Archive for the ‘Uncategorized’ Category
Mortgage Giant Asks Taxpayers for Another $6 Billion
Filed under: News, Economy, Foreclosures
WASHINGTON — Government-controlled mortgage giant Freddie Mac has requested $6 billion in additional aid after posting a wider loss in the third quarter.
Freddie Mac said Thursday that it lost $6 billion, or $1.86 per share, in the July-September quarter. That compares with a loss of $4.1 billion, or $1.25 a share, in the same quarter of 2010.
The government rescued McLean, Va.-based Freddie Mac and sibling company Fannie Mae in September 2008 after massive losses on risky mortgages threatened to topple them. Since then, a federal regulator has controlled their financial decisions.
Taxpayers have spent about $169 billion to rescue Fannie and Freddie, the most expensive bailout of the 2008 financial crisis. The government estimates that it will cost at least $51 billion more to support the companies through 2014, and as much as $142 billion in the most extreme case.
Freddie and Washington-based Fannie own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans worth more than $5 trillion. Along with other federal agencies, they backed nearly 90 percent of new mortgages over the past year.
The two mortgage giants buy home loans from banks and other lenders, package them into bonds with a guarantee against default, and then sell them to investors around the world. When property values drop, homeowners default – either because they are unable to afford the payments or because they owe more than the property is worth. Because of the guarantees, Fannie and Freddie must pay for the losses.
Fewer foreclosures and delays in foreclosure processing because of a yearlong government investigation into mortgage lending practices have reduced the companies’ projected losses.
Fannie and Freddie are required to pay 10 percent dividends on the government money they receive. Freddie paid $1.6 billion in dividends to the Treasury Department in the July-September quarter.
Pressure continues on the government to eliminate Fannie and Freddie and reduce taxpayers’ exposure to risk. The Treasury Department put forward a plan in February to slowly dissolve Fannie and Freddie, although that process could take years. Abolishing Fannie and Freddie would transform how homes are bought and redefine who can afford them.
Copyright 2011 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
Also see:
Watchdog: Fannie, Freddie Knew of Robo-Signing in 2003
Is ‘Occupy’ Ready to Move Into Foreclosed Homes?
Victims of Robo-Signing: Fight the Machine!
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More on AOL Real Estate:
Find out how to calculate mortgage payments.
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Find foreclosures in your area.
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Source: http://realestate.aol.com/blog/2011/11/03/freddie-mac-asks-taxpayers-for-another-6-billion/
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Candidates Put Housing Crisis at Fannie and Freddie’s Doorstep
Discussion of the housing crisis took up a significant chunk of Wednesday’s GOP primary debate, with candidates expressing their views on the sluggish market and how they aim to fix it.
Until Wednesday, housing had been something of a ghost issue this primary season. But with 4 million homeowners delinquent on their loans and about 23 percent of them underwater, candidates were bound to confront the issue sooner or later. CNBC’s “Your Money, Your Vote” debate nudged them into doing just that Wednesday.
While detailed proposals were mostly absent from discussion, many of the candidates said that Fannie and Freddie, government-sponsored mortgage-holders who own or guarantee a majority of the country’s mortgages, must go.
“I would find a way to unwind Fannie and Freddie Mac such that the marketplace can determine the future of the housing market,” said businessman Herman Cain.
“We need to put them back into bankruptcy,” added Minnesota Congresswoman Michele Bachmann later in the debate.
During the debate, candidates claimed that the government’s hand in the housing market, extended in the form of the two mortgage giants, disrupts natural market forces and leads to doomed-to-fail loans.
Former Massachusetts Gov. Mitt Romney (pictured above right, with Newt Gingrich) reasserted his strong opposition to any government action aimed at fixing the housing crisis, asking rhetorically, should the “federal government go out and buy all the homes in the country?”
“You’ll see home prices come back up if we allow this market to work,” he said.
Bachmann was particularly critical of Fannie and Freddie, railing against them for continually requesting bailouts that have already run far over $100 billion and could ultimately exceed $200 billion. She also attacked Fannie and Freddie for paying million-dollar bonuses to their executives, calling it “crony capitalism.”
Asked about his role as a consultant to Freddie in 2006, when his company was paid $300,000, former Speaker of the House Newt Gingrich said, “I offered them advice on precisely what they didn’t do.” Gingrich, who said there was a “good case for breaking up” Fannie Mae and Freddie Mac, also denied ever lobbying for them.
While the candidates almost uniformly said that they would halt mainstream mortgage assistance to homeowners, they provided little insight into how they would accomplish the task. For his part, Cain outlined a general plan, saying that he would reduce the scope of Fannie and Freddie and then turn them into private companies.
Republicans have already proposed legislation designed to weaken Fannie and Freddie‘s dominance in the mortgage market by forcing the organizations, which currently guarantee mortgages at reduced rates in order to foster homeownership, to charge the same guarantee rates as private investors.
Also see:
Republican Candidates: Short on Housing Policy, Long on Houses
Viewpoint: Housing Is Ghost Issue in Presidential Race
132 Rms, Riv Vu: What If You Could Rent the White House?
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More on AOL Real Estate:
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Insuring a House with Roof Issues
If you’re buying a house with a limited-lifespan-left-on-the-roof , be prepared  for a hiccup or two. As far as roof insurance goes: If the home you’re buying has less than a year’s ‘life’ left on the roof, getting insurance may be virtually impossible. With 2-5 years of life left on the roof,  your insurance company may or may not write a policy for you, depending on who that insurance carrier [...]
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Your Facebook Status: Foreclosed
Filed under: News, Economy, Financing, Foreclosures, Other, Credit
Foreclosure via Facebook? With roughly 4 million foreclosures in the pipeline in this country, some legal experts say it’s just a matter of time until lenders win the right to serve foreclosure documents through the giant social network.
That day has already come for one couple in Australia. When they defaulted on a six-figure loan and couldn’t be found via a physical address or email, the lender’s enterprising lawyers located them on Facebook. The lawyers were able to verify the couple’s identities by matching up their names and birthdates — and, of course, the fact that they had “friended” each other.
Australian courts upheld the lender’s right to send foreclose notices via Facebook, citing the fact that the couple didn’t enable privacy protections on their Facebook accounts and were frequent enough visitors to the site that they would “reasonably receive notice as a result.”
While Marc Rotenberg, president of the Electronic Privacy Information Center in Washington, says he is unaware of Facebook being used in the U.S. to deliver legal notifications, but “it’s bound to happen,” he said. “The real concern the courts have is whether it’s a fair notice that the person actually receives.” According to Bloomberg BusinessWeek, courts in New Zealand, Canada and the U.K. already have adopted the Australian example to avoid having cases stall when people can’t be located and served in person.
“There are people who exist only online,” Joseph DeMarco, co-chair of the American Bar Association’s criminal justice cyber crime committee, told the publication. The ability to serve documents by social-media networks would be useful, he said.
Facebook has taken heat before about its policies protecting the personal data of its 694 million users worldwide. Following the case in Australia, which happened in 2008, company spokesman Barry Schnitt said the company was pleased to see the Australian court validate Facebook as a reliable, secure and private communication medium. (Facebook did not respond to messages left by AOL.)
Is it appropriate to use social networks to find people and deliver legal papers to them via the network?
“No one likes to receive a legal service,” said Rotenberg. Legal service, after all, usually isn’t good news: Someone wants you for something. And yes, he adds, “There are going to be privacy concerns, but in some respects they’re almost inescapable.”
Email, by contrast, is generally not considered by courts to be a safe or reliable way to deliver legal notices. We get too much email, much of it winds up in spam and we don’t always open everything in our in-boxes. Legal notices delivered this way can easily be discounted with a simple “I didn’t see the email.”
But Facebook, said Rotenberg, is different. If you don’t have thousands of friends and you regularly post status updates indicating that you are active on the site, you lose the excuse that you likely overlooked the notice. Of course not everyone with a Facebook page visits the site regularly, but save it for the judge whether you’re one of them.
Bottom line: It’s probably going to be determined to be legal, just not likely to be popular. And should use of Facebook as an electronic process-server escalate as a norm, you can expect it would have some adverse impact on the site’s participation levels. In the meantime, if you don’t want the banks to find you, the best defense is enabling your privacy settings on Facebook and be mindful of the personal data you post.
For more on mortgages and related topics see these AOL Real Estate guides:
- How to Buy Foreclosures
- Spot Foreclosure Scammers Before They Spot You
- Foreclosure: What it Means for Renters
- Foreclosure Help: What a Housing Counselor Can Do
More on AOL Real Estate:
Find out how to calculate mortgage payments.
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Source: http://realestate.aol.com/blog/2011/06/17/your-facebook-status-foreclosed/
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House of the Day: Luxury by Lake Tahoe
This $6.785 million residence, located in the luxurious Martis Camp community of North Lake Tahoe, Calif., boasts four bedrooms, 5½ baths, and an incredible array of cutting-edge amenities — including a home iPad interface system and hydronic heating throughout the flooring.
The master suite, which offers commanding views of majestic arboreal wilderness, includes a fireplace and spa-inspired bath. The lower level features a recreation-media room, complete with a surround-sound system and a bar, as well as a 1,000-bottle wine cellar and an exercise den. Moveable glass walls divide the living room from an outdoor patio and walk-out terrace, which offer extensive outdoor entertaining space including a spa, fire pit, dining area and landscaped lawn. Furnishings throughout are a combination of the rustic and the ultramodern.
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As if this all weren’t enough, Martis Camp residency offers several extra layers of luxury, including an 18-hole golf course, and a family recreation center with swimming, bowling, basketball, cinema and art. Finally, the community includes 26 miles of private trails for hiking, snowshoeing and cross-country skiing.
Brian Hull of Martis Camp has the listing.
Click on the images below to see more homes for sale near Lake Tahoe, Calif.
See more Houses of the Day on AOL Real Estate.
Got a tip for House of the Day? Know of an exceptional or unusual property currently listed for sale? Please email krisanne.alcantara@huffingtonpost.com with your suggestions and be sure to include links to listing details and photos. (Due to the volume of response, we unfortunately are unable to reply to each submission.)
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Source: http://realestate.aol.com/blog/2012/04/03/house-of-the-day-luxury-by-lake-tahoe/
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Average Price Per Square Foot in Coral Gables
The average price per square foot has gone up 9.6% on Single Family Homes in Coral Gables from October 2011 to now. That’s a good sign for the Gables Market. If you would like to sell your house, call the Restivo Team today. We will give you a FREE home valuation. We know we can [...]
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After Slowdown, Foreclosures Rise Again
Filed under: Foreclosures
LOS ANGELES — More U.S. homes entered the foreclosure process in October than in the previous month, with Florida, Pennsylvania and Indiana registering among the largest monthly increases, new data show.
Some 77,733 properties received an initial default notice last month, up 10 percent from September, foreclosure listing firm RealtyTrac Inc. said Thursday.
The number of homes scheduled to be auctioned or repossessed by lenders also posted monthly increases.
All told, notices of default, scheduled auctions and bank repossessions – warnings that can eventually lead to a home being lost to foreclosure – hit a seven-month high in October.
The numbers are further evidence foreclosure activity is picking up.
The activity slowed a year ago after problems surfaced with the way many lenders were handling foreclosure documentation, namely shoddy mortgage paperwork comprising several shortcuts known collectively as robo-signing. Many of the nation’s largest banks reacted by temporarily ceasing all foreclosures, re-filing previously filed foreclosure cases and revisiting pending cases to prevent errors.
But banks appear to be moving past those problems now and starting to tackle a swelling backlog of homes with mortgages that have gone unpaid – something that lenders are seeing more of as the economy struggles and unemployment remains high.
The rate that homeowners were 60 or more days late on their mortgage payment rose in the June-to-September period for the first time since the last three months of 2009, according to TransUnion.
The credit reporting agency said 5.88 percent of homeowners missed two or more payments, an early sign of possible foreclosure. That was up from 5.82 percent in the second quarter of 2011.
The number of U.S. homeowners underwater on their mortgage, or owe more than their homes are worth, represent another potential source of trouble for lenders.
As of June 30, some 22.5 percent of all U.S. homes had a mortgage that was under water, according to CoreLogic. That’s 10.9 million properties. Another 2.4 million borrowers had less than 5 percent equity in their home, the firm said.
Industry experts say a housing market turnaround isn’t likely to occur as long as there remains a glut of potential foreclosures hovering over the market, so October’s increase in foreclosure activity means a potentially faster revival for housing.
“We all know that there is an underlying amount of properties that need to go into foreclosure and the sooner we clear that the sooner we can get housing to a normal level,” said RealtyTrac CEO James Saccacio.
In some states, the number of homeowners put on notice by banks for missing payments far exceeded the national average for October.
Florida posted a 28 percent jump in October from September in homes receiving an initial default notice. Pennsylvania saw a 50 percent increase and Indiana registered a 61 percent gain, according to RealtyTrac.
In some cases, though, government intervention is slowing lenders down.
Take Nevada, where a law went into effect Oct. 1 requiring that foreclosure documents must be filed in the county where a property is located and a lender must provide a notarized affidavit detailing their legal right to proceed.
Saccacio said the law helped cause a 75 percent drop in initial default notices in Nevada last month versus September, bringing defaults to the lowest level since June 2006 at the peak of the housing boom.
“It’s like a rain delay,” Saccacio said. “We’ll eventually see foreclosure processing go up.”
Despite registering a 34 percent drop in foreclosure activity overall, Nevada still registered the highest foreclosure rate in the nation for October, with one in every 180 households receiving a foreclosure-related notice, RealtyTrac said.
In all, 230,678 U.S. homes received a foreclosure-related warning last month, up 7 percent from September, but down nearly 31 percent from October 2010.
Foreclosure auctions rose 8 percent from September, but climbed by more than 35 percent in several states, including Florida, Minnesota and Illinois.
Lenders took back 67,624 properties in October, up 4 percent from the previous month, but down 27 percent from a year earlier.
Bank repossessions increased by a far larger margin in several states. In Oregon they climbed 45 percent, while in New Jersey they posted a 48 percent jump. Indiana registered a 73 percent increase.
Copyright 2011 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
Also see:
‘Mortgage Prof’: 5 Reasons Banks Would Rather Foreclose
The Mortgage Fix That Can Save the Economy
5 Foreclosure Flip Tips From the ‘Flip Men’
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Find out how to calculate mortgage payments.
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Source: http://realestate.aol.com/blog/2011/11/10/after-slowdown-foreclosures-on-the-rise-again/
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Renting is Easy
There are times when we need an extra space for our need. However, we do not have enough money to buy a new place. This way we need to rent place. Of course, there are many things that we need to consider when we are renting a place. Often we encounter that renting a place [...]
Source: http://www.brothernwla.org/renting-is-easy/
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Home Demolished by Accident
Filed under: News, Home Improvement
Updated Jan. 7: Andre Hall came back from the holidays to continue repairing a 4-bedroom, 1-bath home he had acquired from a friend facing foreclosure in the West End area of Pittsburgh in November only to find that a city contractor had demolished the 1916-built house that had been vacant for five years.
“When I came back I saw a guy with a backhoe tearing the house down,” Hall told AOL Real Estate.
City records show Hall had six months from the November acquisition date to make repairs on the once-condemned Sheraden neighborhood home that had previously sustained water damage, reported the Pittsburgh Tribune-Review.
Hall, 40, who works in home repairs, said he was about three weeks away from being able to
move into the 1,613-square-foot home that had an assessed value of $31,000. He planned to live there with his girlfriend, her three children, and his three daughters when they would come visit in the summers from Kansas City, Kan. The couple currently lives in a one-bedroom apartment.
“I wasn’t even able to do Christmas for my girls because everything I had I was putting into the house. This was my gift to them,” he said.
“My dream is done now,” he said. “Someone needs to man up and take responsibility for this.”
P.J. Deller Excavating & Hauling was hired to tear down the home immediately next door, and although it did so, it is accused of also demolishing Hall’s home.
“We have stopped any contracting from going to P.J. Deller until further notice,” a spokeswoman for Mayor Luke Ravenstahl told competing publication the Pittsburgh Post Gazette. “They will not be doing any demolition for the city until our Law Department has appraised the matter.”
The Bureau of Building Inspection wrote to and called Deller in early November, telling the firm that Hall’s home was no longer scheduled for demolition, according to John Jennings, acting chief of Pittsburgh’s Bureau of Building Inspection, who added that the city did not have record of Hall obtaining a building permit to do work on the house.
Still, that doesn’t change that Hall’s house, a pool table, furniture and even his tools inside are now gone. “One of the [demolition] workers even had my lumber in the back of his truck.”
Hall said the workers said they were also to tear down the house next door, but they had started on his first. They had not gotten to the other home by time Hall arrived. If only they had done the other one first.
Hall’s girlfriend, Shawna Jones, told AOL Real Estate that they have not heard from the city at all. “The city has not contacted us and the contractor is missing in action. No one has called us but the news media.”
Hall, who said he was still finalizing homeowner’s insurance for the home at the time of the demolition, said he has contacted a couple of attorneys, but all he wants is a house to live in. He went on a month-to-month lease ever since the previous owner of the home, Lorraine Nichols, began working with him to help him obtain the home. “Everytime I had a court date [about the foreclosure] Lorraine was with me. She gave me the home and didn’t want me to pay her anything. She just wanted me to take care of the $15,000 in back taxes that were owed.” He says there was no mortgage on the home and he would’ve owned it free and clear after the taxes were paid.
“I just need some help getting this resolved, that’s all. I just hope it don’t take three years because I was planning on being in there in three weeks.”
In April, a 69-year-old Denton, Texas woman was also the victim of a wrongful demolition after a crew wrongly tore down most of her house, instead of one across the street, reported the Denton Record-Chronicle.
Thinking about adding value with home improvements? Here are some AOL Real Estate guides to help you, whether you’re selling or staying.
- Home Improvements: Do It Yourself or Hire a Contractor?
- 10 Home Improvements That Pay You Back
- Home Renovation: Tips for Thrifty Upgrades
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Source: http://realestate.aol.com/blog/2011/01/06/home-demolished-by-accident/
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‘Project X’ Copycat Revelers Allegedly Wreck $500,000 Home
It didn’t take long before the carnage in the hit house-party movie “Project X” spilled onto the real real estate market.
Thirteen teenagers are being questioned for their possible involvement in a wild house party that will cost the builder nearly $100,000 in repairs, reports KHOU in Houston, Texas.
“It’s devastating. This is a new home that was ready to sell,” said private investigator Mark Stephens, who was hired by the homebuilder to observe the property. Stephens estimates the home to be worth $500,000.
A tour of the once pristine, 4,000-square-foot-home today reveals gaping holes in the walls, heaps of broken glass and liquor bottles strewn across the property.
Stephens told KHOU that the night after the property was vandalized, he returned to the neighborhood in the hope of catching the culprits in the act. Just down the street, in another vacant home, he came upon a group of teenagers throwing another massive party.
Police took 13 teenagers into custody, with two minors being young enough to be released back to their parents.
Stephens said that when he asked the teens why they broke into the home, they simply said “Project X.”
Yet this isn’t the first time the riotous teen flick reportedly has inspired copycat revelry. Another party in Houston turned deadly after an unidentified teen was shot multiple times at an illegal party in another vacant home, ABC News reports. The party, which drew between 500 to 1,000 high school and college-age students, was shut down by police, but the gunman reportedly escaped on foot.
Idle Hands, Empty Homes
An underlying problem in these and other cases of home vandalism is the glut of vacant homes sitting idle on the market. As foreclosures have flooded local real estate inventories, vacant properties have attracted all manner of blight, lowering property values and putting more financial stress on already struggling neighborhoods.
And the vacancy problem could continue to rise. Despite a new report that shows a 13 percent drop in completed foreclosures in the first month of this year, as compared to January 2011, there are signs that foreclosures could soon rise. With the $25 billion mortgage settlement finally underway, experts expect foreclosure activity to increase through 2012, as banks begin to clear a massive backlog of disputed foreclosures. One in every 637 homes received a foreclosure filing in February, according to RealtyTrac.
In Houston, where both wild parties took place, one in every 689 homes received a foreclosure notice in February — up nearly 10 percent from the previous month.
Also see:
Renters Beware: Fraudsters Still Lurking on Craigslist
‘Home Alone’ House Sells for $1.6 Million
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More on AOL Real Estate:
Find out how to calculate mortgage payments.
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Source: http://realestate.aol.com/blog/2012/03/15/project-x-copycat-revelers-allegedly-wreck-500-000-home/
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Robo-signing settlement may boost short sales
The government’s $25 billion settlement with the nation’s five biggest mortgage servicers over so-called “robo-signing” practices could boost short sales, as loan servicers will receive credit when they approve sales that include forgiveness of a portion of underwater homeowners’ debt.
Although the settlement is only expected to help a fraction of homeowners who owe more their properties are worth — perhaps one in 20, according to one estimate — it will also help bring certainty back to housing markets by removing some of the obstacles that have been keeping homes stuck in the foreclosure pipeline.
Announced last month, detailed terms of the agreement between mortgage servicers and a coalition of state attorneys general and federal agencies were filed today.
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Broadly, the settlement calls for mortgage servicers to pay $5 billion in fines and commit to a minimum of $17 billion in homeowner relief, including principal reductions. Another $3 billion is earmarked for helping underwater borrowers refinance.
“We will see an increase in short sales, because lenders and loan servicers will get the same credit for doing a short sale, as if they did a loan modification or principal reduction,” said Rick Sharga, executive vice president of Carrington Mortgage Holdings LLC.
The Wall Street Journal reported Sunday that the structure of mortgage write-downs was a major point of contention in the year-long negotiations leading to the settlement.
Allowing debt forgiveness on approved short sales to count against the required $17 billion in principal reductions helped secure a settlement that will reach more borrowers, the paper said. Loan servicers will also get partial credit even when it’s investors, rather than the banks themselves, taking the loss, the Journal said.
A researcher at the Brookings Institution told the Journal that the settlement could help about 5 percent of underwater borrowers, or about 500,000 homeowners.
“We will probably see a short-term increase in forcelosure activity, because the servicers and lenders at last have a sense of certainty about what they can and cant do,” Sharga told Inman News. Part of that increase will also be among loans that don’t meet the criteria of the agreement.
For loan servicers to get credit for a principal reduction, a loan must be at least 30 days delinquent, have a pre-modification loan-to-value (LTV) ratio of at least 100 percent, satisfy specified debt-to-income ratios (DTIs), according to ananalysis of the settlement by the lawfirm K&L Gates. At least 85 of occupied properties must have had an outstanding principal balance at or below the highest Fannie Mae and Fanni Freddie conforming loan limit cap as of January 1, 2010.
Because servicers won’t get 100 percent credit for all types of relief that are provided, the actual amount of relief provided could total as much as 32 billion, state attorneys general said in announcing the settlement.
“In terms of the overall housing market , our position is this will have very little effect on anything,” Sharga said. “Consumer advocates don’t think it went far enough, and people who look at housing markets realize that the number of properties and the amount of money involved won’t have a measurable effect on markets.”
Federal housing officials addressed those and other concerns today.
“This agreement does not — and is not intended to — solve or resolve all the issues and abuses related to the housing crisis,” officials with the Department of Housing and Urban Development blogged today. “This agreement is very narrow as to what it releases banks from. This settlement is intended to address the servicing aspect of the crisis, which did not cause the housing crisis.”
The settlement doesn’t prevent the government from punishing wrongful securitization conduct that will be the focus of the new Residential Mortgage-Backed Securities Working Group, HUD noted. State and federal authorities can also pursue criminal enforcement actions related to conduct by servicers, including civil rights, fair housing, fair lending and other violations.
Also, if the remaining six to 14 loan servicers sign on to the settlement, it would grow to about $30 billion with more than $45 billion in benefit to homeowners, HUD said.
Cade Holleman, executive director of the Irvine, Calif.-based National Association of Women REO Brokerages, said the day is fast approaching when brokers and agents who have concentrated heavily in real-estate owned properties will have to diversify.
Short sales, refinancings, and loan modifications are each “pulling REO inventory out of the game,” he said.
“You’ve got to keep your eye on that process,” Holleman said.”You can no longer be 80 percent REO,” but must diversify into short sales and property management.
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Tips for Choosing Home Builders
If you have decided to build your next home, congratulations! You will have plenty of crucial decisions to make within the upcoming months from where to build your home to what colour to paint the master bedroom walls. The first decision to make, of course, is what builder to hire. There are dozens of different home builders [...]
Source: http://www.brothernwla.org/tips-for-choosing-home-builders/
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Contractor Mortgages: Tips
When it comes to finding a contractor mortgage, there are some tips that will help you be successful. There is no need to have three years on your books or to be earning thousands a month to gain that home loan you are looking for, but you do need to have patience. The first tip [...]
Source: http://www.brothernwla.org/contractor-mortgages-tips/
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Now on Sale at Costco: Mortgages
NEW YORK — Not only can Costco shoppers find bulk-packs of chicken wings, 24-rolls of toilet paper and large-screen TVs at a discount, they can now land themselves a mortgage.
After a year of testing, Costco is rolling out a full-service mortgage lending program on its website in partnership with First Choice Bank, a New Jersey-based community bank, and 10 other lenders.
Costco’s partners have issued more than 10,000 mortgages to members under the program. But Lauren Kutschka, Costco’s manager of financial services, expects that number to swell as the warehouse retailer markets the service more aggressively to millions of members in its stores and in its weekly publication Connection.
“I went in to buy some bottled water, big bags of chips, cereal and some Nutri-Grain bars that I eat on my route,” said Ray Sheets, a FedEx courier from Canton, Ga. “I saw a home loan brochure on my way out and picked it up.”
Sheets went onto Costco’s site, put in his information and quickly accessed offers from four lenders. The rates, closing costs and terms were listed up front. And the closing costs — of about $2,500 — were about a third of what he would have had to pay through other lenders, he said.
Within a few weeks, Sheets refinanced his $170,000, 15-year fixed mortgage carrying a 4.25 percent rate into a 30-year loan with a rate of 4 percent. The move lowered his monthly payment by nearly $500 to $811 a month.
Mortgages are just one of several financial products available to Costco’s members. The warehouse club also offers health and auto insurance, as well as stock brokerage services, said Kutschka.
“We’ve always known that our members wanted more financial services,” she said. “Right now, we offer recreational vehicle and boat loans, and we’re going to add auto loans to that. We’re also looking to offer student loans.”
Costco had started offering mortgages a couple of years ago, but the service provider it was using didn’t share enough details about how it was dealing with Costco’s members, said Kutschka. So Costco started over from scratch, partnering with First Choice Bank to build a new mortgage lending portal.
Much like LendingTree, the site gathers quotes from various lenders. However, there is one key difference. Under the Costco program, the borrower’s identity is revealed only after they officially select the lender, said John Alexander, business development director at First Choice.
With many other lead-generation sites, the consumer fills out an application and any lender can make an offer and begin sending marketing communications to the applicant without restrictions.
Costco members will still need to do their homework and compare offers, though, said Keith Gumbinger of mortgage information company HSH.com. Even after a year of testing, Costco’s service is still new.
First Choice said it will police the other lenders to ensure they comply with Costco’s policies, which include giving accurate rates and terms, and following up quickly on questions and requests. The technology enables Costco to monitor individual applications and make sure that they are handled properly and expeditiously.
Costco takes no profit on the lending itself, but it does get paid to market the service.
In Sheets’ case, his lender, Bank of the Internet, sent a representative — an attorney — to his home to close on the loan, he said. She answered all his questions and explained all of the legal terms in the contract.
“There were no surprises,” he said.
Gumbinger said the service may prove better for people like Sheets, who are refinancing than those who are purchasing homes.
“The mortgage origination process is still a hands-on, face-to-face process,” he said. “It involves a comfort level and you don’t get that with an online service.”
That may be true in the initial stages of the borrowing process, but once a Costco borrower has chosen a lender, the level of service steps up, as in Ray Sheets’ case.
Given the size of Costco’s footprint and its ability to squeeze great deals out of vendors, Costco members should at least “include the site in their search plan,” said Gumbinger.
Read more on CNNMoney:
America’s Cleanest Cities
Foreclosure Logjam Breaking Up
Best Deals on Renovating
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Source: http://realestate.aol.com/blog/2012/04/26/now-on-sale-at-costco-mortgages/
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Satisfying Services from Verizon
People who want to make sure that they are working with best mobile phone providers are now welcome to seek help using the internet. You can find lots of comments and feedbacks about different mobile phone providers in your country which are reliable and perfect for your needs. When you are located at United States [...]
Source: http://www.brothernwla.org/satisfying-services-from-verizon/
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You Can Still Get a Home Equity Line of Credit
Filed under: Home Equity
Not long ago, homes worked like giant credit cards. Home Equity Lines of Credit (HELOCs) helped borrowers cash in on the equity in the homes. You can still get a HELOC today, though the business is much smaller, with home prices down about 40 percent from their peak and banks tightening their lending standards. The volume of new HELOCs created in November was just $4.9 billion. That’s less a quarter of the HELOCs created two
Not long ago, homes worked like giant credit cards. Home Equity Lines of Credit (HELOCs) helped borrowers cash in on the equity in the homes.
You can still get a HELOC today, though the business is much smaller, with home prices down about 40 percent from their peak and banks tightening their lending standards.
The volume of new HELOCs created in November was just $4.9 billion. That’s less a quarter of the HELOCs created two years before, in November 2007, according to a recent report from credit tracker Equifax.
So banks are still creating billions of dollars in new HELOCs every month for borrowers who use them for purposes from an alternative to automobile financing to a credit line for small business.
HELOC interest rates now hover around 5 percent. That’s down from over 7 percent two years ago and is much better than the rates offered by many credit cards, according to Bankrate.com.
The new HELOCs are also smaller, averaging $80,724 in November 2009. That’s down from $80,724 two year before, according to Equifax. Banks also require strong credit to get a HELOC. Only borrowers with credit scores 820 and higher qualified for HELOCs over $100,000 in 2009. A credit score over 800 was needed to get a line over $80,000, compared to just 700 back in 2007.
The places where borrowers use HELOCs has also changed with falling property values. Borrowers Pennsylvania made up 8 percent of the market for new HELOCs in 2009, putting a state largely ignored by housing boom on par with the real estate gold rush state of Florida, which also had 8 percent of the HELOC market in 2009, and ahead of California, which had 7 percent.
Common sense should also limit the size of a credit line.
“Since many economists believe home prices have further to fall, don’t borrow the maximum you can,” said Amanda Gengler, writer for Money Magazine in a PBS interview.
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Source: http://realestate.aol.com/blog/2010/12/09/you-can-still-get-a-home-equity-line-of-credit/
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Are Low Mortgage Rates Killing the Housing Market?
Filed under: News, Advice, Buying, Economy, Financing, Investing, Selling
This may fall under the category of “too much of a good thing,” but there is growing sentiment that the historically low interest rates on mortgages are actually fueling the stagnation of the housing market.
By keeping rates low, the hope was that more people would be motivated to buy homes. And when that didn’t happen, fingers of blame were pointed in the direction of more stringent lending standards. People can’t qualify for loans, can’t avail themselves of the low rates — so went the bank-bashing.
But along came some numbers that tell a different story. Yes, lending standards are making it tougher to qualify for loans now, but the reality is that fewer people are even trying. The national Mortgage Bankers Association, which tracks new mortgage applications weekly, says those applications were down 14.9 percent last week from one week earlier. The group expects to see mortgage originations fall from an estimated $1.2 trillion in 2011 to $900 billion in 2012.
Could it be that when Federal Reserve Chairman Ben Bernanke announced that the low interest rates would be around through 2013, buyers just plopped back on their couches waiting to see if the housing prices would fall even further?
The ‘Luxury of Waiting’
“By keeping rates low for two years, you gave buyers the luxury of waiting to see if the market is at the bottom,” says Paul Habibi, professor of real estate at UCLA’s Anderson School of Business Management. “Why wouldn’t you wait if you were a buyer?” he asks. “There are no expectations of home value appreciation, so all that low interest rates have done is create a big holding pattern in buyer behavior.”
So should we be praying for rates to start creeping up?
“Rising rates are absolutely a better motivator than falling ones,” says Dan Green, loan officer with Waterstone Mortgage, who runs the award-winning TheMortgageReports.com website. He notes that for the second straight year, low rates sparked a boom in refis, but did little to help the purchase market.
It’s kind of maddening for mortgage guys like Green who underscore that a 1 percent mortgage rate drop, like the one we’ve had since last year, translates into an instant 11 percent increase in purchasing power.
“Falling mortgage rates do more to help home affordability than falling home prices,” he says. Yet still no one is buying.
Which leads to the next line of thinking: If lower interest rates immobilized buyers, might not rising rates serve as a cattle prod? A few good pokes in the bellies of reluctant buyers might just get them off the couch and back into the game.
Also see:
Want a Mortgage? Avoid These 8 Mistakes
Upside Down on Your First House? Just Buy a Second One!
Mortgage Mod Hell: Trapped Between Lenders, Collectors
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Make Your Lawn Eco-Friendly and Low-Maintenance
Filed under: Design, Home Improvement
The prospect of weekly vacuuming and annual steam cleaning is enough to turn off many people to carpet. Dishwashers have gotten so powerful that “pre-rinsing” is becoming as outmoded as vinyl records. Even toilets are self-cleaning. What does this have to do with landscaping? Well, it’s a paradox: American homeowners are willing to hunt down every time-saving device for their home interiors, but they continue to spend dozens, if not hundreds, of hours maintaining their lawn each year. Moreover, the maintenance of your lawn is, if anything, worse for the local ecosystem than many of the low-maintenance alternatives.
Learn alternative landscaping techniques for your lawn and the myths about tending it by which you should no longer abide!
The Sanctity of the American Lawn
Arguably, natural grass landscaping is a generational thing. The vision of our dream home was conceived of early on in life: Our parents had natural grass lawns, so our dream house typically includes a natural grass lawn. But the 21st century has seen a growing concern for water conservation, while “grassless” landscaping design has improved by leaps and bounds. Green doesn’t always mean natural, and many lawn grasses aren’t even indigenous. It doesn’t have to be a moral thing: Almost nobody will judge you for maintaining a perfectly manicured St. Augustine grass lawn. But at the same time you shouldn’t base your choice of ground cover on the idea that natural grass is an inherently superior way to go. (Find highly rated professional landscapers in your area.)
Alternative Landscaping Ideas, Tips, and Benefits
- Ground covers. Mother Nature has a much larger catalog of botanical beauties than just grass. Juniper, clover, periwinkle and mosses are just a few alternative ground covers. For something more inside-the-box, “low-mow” grass species or ornamental grasses can at least reduce your lawn maintenance load.
- Conserving water. If you’re less concerned with reducing maintenance and more concerned with eco-friendly landscaping, you should focus on water conservation. Reportedly, landscaping accounts for more than 50 percent of water consumption in some municipalities.
- Reducing lawn area. Don’t fall into the trap of all-or-nothing thinking. By adding decorative rocks, installing a concrete patio or walkway, and planting a well-placed tree or two, you can significantly reduce your lawn area (and maintenance) without completely losing the appeal of natural grasses. (Find highly rated professional walkway-installers in this area.)
Leaf-Raking: The Great Landscaping Myth
Hand-in-hand with the sanctity of conventional landscaping are a handful of myths that lead to further missed opportunities to lower your maintenance chores. Perhaps no myth is bigger than the one that you must rake and dispose of leaves before they’re buried under the first heavy snowfall. It’s true that you can’t leave a layer of fall foliage to slowly decompose on your lawn, while blocking sunlight and moisture. But if you get the lawn mower out and churn those leaves up into fertilizing mulch, your lawn may actually be better for it. You don’t even have to wait for a dry spell. Assuming your mower blades can avoid getting snagged, slightly damp leaves actually shred more readily.
Now, there is one caveat: A thick layer of mowed leaves can contribute to excessive thatch, the layer of organic material between grass blades and the soil. Ironically, the dead leaves that improve the soil quality can cause grass to grow too fast the following spring, the ostensible cause of thatch. That said, so long as you don’t treat your lawn with conventional fertilizer and don’t overwater, your lawn should be fine. To truly ease your mind, you can periodically (maybe once every one to three years) aerate your lawn, a wise step whether you rake your leaves or not. (Find highly rated professional landscapers in your area.)
Other Landscaping Myths
- It’s better to have long grass or it’s better to have short grass. Different grasses have different optimal lengths, but more important, by far, is the willingness to mow your lawn often. Taking long grass and mowing it short will leave mostly bare stock, leaving your grass less able to produce new grass shoots. If you’re unwilling to make this commitment, it’s another reason to consider the alternatives. (Find highly rated lawn care professionals in your area.)
- Hedges are the best way to improve my home’s curb appeal. Hedges or shrubs are beautiful landscaping additions, but they can also be dangerous disguises. Hedges can trap moisture to the side of your home for extended periods. If you’re trying to cover up siding that’s already in decline, hedges can become the coup de grace. (Find highly rated professionals to remove trees or shrubs.)
- It’s best to water my lawn in the evening, when I won’t need as much water. Yes, the midday sun will cause a certain amount of your lawn irrigation to evaporate, but your grass is still in greatest need during this time. By watering later in the day, you may be creating enough moisture for fungus to take hold. (Find highly rated sprinkler-system professionals in your area.)
Still wondering what you should do with your lawn or exterior spaces? See AOL Real Estate’s Home Improvement Guides for more tips:
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Home Equity Borrowing Still a Pretty Good Deal
Filed under: Home Equity
Not long ago, homes worked like giant credit cards. Home Equity Lines of Credit (HELOCs) helped borrowers cash in on the equity in the homes. Dan Wolfrum of Peoria, Ariz., bought his home at a foreclosure auction in 1991 for $51,000. At the time, the four-bedroom, two bath house on a peaceful cul-de-sac in the Phoenix area seemed like a no-brainer. As the value of his home skyrocketed in the decade that followed, Wolfrum observed
Not long ago, homes worked like giant credit cards. Home Equity Lines of Credit (HELOCs) helped borrowers cash in on the equity in the homes.
Dan Wolfrum of Peoria, Ariz., bought his home at a foreclosure auction in 1991 for $51,000. At the time, the four-bedroom, two bath house on a peaceful cul-de-sac in the Phoenix area seemed like a no-brainer.
As the value of his home skyrocketed in the decade that followed, Wolfrum observed fellow homeowners in his neighborhood take out home equity loans to finance swimming pools, SUVs and summer vacations. In the late 1990s, after divorcing and remarrying, the meat distributor salesman finally took the plunge and applied for his own home equity loan to pay for home renovations and a new car. A few more refinances and one loan consolidation later, Wolfrum owes $170,000 on his mortgage.
With foreclosures and short sales rampant in the Phoenix area, Wolfrum’s house is now worth less than what he owes. His income in decline and retirement getting nearer, Wolfrum is now working with mortgage experts to lower his payments.
Wolfrum’s now-familiar tale might lead one to conclude that home equity loans and home equity lines of credit (HELOCs) are at the top of the current list of homeowner no-nos. But that conclusion would be dead wrong.
Certainly banks have tightened their lending standards, due to declining housing markets nationwide. According to Equifax, the volume of new HELOCs created in November 2009 was $4.9 billion, less than a quarter of the amount created two years earlier, in November 2007. But rates remain at historic lows, around 5 percent for revolving credit HELOCs and just under 9 percent for fixed-rate home equity loans, according to Bankrate.com. Good luck finding credit cards with rates below those.
If you plan to brave the waters of home equity borrowing, here are a few current guidelines:
1. The first key to success is to use home equity borrowing in a sensible, educated way. A good general rule is to reserve it only for something that could be considered an investment, such as education or home improvements. Avoid quickly depreciating purchases such as cars, vacations, and big-screen TVs.
2. Do some serious comparison shopping before signing up with any particular bank or lending institution. These days, many major lenders aren’t doing home equity deals, even with consumers with good credit. But some smaller, regional and online banks are. The trick is to find them and find the ones with the best rates. Ask around at local banks and do some searching on the Internet, as well. As always, an excellent credit score helps–over 740 is best.
3. Don’t use your house as a piggy bank. A good example of this is not using home equity to pay down credit card debt. This is an easy way to fall into deeper debt without addressing the underlying problem–mainly, that you’re spending too much to begin with. Even home improvements and tuition payments can drain your home dry if the spending limits aren’t kept in check.
4. Finally, be careful to limit the size of your home equity loan. Avoid combined mortgage and home equity borrowing that leaves a cushion of less than 20 percent equity. If you owe more than 80 percent, you’ll pay higher interest rates and eliminate a vital source of emergency funds. Besides, if housing prices continue to decline, you could find yourself “underwater,” just like Dan Wolfrum.
Another issue to be watchful of is the increased difficulty homeowners with second mortgages are having in modifying their loans, though President Obama’s recent bailout initiative regarding five states that have seen housing values drop more than 20 percent, may easy some of that pain.
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Source: http://realestate.aol.com/blog/2010/12/09/home-equity-borrowing-still-a-pretty-good-deal-02/
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ICN Informed Citizen News 10/04/09
ICN Informed Citizen News broadcast Sunday October 4th, 2009. The news you should have heard this week, but didn’t. This week’s stories… #1 Did 60 million mortgages become unforeclosable? kansascity.bizjournals.com #2 Faber on shadow housing inventory www.cnbc.com #3 FHA reserves drop below requirement www.washingtonpost.com #4 Delinquencies at record pace www.reuters.com #5 Moody’s Some home prices [...]
Source: http://fha-interest-rates.org/2012/05/18/icn-informed-citizen-news-100409/
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House of the Day: Iconic Redwood Grove Lists at $8.75M
Filed under: Design, News, Buying, Investing
The iconic Garberville estate known as Redwood Grove, designed in 1926 by Hearst Castle architect Julia Morgan, has come on the market at $8,750,000. Located in Northern California’s Humboldt County, the 5,416-square-foot home has been meticulously restored over the past four years with great attention to its architectural integrity.
The home sits on two acres that border the Eel River and are surrounded by protected California Redwood state parks. The grand manor house has a Gothic-style great room with an exposed redwood beamed cathedral ceiling. There’s a wood-burning fireplace and the original leaded glass windows. It is being sold furnished.
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The chef’s kitchen to-die-for has custom cabinetry, top-of-the-line appliances and a copper salad sink. The master suite overlooks the river and, of course, the ancient redwood forest beyond. It, too, has a cathedral ceiling.
There are two additional bedroom suites, an office with a built-in desk and cabinets, and a finished basement with a 1,000-bottle wine cellar crafted by a master artisan with bloodwood wine racks.
The property includes a two-bedroom, two-bathroom guesthouse with a fireplace. The original carriage house is a one-bedroom apartment over the two-car garage/shop.
The flat, expansive grounds include an organic orchard and garden, Koi pond with lilies and five terraces for entertaining — one which sits directly above the river and has a built-in Viking kitchen. Many of the furnishings are custom-made and include Persian rugs and artwork.
Julia Morgan is best known as the designer of the the Hearst Castle and nearby Hacienda at San Simeon Ranch. She designed more than 700 homes, institutional and commercial buildings in her 45-year career, including rebuilding The Fairmont Hotel after the 1906 San Francisco earthquake. Morgan’s trademark references to nature are evident throughout this home at Redwood Grove, which includes the restored hand-painted wall panels.
The home is co-listed by Melody Rogers-Kelley of Nourmand & Associates, Beverly Hills and Dave McKenny of McKenny Advisory and Suzi Schultz of Integrity First Real Estate Depot.
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Explaining Mortgage Insurance
Filed under: Home Equity
As a first time home buyer there is a lot of new concepts and terminology to get the hang of. The home buying game can be intimidating and you’ll need to seek guidance to learn the lingo.
You’ve finally found the perfect home and are working out the finances with your real estate agent and mortgage broker. This step of the home buying process can be eye opening and a shock to the
As a first time home buyer there is a lot of new concepts and terminology to get the hang of. The home buying game can be intimidating and you’ll need to seek guidance to learn the lingo.
You’ve finally found the perfect home and are working out the finances with your real estate agent and mortgage broker. This step of the home buying process can be eye opening and a shock to the wallet in many ways. The costs of financing and closing on a home can be staggering and you may wonder what each of the elements are that are making your monthly payment rise each time you run the numbers.
Often as a first time homebuyer you don’t quite have the twenty percent down on your home that is the standard when you use all those handy online mortgage calculators to figure out your payment. When you have less than the twenty percent down on the cost of your home, you are forced by the bank or mortgage holder to take out PMI, or private mortgage insurance. This protects or insures the bank against the possibility of you defaulting on your loan. The additional monthly cost of the private mortgage insurance can be a substantial line item and add a significant amount of money to your monthly mortgage payment.
Only once you have paid your mortgage down to 78% of the value of the current loan, and are in good standing with the bank, may they drop your PMI. Often times you’ll find it won’t just be an automatic process by the bank. It’s something you’ll probably need to call up and ask for. There may also be a chance you can get your home appraised if home values rise significantly in your area to prove you have 20% equity, and you then have an argument to drop the PMI. You will have to pay for the audit though, and it may not be a quick and simple process working with the mortgage holder to drop the insurance.
Mortgage insurance can be a pain on the pocket book and may seem an unnecessary cost for the struggling first time homebuyer, however this may just be the necessary evil that allows you to get a large loan in the first place. So save, save save your money and get that twenty percent down from the get go or expect to have higher payments for the first couple of years of your new mortgage loan.
Learn more about Types of Mortgages.
See current Mortgage Rates.
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Source: http://realestate.aol.com/blog/2008/11/11/explaining-mortgage-insurance/
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How to Tap Home Equity Wisely
Filed under: Home Equity
Many of the people losing their homes to foreclosure today find themselves in this situation because they used their home as a piggy bank: tapping their home equity beyond what they could truly afford to carry. If you’re thinking of tapping into the equity in your home, be sure you can afford to make the payments. Remember you put your home at risk when you take an equity line. Your home becomes collateral; and if
Many of the people losing their homes to foreclosure today find themselves in this situation because they used their home as a piggy bank: tapping their home equity beyond what they could truly afford to carry. If you’re thinking of tapping into the equity in your home, be sure you can afford to make the payments.
Remember you put your home at risk when you take an equity line. Your home becomes collateral; and if you can’t make the payments, you could lose your home.
Also, given the uncertainty in the housing marketplace, don’t even think about taking a loan that would be above 80 percent of the market value of your home. That leaves you some room in case house prices drop further. You’ll also get better interest rate offers when you’ll still have 20 percent equity left in your home.
Now let’s map out the decision-making process for tapping equity safely:
Turn 1: Should you take a equity loan or equity line?
When borrowing against the equity on your home you can choose one of two types of loans. One is a equity loan, which is usually at a fixed rate for a fixed amount of money and time. When you pay off that loan the loan will be closed. The second option is an equity line of credit, which is usually at a variable rate. The advantage of an equity line is that once you have it in place you can pay it off and then tap it again through the term of the loan, which is usually 15 years, but other terms may be available. Check with your bank about the specific terms of their equity line or loan programs.
So which type should you take? That depends upon your plan. Also consider which way you think interest rates will be moving. A fixed-rate equity loan may be your best choice if you know that you only want to use if for one specific purpose, pay it off and close the loan. With a fixed-rate you know the interest rate won’t change.
An equity line of credit might be best if you know you have a series of projects you want to do or more than one major purchase you want to make. Your plan is to pay each project or purchase off and then tap the equity. If that’s what you want to do than an equity line of credit may be your best bet, but do remember that the interest rate will be variable and could start to creep up when the Federal Reserve starts to raise interest rates again.
Turn 2: What interest rate should you expect?
Interest rates will vary based on your credit score. Those with the best credit scores of 740 or above can get the best rates that you’ll see quoted on the Internet. For example, currently you can get a $50,000 equity line for as low as 4.84 percent and a $75,000 equity loan for 8.25 percent.
But those favorable rates only go to people with the best scores. FICO has an excellent breakdown showing what you can expect to pay in interest based on your credit score. This will not necessarily be the final quote that you’ll get from your bank, but it gives you an idea of how much more you might have to pay if your credit score is below 740. For example, someone with a credit score of 700 to 719 would pay 0.8 percent more for an equity loan. You can check your credit score for free at CreditKarma.com.
The final interest rate you’re actually offered will depend on the lender. Shop around for rates based on your credit score. Some lenders may offer better rates than others.
Turn 3: Check out the fees
You may find a great interest rate, but if the upfront fees are high that could wipe out any savings from a slightly lower interest rate. Generally it’s best to look for the lowest fees. In fact, some banks are even offering to pay your appraisal costs and waive any application fees. Make sure there aren’t any hidden fees, such as a broker fee to be paid to a third party. Some fees you will likely have to pay include recording fees and an annual fee to use your credit line.
Turn 4: Understand the Tax Benefits
Some people say an equity line is the best way to go, even better than an auto loan or other type of loan, because you can write off the interest. If an auto loan is being offered at 0 percent and you get a good price on the car you want, why put your home at risk at all?
In order to write off the interest on an equity line, you must itemize deductions. If you’re not doing that now, the interest on your equity line likely will not be enough to make it worthwhile in the future. So if you’re choosing an equity line so you can write off the interest, be certain you’ll be able to do so. Also, you can only write off interest on up to $100,000, so if you’re taking an equity line of greater than that amount, the interest on the loan above $100,000 won’t be deductible.
Equity loans and lines of credit can be a good option for you, but use them wisely. Be sure you’ll be able to make the payments for the length of the loan. If you have any doubts about your income, don’t put your home at risk.
Lita Epstein has written more than 25 books including The Complete Idiot’s Guide to Personal Bankruptcy and The Complete Idiot’s Guide to Improving Your Credit Score.
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Pending Homes Sales: Outlook Brightest in Nearly 2 Years
Filed under: News, Economy, Selling
WASHINGTON — The number of Americans who signed contracts to buy homes rose in January to the highest level in nearly two years, supporting the view that the housing market is gradually coming back.
The National Association of Realtors said Monday that its index of sales agreements rose 2 percent last month to a reading of 97. That’s the highest reading since April 2010, the last month that buyers could qualify for a federal home-buying tax credit and the last time the reading was above 100.
A reading of 100 is considered healthy.
The Realtors’ group also released revised data for 2011. That lowered November’s initial 19-month high of 100.1 to 96.9. But contracts have been markedly up since the summer when some feared a second recession loomed.
Contract signings typically indicate where the housing market is headed. There’s a one- to two-month lag between a signed contract and a completed deal.
A sale isn’t final until a mortgage is closed. One-third of Realtors complain that they’ve had at least one contract scuttled in January, December, November and October, according to the Realtors’ group. That’s up from 18 percent of Realtors in September.
Nonetheless, the gain in signed contracts supports other evidence of improvement in the housing market.
Pierre Ellis, an economist at Decision Economics, said home sales and building is in the midst of “ongoing general, but gentle, progress.”
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Builders are growing more optimistic after seeing more people express interest in buying this year. Sales of previously occupied homes are at their highest level since May 2010. More first-time buyers are making purchases. And the supply of homes fell last month to its lowest point in nearly seven years, which could push home prices higher.
Homes are the most affordable they’ve been in decades. And mortgage rates have never been cheaper.
Much of the optimism has come because hiring has picked up. More jobs are critical to a housing rebound.
“Easier mortgage lending criteria, very low rates and the improving labor market are all contributing to the beginnings of a real upturn in home sales, if not yet prices,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics.
Sales may also be rising because of an April deadline for higher mortgage application fees for Fannie Mae and Freddie Mac-backed home loans. The government-controlled mortgage buyers own or guarantee about half of all U.S. mortgages and 90 percent of new loans, and have been telling customers to submit their applications now.
Analysts caution that the damage from the housing bust is deep and the industry is years away from fully recovering.
Potential buyers are holding off for a number of reasons. High unemployment and weak job growth have deterred many potential buyers. Loans are harder to come by. Lenders are requiring bigger down payments and strong credit scores to qualify.
Even those with good credit and stable finances are hesitant to buy out of concern home prices will keep falling.
Also see:
New Home Sales Dip, But Beat Expectations
30-Year Mortgage Rate Up, But Still Under 4%
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Source: http://realestate.aol.com/blog/2012/02/27/pending-homes-sales-outlook-brightest-in-nearly-2-years/
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Locking In Peace of Mind
WITH mortgage rates inching higher, some borrowers might want to consider a lock-in agreement, which freezes the terms of a loan while it is being processed, potentially saving borrowers thousands of dollars over the life of the mortgage.
This guarantee may be especially important for those who are refinancing, where even a quarter of a percentage point could skew a borrower’s calculations and make a refinancing less financially desirable, said Keith T. Gumbinger, a vice president of HSH.com a financial publisher in Pompton Plains, N.J.
Rates for the 30-year fixed-rate mortgage averaged 3.95 percent nationwide in March, up from 3.89 percent in February, according to Freddie Mac, though that is still significantly lower than the 4.84 average rate in March 2011. The average rate was 3.98 percent on Thursday, versus 3.99 percent the week before.
“We expect fixed-rate mortgages to gradually move higher over the next six months to about 4.25 to 4.5 percent as the country’s economic condition improves,” said Frank Nothaft, Freddie Mac’s vice president and chief economist. “This would be a move from the all-time record low rates we’ve experienced over the last few months but still at historically low levels.”
Rate lock-ins can provide buyers with some peace of mind, not to mention one less thing to think about in an otherwise onerous application process.
Lenders typically will give loan rate guarantee agreements when a borrower has a purchase agreement, but a few will provide them to those who are preapproved for a mortgage, said Rick Allen, the chief operating officer of Mortgage Marvel, an online site.
While shopping for a mortgage lender, Mr. Allen suggests inquiring about loan locks, too. “Get a copy of the rate lock agreement,” he said, noting that this would help borrowers better understand how the process works.
The cost of reserving an interest rate depends both on the duration of the lock and the amount of the loan. “The longer the lock, the more costly it is,” said Mark Lazar, an owner of Allied Financial Mortgage in River Edge, N.J. Most locks are for 30, 45 or 60 days, but some lenders will go as long as six months.
Most lenders offer some version of a free lock, Mr. Gumbinger said, though it may be only for 30 days. Others charge points — or fractions thereof — based on the loan size, which could amount to several hundred dollars. (A point is equal to 1 percent of the loan amount.) Sometimes these charges are refundable at closing, Mr. Gumbinger said.
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Home Mortgage Debt Declining At Rapid Pace
It appears that low interest rates, refinancing and other government measures aimed at reducing mortgage debt are working. The latest report from the Bureau of Economic Analysis (BEA) finds that total U.S. home mortgage debt during the first three months of 2011 is $10.3 trillion, compared with $11 trillion in mid-2008. Even better news, Americans [...]
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30-Year Mortgage Rate Again Nears Record Low
Filed under: News, Buying, Refinancing
WASHINGTON — The average rate on the 30-year fixed mortgage dropped near its all-time low this week, making homebuying and refinancing a bargain for those who can qualify. Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan fell to 3.88 percent from 3.98 percent. That’s just above the rate of 3.87 percent reached in February, the lowest since long-term mortgages began in the 1950s.
The 15-year mortgage, a popular option for refinancing, plunged to a fresh low of 3.11 percent from 3.21 percent last week. The previous record of 3.13 percent was hit last month.
Mortgage rates are lower because they tend to track the yield on the 10-year Treasury note. Last week’s disappointing report on March job growth led more investors to sell stocks and buy Treasurys, which are considered safer investments. As demand for Treasurys increases, the yield falls.
Yet the low rates are unlikely to draw in many more people looking to buy a home or to refinance their mortgage.
Waiting, As Home Prices Keep Falling
Some would-be buyers are still skeptical about purchasing a home with prices still falling. Home appraisals that are higher or lower than the sales price have scuttled a rising number of home contracts. Many Americans are struggling with damaged credit and unstable finances.
And mortgage rates have been below 4 percent for all but one week since early December, leaving some potential buyers and refinancers unimpressed by new record lows.
“The rates have been very attractive for some time,” said Bill Armstrong, vice president of Mackintosh Realtors in Damascus, Md. “Rates going a little higher or lower is not going to have much of an impact.”
Still, the mild winter has helped lift expectations for the housing market after four years of sluggish sales.
January and February made up the best winter for re-sales in five years, when the housing crisis began. And builders in February requested the most permits to construct homes in more than three years.
Fewer Apply
Applications for new mortgages have fallen over the past month, according to the Mortgage Bankers Association. But there has been a sharp rise in the average mortgage size, suggesting an appetite for bigger loans. The average size of mortgage applications has increased by $20,000 since December, to about $235,000 last month.
Home prices continue to fall. Prices tend to lag sales and millions of foreclosures and short sales — when a lender accepts less than what is owed on a mortgage – remain on the market. And the housing crisis and recession have also persuaded many Americans to rent instead of buy, which has led to a drop in homeownership.
To calculate the average rates, Freddie Mac surveys lenders across the country on just Monday through Wednesday of each week.
The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fees for the 30-year and 15-year fixed loans were unchanged at 0.7.
For the five-year adjustable loan, the average rate fell to 2.85 percent from 2.86 percent, and the average fee fell to 0.7 from 0.8.
The average on the one-year adjustable loan rose to 2.80 percent from 2.78 percent, and the average fee was unchanged at 0.6.<
Copyright 2012 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
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See also:
Homebuying: 5 Key Steps to Your 1st Real Estate Purchase
Banks Neglect REO Homes in Minority Areas, Study Says
Home Costs: 4 Crucial Questions Reveal Hidden Expenses
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Army Sergeant Battles Mortgage Servicer — and Wins
Filed under: News, Foreclosures, Credit
A Georgia homeowner was awarded $21 million in a lawsuit against one of the largest mortgage servicers in the nation. The homeowner, David Brash, a U.S. Army sergeant, claimed that PHH incorrectly reported his account as “seriously delinquent,” when payments had been made on time through automatic deductions from his paychecks. The hefty judgment, according to the plaintiff’s attorney, was necessary to get the mortgage servicer’s attention. Huffington Post Business reporter Yepoka Yeebo has the full story:
A federal jury has awarded a Georgia man more than $21 million in a lawsuit pitting the homeowner against one of the nation’s largest mortgage servicers.
U.S. Army sergeant David Brash was awarded the damages in March, after a Columbus, Ga., jury found that PHH Mortgage, the country’s eighth largest mortgage servicer, had incorrectly reported Brash to credit score companies as “seriously delinquent” despite the fact that all his mortgage payments had been automatically deducted from his paycheck.
According to court documents, Brash sent letters to the mortgage company that went unanswered, violating federal laws. When he called his mortgage company to find out why his payments were not going through, his attorneys said, he was repeatedly routed to overseas customer services staff who couldn’t answer his questions.
See the full story on Huffington Post Business.
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Home Equity Borrowing Still a Pretty Good Deal
Filed under: Home Equity
Not long ago, homes worked like giant credit cards. Home Equity Lines of Credit (HELOCs) helped borrowers cash in on the equity in the homes. Dan Wolfrum of Peoria, Ariz., bought his home at a foreclosure auction in 1991 for $51,000. At the time, the four-bedroom, two bath house on a peaceful cul-de-sac in the Phoenix area seemed like a no-brainer. As the value of his home skyrocketed in the decade that followed, Wolfrum observed
Not long ago, homes worked like giant credit cards. Home Equity Lines of Credit (HELOCs) helped borrowers cash in on the equity in the homes.
Dan Wolfrum of Peoria, Ariz., bought his home at a foreclosure auction in 1991 for $51,000. At the time, the four-bedroom, two bath house on a peaceful cul-de-sac in the Phoenix area seemed like a no-brainer.
As the value of his home skyrocketed in the decade that followed, Wolfrum observed fellow homeowners in his neighborhood take out home equity loans to finance swimming pools, SUVs and summer vacations. In the late 1990s, after divorcing and remarrying, the meat distributor salesman finally took the plunge and applied for his own home equity loan to pay for home renovations and a new car. A few more refinances and one loan consolidation later, Wolfrum owes $170,000 on his mortgage.
With foreclosures and short sales rampant in the Phoenix area, Wolfrum’s house is now worth less than what he owes. His income in decline and retirement getting nearer, Wolfrum is now working with mortgage experts to lower his payments.
Wolfrum’s now-familiar tale might lead one to conclude that home equity loans and home equity lines of credit (HELOCs) are at the top of the current list of homeowner no-nos. But that conclusion would be dead wrong.
Certainly banks have tightened their lending standards, due to declining housing markets nationwide. According to Equifax, the volume of new HELOCs created in November 2009 was $4.9 billion, less than a quarter of the amount created two years earlier, in November 2007. But rates remain at historic lows, around 5 percent for revolving credit HELOCs and just under 9 percent for fixed-rate home equity loans, according to Bankrate.com. Good luck finding credit cards with rates below those.
If you plan to brave the waters of home equity borrowing, here are a few current guidelines:
1. The first key to success is to use home equity borrowing in a sensible, educated way. A good general rule is to reserve it only for something that could be considered an investment, such as education or home improvements. Avoid quickly depreciating purchases such as cars, vacations, and big-screen TVs.
2. Do some serious comparison shopping before signing up with any particular bank or lending institution. These days, many major lenders aren’t doing home equity deals, even with consumers with good credit. But some smaller, regional and online banks are. The trick is to find them and find the ones with the best rates. Ask around at local banks and do some searching on the Internet, as well. As always, an excellent credit score helps–over 740 is best.
3. Don’t use your house as a piggy bank. A good example of this is not using home equity to pay down credit card debt. This is an easy way to fall into deeper debt without addressing the underlying problem–mainly, that you’re spending too much to begin with. Even home improvements and tuition payments can drain your home dry if the spending limits aren’t kept in check.
4. Finally, be careful to limit the size of your home equity loan. Avoid combined mortgage and home equity borrowing that leaves a cushion of less than 20 percent equity. If you owe more than 80 percent, you’ll pay higher interest rates and eliminate a vital source of emergency funds. Besides, if housing prices continue to decline, you could find yourself “underwater,” just like Dan Wolfrum.
Another issue to be watchful of is the increased difficulty homeowners with second mortgages are having in modifying their loans, though President Obama’s recent bailout initiative regarding five states that have seen housing values drop more than 20 percent, may easy some of that pain.
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Source: http://realestate.aol.com/blog/2010/12/09/home-equity-borrowing-still-a-pretty-good-deal-02/
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Purchase Offer Accepted
After looking at a slew of short sales and foreclosures, and having a full price cash offer rejected, our buyers are ecstatic …  celebrating royally right now.  Their offer on a townhouse was accepted, and they are closing next month. Cash offers often give a seller a level of confidence that home purchases requiring lender approval (and an appraisal – in this rather [...]
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House of the Day: Where the Deer and Antelope Play
Filed under: News, Buying, Investing
While it doesn’t carry a price tag quite as mind-blowing as its neighbor (nearby Jackson Land and Cattle Ranch is listed at $175 million), this $100-million ranch near Jackson Hole, Wyo., known as “Walton Ranch,” still is certainly one of the most expensive properties on the American market.
The 1,848-acre property nestles between Yellowstone and Grand Teton Parks, and plays host to a rich array of wildlife. Elk, bear, moose, mountain goats, bighorn sheep, antelope and deer roam its expansive woodlands and meadows, which stretch along three miles of Snake River. And even with all that nature at hand, the ranch affords residents easy access to world-class ski resorts and vibrant nightlife — it’s just five miles to Jackson Hole.
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To protect the property’s pristine environment, the former owners placed it under conservation easement in 1983. That distinguishes it from neighbor Jackson Land and Cattle Ranch, whose heftier price stems partly from the fact that it has 35 separate lots open for development. Walton Ranch is a functioning cattle ranch and hay farm with a two-story main house and manager’s complex containing two homes, bunkhouse outbuildings, sheds, barns, and, of course, corrals.
Ranch Marketing Associates is handling the property.
Got a tip for House of the Day? Know of an exceptional or unusual property currently listed for sale? Please email ann.brenoff@huffingtonpost.com with your suggestions and be sure to include links to listing details and photos. (Due to the volume of response, we unfortunately are unable to respond to each submission.)
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Obama: Mortgage Help Coming for Military, FHA Borrowers
Filed under: News, Foreclosures, Refinancing
WASHINGTON — President Barack Obama is aiming mortgage relief at members of the military as well as homeowners with government-insured loans, the administration’s latest efforts to address a persistent housing crisis.
In his first full news conference of the year Tuesday, Obama was to announce plans to let borrowers with mortgages insured by the Federal Housing Administration refinance at lower rates, saving the average homeowner more than $1,000 a year. Obama also was detailing an agreement with major lenders to compensate service members and veterans who were wrongfully foreclosed upon or denied lower interest rates.
A senior administration official described Obama’s proposals to The Associated Press, ahead of the announcement, on the condition of anonymity.
The efforts Obama is announcing do not require congressional approval and are limited in comparison with the vast expansion of government assistance to homeowners that he asked Congress to approve last month. That $5 billion to $10 billion plan would make it easier for more borrowers with burdensome mortgages to refinance their loans.
Lower Refinancing Fee
Under the housing plans that Obama was to announce Tuesday, FHA-insured borrowers would be able to refinance their loans at half the fee that the FHA currently charges. FHA borrowers who want to refinance now must pay a fee of 1.15 percent of their balance every year. Officials say those fees make refinancing unappealing to many borrowers. The new plan will reduce that charge to 0.55 percent.
With mortgage rates at about 4 percent, the administration estimates a typical FHA borrower with $175,000 still owed on a home could reduce monthly payments to $915 a month and save $100 a month more than the borrower would have under current FHA fees.
Though 2 million to 3 million borrowers would be eligible, the administration official would not speculate how many would actually seek to benefit from the program. The FHA provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. The loans typically go to homeowners who do not have enough equity to qualify for standard mortgages. It is the largest insurer of mortgages in the world.
Review of Vets’ Foreclosures
For service members and veterans, Obama will announce that major lenders will review foreclosures to determine whether they were done properly. If wrongly foreclosed upon, service members and veterans would be paid their lost equity and also be entitled to an additional $116,785 in compensation. That was a figure reached through an agreement with major lenders by the federal government and 49 state attorneys general.
Under the agreement, the lenders also would compensate service members who lost value in their homes when they were forced to sell them due to a military reassignment.
Obama is holding the news conference in the midst of a modestly improving economy. But international challenges as well as a stubbornly depressed housing market remain threats to the current recovery and to his presidency.
Obama has not held a full news conference since November. The White House scheduled this one on the same day as the 10-state Super Tuesday Republican presidential nominating contests. While aides insisted the timing was coincidental, it follows a pattern of Obama seeking the limelight when the attention is on the GOP.
The news conference comes amid a new sense of optimism at the White House. Obama’s public approval ratings have inched up close to 50 percent. The president recently won an extension of a payroll tax cut that was a main element of his jobs plan for 2012. Economic signals suggest a recovery that is taking hold.
Still, he will probably face questions about the pace of the recovery. The unemployment rate in January was 8.3 percent, the highest it has been in an election year since the Great Depression. With rising gasoline prices threatening to slow the economy, Obama has also faced attacks from Republicans over his energy policy.
Iran’s nuclear ambitions will also command attention in the aftermath of his meeting Monday with Israeli Prime Minister Benjamin Netanyahu. Tension over Iran has already contributed to higher oil prices, and Israel’s threats of pre-emptive military strikes to prevent Tehran from building a nuclear bomb have dominated Washington discourse for weeks.
Other developments in the Middle East, where turmoil has soured some of the promise of last year’s Arab Spring, are also likely to be addressed. Syria’s bloody crackdown on protesters has increased pressure on Obama to intervene. Republican Sen. John McCain on Monday urged the United States to launch airstrikes against Syrian President Bashar Assad’s regime to force him out of power.
Copyright 2012 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
Also see:
Only 5% of Underwater Homes May Qualify for Write-Downs
REO to Rental: Fannie Mae Dips Further Into Foreclosure Pool
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Source: http://realestate.aol.com/blog/2012/03/06/obama-mortgage-help-coming-for-military-fha-borrowers/
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Credit Score Catch-22: Mortgage Shopping Can Raise Your Rate
Filed under: News, Advice, How To, Credit
It’s a Catch-22 if ever there was one. The very process of shopping around for a low interest rate on a mortgage can adversely impact your credit score and cost you your eligibility for the cheaper loan you’re seeking.
Each time a lender does what is known as a “hard pull” on your credit report, their action actually shaves a few points off your score. A lower credit score means a higher mortgage rate. (You can check your own score 500 times a day and it won’t matter. A hard pull is when a third party checks your score with the intent of extending you credit.)
With lenders tightening the noose, credit scores have become a matter of great concern for home buyers struggling to qualify for loans. Getting a favorable loan rate can mean saving hundreds of thousands of dollars over the course of the loan, so the idea that just in the course of loan-shopping you are doing yourself financial damage is logic-defying. But it’s true.
The one break you can get is to do all your loan shopping within a two-week window. All checks done within this period will count as one — and drop your credit score by just two to five points. But step outside that window, and each hard pull of your credit will cost you two to five points. Shop among eight lenders and you could see your scores drop by 40 points — a drop that takes at least six months to recover from.
Tracy Becker, a national credit-score specialist located in New York’s Hudson Valley and founder of the 20-year-old North Shore Advisory, offers these tips:
1. Don’t open or close any credit accounts for three months prior to applying for a loan.
Yes, you read that right: Closing a credit account hurts just as much as opening a new one. Even the act of ending your car lease will cost you up to 60 points on your credit score.
Somewhere, some place, some analyst determined that one of the symptoms of a person about to go into default was that they began to close credit accounts. Well, duh. Isn’t that what you’re supposed to do when you find yourself overextended? Apparently the credit scorekeepers lump the financially solvent in with the defaulters’ profile. So if your car lease is about to expire, extend it for three months while you loan shop, says Becker. And don’t apply to increase your credit limits on any cards or take out any new ones.
2. Don’t apply for a loan until you have a signed contract to buy a house and then do an intense day of loan-shopping.
The idea is to have all your hard pulls done within the 14-day window. One obvious problem is that not all home deals come to fruition. Estimates are that about 35 percent of open escrows fall apart. That means that those 35 percent of buyers will likely be back out there looking for another home and another home loan. And when they find it, their earlier efforts could work against them. The one glimmer of reasonableness here is that if you return within 90 days to the initial lender you approached, they will consider the credit score they pulled on that first go-round.
Becker had a client about a year ago who wanted to refinance his Long Island home. Not knowing the rules, he shopped for a loan about 30 times over a five-month period. He also went shopping for a car loan, got a credit card limit increase and was looking for a student loan for his daughter. The result: His credit score dropped 40 points and he couldn’t get the mortgage loan he wanted, at a cost to him of an extra $600 a month.
Another of her clients had a credit score of 722 when he started looking to refinance his home. But he went out and bought a car, dropping his score by four points. Once under the credit threshold of 720, the refi application was denied. “Ultimately he paid down some balances and got back the extra points, but it was a lot of stress, a lot of paperwork and two-and-a-half months to get the loan he wanted,” says Becker.
3. Don’t let your balances exceed more than 10 percent of your available credit for at least three months, and pay your bills on time.
Getting a home loan these days is hard for everyone, and near impossible for those who have bad credit. Becker says to keep your balances below 10 percent of your available credit for at least three months prior to applying. That means if you have a credit card with a ceiling of $10,000, don’t let the balance exceed $1,000. And since the credit reporting bureaus don’t update their sites daily, you need to allow for a three-month delay.
FICO last month released information about how easily even a single unpaid bill can wreak havoc with your credit score. If you have a score of 780 and are 30 days late on your mortgage, your score will drop to 670 and it will take you three years to recover it. (Obviously, the F in FICO doesn’t stand for Forgiveness.)
Credit consultant and head of New Start Financial Corp. Wayne Sanford — a.k.a. “Wayne the Credit Guy” — says that credit scores are just part of the equation.
He recently worked with a Texas family trying to buy a $330,000 home in Plano. The couple was ready to put $150,000 on the purchase and had scores of 690 and 740 between them. Yet the loan was flagged because a well-known national furniture store had marked their account as having a “consumer dispute.” It was a computer error; the account had never been disputed and had in fact been paid in full on time and was closed. Nevertheless, it held up their loan and they almost lost their house deal.
Sanford advises running regular checks on your credit–which, by the way, won’t impact your scores.
For more on credit scores and related topics, see these AOL Real Estate guides:
- How to Keep Your Credit Score Stable
- Disputing Credit Report Errors
- How to Get a Home Loan With Bad Credit
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Young Real Estate Investor: Where to Stash Extra Cash?
Filed under: Advice, Investing, Refinancing
Andy Buman, 29, got interested in real estate a few years ago while working in construction. Since then, he has purchased two bank-owned single-family homes near Omaha, Neb., as rentals, and last fall bought a primary residence for himself and his fiancée, Valerie (both pictured at left). He has managed to save $20,000 in cash, and is looking for the smartest way to apply it.
Buman, an Iowa State graduate who now manages a call center, comes from a family of strivers. His great-grandfather emigrated from Germany and started the farm in Harlan, Iowa, where Buman grew up — and where his uncles and grandfather still raise 2,000 head of cattle and 1,000 acres of corn. (His dad went into banking.)
From the outset, Buman focused his real estate interests on a few small towns surrounding a retail distribution warehouse and a trucking center, about 25 miles from Omaha. The Omaha/Council Bluffs, Iowa metropolitan area had an unemployment rate of 4.9 percent in June, which explains how Buman managed to rent both homes five hours after listing them.
“There’s a lot of employment — services, farming, cattle, railroads, stores — it’s not hard to get a job here,” says Buman. “A lot of employees want to be close to work and the cost of living in these little towns is next to nothing.”
His first purchase was a two-bedroom, 900-square-foot home for $24,000. He invested $5,000 in repairs, rented it for $550 a month, and has already paid off the mortgage. Buman followed up with a four-bedroom 1,500-square-foot home. He paid $34,500, invested $7,000 in repairs and rented it for $700 a month. The home still has a mortgage balance of $16,500 at 5.5 percent.
Last fall, Buman and his college sweetheart, who are marrying later this month, bought a three-bedroom ranch 10 minutes from Omaha for $185,000. It’s close to family, and to the University of Nebraska Medical Center, where Valerie begins her residency next spring.
The home has a 30-year, fixed-rate mortgage at 4.25 percent, and a balance of $168,000. When the balance on the loan falls below $148,000, the couple can stop paying mortgage insurance, which costs $94 a month.
Buman’s question: With his extra $20,000, should he pay off the mortgage on the rental property? Pay down the single-family home to eliminate the mortgage insurance payment? Or consider another option?
See the full story at Daily Finance.
Also see:
College Town Real Estate Investments Score High Marks
Low Refi Rates Are Great, But Not for Everyone
5 Reasons Why Real Estate Deals Collapse
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Find homes for sale in your area.
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Vacant House Targeted by Squatters, Scammers and Thieves
Filed under: News, Advice, Foreclosures
Empty houses — those either awaiting foreclosure or where the owners have moved out for other reasons — might as well have a “kick me” sign on them. Actually, make that “vandalize me” sign. They are frequently the targets of squatters who move in illegally, scammers who claim they own them and rent them out to unsuspecting tenants, or just plain old garden variety thieves who break in and steal the valuables right down to the copper plumbing and refrigerator.
Or, in the case of one Suffolk County house, all three. According to a story on ABCLocal News, the Bay Shore home of Richard and Lisa Scott slipped into foreclosure in 2009. The Scotts said they gave their lender, Bank of America, three short sale offers that went nowhere fast, with the bank citing incomplete paperwork that the Scotts and their agent insist was delivered. The Scotts, meanwhile, moved out to rebuild their lives in the South.
Shortly thereafter, Scott’s brother reported driving by and seeing a squatter living in the house, with the air conditioner running and lights blazing. Once the squatter was removed, someone ran a scam ad on Craigslist and leased out the house, collecting $4,000 from the unsuspecting tenant. And then, to add insult to injury, with the squatter and tenant gone, vandals broke into the house and stripped it bare, leaving holes punched in the walls and stealing the copper plumbing, the appliances, even the kitchen sink.
According to the report, BofA is now trying to hasten the foreclosure process.
As for those who may be forced to leave a home vacant, here are some tips to make sure this doesn’t happen to you.
1. Try not to move out.
Vacant homes have increasingly been targeted by squatters. The bank can’t force you out of your home until they foreclose. Until then, you own it — no matter how many missed payments you have. If you must leave, consider renting it out. Let the tenant know you are pursuing a short sale and that the home may be foreclosed on, but that you are giving them a discount in the fair market rent in exchange for maintaining the property.
2. Notify the local police and utilities that the home is going to be vacant.
Utility companies make it possible for squatters to set up shop. By presenting a doctored up lease agreement and some sort of “proof” of ID, anyone can get an account established and the electricity turned on in your home. By calling and putting it in writing that the house is going to be vacant, you are at least alerting the utilities — which likely won’t make a whit of difference.
3) Let your neighbors know.
Nobody feels good about saying they are losing their home. But with it happening to so many, no one will be surprised. If the neighbors know that the house will be empty, they can keep an eye on it and report any suspicious activity to you and the police. In exchange, maybe you want to hire their kid to keep the grass cut and the yard tidy.
4) Stop thinking this isn’t really your problem.
Yes, you fully expect that the bank is going to foreclose on you and are saying to yourself, “Why should I care?” Look at the Scotts’ example. They were sickened to return to their house — which they still own and are still responsible for — and find the damage.
Also see:
Realtors’ Latest Challenge: A Surge of Squatters
Woman Faces Foreclosure on Home She Bought for $1
Protesters ‘Liberate’ Foreclosed Homes
More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
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1 in 4 Spend More Than Half of Income on Housing, Study Says
In the wake of the housing bust, almost 1 in 4 working families spend more than half their income on housing costs, according to a new study.
The study by the Center for Housing Policy found that both homeowners and renters continue to struggle with housing costs since the market tanked in 2008. Between 2008 and 2010, renters saw their median income decline even as housing costs rose, while homeowners’ loss of income outpaced a modest drop in housing costs. Experts typically warn against using more than 30 percent of pretax income toward housing costs. (Read more about debt-to-income ratio here.)
In 2010, the latest year in which data was available, there were 10.6 million households with more than half their income going toward housing, including utilities. A total of 23.6 percent of working households fell into that precarious category — up 1.8 percentage points from 2008. (The study defines working households as those that make less than 120 percent of an area’s median income and work at least 20 hours a week.)
With prospective buyers finding it harder to qualify for a mortgage and job security remaining a top concern for many families, rental demand has surged in past years, driving up costs. For homebuyers who purchased risky loans with little equity at stake during the boom years, high interest and sliding home values have pushed thousands underwater, with insufficient savings to escape the cycle.
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“The data show that homeowners have been hit hard by the housing crisis in more ways than just lost equity,” said Jeffrey Lubell, executive director at the Center for Housing Policy, in a statement. “Many working homeowners have been laid off or had their hours cut.”
Homeowners felt the pinch of diminishing salaries more acutely than renters, dropping to a median of $41,413 in 2010, down from $43,570 in 2008. Working renters, on the other hand, typically make less, with a median income of $30,229 in 2010.
Unsurprisingly, the groups that were most at risk of having a severe housing cost burden made less than 80 percent of their area’s median income, whereas wealthier households held steady over the 2-year period.
Where Housing Hurts Most
Between 2008 and 2010, affordability has significantly declined in 24 states. The five states with the highest share of households spending more than half their incomes on housing were California (34 percent), Florida (33 percent), New Jersey (32 percent), Hawaii (30 percent) and Nevada (29 percent).
With several experts predicting that the $25 billion mortgage settlement with the nation’s largest banks will lead to more foreclosures at the start of 2012, both renters and owners should brace for more price fluctuation in their local markets, at least in the short term.
That said, the group most affected by the price confusion are those who bought during the height of the housing bubble, prior to 2008. For those entering the market today, however, sinking prices and near-record low mortgage rates places home affordability at a 20-year high.
Also see:
Black Borrowers Face Higher Hurdles in Lending, Study Shows
How the Foreclosure Settlement Could Affect You
More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Find rentals in your area.
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Source: http://realestate.aol.com/blog/2012/02/27/1-in-4-spend-more-than-half-their-income-on-housing-study/
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Home equity loan defaults soar
Filed under: Home Equity
NEW YORK (Fortune) — One of the last sources of ready cash for homeowners looking to get money from their house appears to be shutting down and the results aren’t likely to be pretty for the economy.
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Betting against the BoA – Countrywide deal
Countrywide: From bad to worse
NEW YORK (Fortune) — One of the last sources of ready cash for homeowners looking to get money from their house appears to be shutting down and the results aren’t likely to be pretty for the economy.
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Last week, buried deep in the ugly details of Countrywide Financial Corp.’s earnings release, was the news that its $32.4 billion portfolio of prime HELOCs — home equity lines of credit — had begun to rapidly deteriorate. The reeling Calabasas, Ca.-lender was forced to take a $704 million charge related to homeowners’ inability to pay back equity they extracted from their homes.
The structure of these loans appears to spell trouble for Countrywide and other home lenders with big home equity loan books. According to an overlooked Moody’s Investors Services note that came out last Wednesday, once a certain threshold of losses is achieved in a home equity loan securitization pool, the bond holder is paid off ahead of the lender.
What’s worse is that it’s difficult to see how large a lender’s exposure is to home equity loans. Known as rapid amortization, this risk is treated as a contingent liability for Countrywide and other home equity loan lenders and is carried off balance sheet, until deterioration occurs and the lender goes on the hook for the loans. Countrywide is the nation’s biggest home equity lender, with around 9% of the market.
In the short-term, this is just another blow for a investors in the financial sector. Longer-term however, it looks like a lot of ready cash is getting taken away from homeowners, at least in California. Coupled with rising unemployment, this could pose a major headache for already strapped homeowners.
To head off more defaults, Countywide sent out letters to 122,000 homeowners last week informing them that their home equity credit lines were shut down since their estimated home values had dropped below their loan amounts.
Right behind Countrywide was Chase Home Lending, which notified borrowers in Los Angeles, Imperial and Orange Counties that they could tap their credit lines for no more than 70% of the value of their house. Previously, the limit had been 90%.
The Calculated Risk blog, which specializes in real estate and mortgage finance issues, has estimated that mortgage equity withdrawals for the fourth quarter totaled $145 billion. If tightening lending standards are put rapidly into place for home equity loans, it is not inconceivable that $50 billion or more of spending power is instantly removed from the economy.
In other words, at least one-third of the recently passed $150 billion stimulus package is already canceled out.
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5 Ways to Nab Autumn Buyers Before They Hibernate
Filed under: News, Advice, Buying, Selling
Even in a good real estate market — which this is not — autumn is when buyers start to nod off before the deep sleep of winter. How does a seller combat the market doldrums this time of year?
Here are five tips for getting your house sold before real estate hibernation season sets in.
1. Determine if you really need to sell.
If you do, keep reading. If you don’t, consider taking your house off the market until the spring. Traditionally — and we admit there is nothing traditional about the current housing market — buyers lose interest in the fall. Kids are settled in school, the holidays are approaching, and buyers’ sense of urgency just evaporates.
In today’s market, it’s all that and more. As a seller, you are competing with foreclosures and short sales as well as standard sellers. Unless you really need to sell, consider delaying the listing of your house for a few months to avoid it sitting on the market and growing stale. If it makes you feel better, let a few agents know that you are still open to an offer and make it a pocket listing.
2. Update your listing photos, especially if you live in a four-season climate.
It just won’t do to have photos of the trees in full bloom and the lawn nice and green when your house is in Minnesota and it’s January. Yes, you know your house has been on the market for six months, but why underscore that fact to prospective buyers with your photos?
By the way, don’t be afraid of winter photos. House exteriors can look pretty in the snow, but do try and shoot it while the snow is fresh. For the interior photos, light the fire in the fireplace and make sure every room conveys warmth.
If you are shooting the photos with a cell phone camera — and you shouldn’t be — make sure there is no date stamp.
It’s important to change out the photos every season. It’s easy enough to do and different photos “speak” to different buyers. Encourage your agent to update the remarks in the MLS listing as well. “Spend Christmas in front of this beautiful original stone fireplace” won’t fly in February.
3. Know your potential buyers and speak directly to them.
Long gone are the days when buyers would get into bidding wars over houses. But what’s not gone are the emotions that a home can evoke. It’s your job to identify what makes your house a home, and zone in on that emotion — and hire an agent smart enough to do the same. Before you list, ask prospective agents to describe the potential buyer of your house.
It’s important that you and your agent know whether you are marketing to a family, a young professional, someone who wants a sophisticated urban loft. Once that’s determined, think about where you find those people. What publications do they read, what websites do they visit? Where are they likely to look for the house of their dreams?
Los Angeles area agent Gary Harryman of Pritchett-Rapf once listed a pyramid-shaped house in the Santa Monica Mountains. He envisioned his buyer to be a creative type who would appreciate the one-of-a-kind structure that even had a perfectly placed sundial on the floor. He also figured, because of the remoteness of the house, that its buyer would likely be someone who worked from home. Instead of advertising in the traditional outlets, he took out ads in a magazine for astronomers and in The Hollywood Reporter and Variety. It sold.
For family homes, consider advertising in the local school bulletins or in the PTA newsletter. If your home is an equestrian property, try some of the horse publications — or ask some of the local riding stables to post a flyer on their bulletin board. Are you close to public transportation, near the university with a converted garage that students are eager to rent, on a street filled with stay-at-home moms and a playground at the corner? Your selling point may not be a spectacular view, but if you market directly to your audience you may not need one.
4. Make it easy to buy your house.
The biggest obstacle that buyers have today is getting a loan. If you are in a position to, consider offering owner financing. If not that, can you handle a lease-purchase option? Talk to not just a real estate agent, but also an accountant, and get creative. You might find that tax-wise, you are better off with something other than a sale involving a third-party lender.
How else can you help someone afford your home? Is there any room for rental income? Could your garage be converted into a rental unit? Is it set up for a work-from-home business?
Buyers today are shopping situations as much as they are houses. They want bargains and are more savvy than ever before about what homes are selling for. While those bargain-hunters may be drooling over foreclosures and short sales, the convenience and expediency of a standard sale has value.
5. Keep your house comfortable during showings.
In the winter, turn the heat on. In the spring, open the windows. In the summer, stage the patio furniture. And in autumn, rake the leaves, burn some spice candles and remember that the buyer pool has dwindled, so make each showing count.
Also see:
Faked You Out! Prop Furniture Finds a Place on Home Stage
5 Staging Tricks for a Quick Sale
Latest Open House Bait: Botox and Thai Massages
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More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Finds homes for rent in your area.
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Source: http://realestate.aol.com/blog/2011/10/13/5-ways-to-nab-autumn-buyers-before-they-hibernate/
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Case-Shiller: Why the Sky Isn’t Falling
Filed under: Buying, Economy, Financing, Selling, Credit
Count me among the unpanicked over the Standard & Poor’s/Case-Shiller monthly housing index that shows housing values have dipped past a low set during the Great Recession. I’m not even getting goosebumps over the chilling words “housing double-dip.”
Nope. For the 70 million home-owning Americans who don’t have a need to sell their homes at the moment, this is not the end of the world. Yes, they can thank their lucky stars that they still have jobs and didn’t get ensnared in a toxic mortgage. And yes, they can feel for their friends and family who weren’t so fortunate — or, if they are feeling less charitable, weren’t as smart as they. But for the bulk of Americans, this is a problem that, well, doesn’t hit that close to home.
Want perspective? Of the 75 million owner-occupied homes in the U.S., about 5 million were sold in the past year, which means that there were tens of millions of home owners who were content to stay put, paying their bills and living obliviously to the drops in home prices. Of those five million sales last year, about one third were distressed sales.
Currently, there are 3.87 million homes on the market. In April, distressed homes were 37 percent of sales (24 percent foreclosures and 13 percent short sales). And 7 percent of new listings were foreclosures, but they’ve been entering the pipeline at a steady pace and selling quickly at bargain prices, says the National Association of Realtors.
Of course, scary Case-Shiller numbers are nothing new. Since last June, when a yearlong rebound in prices began to sputter out, the index has recorded losses every month. If there’s a bright spot, it’s that in the last quarterly report, all 20 cities tracked showed declines; in the most recent index, two of the 20 actually showed month-over-month improvement.
And for the record, the experts back in December offered the same explanations as did the experts commenting on this week’s report: The large number of foreclosures on the market and the expiration of the federal homebuyer tax credit are pushing prices down.
I’d throw in an even larger reason that the experts gloss over: Lenders aren’t lending money to even qualified buyers. They have imposed unrealistic standards for those applying for mortgages and then wonder where all the buyers are. Maybe they should look for them under the mountains of paperwork that they keep demanding and misplacing. Seriously, has anyone tried to get so much as a refinance lately?
NAR says, albeit more politely than I do, that “the recovery is uneven, held back by unnecessarily tight credit.” The association projects that “if the lending community simply returned to the safe, sound standards that were in place a decade ago (before the lax standards that led to the unprecedented boom-and-bust cycle), home sales would rise 15 to 20 percent over current projections.” Now wouldn’t that be nice?
These AOL Real Estate guides can help, no matter whether you choose to buy or sell:
- First-Time Homebuyer’s Guide
- How to Shop for Your First Home
- How to Price a Home to Sell Fast
- How to Get a Low Mortgage Rate
More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Get property tax help from our experts.
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Source: http://realestate.aol.com/blog/2011/06/02/case-shiller-the-sky-isnt-falling/
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Curb Appeal Is Still King
Filed under: News, Home Improvement
Curb appeal counts: If you’re looking to invest some money in your house, look no further than the front door. For the second year in a row, curb appeal projects remain at the top of the list of high-value home improvements, according to just-released data from Remodeling’s 2010-2011 Cost vs. Value Report.
In fact, an entry door upgrade is the curb appeal project that returns the most at resale — and the only one surveyed to recoup its entire cost, at 102 percent payback. Other big returners are a replacement garage door, an upgrade to fiber-cement siding and a wood deck addition.
This year’s edition of the annual survey covers 35 exterior and interior improvements, with data on project costs and resale value nationally and by region. As you might expect, home improvement returns overall have taken a hit in recent years, with project costs escalating while home prices have stagnated. This year, for the first time since 2006, the cost of remodeling projects started to come down–but resale values declined even more precipitously.
To read the full survey, visit Cost vs. Value’s official site.
For help making smart home improvements, check out these AOL Real Estate guides:
Improvements That Get Your House Sold
Top 10 Home Improvements That Pay You Back
Home Improvements Sellers Should Avoid
More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Get property tax help from our experts.
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Source: http://realestate.aol.com/blog/2010/12/15/curb-appeal-is-still-king/
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Superstar real estate agent plots comeback
Filed under: Home Improvement
Motivated by greed and ego
Those were the days when Americans were addicted to real estate. It seemed like on every cable channel, there was a different program featuring the nation’s collective obsession. Justo was in the middle of it all; a promo for “Million Dollar Agents” described him as “the biggest fish in Miami’s shark-infested pool of real estate.”
Crews filmed him racing maniacally around Miami, showing luxury homes by
Motivated by greed and ego
Those were the days when Americans were addicted to real estate. It seemed like on every cable channel, there was a different program featuring the nation’s collective obsession. Justo was in the middle of it all; a promo for “Million Dollar Agents” described him as “the biggest fish in Miami’s shark-infested pool of real estate.”
Crews filmed him racing maniacally around Miami, showing luxury homes by day (from a helicopter) and going to parties at night (in a chauffeured Rolls Royce). Cameras captured his unorthodox methods of doing business: using a lunar calendar to plan deals, going barefoot during meetings, meditating with his sales team.
Justo was a natural on TV, with his amber eyes, bald head and perpetual tan. His custom-made, silk suits — white or black or occasionally red — looked suspiciously like pajamas, which he wore to closings and clubs alike.
“We get paid for having fun!” Justo roared in one episode.
Justo spent $1,000 on sushi lunches. $3,000 a month on life coaching. He didn’t accumulate many things — he enjoyed sparsely decorated, all-white furniture and rooms — and freely let his friends stay in the various homes he owned.
Justo says that during those years, he “wasn’t operating out of integrity” — and that many of the people surrounding him weren’t, either. Greed and ego were his motivation. He took advice, he says, from the wrong people and didn’t pay attention to details.
He also didn’t make many friends, says Kevin Tomlinson, a real estate blogger and Miami Beach agent who says Justo stole on of his clients in the late ’90s.
“When I got into the business, he was the king. He was the legend that everybody looked and aspired to be,” Tomlinson said. “But over the years, his reputation within the broker industry is a mixture of people being afraid or intimidated by him and his success or downright loathing.”
Justo took out mortgages he couldn’t afford, tapped into equity, splurged with credit cards. He didn’t diversify his portfolio and didn’t save a penny.
“I knew the market was going to crash,” he said. “It was irresponsible what we did, what all of us did in the United States. We took out huge loans, we bought things that people had no business buying.”
Checking account balance: $49.73
Friday, Feb. 13, 2009. A clerk at the federal court in Miami stamped “RECEIVED” on Justo’s bankruptcy filing.
For three years, Justo had tried to avoid filing Chapter 7, even borrowing $15,000 from his 85-year-old mother and $75,000 from his 83-year-old aunt to pay his monthly debts. But he was underwater on too many mortgages. There were other creditors, too, including the IRS, which claimed that he should have filed his taxes in the United States, not in the Virgin Islands, which Justo says is his principal residence.
He was named in two lawsuits, one filed by a former real estate agent who worked for his team, and another by Padron, his former business partner. Both sought hundreds of thousands of dollars, alleging that Justo didn’t pay commissions on various deals.
Justo had no savings, no stocks, no bonds.
His checking account hit bottom at $49.73. His financial picture was summed up in one dry sentence in the bankruptcy filing: “At the current time, the debtor has no income due to the state of the real estate market.”
That week, at the urging of a friend, Justo had offered his penthouse as a crash pad to a group of traveling Buddhist monks from Tibet. As the monks chanted in an even baritone, Justo’s mind reeled in turmoil.
“What happens if everything is gone?” he thought.
He wrote a $3,000 check as a donation to the Buddhist monks. It bounced.
‘A world with all possibilities’
Sparked by a former co-worker, Justo had studied New Age and Buddhist philosophy for years, visiting meditation retreats, spiritual centers and monasteries. But somehow, he said, the concepts of attachment and greed never really sank in until he went bankrupt.
It was the scariest thing he had ever done; scarier than meeting Fidel Castro twice in the mid 1990s, more daunting than coming out as a gay man to his parents.
“Fear is not something I’m familiar with,” he says.
It was scary, he said, because it forced him to confront the truth: He had failed. He had come close to bankruptcy before, always somehow pulling himself back from the brink by selling a property or getting a loan. There was no safety net this time, not in this economy.
When he first realized he was about to lose everything, Justo wondered whether it was better not to exist at all. It was the first time, he says, that he had ever considered suicide.
“Then I thought, I’m alive, I love my life. I have my health. I don’t have cancer,” he says. “I started to realize how little I need to really live.”
As he sheds mansions (five have already been taken by the bank, and it seems like the penthouse will be gone soon, as well) and possessions (he only owns about $6,000 worth of stuff, including furniture, clothing and, some Buddhist art), Justo insists that material possessions mean nothing to him.
And if he manages to make money again, he insists he won’t be foolish with it.
“I’m creating a real estate empire based on love,” he says, adding that he plans to give large chunks of his cash away to charity — once he puts a million dollars each in the bank accounts of his mother and aunt.
“In the past, I created my own hell. I needed to be brought to my knees,” he says. “Whatever you believe, you create. Today, I live in a world with all possibilities.”
But for Justo, those possibilities still include luxury. “I’ve been rich and I’ve been poor, and I like being rich a lot better,” he says.
He says that after he pays his family back, he wants a yacht. And maybe a personal chef.
Which begs the question: Has he really learned from his mistakes?
He’s back and ready to sell
It’s 8:30 a.m. on a bright Miami morning and Justo has assembled a dozen people in his penthouse. They sit in a circle facing the boss and drinking coffee.
Four of Justo’s “Billion-Dollar Team” are in attendance. One of his lawyers is there. So is Justo’s masseuse. And a banker who is foreclosing on the penthouse. There’s also an interior designer, a former client who owns a $12 million estate and the architect who is designing Michael Jordan’s Florida home.
Justo talks, nonstop, for nearly two hours. The message: He’s back and ready to sell. If he is afraid of the future — one in which he has to borrow money to pay his bankruptcy attorney, his cell phone bill and food — he’s not showing it. It seems as though Justo is actually having fun talking about his troubles.
“That Bernie Madoff guy, the day he came clean and said he stole all those millions, that’s the day he was freed,” Justo says.
It’s Justo’s acceptance of his failure that will propel him back to the top, his friends say.
“I fully expect him to land on his feet,” says Jeffrey Rubenstein, one of Justo’s lawyers. “He owns what has happened to him. In this day and age and particularly in Miami, that’s a very unusual thing.”
But his brother, Alex Justo, is worried.
“To me, I don’t think my brother needs what he’s trying to build again,” said Alex, who thinks his brother should focus on what he’s good at — selling — and not involve others in his success. “Forget about making this billion dollar whatever. There’s no other Realtor in town that does what my brother does. He’s a genius.”
Justo and two of his agents descend from the penthouse and hop in a Range Rover — the Rolls Royce is long gone — and they begin a daylong frenzy of appointments and meetings. First, a cup of turbocharged Cuban coffee with his mother. Then, a powwow with his bankruptcy attorney. In the lobby, a flat-screen TV broadcasts a CNN headline: “Good Borrowers Go Bust!”
When Justo emerges from the hour-long meeting, an agent tells him that a Saudi Arabian sheik wants to know if there are any estate rentals in Miami for $20,000 a month. Justo orders the agent to follow up, immediately.
In the car, there are calls to clients, showings arranged, listings discussed. Then, a break for lunch.
There are no more three-hour lunches. Justo and a few of his agents go to South Beach to eat on lounge chairs on the sand. His sales manager — a man from Macedonia who started as his chauffeur three years ago — totes a small bottle of sake in a lunch pail for Justo. Another agent brings a plastic bag filled with plastic foam cartons of ceviche.
Justo kicks off his loafers and strips his white pajama-suit off. He’s down to his black Speedo.
Finally, he’s stopped talking. He runs on the sand alone, toward the turquoise ocean. Wading into the water, he dives, head first, into a wave.
Return to Page One: Superstar Agent Plots a Comeback
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Foreclosure Victims Plan Protests Across U.S.
Filed under: News, Economy, Financing, Foreclosures, Home Equity, Refinancing, Selling
Victims of the foreclosure mess and housing crisis are taking to the streets — literally. Street demonstrations are being planned in 10 cities, and in the crowd at the first one you are going to see Dixie Mitchell, a 74-year-old cancer survivor who refinanced her paid-off home to help one of the foster kids in her care — and is now losing it in a foreclosure.
Mitchell (pictured at left), who along with her 76-year-old husband raised eight biological children and 50 foster children in this house, says that she intends to make her voice heard loud and clear as she marches in front of bank offices in Seattle on Sept. 21. The march is the first in a 10-city rollout of protests organized by The New Bottom Line, a coalition of community groups that challenges big banks’ role in the housing crisis.
Mitchell’s story is particularly heart-wrenching: She and her husband were doing just fine living in the house they’ve owned for 44 years until he suffered a stroke that left him paralyzed and cost him his job. The house was fully paid off in the mid-1980s, but they borrowed against it to make roof and kitchen repairs. The straw that broke the camel’s back came in 2005, when Mitchell needed to hire a lawyer, at a cost of $20,000, in an effort to keep a 3-year-old boy who had been in her care since he was an infant.
She was advised by the bank to refinance her house to get the cash. She took out an adjustable rate loan that would reset in two years, at which point, Mitchell says, the lender told her that she would be able to refinance into another 30-year-fixed rate loan. But the original loan was bundled and sold multiple times to different lenders. It reset to a higher rate right around the time her husband suffered a massive stroke, and she quickly fell behind in her payments. Without his earnings, her monthly income is just $2,200 in Social Security and her monthly mortgage is $2,568.
Mitchell filed for bankruptcy, tried getting assistance from every social service agency she could think of, spent two years trying to get a loan modification and even offered to rent out rooms to boarders if the bank would just let her keep her house.
“My husband wants to die at home, at our home,” she says. Her home is set to be auctioned on Oct. 28 and she has no place to go.
Why is she going to participate in the demonstration?
“I need them [the bank] to look me in the eye and tell me why they think it’s better to put people out in the street,” she said. “They haven’t done their share to help. They don’t even give you a chance … all they do is lose your paperwork and make you send it over and over again. Each time you talk to somebody, you get a different answer.”
Those are sentiments shared by many.
LeeAnn Hall, executive director of Alliance for a Just Society and one of the organizational members of The New Bottom Line, said the Seattle area protests will be staged both in downtown Seattle and at the annual policy summit meeting of the Association of Washington Business, a statewide chamber of commerce. The meeting is being held in Suncadia, a mountain resort near Cle Elum, Wash. The governor is expected to attend the meeting and Hall said that the group hopes to engage her.
Subsequent demonstrations are planned across the country in Boston, Chicago, Denver, Los Angeles, New York City, San Francisco and other locations.
The New Bottom Line said that it is targeting “big banks that bankrupted the country and drained wealth from American families.” The direct actions primarily target JPMorgan Chase, Bank of America and Wells Fargo, and include taking over bank buildings, meetings of corporate officials, civil disobedience, prayer vigils and mass mobilizations.
“We are struggling with less and less, while the big banks profit more and more,” said George Goehl, executive director of National People’s Action, another organizational member of The New Bottom Line. “The big banks have done nothing but dodge taxes, throw people out of their homes and choke small business, all the while draining our wealth to pad their bottom line. It’s time for JPMorgan Chase, Bank of America and Wells Fargo to pay us back.”
According to a press statement, the group’s goals are that banks:
o. Pay their fair share of taxes — their statutorily required 35 percent corporate income tax and not “game” the system through off-shore tax shelters and loopholes.
o. Stabilize the housing market and revitalize the economy by reducing principal for all underwater homeowners to current-market value. “This would end the foreclosure crisis, reset the housing market, pump billions of dollars back into the economy and create one million jobs a year,” the group says.
o. Invest in American jobs by using their trillions of dollars in cash reserves to invest in small businesses — the main source of jobs in the U.S. — and other job-generating investments.
Also see:
Viewpoint: What’s Behind Banks’ Big Foreclosure Push?
101-Year-Old Foreclosure Victim to Get Home Back
Woman Faces Foreclosure on Home She Bought for $1
More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
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Selling Your House? Get Out the Paint Roller
Filed under: News, Home Improvement, How To
If you’re trying to sell your house, the first thing a Realtor will tell you is to break out the paint roller. A fresh coat of paint is the quickest and least expensive way to lighten, brighten and perk up a home’s interior. It’s also a job you can tackle yourself–if you do it right. In today’s “DIY Diagnosis,” our friend Brie Dyas at DIYLife tells you how to paint a room for great results.
The arrival of a new season always triggers a need to change up the wall colors in my home. And when I want a change, I want one now. But when it comes to painting a room, it’s easy to get swept up in getting the job done instead of getting the job done right. Here’s a handy list of common problems that can come up, why they did and how you can stop ‘em.
- A dark hue looks faded. This happens when you paint over a light color with darker one. To prevent this from happening, apply a gray-tinted primer coat in between. This will stop the lighter hue from bleeding through the bolder one, and will create a neutral base that’ll let bold hues look their best.
– A random shiny spot appears a week after painting. When a flat paint is applied to a high-traffic area, a glossy spot can appear where hands (or a sponge) frequently comes in contact with the painted surface, rubbing off the matte finish. So, when it comes to high-traffic areas where you know you’ll have to do some cleaning, go for a semi-gloss.
For the rest of the tips, read the full story at DIYLife.
Want more interior painting advice? These AOL Real Estate guides can help:
- Painting Tips for Home Staging
- Top Tips for Interior Painting Projects
- Sell Your Home With These Paint Colors
More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Get property tax help from our experts.
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Source: http://realestate.aol.com/blog/2011/06/07/selling-your-house-get-out-the-paint-roller/
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Serena and Venus Williams’ Home Addition Revealed
Filed under: Design, News, Celebrity Homes, Home Improvement
Serena and Venus Williams have recently completed a two-story addition to replace a one-story wing on their massive Palm Beach Gardens, Fla., estate that they share. The 4,000-square-foot structure, which sits to the left of their circular drive by the gated entry, houses their training facility, says area real estate agent Jeff Lichtenstein, who commissioned an aerial photo of the home (pictured below).
“The sisters applied for permits to do an addition to their home in March of 2010 and just completed it,” he says. In fact, several construction projects were conducted on their property over the past year. (A Bing aerial shot before the remodel is also below).
Serena also remodeled her bathroom, which cost her about $180,000, according to county records, and probably has an elegant vanity with mirrors and drawers for her beauty products since Serena once wrote in her official Women’s Tennis Association bio that her favorite place to visit was “the mirror in my house.”
Considering her bathroom before the remodel was described by one Vogue writer as “an over-the-top affair of white marble, gold fixtures, a tub that could fit four,” we really can only imagine all of the new upgrades for showcasing her cosmetics.
“I’m addicted to hair products,” she told Vogue. And lotions and scrubs and perfumes. “I got so much stuff I could sell it on the street.”
The 11,000-square-foot home, which the tennis champions finished building in 2000 after purchasing a home there in 1998 for $525,000, is on the BallenIsles Country Club grounds, a gated golf community of 1,562 homes. This is the same community, where Bernie Madoff‘s sister Sondra Wiener lived before selling her home in 2009, says Lichtenstein of Illustrated Properties.
The Williams sisters did not put an outdoor tennis court
on their property, but the BallenIsles put one on its grounds for them when it spent $26 million redoing its 22 courts. The other residents and country club paid to put in two blue Har-Tru courts, which are the type of hard courts the professionals use, says Lichtenstein, who has a picture of the courts on his blog.
Most residents have to be paying members of the country club to use its facilities, but apparently not the sisters. “They tried to charge me $85,000 to be a member. Uh-huh. Knowing I could bring in a lot of people if they give me a membership for free,” Serena told Vogue. And the sisters have done tournaments there, which is about an hour’s drive from the Miami Dolphins’ stadium. The Williamses are part owners of the franchise.
“We’re South Florida girls. When we get off the road … we come home to Dolphins games,” Venus told ESPN.
But they also go to relax in their V-shaped home, with two master wings, one for each sister. The home has a circular theme throughout, from a circular foyer, breakfast room, dining room, library and two-story glass enclosed sitting rooms off each master bedroom with its own double walk-in closets with built-ins.
“Suffice it to say you have not lived until you’ve been in Serena Williams’s closet. The size of a studio apartment in New York, it is an explosion of color and fur, organized by Serena herself, who ‘hates mess’ and therefore spends her downtime rearranging racks and racks of her on- and off-court wardrobe and accessories,” Vogue reported.
Her closet has sections that keeps her fur-coats separate from another coat section, and there is a handbag section, a sneaker section separate from her other shoes, and one for gowns too.
“It is a very specific house,” Lichtenstein tells AOL Real Estate. “It is a giant house for the community.” And he says it will be a tough sell should ever the sisters decide to live separate lives.
“There are not a lot of homes with double master suites like that. There are couples who want their own master suite, but these are mirrored wings.” In order to sell the home, he says buyers will have to be relatives in a similar situation as the Williams’ sisters, or, he jokes, “be a husband and wife who argue with each other a lot.”
The palatial home, with 30-foot ceilings and white marble floors, is about 15 miles away from the home Venus and Serena once shared with their parents, who are now divorced. In 1991, the family moved to Palm Beach Gardens from their home state California so that Venus and Serena could train with Rick Macci, who had also trained Jennifer Capriati.
“I could not wait to move out,” Serena told O magazine. “I was ready…to go to bed when I wanted, ready to watch what I wanted on television when I wanted to, ready to hang out with friends and not be asked, “Serena, where are you going?” So when Serena was 18 and Venus was 19, they moved out of their parents home and into one together.
Serena told O that she finally felt like an adult when her first electric bill arrived.
“[It was] $1,500! I couldn’t believe it. Suddenly I understood why Daddy was always telling me to turn out the lights. Another time I came home from a tournament and — click! No lights. Our power had been turned off because I hadn’t paid the bill on time. I was constantly running out of groceries, toiletries, and little things I needed. That’s when you realize what it means to be an adult: when you’re on your own and you run out of toilet paper.”
More on AOL Real Estate:
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Source: http://realestate.aol.com/blog/2011/01/07/serena-and-venus-williams-home-addition-revealed/
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Mortgage Rates Stay Low, But Homebuyers Aren’t Budging
Filed under: News, Economy, Financing, Refinancing
WASHINGTON — The average rate on the 30-year fixed mortgage fell to 4 percent this week, nearly matching the all-time low hit just one month ago.
Freddie Mac said Thursday that the rate on the 30-year loan dropped from 4.10 percent last week. Four weeks ago, it dropped to 3.94 percent — the lowest rate ever, according to the National Bureau of Economic Research.
The average rate on the 15-year fixed mortgage fell to 3.31 percent from 3.38 percent. Four weeks ago, it too hit a record low of 3.26 percent.
Mortgage rates tend to track the yield on the 10-year Treasury note. They yield fell this week after investors shifted money out of stocks and into the safety of Treasurys on fears that Europe’s debt crisis could worsen.
The Federal Reserve is also shifting more money into longer-term Treasurys to try to force mortgage rates lower. Treasury yields fall when buying activity increases.
Less Home Buying Than Expected
Federal Reserve Chairman Ben Bernanke said Wednesday that low rates have failed to spur the increase in home buying or mortgage refinancing that government officials had expected.
High unemployment and declining wages have made it harder for many people to qualify for loans. Many Americans don’t want to sink money into a home that could lose value over the next three to four years. And most homeowners who can afford to refinance already have.
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The number of Americans who bought previously occupied homes fell in September and is on pace to match last year’s dismal figures — the worst in 13 years.
Sales of new homes rose last month after four straight monthly declines. But the increase was largely because builders cut their prices. And it followed a peak buying season that was the worst on records going back nearly 50 years.
A Run on Refinancing
The low rates have caused a modest boom in refinancing, but that benefit might be wearing off. Most people who can afford to refinance have already locked in rates below 5 percent.
Rates have been below 5 percent for all but two weeks in the past year. Just five years ago they were closer to 6.5 percent. Ten years ago, they were above 8 percent.
The average rate on the five-year adjustable loan fell to 2.96 percent from 3.08 percent. That matches a record low hit four weeks ago.
The average rate on the one-year adjustable loan declined to 2.88 percent from 2.90 percent. It fell last month to 2.81 percent, the lowest on records dating to 1984.
The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for the 30-year fixed mortgage fell from 0.8 to 0.7. The average fee on the 15-year fixed loan was unchanged at 0.7. The average fees on the five-year adjustable loan one-year adjustable loan were also unchanged at 0.6.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.
Copyright 2011 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
Also see:
Open Houses of the Week: Hobnob With the 1 Percent
Where Are the Real Home Bargains? Not Where You Think!
Mortgage Giant Asks Taxpayers for Another $6 Billion
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Second-Home Owners Eligible for Mortgage Help
Filed under: News, Foreclosures
California expanded its $2 billion program to help homeowners avoid foreclosure to those with second homes as well.
The California Housing Finance Agency established the four Keep Your Home programs using money from the Treasury Department’s $7.6 billion Hardest Hit Fund. Before, borrowers were restricted from modifications, unemployment funds, relocation assistance and even principal reductions if they had a second home.
Officials eliminated the exclusion, because they said many homeowners are co-signers on a second home or are underwater on their first property.
Other changes to the programs include allowing borrowers to take advantage of principal reduction offers even if they completed a cash-out refinance in the past, which many Californians did during the boom.
Read the full story at HousingWire.
See also:
How Much Down Payment Do Homebuyers Need?
No-Money-Down Mortgage Can Still Be Found in Small Towns
New Credit Score Will Tell Lenders More About You
Viewpoint: Obama’s Drop-in-the-Bucket Idea for Housing
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Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
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Source: http://realestate.aol.com/blog/2011/11/11/second-home-owners-eligible-for-mortgage-help/
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Mortgage Points: When It’s Smart to Pay More Upfront
Filed under: News, Advice, Financing
Pay more now for a chance to save much more later? That’s the idea behind paying “points” on a mortgage loan. But it doesn’t necessarily make sense for every homeowner.
Mortgage points provide an opportunity for borrowers to lower their monthly mortgage payments by paying a lump sum at a loan’s closing in exchange for a lower mortgage interest rate over the course of a loan.
Mortgage points are a smart option for borrowers who plan to stay in the same mortgage and not refinance for a relatively long period of time. But points are not recommended for borrowers who are likely to relocate or refinance in the not-so-distant future.
Borrowers pay points in order to lower their mortgage interest rates by a certain amount. The cost of one point is equal to one percent of the mortgage amount. In the case of a 30-year fixed-rate mortgage, paying one point will typically lower your interest rate by somewhere around one eighth of a percent, according to Tim Dwyer, chief executive officer of Entitle Direct, a title insurance company.
So if borrower A paid one point on a $200,000 mortgage with what would have been a 4 percent interest rate, she would lower her interest rate to 3.875 percent (4 percent — 1/8th percent) for the cost of $2,000.
A good way of looking at points is to view them as an investment that “yields a return for the longer you stay in your house,” mortgage expert Jack Guttentag writes.
If Borrower A stays in the same mortgage for only a few years before selling her home or refinancing, she may end up not saving enough in monthly payments to justify paying the $2,000 upfront. But if she stays in the mortgage for a longer period of time, she eventually breaks even on her investment and enjoys saving money every month from there on out.
“If the points are reasonable, I want to pay that upfront and enjoy the interest rate savings over 10 years because I know I’m not going to refinance,” Dwyer says. But if “you’re a young couple” and “you know you’re going to have more babies, you know you’re going to be moving out,” then you should avoid paying points.
Banks may offer 10 or more point combinations on any given loan, Guttentag writes, and borrowers often don’t end up selecting the option that aligns most with their interests, simply out of ignorance. You can use a point calculator to find out how long it would take to break even using different point combinations.
In a perfect world, borrowers would pay points only if it benefited them in the long run. But, in fact, many borrowers pay points out of necessity. Why?
Lenders will only allow borrowers’ monthly mortgage payments to equal up to a certain percentage of their monthly income. Often they will only approve loans for borrowers whose monthly mortgage payments would not exceed 28 percent of a borrower’s monthly income.
Paying points allows a borrower who otherwise wouldn’t qualify for a loan because of income limitations to lower his or her monthly payment to the extent that the bank is willing to make the loan.
Some banks offer “negative points,” a rebate paid by lenders toward a borrower’s closing costs. “Negative points” lower closing costs for a mortgage, but raise its monthly interest rate. They can be a good option for borrowers who are hard-pressed to cover closing costs with zero points or who intend on moving or refinancing in a few years.
Follow Teke Wiggin on Twitter (@tkwiggin), follow @AOLRealEstate, or connect with AOL Real Estate on Facebook.
See also:
Mortgage Jargon in Simple Terms
Real Estate Terms and What They Mean
Don’t Be Surprised by Expenses of Homeownship
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