

You can receive the tax credit, regardless of whether they owe taxes or are due a refund. For example:

The Ohio Housing Finance Agency (OHFA) on March 31 announced the Homebuyer Tax Credit Advantage program, which can assist homebuyers with downpayment and closing costs and can be used with the $8,000 tax credit.

First-time buyers can claim $8,000 tax credit on 2008 return, even if they purchased in 2009!
First-time homebuyers can take advantage of tax credit and claim it on their 2008 tax return that is due April 15.
Eligible homebuyers who make their purchase between Jan. 1, 2009 and Dec. 1, 2009 can treat the purchase as if it had occurred on Dec. 31, 2008.

In other words, if you bought a home since Jan. 1st you won′t have to wait to claim the credit on your 2009 income tax return! In essence, eligible buyers have three filing options for their 2008 taxes:

  1. If you purchased a home between Jan. 1, and April 15, 2009 you can claim the $8,000 credit on your 2008 return due on April 15.
  2. You can extend your 2008 income-tax filing until as late as Oct. 15 (The IRS grants automatic extensions, but the taxpayer must file for the extension. See http://www.irs.gov/ for instructions on how to obtain an extension.)
  3. If you have filed your 2008 return before you purchased your home, you may file an amended 2008 tax return on Form 1940X.

Of course, 2009 purchasers will always have the option of claiming the credit for the 2009 purchase on your 2009 return, which is due April 15, 2010.

DATE: February 23, 2009

Four Ways the Stimulus Helps Buyers and Sellers

There are four primary sections of the economic stimulus plan that will benefit home owners and buyers,″ said Gibran Nicholas, Chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers.

Benefit #1 - Expansion of Home Improvement Tax Credit″The tax credit for making energy efficient home improvements is now 30% of the cost of the improvements up to a maximum of $1500,″ Nicholas said. ″This means that if the improvements cost you $4,500, you would receive a tax refund of $1,500 when you file your tax returns.″ Eligible improvements include energy efficient exterior doors and windows, insulation, heat pumps, furnaces, central air conditioners and water heaters. ″Generally, most modern improvements like windows, furnaces, and air conditioners meet the necessary standards for energy efficiency,″ Nicholas said. ″If you′ve been holding off on making some of these improvements, now is a great time to get a move on it - especially with all the great deals being offered.″

Benefit #2 - Expansion of First-time Home Buyer Tax Credit The tax credit available to first time home buyers was increased from $7,500 to $8,000 for homes purchased between January 1, 2009, and December 1, 2009. Also, the credit no longer needs to be paid back as long as the buyers live in the home without selling it for at least 3 years. ″The previous version of the credit expired on July 1, 2009, and required home buyers to pay the funds back over a 15 year time frame,″ Nicholas said.

The income limitations remain the same ($75,000 for single tax payers claiming the full credit and $150,000 for married tax payers), as do most other qualification requirements. Also, the credit remains refundable. ″This means that first-time home buyers who owe less than $8,000 in taxes for the year are still eligible for the full $8,000 credit when they file their tax returns, and the IRS will write them a check for the difference between $8,000 and their actual tax bill,″ Nicholas said. ″In fact, the credit can be claimed on your 2008 tax returns that you file by April 15 of this year, even if you buy the home in 2009.″

There is one catch, however: if you bought the home in 2008, the credit remains $7,500, and it still needs to be paid back over a 15 year timeframe beginning in 2011 when you file your 2010 returns.

Benefit #3 - Higher Reverse Mortgage Loan Limits The loan limits for FHA-insured reverse mortgages have been increased to $625,500 across the entire country - not just the higher cost areas. The previous limit was $417,000 across the country. ″This is especially important because the FHA program is virtually the only game in town as private and jumbo reverse mortgage programs have nearly all evaporated,″ Nicholas said.

This coincides with another little-known change in the reverse mortgage arena: the availability of reverse mortgages on home purchase transactions. ″This is a fantastic opportunity for senior citizens to buy a new home and live mortgage payment-free without having to wait for their old home to sell,″ Nicholas said. ″Seniors could also use this strategy to buy a new home and turn the old home into a rental or otherwise wait for market conditions to improve before trying to sell the old home.″

Benefit #4 - $729,750 FHA and Conforming Loan Limits Restored in High Cost Areas″ The $729,750 maximum loan limit had been in force throughout 2008, but was reduced to $625,500 in 2009,″ Nicholas said. ″The economic stimulus plan restores the $729,750 maximum. This makes higher cost homes more affordable - especially in the coastal housing markets that tend to have higher than average home values.″

DATE: February 16, 2009

Save up to $350 on Your Appraisal

When HUD takes a property back through the foreclosure process ending with the Sheriff Sale they will then have an appraisal performed on the property to determine it′s worth. The initial appraisal price is what HUD will list the property for when they assign it to a real estate agent to be sold. The good news for you is that you can save up to $350 when you buy a HUD owned property because the appraisal has already been completed and is good for 6 months. Lenders will order a new appraisal automatically when you apply for a loan and charge you as much as $350 but because you are buying a HUD owned property the appraisal has already been done. Just tell your lender the appraisal has already been done by HUD and save the money to buy something nice for your new home.

DATE: February 5, 2009

Wait a Day or Two for a Better Price

HUD reduces the prices on it′s homes every 30 days. So if you are thinking about making an offer and the days on market is 29 days, you might just want to wait a day to see if the price drops before making your bid. Depending on the area, the price and the length of time that the home has been on the market, HUD will use it′s computerized formula′s to determine the new price. We have seen prices recently drop as much as \$10,000 every 30 days. Fannie Mae and Freddie Mac do the same thing every 30 days. Want to know more about saving a bunch of money when buying a foreclosed property, give me a call today on my cell phone at $agent_cell and we′ll go over the information you need to know that will help you get the best possible deal.

DATE: January 28, 2009

The Best Buys May Not Be a Foreclosure

Sometimes the best Foreclosure buys are the ones that never end up being Foreclosed on. What? The best buys a lot of times are pre-foreclosure properties or more commonly known as ′Short Sales′. We like Short Sales because many times the home owner is still in the house so it has not been abandoned and ends up with frozen pipes, torn up carpet holes in the wall and vandals beating the house up and taking the copper piping which can happen with foreclosed properties. Many times the home owner is still in the house with the heat on, taking care of the property because they are living in the home. Short Sales can be tougher to buy sometimes because you really have to know how to navigate through the Short Sale buying process. We have the expertise to help you do just that, so don′t rule out short sales.

DATE: January 20, 2009

Get Pre-Approved Now to Save a Bunch Later

Did you know in order to buy a Foreclosed property you must be pre-approved by your lender. An offer cannot even be submitted in many cases because HUD, Fannie Mae and many area Banks that have acquired foreclosed properties will not even consider an offer unless the you have been pre-approved. It is important for you to get with your lender right away to get your pre-approval letter. Most banks can issue you a pre-approval letter within 24 hours. If you do not know any lenders just don′t take anyone word or referral. Most of the properties you are going to be looking at are foreclosed properties and many of them were foreclosed on because of predatory lending practices, don′t be a victim yourself! If you need names of good lenders who have been around for years and are still in the business give me a call and I′ll be happy to supply their names and numbers to you.

DATE: January 14, 2009

Know What The True Cost To Buy Is

Let′s say there is a really hot HUD foreclosure that just came on the market and you decide to make a bid on it but you want to make sure you buy it so you decide to offer more than the house is listed for. That′s smart because we are seeing the really hot deals still sell fast and most of the time for more than what they are listed for. If you are using FHA financing to buy your HUD owned foreclosure you will need to bring cash to the closing table to pay the difference between what you offered to pay for the property and the appraised value of the home. FHA will not allow you to finance more than the appraised value and will require you to bring the difference to closing. Don′t overbid if your are using FHA financing unless you are able to bring cash to the closing table.

DATE: January 6, 2009

Improve Your Credit Score Now

Take every step possible to improve your credit score. The better your credit score the better your loan terms and likelihood of getting the loan. The Federal Trade Commission has made it mandatory that the 3 major credit reporting agencies provide you with a free credit report every 12 months. To get your free report(s) visit this web site http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre34.shtm By going on line you will be able to download your credit report from each of the 3 credit reporting agencies immediately and for FREE. Make sure you inspect each report carefully for the following; addresses you never lived at, aliases you never used, multiple social security numbers, wrong birth date, credit cards you don′t have, loans you never took out, unpaid bills you know were paid, delinquent bills you know never were, inquiries from companies you never did business with and anything else that looks unusual.