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By: Jose G. Landa© Eagle Pass Police Department officer Eriberto Leija was indicted by a United States District Court for the Western District of Texas, Del Rio Division, grand jury on Wednesday, October 3, 2012, on three counts, including making a false statement to United States Customs and Border Protection…

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Filed under: News, Financing, Refinancing

By Marcy Gordon

WASHINGTON — Average U.S. rates on 30-year and 15-year fixed mortgages this week fell to fresh record lows for the sixth straight week. Cheap mortgages continue to help boost prospects for home sales this year.

Mortgage buyer Freddie Mac says the average rate on the 30-year loan dropped to 3.67 percent. That’s down sharply from 3.75 percent last week and the lowest since long-term mortgages began in the 1950s.

The 15-year mortgage, a popular refinancing option, declined to 2.94 percent. That’s down from 2.97 percent last week.

Rates on the 30-year loan have been below 4 percent since early December. The low rates are a key reason the housing industry is showing modest signs of a recovery this year.

A drop in rates could also provide some help to the economy if more people refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend.

A Federal Reserve survey issued Wednesday showed the economy growing moderately in most regions of the country this spring as companies continued hiring. Manufacturing and home sales improved in most of the Fed’s 12 regional districts, as did residential and commercial construction.

In April, sales of both previously occupied homes and new homes rose near two-year highs. Builders are gaining more confidence in the market, breaking ground on more homes and requesting more permits to build single-family homes later this year.

Mortgage applications rose by 1.3 percent during the week ended June 1, the Mortgage Bankers Association reported Wednesday, mainly because more people applied to refinance their homes. Applications to buy a home actually fell for the fourth straight week.

A better job market also has made more people open to buying a home. But a dismal jobs report for May from the government last Friday fanned fears that the economy is sputtering.

U.S. employers created only 69,000 jobs in May, the fewest in a year, and the unemployment rate ticked up.

The Labor Department also said the economy created far fewer jobs in the previous two months than first thought. It revised those figures downward to show 49,000 fewer jobs created. The unemployment rate rose to 8.2 percent in May from 8.1 percent in April, the first increase in 11 months.

The pace of home sales remains well below healthy levels. Economists say it could be years before the market is fully healed.

Many people are having difficulty qualifying for home loans or can’t afford larger down payments required by banks. Some would-be home buyers are holding off because they fear that home prices could keep falling.

Mortgage rates have been dropping because they tend to track the yield on the 10-year Treasury note, which fell last week to a 66-year low. Uncertainty about how Europe will resolve its debt crisis has led investors to buy more Treasury securities, which are considered safe investments. As demand for Treasurys increase, the yield falls.

To calculate average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average does not 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 30-year loans was 0.7 point, down from 0.8 last week. The fee for 15-year loans also was unchanged at 0.7 point.

The average rate on one-year adjustable rate mortgages rose to 2.79 percent from 2.75 percent last week. The fee for one-year adjustable rate loans was steady at 0.4.

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:
Housing Prices and Existing-Home Sales Rise in April
Senator’s Mortgage Trouble Highlights Positive Housing Trend

Follow us on Twitter at @AOLRealEstate or connect with AOL Real Estate on Facebook.

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Source: http://realestate.aol.com/blog/2012/06/07/mortgage-rates-drop-to-record-lows-for-6th-straight-week/

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Filed under: News, Advice, Buying, Economy, Foreclosures, Home Equity, Lifestyle, Other, Selling

We like to panic as much as the next homeowner, but reading the proclamations each month uttered by the Great Gods of Real Estate — Case and Shiller — is simply growing wearisome.

Nobody really knows what to make of all the contradictory statistics and reports about home sales and prices that are released every few nanoseconds, but the Standard & Poor’s Case-Shiller index — like the one this week that said home prices saw a puny 1 percent uptick from April 2011 — is the one that always grabs the public’s solemn attention and causes that kick-in-the-gut feeling.

Here are three reasons why the report is pretty meaningless to a homeowner:

1. Case-Shiller pretends to be a national index.

Yet nationally, there are more than 3,100 municipalities, of which Case-Shiller tracks just 20. And they aren’t even the biggest cities. Real estate is highly localized. Prices in those 20 cities might have ticked up just 1 percent, but in your neighborhood, it could have been more — or less. You won’t know until you check your very specific neighborhood comparable sales.

2. Case-Shiller only considers single-family, detached homes.

Uh, what about those of us who live in condos? In multi-family homes? What about new construction? Nope, all invisible to Messrs. Case and Shiller.

Dan Green, who blogs for The Mortgage Reports, notes that in a market like Chicago, these excluded homes actually outnumber the included ones. So if you live in Chicago, you can presumably ignore the market-chilling results of this latest release.

For the rest of us, the numbers are equally meaningless. As a buyer or seller in the new-homes market, you need to know what’s happening with new homes; ditto for condo shoppers.

3. Timing is everything.

The Case-Shiller index takes 60 days to release its data, so it essentially is reporting on where the housing market was two months ago. Frankly, in this rapidly changing market, two-month-old information is worthless to buyers and sellers.

The sale of a home on your street last week, which is what the bank’s appraiser will be looking at, holds far more importance than the price someone else got two months ago.

The only value we glean from the Gospel of Case-Shiller is that their reports have consistently studied the same markets since 1987, which allows them to provide an interesting comparative analysis over time. Their methodology is unimpeachable in this regard. But current homebuyers and sellers shouldn’t get their britches tied in knots over reports based on narrow, incomplete and out-of-date information.

Also see:
Short Sales: What You Need to Know
Tweet Your Way to a Home Sale

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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Source: http://realestate.aol.com/blog/2011/07/28/case-shiller-index-3-reasons-to-blow-it-off/

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Filed under: News, Financing, Election 2012

One of the nation’s two large government-sponsored backers of home loans recently revealed that it would tighten some of its lending restrictions for certain consumers.

The company announced that it would change the requirements for both new borrowers and those who are refinancing existing home loans. Now the maximum loan-to-value ratios that it will allow is just 90 percent, down from as much as 97 percent in the past, and certain loans will require higher credit scores to be backed by the government-sponsored mortgage giant, based on Fannie Mae data compiled by Bloomberg Businessweek.

In particular, the tighter mortgage requirements mandate that borrowers of adjustable-rate loans, who were not cleared by the company’s Desktop Underwriter software program, will need credit ratings of 640, up from the current 620, the report said. Further, lenders will no longer be able to grant loans for those whose ratings are 40 points below other requirements based on their judgment of other factors.

And on top of everything else, an expert noted that the company will also likely begin asking self-employed borrowers for more tax information in the future, the report said. Now, Fannie Mae will need to see two years of tax returns for both them and their businesses to verify their income. This change may be related to a software update the company applied to its underwriting program.

Undermining the Market?

“This can knock a decent portion of borrowers out of the picture who had a rough year in business two years ago,” Matt Hackett, underwriting manager at New York lender Equity Now Inc., told the news agency. “You’d be surprised how much of an effect this has.”

Fannie Mae and Freddie Mac, both of which are now run by the federal government, back about two-thirds of all new home loans, the report said. Experts believe these tighter restrictions will be significantly problematic to the housing market.

The real estate industry is still largely in recovery mode after the crash observed a few years ago, though there have been some improvements in recent months. Currently, housing affordability is at or near all-time highs thanks to low interest rates and prices, though prices are expected to rise over the remaining few months of the year.

See more on Credit.com:
10 Mistakes New Homebuyers Make
Can You Have Too Much Credit?
What’s Really in Your Credit Report?

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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.
Find homes for rent in your area.

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Source: http://realestate.aol.com/blog/2012/08/27/how-fannie-mae-is-making-it-harder-to-get-a-home-loan/

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Filed under: News, Investing

By Les Christie

Home prices are showing signs of life, but they have a long way to go to make up for losses from the housing bust.

U.S. home prices dropped by a third from the start of 2007 to the start of 2012, according to Fiserv, an analytics firm.

Fiserv forecasts prices will bounce back an average of 3.7 percent a year for the next five years — a rate that would still leave prices 20 percent below the peak. At that forecasted growth rate, the national average high of $238,000 would not be hit again until 2023.

It could take even longer in some areas. “In some hard-hit markets, prices could take decades to recover,” said Fiserv economist David Stiff.

Among those facing a long haul: Arizona, California, Florida and Nevada, the states most caught up in the speculative feeding frenzy of the mid-2000s.

In California, for example, home prices should grow a little faster than the national average. Fiserv projects 4.4 percent gains during the next five years. But the hole is also deeper, with prices having fallen nearly 46 percent from early 2007 to early 2012. Break even won’t come until after 2026.

Homeowners in Nevada may have to wait the longest to make up lost ground. Home prices in the state plunged nearly 60 percent, and Fiserv projects annual gains of just 2.3 percent. It would take some 40 years at that pace to get back to 2007 levels.

Real estate, of course, is local, and there are many housing markets that never bubbled during the boom. In those places, buyers who bought in 2007 are much more likely to be in the money today. In South Dakota, Texas and West Virginia, prices already are slightly higher than they were five years ago.

In North Dakota, a housing shortage driven by the oil boom has sent prices soaring 17.7 percent over the past five years.

Iowa, Oklahoma and Nebraska, are nearly back to peak, as are Kentucky, Vermont and Alaska. These were all housing markets that recorded only mild price increases during the boom.

See more on CNNMoney:
Buy or Rent? 10 Major Cities
For Sale: Disney-Inspired Fairy Tale Manor
America’s Best Places to Live

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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.
See celebrity real estate.

Follow us on Twitter at @AOLRealEstate or connect with AOL Real Estate on Facebook.

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Source: http://realestate.aol.com/blog/2012/09/26/home-prices-may-not-return-to-peak-until-2023/

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Filed under: Home Equity

Think it’s tough to qualify for refinancing your existing mortgage? So does Richard Shin, a Queens attorney with good credit and great income who was turned down by his original lender when he wanted to refinance his 30-year-fixed rate mortgage on his single family brick home to a 15-year-mortgage with a lower interest rate. Due to tighter lender restrictions, he didn’t qualify until he found a lender who let him bring cash to the table

Think it’s tough to qualify for refinancing your existing mortgage? So does Richard Shin, a Queens attorney with good credit and great income who was turned down by his original lender when he wanted to refinance his 30-year-fixed rate mortgage on his single family brick home to a 15-year-mortgage with a lower interest rate. Due to tighter lender restrictions, he didn’t qualify until he found a lender who let him bring cash to the table to pay down his mortgage.

The number of homeowners taking out a refinance is on the decline and may further dip in 2011, according to the Mortgage Bankers Association, but of those who do refinance lenders are seeing a higher percentage come as cash-in borrowers – those refinancers who bring cash to the table in order to seal the deal.

“We used to have maybe one borrower a year bring cash to the table, but now we’re seeing three or four a month,” said Matthew Hackett, an underwriting manager with New York City lender Equity Now, which refinanced Shin’s home.

Hackett says cash-to-the-table options are being utilized more often because borrowers are needing to lower their loan-to-value ratio if they hope to lower their existing interest rate from somewhere in the upper 5 percent or 6 percent range down to a rate in the 4 percent or lower 5 percent range. This is not just because of tighter lender restrictions, but also because so many homeowners are underwater and owe more on their mortgages than their homes are worth.

Shin, whose home appraised at $1,150,000, brought $60,100 to closing as a down payment to cover the difference between his old $560,000 mortgage and his new $499,900 loan, which featured a reduced interest rate from 6.25 percent to 4.75 percent.

For others looking to refinance, a cash-in refinance may be their only option, and it’s not as bad as an option as you may think. Although not every one has $60,000 to bring to the table, the amount you do bring will not likely be as high, depending on your goals.

Here are two main reasons to do a cash-in refi:

1. Savings accounts aren’t paying anyway. The interest rate on many savings accounts these days hover around 1 percent, whereas your mortgage rate is far higher. Putting a few thousand toward your refinance if it will help you reduce your interest rate a percentage point or more, might be money well spent, especially if you plan on staying in your home awhile. There’s no reason ti put in more than you need to, however, to reduce that rate, says Hackett.

2. Avoid PMI. If you had less than 20 percent equity in your home when you purchased it, there’s a good chance you’re paying private mortgage insurance. When one refinances, this fee typically goes away if the value of your house has increased enough to lower the loan to value ratio. However, in this economy more people are finding that their value has declined. Even those who were not paying PMI might discover upon a refinance that now they need to due to fallen values. Eliminate this fee by bringing cash to the table to cover the difference so that your refi loan is for 80 percent or less than the value of your home.

Although refinances are declining, they still make up nearly two-thirds of all mortgage applications. As of the end of November, however, they decreased 21.6 percent from the previous week to 74.9 percent of total applications, their lowest level since June 2010, reports the Mortgage Bankers Association.

The pool of eligible borrowers who can refinance is small, and those for whom a refinance is beneficial, have already refinanced or mostly likely will in the near future. This downward trend in refinances will cause a decline in total originations next year, but a greater percentage of refinances will likely come from these cash-in borrowers.

Is a cash-in refi right for you?

What’s your break-even point? If you opt to do a cash-in refi, Hackett says, determine your break-even point to decide how much will make it worth it. For example, if you bring $15,000 to the table to get an interest rate that saves you $250 per month on your mortgage payment, it would take you 60 months, or 5 years before you’ve reached $15,000 worth of perceived savings. If you think you might sell your home in less than five years, you’re better off keeping your money in the bank rather than pursuing that lower interest rate. However, if you plan on staying longer, your savings will be even greater because of what you’re saving in interest payments by having the lower interest rate.

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Source: http://realestate.aol.com/blog/2010/12/09/as-refinancing-declines-cash-in-refis-rise/

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Filed under: News, Investing

By Les Christie

Home prices are showing signs of life, but they have a long way to go to make up for losses from the housing bust.

U.S. home prices dropped by a third from the start of 2007 to the start of 2012, according to Fiserv, an analytics firm.

Fiserv forecasts prices will bounce back an average of 3.7 percent a year for the next five years — a rate that would still leave prices 20 percent below the peak. At that forecasted growth rate, the national average high of $238,000 would not be hit again until 2023.

It could take even longer in some areas. “In some hard-hit markets, prices could take decades to recover,” said Fiserv economist David Stiff.

Among those facing a long haul: Arizona, California, Florida and Nevada, the states most caught up in the speculative feeding frenzy of the mid-2000s.

In California, for example, home prices should grow a little faster than the national average. Fiserv projects 4.4 percent gains during the next five years. But the hole is also deeper, with prices having fallen nearly 46 percent from early 2007 to early 2012. Break even won’t come until after 2026.

Homeowners in Nevada may have to wait the longest to make up lost ground. Home prices in the state plunged nearly 60 percent, and Fiserv projects annual gains of just 2.3 percent. It would take some 40 years at that pace to get back to 2007 levels.

Real estate, of course, is local, and there are many housing markets that never bubbled during the boom. In those places, buyers who bought in 2007 are much more likely to be in the money today. In South Dakota, Texas and West Virginia, prices already are slightly higher than they were five years ago.

In North Dakota, a housing shortage driven by the oil boom has sent prices soaring 17.7 percent over the past five years.

Iowa, Oklahoma and Nebraska, are nearly back to peak, as are Kentucky, Vermont and Alaska. These were all housing markets that recorded only mild price increases during the boom.

See more on CNNMoney:
Buy or Rent? 10 Major Cities
For Sale: Disney-Inspired Fairy Tale Manor
America’s Best Places to Live

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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.
See celebrity real estate.

Follow us on Twitter at @AOLRealEstate or connect with AOL Real Estate on Facebook.

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Source: http://realestate.aol.com/blog/2012/09/26/home-prices-may-not-return-to-peak-until-2023/

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Filed under: News, Foreclosures

If you’re teetering on the edge of foreclosure, you may have a much better chance of finding your footing than in years past. Servicers of delinquent or at-risk mortgages appear poised to ramp up their use of alternatives to foreclosure this year, an industry shift that could enable many more homeowners to hold onto their homes through “home retention actions.”

Failing that, if mortgage borrowers have to give up their homes, they might at least find an option that’s preferable to foreclosure.

The analytics firm CoreLogic recently reported that completed foreclosures and the foreclosure inventory in March 2012 have dropped from last year; that indicates banks increasing use of alternatives to foreclosure, a CoreLogic analyst says. The data release showed that the foreclosure inventory had fallen from 1.5 million in March 2011 to 1.4 million in March 2012. The drop came even as foreclosures have stalled in the last year. (Stalled foreclosures would normally increase inventory if everything else were equal.) Completed foreclosures in first quarter of 2012 numbered 198,000, down from 232,000 in first quarter 2011, according to the CoreLogic news release.

“Compared to a year ago, the number of completed foreclosures has slowed,” Anand Nallathambi, chief executive officer of CoreLogic, said in a statement. “Since the foreclosure inventory is also coming down, this suggests that loan modifications, short sales, deeds-in-lieu are increasingly being used as an alternative to foreclosures to clear distressed assets in our communities.”

Short Sales Are Heating Up

The short sale is one tactic that banks are using more often to resolve at-risk and delinquent mortgages. In short sales, homeowners sell their homes for less than their mortgages are worth, resulting in losses for banks.

But a short sale is preferable to a foreclosure for both a mortgage-owner and a borrower: It enables a borrower to mitigate damage to his or her credit score, and allows a bank to limit the loss it might incur from a foreclosure. (For more details see AOL Real Estate’s short sale guide.)

“Banks have put many foreclosures on hold over the past year and a half while waiting for the robo-signing settlement,” says chief economist of listing service Trulia Jed Kolko, referring to the settlement over foreclosure abuses that was finally reached between major mortgage servicers and 49 states in February. And short sales have been increasing, relative to foreclosures, for months now, he says.

Short sales grew at a rapid annual pace last year, according to foreclosure marketplace RealtyTrac. Pre-foreclosure sales, which encompass short sales, rose 33 percent from January 2011 to January 2012. In fact, Bloomberg reports that short sales actually surpassed foreclosure sales in January 2012, citing data from Lender Processing Services (which works with major banks and others in the mortgage industry).

Word on the street corroborates the finding, Zillow chief economist Stan Humphries says: “Anecdotally, we do hear that they’re stepping up short sales quite aggressively.”

The trend seems likely to accelerate: Twin mortgage guarantors Fannie Mae and Freddie Mac announced timelines in April that require servicers of their mortgages, to respond to short sale inquiries from homeowners within a month, or otherwise face penalties.

And Bank of America recently said that it now intends to approve or reject short sales within 20 days. Both timelines, if adopted, would streamline a process that has been known to drag on for many months, often only to end in rejection.

The timelines may spur an increase in short sales by, Humphries says, reducing “a lot of the uncertainty that has occurred here before, where your experience in heading down that path is highly variable.”

Loan Modifications Set to Soar

“Home retention actions,” also have ticked up recently, rising slightly in the last two quarters of 2011, according to the Office of the Comptroller of the Currency. Like short sales, retention actions are used to stave off foreclosure. And they also seem poised to increase in coming months.

One home retention action, the loan modification, is a method that market observers are watching closely: Possible industry developments may precipitate a wave of them.

For one, the Obama administration recently tripled the subsidies that are offered under the Home Affordable Modification Program, which provides loan modifications to delinquent or distressed homeowners. Experts say that may incentivize banks, private investors and even mortgage guarantors Fannie Mae and Freddie Mac (all of whom have put up some resistance to HAMP modifications in the past) to participate in the program.

Among other qualifications: To be eligible for HAMP, you must prove a financial hardship, be at-risk or delinquent on your loan, and have enough monthly income to support a modified payment. (See the rest of the requirements by visiting makinghomeaffordable.gov.)

Then there’s the mammoth sum of principal reductions, which often are a part of loan modifications, that the nation’s five biggest servicers are compelled to perform in the next three years: The banks may forgive well over $30 billion in mortgage debt in order to satisfy credits that they agreed to pay — in the form of principal reduction — as part of the robo-signing settlement.

We should see “an uptick in principal reductions and loan modifications there” for mortgages backed by the five banks involved in the settlement, Humphries says.

Bank of America, one of the banks that agreed to the settlement, has said it will reduce about 200,000 mortgages by an average of $100,000 each.

If you think you may qualify for a loan modification under the settlement, contact your lender or visit nationalmortgagesettlement.com for more information. But keep in mind: Mortgages guaranteed by Fannie Mae and Freddie Mac (which underwrite about 60 percent of U.S. mortgages, as well as mortgages insured by the FHA) are not eligible for modifications under the settlement.

Another possible development could also boost the number of loan modifications in 2012. The Federal Housing Finance Agency may approve principal reduction as a home retention action for Fannie Mae and Freddie Mac-backed loans. Increasing pressure from policymakers, and a recent study that found that this strategy would save the mortgage giants money, may pressure the FHFA to finally give permission to the twin mortgage guarantors to allow servicers of its mortgages, typically banks, to reduce principal on mortgages.

More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
See celebrity real estate.

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Source: http://realestate.aol.com/blog/2012/05/03/avoiding-foreclosure-more-and-better-options-available-now/

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Filed under: News, Credit

A report recently released by the Federal Reserve offers new figures that capture the full scope of the housing bust’s devastating impact on household wealth.

Median family net worth plunged by close to 40 percent during the economic crisis, the report found. The study shows that the real estate market’s collapse was largely responsible for the decrease: Family median income before taxes fell 7.7 percent and non-housing assets also depreciated in value. But the Fed said plummeting home prices issued the largest blow to families’ net worth.

“Although declines in the values of financial assets or business were important factors for some families, the decreases in median net worth appear to have been driven most strongly by a broad collapse in house prices,” the report said.

The report also said that the recession hit the U.S. middle class hardest, since much of their wealth was concentrated in their homes.

National Association of Home Builders CEO Jerry Howard says its findings suggest that the housing slump remains one of the largest roadblocks to an economic recovery. In fact, the report is a call to action for the U.S. government, he says, which should do more to revive the real estate market.

“In [government] conservatorship [Fannie Mae and Freddie Mac] are as close to being dead in the water as you can possibly be,” he said. “In these current climates, the access to mortgage credit is so restricted that it is an impediment to the recovery, not just because people can’t get it, but people are afraid to apply for it because it is such a burdensome and intimidating process right now.

Howard believes that lenders, many of whom service mortgages that conform to Fannie Mae and Freddie Mac-dictated requirements, should perform more “holistic” evaluations of mortgage applicants. But other experts see current mortgage requirements as appropriate, given the lax standards of the housing boom, which Howard admits made it “much, much too easy for people.”

The government’s failure to do more to jumpstart the housing market betrays its 50-year history of championing homeownership, Howard says.

“For most baby boomers, from the time that they entered the job market, they were encouraged to build your … nest egg around housing.”

See also:
How to Get Your Mortgage Above Water
Underwater Mortgages Keeping Housing Market Afloat?
Should Underwater Homeowners Just Walk Away?

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Find out how to calculate mortgage payments.
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Source: http://realestate.aol.com/blog/2012/06/14/fed-report-captures-housing-meltdowns-massive-blow-to-wealth/

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If you’re into bartering, chances are you’ve discovered BarterQuest a relatively new site that helps folks trade one product or service for another — like eBay but without cash. BarterQuest also makes multi-party trades easy, so you don’t have to find that one person looking for the exact thing you have, you can do three way (or more) swaps.

Read more…

The post BarterQuest How-to: Trade Smart at the Best Bartering Site appeared first on DailyPerk.

Source: http://dailyperk.perkstreet.com/barterquest/

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Filed under: News, Foreclosures

By Samantha Henry

A New Jersey appeals court blasted Bank of America this week, chastising the company for the way it handled the case of a woman the court found to be making a good faith effort to hang on to her foreclosed home.

In upholding a lower court decision, the New Jersey Superior Court’s appellate division questioned why the lender had approached Sylvia Ficco in October 2009 with a written offer to modify the mortgage payments on her Morris County home. The lender accepted her checks, and then tried to foreclose on the property, sending her a warning that the mortgage modification offer had been sent in error.

“We confess some puzzlement at why a mortgage company would continue foreclosure proceedings against a debtor who, unlike many, is actually paying her mortgage,” the appellate judges wrote in a copy of the decision issued Thursday.

A message left Friday for the plaintiff’s attorney, Jeanette J. O’Donnell, was not returned.

Court papers show that Bank of America division BAC Home Loan Servicing L.P., formerly Countrywide Home Loans Inc., had sent Ficco a letter in October 2009, offering her a three- month “loan modification” trial after she defaulted on a nearly $600,000 home loan. The letter said she would be able to join the modification program permanently if she met the requirements and paid on time, according to court papers. She was qualified for the program in March 2010, according to court papers, and started making payments on her $591,913 mortgage.

However, the bank later claimed that the trial offer had been sent in error, and that Ficco wasn’t meant to be permanently accepted into the program.

The appeals court chided the company for its practices, questioning why it had sent the offer, accepted Ficco’s payments, and then reneged on the deal.

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.

See also:
Why Millions May Be Leaving Mortgage Assistance on the Table
Those Mortgages Blamed for Housing Crisis? They’re Back

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Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Find homes for rent in your area.

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Source: http://realestate.aol.com/blog/2012/06/25/court-blasts-bofa-for-reneging-on-homeowners-mortgage-mod/

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Filed under: News, Advice, Selling

By Jeff Brown

As if there aren’t enough hassles in selling a home, one more has come into focus: You really must have professional photos.

That’s the advice in a recent Wall Street Journal story starting off with the point that a big part of home shopping is now done online. A listing with just one murky outside shot taken on a dreary day can’t compete with one that has 25 perfectly lighted photos from just the right angles. Most homeowners and Realtors just aren’t good enough to take quality shots on their own, the WSJ article suggests.

Another thing to worry about on the road to selling a home in one of the worst housing markets in history (even given the recent rebound).

Let’s put this new concern into the big picture.

Spend a half hour on a major listing site, such as AOL Real Estate, Realtor.com, Zillow.com or Trulia.com, and you’ll see that good photos really do speak thousands of words. The most appealing listings often have 20 to 25 shots covering the home’s interior, exterior and grounds.

It quickly becomes irritating to see a listing with only one to three photos, and likely will spark some doubts about the property: What’s the deal? Aren’t they serious about selling? Have they skimped on other things, too, like maintenance? Do the sellers really think I’m going to drive all the way out there just to see what ought to be on the Web?

Good photos, and plenty of them, really are a basic requirement these days. They should be taken on a sunny day from plenty of perspectives, and the home should be tidy and clean.

But paying hundreds of dollars to a professional photographer might be going too far. The WSJ story quotes experts promoting photos that make the home look as good as possible, with wide-angle lenses making a home look bigger, for instance. But misleading photos can backfire.

Here’s how:

1. Careful cropping can conceal the fact that the neighbor’s home is too close for comfort, but buyers who come in person will see that right away — or spot it with the satellite view in Google Maps.

2. A buyer who might have made an offer on a home with a few flaws might walk away if a tour is a letdown after the stunning photos.

3. Remember, too, that many home shoppers will be brought by their own agents, who in many cases won’t have seen the home before. Embarrass too many agents with deceptive advertising and the home might not be shown as often, delaying a sale.

So what’s the key to selling a home in today’s buyer’s market?

As one of the readers commenting on the WSJ story said, the biggest factor hasn’t changed: price. Flaws make a home less valuable, even if you can Photoshop them into oblivion.

See more on TheStreet.com:
10 Home Improvements You’re Wasting Time and Money On
5 Great Cities for Gen-Y’ers
Why You Should Think About a Weird Mortgage

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Find out how to calculate mortgage payments.
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Source: http://realestate.aol.com/blog/2012/08/30/home-listing-photos-what-you-cant-get-away-with/

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Filed under: News, Buying, Economy

By Kerri Panchuk

Home prices grew from the previous rolling quarter and year-over-year in May, making it the first time in two years that both indicators have risen in the same period, asset valuation firm Clear Capital said.

The firm published its home data index market report, showing that the West, South and Northeast saw both quarterly and yearly price gains.

Truckee, Calif.-based Clear Capital uses rolling quarters to study home prices. It compares the most recent four months to the previous three months to give users a more timely look at market prices.

Read more on this story at HousingWire.

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Source: http://realestate.aol.com/blog/2012/06/05/home-prices-up-quarterly-and-yearly-clear-capital/

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Filed under: News, Home Improvement

Even if you’re just renting a place for a short time, it’s important to personalize it with the style and conveniences that make you feel at home. If you’d like to make home improvements but hesitate because of longer-term living plans, consider projects that can move with you.

“I’m a big proponent of ‘make it yours,’ even if you’re only going to be in a place for six months,” says Paige Rien, a designer for HGTV’s “Hidden Potential” with her own practice outside of New York City. “Always think about a change in terms of what it’s like to undo it…If it’s not hard to install, it won’t be hard to uninstall.”

Here are top tips for home improvements that travel with you.

Wall décor options: Wall décor easily makes a personal style statement and sets the tone for a room. But if you’re afraid to hang the kinds of large pieces that leave major anchoring holes behind, Rien recommends creating a “gallery wall” with a collection of favorite family photos in smaller, lighter frames. Such an exhibit moves easily to your next destination, and the minimal damage left behind will be easy to repair with a bit of spackle and sandpaper.

Another way those with wall hanging hang-ups can add interest is with picture ledges and other easy-to-install shelves. Use these instant display pieces to hold art or small collections, or get creative to form architectural elements. “I actually have some shelves we used as a mantel in our last apartment, because the fireplace didn’t have one,” says Rien. “Now we’re in a place that has a mantel, so the shelves are being used for something else.”

Browse through photos of millions of home listings or search for rentals

Light fixtures: If you’re not thrilled with the builder-grade fixture that presides over your dining area or illuminates another major space, replace it. Most major home improvement retailers have lighting departments with an array of DIY-friendly fixtures. A ceiling fan is more complicated to install, but it’s worth the investment in an electrician’s help when you consider the dollars a fan can trim from year-round utility bills. Whatever kind of fixture you choose, make sure to carefully pack and store all parts of the original for easy reinstallation when it’s time to move.

Flooring enhancements: Area rugs work wonders in defining a space and lending a pop of color or needed texture. Roll out an eye-catching area rug over existing carpeting, tile or hardwood, then roll it up again later for a new look in a new place. One of Rien’s favorite temporary flooring tricks is to install FLOR modular carpet tiles as runners, area rugs or room-filling solutions. The FLOR tiles can be quickly applied over most existing flooring surfaces, are easy to clean and replace, and can be pulled up and placed elsewhere in a completely different configuration.

Portable security systems: Smart, streamlined technologies in today’s home security options make them flexible and portable enough to move with you. DIY wireless systems like the Archerfish Solo can be installed to protect your current abode, offering video surveillance that’s configured to notify you by smartphone or e-mail when threats or unexpected events occur.

Outdoor enhancements: The accessories you choose to create curb appeal in one place can do the same elsewhere, so consider portability as you invest in your exterior home improvements. A beautiful mailbox, for example, can just as easily collect mail at a new address, and high-quality ceramic pots can be planted with a new array of garden color on your next porch.

What you can’t take with you
“Not everything is portable, even though you think it will be,” advises Rien. “You have to be able to part with the things that don’t work–either sell them or put them in the basement.”

Window treatments form one category of poor travelers. You may think that your blinds or shutters are sized to a standard window, but their dimensions only have to be off by a fraction of an inch to be unusable in your new home. Instead, offer or even sell them to the new occupant of the home you’re leaving, and start fresh when you do windows in your new place.

Other fixtures can also prove to be basement-bound if they don’t suit the scale or style of your new home. For example, a huge heirloom chandelier may overtake a scaled-down dining room, dwarfing diners rather than enhancing the space. And most outdoor accessories may be more weathered than you realize, so leave the porch lights on for the new resident and build a new welcome at your next house.

Tom Kraeutler is a home improvement expert for AOL Real Estate and host of “The Money Pit,” a nationally syndicated home improvement radio program offering home improvement and remodeling tips and ideas, as well as help tips for buying or selling a home.

Still trying to decide which is right for you? Here are some AOL Real Estate guides to help you no matter whether you choose to buy or rent:

• Neighborhood Hunting Made Easy
• Tips for Finding a Rental Apartment

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/2011/03/16/renters-make-home-improvements-that-can-move-with-you/

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Filed under: Celebrity Homes, Financing, Credit

Mortgage rates have fallen to record lows. But if you’re in the market for a home loan, you’re going to have a tough time matching the deal that Facebook founder and CEO Mark Zuckerberg got on his mortgage.

Like millions of Americans have done in recent years, Zuckerberg decided to refinance his mortgage. But according to Bloomberg, the rate he got was amazing low: just 1.05 percent.

How did he do it? And can non-moguls get a similar deal?

Taking a Monthly Gamble

The key to understanding why Zuckerberg got such a great deal on his mortgage is that he didn’t get a conventional fixed mortgage. Rather, he decided to refinance his $5.95 million loan on his Palo Alto, Calif., home with an adjustable-rate mortgage.

Adjustable-rate mortgages, or ARMs, got a lot of notoriety during the housing boom. With lower interest rates, ARMs helped many homebuyers afford high-priced homes, because they often offered low teaser rates for an initial period of time. But after that teaser rate went away, borrowers were stuck making higher monthly payments, which many blame for what eventually cracked the housing bubble.

Even so, the average ARM, which locks in rates for one year at a time, carries a rate of 2.7 percent. What helped Zuckerberg get an even lower rate was his willingness to accept monthly resets of his interest rate. That means his monthly payments could rise as soon as August.

Despite that theoretical risk, few people expect interest rates to rise anytime soon. The Federal Reserve has said that it plans to keep rates low at least for the next couple of years, and many analysts expect an even longer period of low rates.

That said, there’s not much downside to the Facebook founder even if the Fed raises rates. That’s because Zuckerberg has a huge reserve of wealth behind his loan. Unlike most homeowners, he can simply sell assets and pay off his mortgage loan if the interest rate on his loan suddenly skyrockets.

How the Rest of Us Should Play the ARMs Race

The trend that most homeowners have followed recently is to get rid of adjustable-rate mortgages in favor of fixed loans. With average rates on 15-year mortgages at 2.86 percent and 30-year mortgages fetching 3.56 percent, ordinary homeowners don’t get much benefit from taking on the risk of an adjustable-rate mortgage.

Despite Zuckerberg’s cheap rate, trying to follow in his footsteps isn’t a smart idea for most homeowners. Refinancing to a fixed-rate mortgage will help you lock in affordable, predictable payments no matter what happens to interest rates in the future.

You can follow Motley Fool contributor Dan Caplinger on Twitter here. The Motley Fool owns shares of Facebook.

See also:
Anderson Cooper’s Manhattan Pad Sells for $3.8 Million
Listing Fails: The Best of the Worst in Real Estate This Week
Countrywide ‘VIP Loans’: Few Pols Resisted Mortgage ‘Gifts’

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Source: http://realestate.aol.com/blog/2012/07/16/facebook-ceo-mark-zuckerberg-refinances-mortgage-loan-down-to-1/

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Consumers may prowl for homes in 2012: Fannie Mae

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By: Ricardo E. Calderon© Texas Department of Transportation Laredo District Administrator Melisa Montemayor welcomed Eagle Pass and Maverick County officials, business, and civic leaders to the grand opening ribbon-cutting ceremony of Texas Loop 480 Segment II from the City of Eagle Pass Camino Real International Bridge, also known as International…

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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.

Browse through photos of millions of home listings or search for rentals

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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Filed under: News, Economy, Financing

After years of economic turmoil faced by millions of Americans, a large number of consumers now have new attitudes toward the kinds of financial missteps that can land borrowers in credit trouble, including strategic defaults.

A sizable amount of Americans now consider it socially acceptable to have a low credit score or strategically default on their outstanding mortgage balances, according to new data compiled by JZ Analytics as part of a poll for ID Analytics. In all, 36 percent of those polled said they believe it’s acceptable to have a poor credit score these days, accounting for 77 million people across the country if the data is extrapolated out.

More interesting, however, is that many consumers have seen their attitudes toward intentionally falling behind on underwater mortgages change drastically in the last few years, the report said. A total of 32 percent of those polled — 68 million people nationwide — say homeowners should be able to strategically default on their mortgages without facing any consequences whatsoever for doing so.

Further, 13 percent, or 28 million Americans, say they would likely strategically default, the report said. Another 17 percent, or 36 million residents, say they know people who have already done so.

“Our research into the consumer opinion of the economic crisis of 2008 found alarming results,” said John Zogby, a senior analyst at JZ Analytics and creator of the Zogby Poll. “What jumped out is how many Americans feel it is acceptable for homeowners to walk away from a mortgage and go into foreclosure. If Americans carry on with that mindset, it will continue to cause problems as the economy undergoes a slow recovery.”

Another area in which consumers have more relaxed attitudes toward certain aspects of their credit rating is whether they would exaggerate their standing to obtain new lines of credit, the report said. In all, 17 percent of those polled said they would do so, making up some 36 million Americans.

Finally, another 35 percent of respondents — 75 million Americans in all — said they are now more afraid of being victimized by identity theft than they were five years ago, the report said.

Identity theft and account mismanagement can lead to serious damage to a borrower’s credit score, and therefore all financial documents, including credit reports, should be monitored closely as often as possible.

See more on Credit.com:
How Often Does Your Credit Report Change?
5 Reasons Why Your Credit Score May Not Matter
The Ultimate Credit Report Cheat Sheet

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/2012/10/08/more-americans-consider-strategic-default-on-mortgages-acceptable/

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Filed under: News, Home Equity, Refinancing, Selling

Peter Safronoff drives a Hyundai and lives in a rental bungalow in Encinitas, Calif., a beach community north of San Diego. At 63, it’s not the golden-years lifestyle the financial consultant planned on, but it’s the one he has.

“I live in a beautiful place, in more modest circumstances,” he says, “but at least I know I won’t go bankrupt now.”

That’s because last November, Safronoff walked away from his 1,600-square-foot home near San Diego, which he bought for $400,000 in 2005 with a 10% down payment. Like so many American homeowners, he lost his job in the financial crisis and watched the value of his house plunge. Unable to modify his loan — and unwilling to push himself into complete financial ruin to keep his condo — he made a strategic decision to pack his bags and leave the keys for the bank.

Homeowners like Safronoff keep the lending industry awake at night.

A report released in April by FICO, a credit-scoring and analytics company, offered tools to mortgage lenders to spot potential defaulters. They weren’t who you might think: FICO’s red flags included people with high credit ratings who were up to date on credit card and auto payments. As a financially savvy businessman with a credit score above 800 until very recently, Safronoff fits the profile.

His story follows a familiar trajectory. He bought his home in a boom market. When the economy turned, he lost his six-figure income, the value of his home plunged and his homeowner fees doubled. Relying on his $1,500 social security income and savings, Safronoff (pictured) found himself struggling to keep up with his monthly payments, which had ballooned to more than $3,700. Still, he never missed a payment. As he dug further into his savings, he was unable to qualify for refinancing, and his attempts to get a loan modification failed. Hundreds of faxes and many loan servicers later, he was at the end of his rope.

Safronoff says that while his attempts to find a solution met a dead end, he doesn’t besmirch his lender, a national company. Still frustrated, however, he looked for other options and found YouWalkAway.com, an agency specializing in foreclosure planning or strategic defaults.

He is not alone. A study from the University of Chicago’s Booth School of Business reported that 35% of mortgage defaults in September 2010 were strategic, compared with 26% in March 2009.

Jon Maddux, CEO of YouWalkAway.com, says his business mirrors that growth. Business is up 10% this year — and had 40% annual growth in 2010 — as more and more homeowners view walking away as a financially prudent decision.

Maddux says that his first wave of customers, in 2008, were much different than the ones he sees today. “In 2008 people were very saddened and in distress. They felt they had to save the house at all costs,” he says. “But now people who were holding on really can’t hold on any longer. We’re seeing people who called three years ago call back.”

Home Prices Expected to Keep Falling

The news for homeowners continues to get worse. A Zillow study this week reported that home prices have experienced the biggest quarterly drop since 2008 and may not hit bottom until 2012. Today, prices are down nearly 30% from the peak in 2006, and the number of negative-equity, or underwater, homes has hit a new high. Two million homes are in foreclosure, Zillow reported, with another 1.5 million seriously delinquent.

Ellen Harnick, a senior policy counsel at the Center for Responsible Lending, suggests that part of the reason that strategic defaults are occurring is that continued unemployment and the lengthy process for loan modification are leaving more people with fewer options.

“Studies have shown that negative equity is necessary but insufficient. People who walk away have had some other event, so that it’s not a choice but a lack of options,” she says. “For primary residents, you have to live somewhere. Most people will continue to pay mortgages as long as they can.”

Some help could come for homeowners in proposed legislation for the Housing Opportunity and Mortgage Equity Act, which would allow any homeowner with a loan backed by Fannie Mae or Freddie Mac to refinance at the current rate, regardless of home value, income or credit rating.

What Is the Real Cost of Walking Away?

Public debate has centered on two issues: the ethical or moral question of walking away from a contract and the systemic risk to the housing market. Vocal critics of strategic defaults, such as economist Luigi Zingales at the University of Chicago, argue that walking away hurts market efficiency, increases mortgage prices, damages the community, and depresses the overall housing market. Add to that the damage of a broken promise.

But others, including University of Arizona law professor Brent White, say the question of whether to default strategically comes down to contract law. In White’s view, the lender-lendee contract “explicitly sets out the consequences of breach.” He argues that the agreement allows for a walk-away, provided the goods in question are returned. In other words, sending the keys back to the bank is part of the contract.

The possibility of walking away is a flashpoint for homeowners and lenders alike. Until recently, the only time planned foreclosures occurred were after major life-altering events: divorce, medical emergency, or business failure. In the last two years, the term “strategic default” has gained traction to describe walking away from a loan–also “jingle mail,” from the sound of metal house keys clanking in an envelope.

For underwater homeowners, strategic default is one way to preserve remaining wealth, says Augustine Diji, a former real estate broker and founder of the website The Strategic Default Monitor.

Safronoff says that his decision to walk away was painful financially and emotionally. But it came down to economics and the relief he stood to gain as opposed to “sit in the house and freak out.” He didn’t see the process as ethically questionable because he says that he had tried all other options and saw this as a business decision.

The major penalty for strategically defaulting is the substantial hit of 150 or more points to a credit score. That means higher interest rates, more restrictive terms on credit and other difficulties obtaining financing. It could be hard to qualify for rental properties as well. In some states, lenders who sell a foreclosed property for less than the amount owed on the mortgage can pursue the defaulter for the difference, according to the FICO report.

The trend toward defaults underscores that credit may not be the king it once was.

“People’s perceptions of credit are changing as we speak,” Diji says. “There was a time when credit meant so much, and your score gave you so many benefits. Today, defaults throw that upside down.”

Nicholas Carroll, blogger and author of “Walk Away From Your Debt,” says the dot-com crash in the Silicon Valley in 2000-2001 foreshadowed the current wave of strategic defaulters. Looking back, he says, “people who walked away were back on their feet much sooner than people who tried to hang on.” He adds that cash — rather than a home — is increasingly the new nest egg.

With peace of mind today, Safronoff is focused on rebuilding his financial life and reconstructing his credit. He doesn’t regret walking away from his house but does not endorse it for other homeowners either.

“It was the right decision for me,” he says, “but for others it may not be right. There is no simple answer.”

Catherine New is a reporter with the Huffington Post Media Group.

For more on foreclosure and related topics see these AOL Real Estate guides:

• Stop Foreclosure Rescue Scammers Before They Scam You
• Foreclosure Help: What a Housing Counselor Can Do
• How to Buy Foreclosures

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/2011/05/11/who-walks-away-from-a-mortgage-not-who-youd-expect/

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5 signs that it’s a good time to sell

Why desperate homeowners could find relief this year

Traditionally, most homes have sold during the spring months. In the current volatile housing market, the time of year is not the most reliable predictor of the best time to sell.

Homes certainly show better in spring than they do on a dark and dreary winter day. Lately, however, weather patterns are hard to predict.

The weather has some effect on home sales. It can slow things down if incessant rain keeps sellers from being able to prepare their homes for sale. However, a bigger influence on the housing market is the overall economic situation and its impact on buyers’ psyche.

Normally, the home-sale market ramps up in March or April and stays busy until the beginning of July when the market tends to slow down for the summer. The 2011 home sales went counter to this. The market was active at the beginning of the year, but stalled in April. If you waited until spring to sell last year, you would have missed the best selling opportunity of the first half of 2011.

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The early slowdown was partially due to the expiration of the homebuyer stimulus package. The homebuyer tax credit program accelerated home purchases creating a mini bubble in 2010 that was followed by a significant slowdown in home sales.

Negative economic news played a big part in the sluggish home sales during most of last year. The stock market was unpredictable, and the earthquake in Japan had repercussions for many industries. Plus, Greece was on the brink of bankruptcy, and the future of the European Union was in doubt.

Bad economic news and massive uncertainty lowers consumer confidence. Buyers need to have jobs, but they also need to feel confident in their future to take on a major purchase like a house.

HOUSE HUNTING TIP: The best time to sell is when consumer confidence is on the upswing; interest rates are low; unemployment is decreasing; the economic news is mild; and there are more buyers in your local market niche than there are sellers. A high-demand, low-inventory market gives sellers an edge.

The Conference Board Consumer Confidence Index fell in March 2012 to 70.2 (1985=100), down from 71.6 in February, when it was up sharply.

Lynn Franco, director of The Conference Board Consumer Research Center, attributed the improvement in consumer confidence in February to less pessimism about current business and employment conditions and more optimism about the short-term outlook for the economy and job prospects despite a rise in gas prices. Franco said the moderate decline seen in March was “due solely to a less favorable short-term outlook.”

Interest rates are currently at historic lows and are expected to stay low for the rest of the year. Even with low rates, buyers have had difficulty qualifying due to rigid mortgage approval underwriting.

Capital Economics, an analytics firm, expects the housing crisis to end this year partially due to lenders loosening credit. According to Capital Economics, one indicator of loosening is that banks are now lending 82 percent of loan-to-value (LTV), compared with a low of 74 percent LTV reached in mid-2010. This means qualified buyers need less cash to buy, which should lead to more sales this year, although higher home prices are not expected.

These positive indicators combined with a drop in homes for sale at the end of 2011 and a decrease in unemployment may provide an opportunity for sellers in spring 2012, provided their homes are priced right for the market. A major surprise on the economic front could change the picture.

THE CLOSING: Regardless of the economic indicators, the best time to sell is when the time is right for you.

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Filed under: News, Advice, Home Improvement

Home security technologies are keeping pace with the other gadgets in our connected, on-demand lives. Unlike the cumbersome systems of the recent past, new home security components are discreet, easily controlled from afar, and smart enough to screen out don’t-need-to-know info, like your pet’s indoor traffic patterns.

If you’re shopping for trustworthy home security support and flexible system options, you have plenty of choices. New-and-improved technologies are also far more affordable than you might guess, whether they’re designed for DIY home security or professional installation.

Smarter surveillance
Motion sensors are standard in home security, and now, high-tech cameras can also be part of

See photos of homes for sale in your area and across the country on AOL Real Estate

the plan. A new generation of camera-driven surveillance systems like Cernium’s Archerfish removes concerns about cost and time-consuming screening by having the smarts to actually focus on what’s important: your home’s safety. You can program for expected events and types of motion, such as the kids coming home from school, and will be notified when there’s an unexpected event, whether it be a package you forgot you’d ordered or an actual intruder.

“The key change is this degree of intelligence,” says Craig Chambers, Cernium president and CEO. “Instead of having to think about when you want to check the video camera–and most of the time, find out nothing’s happening–you can very easily configure Archerfish to look for certain kinds of activities in the field of view. Once they’re detected, you’ll get an e-mail notification with a video clip attached. You have the convenience of knowing what’s going on without having to constantly look in on what’s happening.”

Wireless components
Thanks to the flexibility of wireless technology, you can station critical components in tight spaces or places where wiring would usually be a challenge (as with a partially finished attic or basement). Their comprehensive coverage can be put to work wherever you need them, making it easy to steer clear of interference from other appliances or in-home wireless networks.

New home security tips

More intuitive controls
Gone are keypads with tiny screens and hard-to-decipher displays. Today’s home security controls offer touch-screen capabilities in living color, with intuitive system designs that look more like your favorite smartphone app than the complicated monitors they are. Smart security control panels don’t even have to be mounted on a wall–many are meant to conveniently travel with you from room to room. Mission control can also extend to your laptop or smartphone, allowing you to check in and receive important alerts during daily routines or extended travel.

Portability
With the exception of professionally installed and hard-wired home security systems, just about every contemporary component is designed to travel to a new home or other site with security concerns. That portability also plays into changing needs within your current living space: compact surveillance cameras, motion sensors and control panels can easily move from one position to another.

Multitasking home management
Home security can also be integrated with other critical monitoring streams for a one-stop solution to home management. Fire and carbon monoxide alarms, temperature regulation, HVAC component status, home lighting, and even freeze and flood alerts can be accessed from the same set of controls. ADT’s Pulse system is one example of full-service home automation, easy to monitor and manage remotely via interactive touchscreen, your laptop or smartphone.

High-tech hubs, otherwise known as security companies
Ever-advancing technology means your home security company has even more sophisticated means of supporting your needs. Cutting-edge computer systems, stellar backup measures and strict systems redundancies make it possible to respond immediately and provide customers with critical data records. The ability to customize systems has also increased by leaps and bounds through the integration of wireless components, mobile apps and surveillance technologies smart enough to distinguish between real threats and false alarms.

Even as home security continues to evolve and change, the points to consider while shopping remain the same. Check out the costs involved, including installation charges and any monthly fees and deposits associated with a long-term service contract. Compare component options and make sure you understand how various systems would–or wouldn’t–work for your home and lifestyle. Also think about features and whole-system integrations that can make your life easier, offering one-touch control and the level of communication you need to keep your home secure, wherever you are.

Tom Kraeutler is a home improvement expert for AOL Real Estate and host of “The Money Pit,” a nationally syndicated home improvement radio program offering home improvement tips and ideas, including tips on home security.

For more on home security and related topics, see these AOL Real Estate guides:

• Low-Cost Home Security Solutions
• Protect Your Home From Break-Ins During the Holidays
• Home Security: Systems With Cutting Edge Protection
• The Renter’s Guide to Holiday Safety
• Apartment Fire Safety Tips

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/2011/03/21/high-tech-home-security/

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Filed under: Design, News, Economy

While picking up some prescriptions recently, my local pharmacist, who knows I write about home construction, asked me if I had any suggestions for how he should build his new house. Since I’m a big advocate for prefab, I suggested that he consider building his house modular. His response shocked me: “I wouldn’t want to build modular — it would upset my neighbors and bring down the neighborhood.” I thought that type of thinking about prefab was ancient history, but his response was clear evidence that it is not.

After having written several books on the subject — filled with evidence of the beauty and diversity of prefab — I thought we had moved past the bias that prefab is synonymous with double-wides.

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Prefab Options

Prefabricated construction includes all types of buildings that are either partially or completely built in a factory. Modular construction is one of the most common types of prefab. Large boxes are built in a factory and then taken by flatbed truck to a site and lifted with a crane into place. A house can be built with one box or 36 boxes.

Another common type of prefab is panelized construction. Large exterior wall sections of the house are built in the factory and put together on site like a jigsaw puzzle. A similar method is building with structural insulated panels, known as SIPs, which are like sandwiches of oriented strand board, or OSB, fused together with insulation in between. Other types of prefab include concrete panels, prefabricated timber frames and even some log cabins. The savings varies with prefab, depending on the size of the house, location and type of construction.

With all that I’ve learned over the years, I would never consider building a house on-site. The feedback that I get from my readers, when they have acquired some knowledge of prefab, is that they’ve become believers — and wouldn’t consider the on-site option either.

Environmental Impact

My preference for prefab comes from years of investigating the best ways to build a house.

As an environmentalist, there are many reasons to prefer prefab. Much of the on-site construction debris goes into a dumpster — the homeowner is paying for the debris, dumper and tipping charges.

In a factory, wood cutoffs are sorted and used for other houses. Many of the cutoffs from materials, such as drywall and metal, are returned to the manufacturer for recycling. Materials are shipped in bulk to the factories, so they cost less and shipping charges are reduced.

Prefab houses are built in an environment where the wood is protected from the elements and has less chance of developing mold and rot. And it and won’t twist and buckle, creating thermal bridges where air will infiltrate. Furthermore, prefab houses are built by professionals under the watchful eyes of supervisors who are checking the work all along the process.

These advantages are all in addition to the shorter construction time and financial savings associated with building prefab.

Cost Advantages

Several years ago the Structural Building Components Industry compared the construction of a site-built house to a panelized one in a study called “Framing the American Dream.” The panelized house took substantially fewer hours to build, used less lumber, created far less scrap and cost 16 percent less in labor and materials. Another study from a coalition of Philadelphia building experts, titled “Going Mod,” found a $32 savings per square foot using modular rather than site-built construction.

Over the years that I have been writing books on prefab, I have became more and more conscious of the importance of building houses with healthier environments and increased energy efficiency. Heating and cooling houses currently accounts for about 40 percent of the energy used in this country. With the environmental and political ramifications of acquiring energy from fossil fuel, I thought there must be a way to build houses that require less.

I have also been influenced by the recent power outages in the Northeast. Twice in the last six months, it took Connecticut Light and Power almost a week to restore power to my neighborhood. I began to consider how wonderful it would have been to be somewhat independent of the grid (the power utility) and be able to sustain at least some of the energy in our house during those outages. Through my research I’ve found numerous ways of limiting the need for energy in the home and several ways to create energy without the need for fossil fuel.

These options would make the house more comfortable and save on energy costs. According to a report last week by McGraw-Hill Construction, the green housing market is growing rapidly, having tripled since 2008. Green homes, which comprised 17 percent of new residential construction last year, are expected to increase by 29 percent to 38 percent of the market by 2016.

Prefab to Prefabulous

About a year ago I decided to write a book profiling prefabricated houses that require minimal energy. I thought it would probably be difficult to find enough of these houses in this country. To my delight, I found more than I could possibly include in one book.

The houses I found are varied in style, location and method of construction — but they are all smaller, very energy and water efficient, with healthy environments, and with a more sustainable use of materials. The result of this search is “Prefabulous + Almost Off the Grid: Your Path to Building an Energy-Independent Home.” (It’s scheduled for released by Abrams in October and is available for pre-order this week.)

I hope you will send in your questions and follow this blog to learn more about the advantages of prefab and environmentally friendly and energy efficient home construction.

Sheri Koones is an award-winning author of five books on home construction, with the last several focusing on prefabricated construction. Her most recent book is “Prefabulous + Sustainable.” Her latest work, “Prefabulous + Almost Off the Grid,” will be released in October 2012 by Abrams.

See also:
WATCH: The Pros and Cons of Buying a New-Construction Home
Don’t Be Surprised by Costs of Homeownership
Homebuyer’s Remorse: How to Avoid and Cure

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/2012/03/21/why-your-next-home-should-be-prefab/

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There are a few things just as frustrating as looking for a new home: dating, car shopping and job searching. When it comes time to look for a new place to live, the options seem endless and nothing seems to fit your budget, needs and wants. It would be wonderful to go home hunting if […]

Source: http://www.brothernwla.org/the-benefits-of-new-homes-for-sale/

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Filed under: Home Equity

Think it’s tough to qualify for refinancing your existing mortgage? So does Richard Shin, a Queens attorney with good credit and great income who was turned down by his original lender when he wanted to refinance his 30-year-fixed rate mortgage on his single family brick home to a 15-year-mortgage with a lower interest rate. Due to tighter lender restrictions, he didn’t qualify until he found a lender who let him bring cash to the table

Think it’s tough to qualify for refinancing your existing mortgage? So does Richard Shin, a Queens attorney with good credit and great income who was turned down by his original lender when he wanted to refinance his 30-year-fixed rate mortgage on his single family brick home to a 15-year-mortgage with a lower interest rate. Due to tighter lender restrictions, he didn’t qualify until he found a lender who let him bring cash to the table to pay down his mortgage.

The number of homeowners taking out a refinance is on the decline and may further dip in 2011, according to the Mortgage Bankers Association, but of those who do refinance lenders are seeing a higher percentage come as cash-in borrowers – those refinancers who bring cash to the table in order to seal the deal.

“We used to have maybe one borrower a year bring cash to the table, but now we’re seeing three or four a month,” said Matthew Hackett, an underwriting manager with New York City lender Equity Now, which refinanced Shin’s home.

Hackett says cash-to-the-table options are being utilized more often because borrowers are needing to lower their loan-to-value ratio if they hope to lower their existing interest rate from somewhere in the upper 5 percent or 6 percent range down to a rate in the 4 percent or lower 5 percent range. This is not just because of tighter lender restrictions, but also because so many homeowners are underwater and owe more on their mortgages than their homes are worth.

Shin, whose home appraised at $1,150,000, brought $60,100 to closing as a down payment to cover the difference between his old $560,000 mortgage and his new $499,900 loan, which featured a reduced interest rate from 6.25 percent to 4.75 percent.

For others looking to refinance, a cash-in refinance may be their only option, and it’s not as bad as an option as you may think. Although not every one has $60,000 to bring to the table, the amount you do bring will not likely be as high, depending on your goals.

Here are two main reasons to do a cash-in refi:

1. Savings accounts aren’t paying anyway. The interest rate on many savings accounts these days hover around 1 percent, whereas your mortgage rate is far higher. Putting a few thousand toward your refinance if it will help you reduce your interest rate a percentage point or more, might be money well spent, especially if you plan on staying in your home awhile. There’s no reason ti put in more than you need to, however, to reduce that rate, says Hackett.

2. Avoid PMI. If you had less than 20 percent equity in your home when you purchased it, there’s a good chance you’re paying private mortgage insurance. When one refinances, this fee typically goes away if the value of your house has increased enough to lower the loan to value ratio. However, in this economy more people are finding that their value has declined. Even those who were not paying PMI might discover upon a refinance that now they need to due to fallen values. Eliminate this fee by bringing cash to the table to cover the difference so that your refi loan is for 80 percent or less than the value of your home.

Although refinances are declining, they still make up nearly two-thirds of all mortgage applications. As of the end of November, however, they decreased 21.6 percent from the previous week to 74.9 percent of total applications, their lowest level since June 2010, reports the Mortgage Bankers Association.

The pool of eligible borrowers who can refinance is small, and those for whom a refinance is beneficial, have already refinanced or mostly likely will in the near future. This downward trend in refinances will cause a decline in total originations next year, but a greater percentage of refinances will likely come from these cash-in borrowers.

Is a cash-in refi right for you?

What’s your break-even point? If you opt to do a cash-in refi, Hackett says, determine your break-even point to decide how much will make it worth it. For example, if you bring $15,000 to the table to get an interest rate that saves you $250 per month on your mortgage payment, it would take you 60 months, or 5 years before you’ve reached $15,000 worth of perceived savings. If you think you might sell your home in less than five years, you’re better off keeping your money in the bank rather than pursuing that lower interest rate. However, if you plan on staying longer, your savings will be even greater because of what you’re saving in interest payments by having the lower interest rate.

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Source: http://realestate.aol.com/blog/2010/12/09/as-refinancing-declines-cash-in-refis-rise/

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Filed under: Home Equity

If you’re looking to refinance your mortgage but you also need some extra cash, there may be a few options out there you haven’t considered. Today’s re-fi rates are low, but to get the best deal overall, your best bet may be to refinance your principal loan at the lowest rate you can find and then to apply for a home equity line for the cash. That way, with today’s low home equity rates, you’ll

If you’re looking to refinance your mortgage but you also need some extra cash, there may be a few options out there you haven’t considered. Today’s re-fi rates are low, but to get the best deal overall, your best bet may be to refinance your principal loan at the lowest rate you can find and then to apply for a home equity line for the cash.

That way, with today’s low home equity rates, you’ll get the best interest rates for both portions of your financing.

The other main option is a cash-out refinance, in which the borrower takes additional cash above the loan amount. But that usually means an additional 0.5 percent or more in interest, which can add up to thousands of dollars over the course of a 30-year loan. Instead, simply refinance the balance of your mortgage, and then apply for a home equity line for the rest.

Right now, home equity rates are at prime or prime plus 0.5 percent to 1.0 percent, a lot better than almost any other kind of loan out there, including personal loans and credit card debt.

Cash-out refinancing is not a real option for homeowners who are underwater and need to borrow more than 80 percent of the value of their home. And while there are 95 percent loan-to-value mortgages out there, you can’t be living in a declining market such as Arizona, California, Florida, Michigan and Nevada. Also, if your credit score is below 680, you’ll need to turn to the FHA for the refinance if you want anything more than a 90 percent loan-to-value mortgage.

Generally in today’s market, even if you don’t live in a declining market, you probably won’t be able to get an equity line if it means going above 90 percent loan-to-value. And even that could be difficult, unless you have a credit score over 760. Therefore, home equity lines are a better choice for smaller projects, like making needed repairs on your home.

Also, think twice before paying off credit card debt with a home equity line. While you may be paying a high price for credit card debt, transferring credit card debt to an equity line means you are exchanging unsecured debt (debt that is not guaranteed by an asset) for secured debt (in this case debt that is secured by your home). That means, if for some reason you can’t make the payment on your equity line, the lender has the right to foreclose on your home. You can learn more about how equity lines work in the Federal Reserve’s pamphlet “What you should know about Home Equity Lines of Credit.”

Millions of people put their homes at risk because they used the equity in their homes as a piggy bank and borrowed to levels that are now higher than what their homes are worth. Some have walked away from these homes because the combined mortgage and equity line is higher than what the home’s value is expected to be for 10 or 20 years.

But if you need the cash, and it will put you in a better position financially, you’re better off choosing an home equity line than a cash-out refinance.

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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Source: http://realestate.aol.com/blog/2010/12/09/home-equity-line-adds-new-option-to-refinancing/

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Dr. Marshall Reddick has been one of the biggest icons in the real estate industry of the United States since he established the Marshall Reddick Real Estate Network. Years before he established the network, he worked as a professor for marketing at the California State University in Los Angeles, United States. He served the University […]

Source: http://www.brothernwla.org/dr-reddick-and-the-dawn-of-the-marshall-reddick-real-estate-network/

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Filed under: News, How To, Investing

Scanning the foreclosure listings to snap up your dream home on the cheap?

It’s tempting indeed to take the bottom-fisher route, especially when bank-owned deals are so plentiful and annual housing prices in 20 major cities combined declined 3.8 percent in January, according to the closely watched S&P/Case-Shiller U.S. National Home Price Index released Tuesday.

But veteran real estate agents offer up some sound advice for would-be buyers homing in on bank-owned properties, short-sale deals, and foreclosures. Here’s how to keep the frustration level low when shopping for your bargain-basement dream home.

1. Get your terms straight.

“Foreclosures” is a loose term that buyers bandy about when telling their real estate agent to seek them out. In most cases, homebuyers aren’t really looking for foreclosures in the technical sense.

“A real foreclosure is when the owner is losing their house and it’s being auctioned off on the steps of the courtyard. You need to have cash to buy these houses, so it’s usually only investors who buy foreclosures and get amazing deals,” says Kristi Roberts, a real estate agent with McGuire Real Estate’s Berkeley, Calif., office. “If the house doesn’t sell on the courtyard steps, then it becomes a bank-owned house.”

Nonetheless, when clients ask to be shown foreclosures, most real estate agents know they are likely asking to see bank-owned properties. Chris Dasaro, a Coldwell Banker real estate agent in the Grosse Pointe Woods, Mich., office that also serves the Detroit market, estimates that upward of 80 percent of his clients want to be shown bank-owned properties.

2. Don’t get too excited about lowball listings.

In the greater Detroit area, where January housing prices were actually up 1.7 percent over last year, according to Case-Shiller, Dasaro has seen a couple of instances in which bank-owned properties were listed as much as 50 percent below the market rate. That, of course, generates a feeding frenzy where bidders in some cases end up paying above the market rate for a particular house.

Dasaro estimates that he encounters lowball situations like these in about 5 percent to 10 percent of the houses he sees, and notes that buyers would be wise not to get overly excited with anticipation that they could snap up the house at that listed price.

The lowballing is not a sales technique, but rather the likely result of the banks relying on broker price opinions rather than appraisals for the properties, says Roberts. She notes that she has also seen situations in which the banks have overpriced properties by a large margin, but often in those cases potential buyers are not disappointed if they don’t get the house.

3. Prepare for big differences in bank-owned property sales.

Compared to purchasing a house from a private owner, there are more hoops to jump through when buying a bank-owned property, real estate agents say. Buyers should brace for:

o. Far fewer disclosures from the seller regarding the condition of the property, because the banks rarely, if ever, visit the property they are selling, say real estate agents.

o. Being pressured to buy “as is.” Mary Ann Griffin, an associate Realtor with RE/MAX in Atlanta, says buyers should always make a contract contingent upon the buyer’s home inspection, even if the contract notes that the sale will be done in “as is” condition. Griffin notes that securing a VA or FHA loan requires banks or other sellers to make appraiser-recommended repairs.

o. “Gotcha” addenda in the contract. Roberts notes that banks will often include an addendum to the contract that may contradict something called for in the beginning of the document. Other addendum provisions may include clauses such as a $100-per-day penalty fee for every day the buyer is late in closing the deal or fulfilling a contingency.

o. Lots of fine print. “Buying bank-owned property is like the Wild West of real estate. Sometimes you just have to put on your cowboy hat,” Roberts says. “I’m a real cautious person and address these things by reading the document carefully and having a good team, where we stay on top of it and pay attention to the timelines and deadlines.”

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4. Know what you’re in for in short-sale situations.

Bargain hunters are also keen to take a gander at homes listed as a short-sale. But venturing down this path can often lead to long delays in home ownership, and can sometimes fail in the end.

Under a short sale, the owner puts together a hardship packet that’s sent to the bank and will sometimes include a sales contract with a prospective buyer, Roberts says. But it can take as long as six months before a bank responds as to whether they will accept the seller’s plans for a short sale.

Roberts knows of one particular case in which an investor bid on a Berkeley, Calif., foreclosure on the courthouse steps. Although this investor lost the bid, he was curious nonetheless about the house that sold for $365,000 at auction. In making an inquiry, Roberts learned that the same house was in the final stages of approval for a short-sale for $425,000.

Not only was it a case of the left hand not knowing what the right hand was up to at the bank that was overseeing the transactions, but it ended up costing four months of time for the prospective short-sale buyer, Roberts says.

Another tactic short-sellers use is the illusion of a tight deadline. Recently, Roberts has seen a couple of short-sale auctions in which the listing price is set extremely low but the bids end up closer to the market rate — but surprisingly, the window of opportunity doesn’t close after the auction is over. The short-sale real estate agent continues to accept offers on the house for several more days in order to land the absolute highest price.

Says Roberts: “I have clients who want to go to these fake auctions, and we’ll go, but I see how frustrating it can be for them.”

Griffin offers these tips to short-sale buyers:

o. Try to avoid “potential short sales” and seek out “approved short sales” instead. In some cases, banks will approve a homeowner conducting a short sale, even if no prospective buyers are listed.

o. Work with an experienced agent who has a track record with short sales.

o. Document all correspondence (for example, by using email).

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Source: http://realestate.aol.com/blog/2012/03/29/4-secrets-to-scoring-a-bank-owned-property-deal/

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Filed under: Economy

There have been a number of positive developments in the housing market over the last several months, and that trend continued into September, as many areas continued to improve.

The housing market has strengthened considerably since the end of last year, and as a result, there is now an additional $860 billion in home equity nationwide, according to the latest Housing Scorecard released monthly by the Obama administration. As a consequence, sales of existing homes in the month of August reached the highest level seen in more than two years.

“As the September housing scorecard indicates, our housing market is showing important signs of recovery — with homeowner equity at a four-year high and summer sales of existing homes at the strongest pace in two years,” said Erika Poethig, acting assistant secretary for the U.S. Department of Housing and Urban Development. “The Administration’s efforts to keep housing affordable and refinances strong are critical with so many households still struggling to make ends meet. That is why we continue to ask Congress to approve the President’s refinancing proposal so that more homeowners can secure the help they need.”

As a result of all the rising equity nationwide, which is now at the highest level since the third quarter of 2008, some 1.3 million homeowners are now back above water on their mortgages, the report said. In all, the number of underwater homeowners nationwide has dropped 11 percent since the end of 2011, falling to 10.8 million through the end of the second quarter from 12.1 million.

Meanwhile, efforts on the part of the federal government to aid those who are still underwater with their mortgages have been successful as well, the report said. The Making Home Affordable Program has had nearly 1.3 million homeowner assistance actions take place since its inception, and the Federal Housing Administration has extended some for loss mitigation or early delinquency interventions to another 1.4 million.

Similarly, the Home Affordable Modification Program has been helpful to more than a million consumers nationwide, reducing their mortgage payments by an average of $539 per month, allowing for a total of more than $15 billion in savings to date, the report said.

Experts say improving home prices and continued low rates on mortgages could encourage many consumers to enter the housing market for the first time in years within the next several months.

See more on Credit.com:
How Refinancing Can Affect Your Credit
Can You Really Get Your Credit Score for Free?
How a Mortgage Can Help (or Hurt) Your Credit

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Source: http://realestate.aol.com/blog/2012/10/09/housing-recovery-taking-hold-government-survey-says/

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Filed under: News, Refinancing

By Jon Prior

Even if the promising mortgage refinancing plan that President Obama announced Tuesday night passes Congress, critics say it will fall short of solving the deepest housing problems.

The White House did not release great amounts of detail, but the plan would help homeowners current on their mortgage to refinance down to a lower rate and save an average $3,000 a year on payments. The plan widens the Home Affordable Refinance Program to include mortgages not guaranteed by Fannie Mae and Freddie Mac and would tax banks to raise funding.

Analysts said Wednesday morning that the program could cost as much as $10 billion and could reach between 2 million to 3 million borrowers.

Read the full story on HousingWire.

Also see:
Bernanke: Fed Should Help Turn Foreclosures Into Rentals
Principal Reduction Better Than Short Sales, Report Says

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/2012/01/25/obama-state-of-the-union-plan-inadequate-for-housing/

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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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Filed under: Advice

By Jan Soults Walker

Successful burglars have lots in common — homeowners who unwittingly give invitations to robbery. Here’s how thieves thank you for your generosity.

You come home to an open front door, a ransacked house, and missing valuables. How did a burglar know you’d be gone? How did they get in?

Check out these 10 thank-you notes from your friendly neighborhood burglars, and their advice on how to stop lending them a helping hand.

1. Thanks for the Ladder!

Call me a social climber if you will, but I did discover a ladder in your backyard. Thank you for leaving it where I could lean it against your home and easily reach a second-story window. I really love it when upper story openings aren’t wired to a home security system!

So, if you want to keep me out, store your ladder in the basement or a locked garage. And call your security company to wire upper-story windows into your alarm system.

Vertically yours,
A rising star

2. Loved Your Trash.

Can’t tell you how much fun I have driving around neighborhoods on trash day (especially after big gift holidays) when the empty boxes on the curb reveal what wonderful new toys you have. Your thoughtfulness made it possible for me to land a new laptop and a flat-screen television in one easy trip to your home!

Next time, break down the boxes and conceal them in the recycling or trash bins.

Happy shopping!
Curbside Cruiser

3. Dear Can’t-Get-Around-To-It

Recently, I noticed you hadn’t trimmed trees and shrubs around your home, so I knew I’d have a wonderful place to hide while I worked to break into your home. I really can’t thank you enough for all the great new things I grabbed.

Next time, trim back bushes and trees near windows and doors. Make sure entry points to your home are easily visible from the street — I much prefer to work in private! While you’re at it, install motion-sensor lighting. I’m scared of bright lights!

Cordially,
The Tree Lover

4. Su Casa Es Mi Casa!

I was sincerely relieved to find your back door was a plain wood-panel door. I had no trouble kicking it in (my knees appreciate how easy that was!) Imagine how silly I felt when I discovered that your windows weren’t locked anyway.

You may want to take a cue from your neighbor and install steel-wrapped exterior doors with deadbolts on all your entries. And be sure your windows are locked when you’re away.

All the best,
Buster Door

5. Bad Reflection on You

You’d be surprised how many homeowners position a mirror in their entry hall so I can see from a window if the alarm system is armed. (Yours wasn’t, but I’m guessing you know that by now!) Thanks for taking a lot of pressure off of me.

A little free advice: Relocate the mirror so your alarm system isn’t visible if someone else would peer through a window.

Fondly,
Mr. Peeper

6. The Telltale Grass

Wow, isn’t it amazing how fast the grass grows these days? I swung by now and then and noticed your lawn was uncut, newspapers were piling up on the front steps, and your shades were always closed. To me, that’s an open invitation.

Next time, hire someone you trust to mow regularly, pick up around the doorstep, open and close various window shades, and turn different lights on and off (or put a few on timers). One more thing: Lock any car you leave in the driveway, or I can use your garage door opener to get in quickly.

Best,
Your Trip Adviser

7. Getting Carried Away.

Many thanks for putting your valuables into an easy-to-carry safe that I could carry right out your back door. (Nice jewelry, and thank you for the cash!)

You may want to invest in a wall safe, which I rarely attempt to open. Or, rent a lock box at your bank.

With appreciation,
Mr. Safe and Not-So-Sound

8. Dear BFF

Thanks for alerting a professional acquaintance of mine via your social network that you were away for the week in Puerto Vallarta, having the time of your life. Me? I enjoyed a very relaxing visit to your home with no pressure of being caught.

If only you had known that posting comments and photos of your trip on social networks is fine — but do that after you return so you won’t broadcast your absence!

Sincerely,
Cyber Savvy

9. Tag, You’re It!

Where are you? When you use popular geo-tracking apps, such as FourSquare and Glympse, I might know if you’re not home. Websites such as www.pleaserobme.com help me keep track of your whereabouts.

If you prefer that I not visit your home, be careful about geo-tagging. But, otherwise, thank you for the loot!

– Just Tagging Along

10. Thanks for the Appointment

Thanks for inviting me into your home to view the laptop you wanted to sell. I do apologize for the scare I gave you when I took it (and your purse).

Did you know that some large U.S. cities are averaging one so-called “robbery by appointment” per day? If you want to sell high-ticket items to strangers, I suggest you arrange to meet at the parking lot of your local police station. I definitely won’t show up, and you’ll still have your valuables (and your purse!).

Regards,
A Tough Sell

This article originally appeared on HouseLogic: 10 Things a Burglar Doesn’t Want You to Know

More on HouseLogic:
Why I Love My Minimalist Kitchen
Grilling Safety
5 Secrets Your Contractor Doesn’t Want You to Know

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Find out how to calculate mortgage payments.
Find homes for sale in your area.

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Source: http://realestate.aol.com/blog/10-ways-protect-house-burglars-guide/

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The Central Oregon branch of premiere Northwest brokerage Hasson Company Realtors has become a member of the Central Oregon Builders Association (COBA). As an organization, COBA advocates politically and locally for the housing industry, and provides opportunities for the public to become educated on issues affecting contemporary homebuilding. COBA will provide the Hasson Company with […]

Source: http://www.hassonblog.com/2012/01/hasson-company-branch-to-join-central-oregon-builders-association/

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Filed under: News, Home Improvement

In the wake of last week’s devastating earthquake and tsunami in Japan, prospective home buyers may be asking themselves what about a house makes it more able to weather a natural disaster.

There isn’t a huge difference in the way residential homes are built in Japan compared to in the U.S., although the Japanese are more likely to invest in special earthquake engineering, particularly in commercial and higher-end residential buildings.

Home builders in both Japan and the U.S. use a lot of wood-frame construction, which is flexible and tends to ride out a quake fairly well, said Heidi Faison, outreach director at the Pacific Earthquake Engineering Research Center in Berkeley, Calif. But wood frame structures do have potential vulnerabilities in two key areas: the foundation and the wall that supports a crawl space, which is called a cripple wall.
She recommends home buyers hire an engineer to make sure the wood frame is bolted to the foundation. If a house has a crawl space underneath it or you need to climb a few steps to get up to the first floor, it likely is supported by a cripple wall, which can buckle in an earthquake. If you’re in an earthquake-prone location, that space needs to be filled in with a solid material.

Gary Ehrlick, a structural engineer and program manager for Structural Codes & Standards at the National Association of Home Builders, outlines some other house features to consider:

o. Look at the garage, if the house has one. A large garage door opening or a lot of big windows on the first floor, that can create a soft story — an open space without enough support to withstand violent shaking.
o. Brick veneer can present a major hazard if it’s not attached well. Brick was a problem in the 6.3 magnitude temblor that struck New Zealand last month. “It doesn’t create as much of a hazard inside, but outside it can injure or kill,” he said.
o. Houses built on a slope are often an issue. They need to be tied back well with footings. Also make sure the slope is stable. Liquefaction — where saturated soil becomes liquid — can be a problem and can occur when a building is located near a lake or river. In an earthquake, liquefaction can cause the ground to behave like quicksand, as seen in New Zealand and in the 1989 earthquake in Loma Prieta in the mountains of Santa Cruz, Calif.

See photos of homes for sale in your area and across the country on AOL Real Estate

These are all important things to look for in a house. But they only address hazards caused by the shaking of the earth.

In Japan, most of the damage was actually inflicted by the subsequent tsunami, just as most of the destruction in the San Francisco quake of 1906 was caused by fires that ripped through the city after gas lines were ruptured.

A disaster’s chain of events makes the preparation scenario a bit more complicated.

There is a growing interest in designing homes better able to survive a tsunami. The basic idea in tsunami design, as in flood-resistant construction is to get some of your structure up above the expected level of water, said Gary Ehrlick.

“In commercial structures they talk about vertical evacuation zones.” Under this theory, the first floor, built out of concrete or steel, is strong enough to withstand the pressure of the water. The “zone of refuge” occupies the upper floors.

Another concept that came out of the earthquake/tsunami that leveled Banda Aceh, Indonesia, on Boxing Check out our gallery of Day in 2004 is a house where the first floor allows the wave to wash through it, destroying the walls but preserving the foundation. This would be a concrete frame with columns or wall segments in each corner of the house. The walls are panels made out of something light, like bamboo or wood. After a disaster, such panels would be easy to replace.

Check out our photo gallery of a tsunami-resistant home designed by Kazunori Fujimoto Architect & Associates:

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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.
Get property tax help from our experts.

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Source: http://realestate.aol.com/blog/2011/03/18/is-your-home-earthquake-proof/

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Filed under: News, Economy

WASHINGTON, July 2 (Reuters) – U.S. construction spending rose to its highest level in nearly two and a half years in May as investment in residential and federal government projects surged, a rare dose of good news for the flagging economic recovery.

Construction spending increased 0.9 percent to an annual rate of $830 billion, the highest level since December 2009, the Commerce Department said on Monday. That followed an upwardly revised 0.6 percent rise in April.

Economists polled by Reuters had expected construction spending to rise 0.2 percent after a previously reported 0.3 percent gain in April.

In a reversal of fortunes, housing has become one of the few bright spots in the economy, whose recovery has slowed in recent months as the debt crisis in Europe and an unclear fiscal policy path at home create a cloud of uncertainty for businesses and households.

The gain in construction spending in May was driven by a 1.6 percent rise in private construction outlays. Spending on residential projects jumped 3 percent to the highest level since January 2009.

Private nonresidential construction spending rose 0.4 percent to the highest level since October 2009. Investment in multifamily residential projects surged 6.3 percent, while outlays for single-family buildings increased 1.8 percent.

Residential construction is expected to contribute to growth this year for the first time since 2005.

Spending on public sector construction dipped 0.4 percent to $269.6 billion, down for the fifth month. However, outlays on federal government projects jumped 5.6 percent, the largest gain since December, almost reversing the prior month’s drop.

Spending on state and local government projects dropped 1.0 percent, falling for a fifth straight month.

Copyright 2012 Thomson Reuters. Click for Restrictions.

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Source: http://realestate.aol.com/blog/2012/07/02/u-s-construction-spending-hit-2-1-2-year-high-in-may/

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Filed under: News, Economy

At best, an increase in foreclosures takes a double-edged sword to the housing market. On the one hand, it means we may be inching toward stabilization, as shadow inventory begins to move through the pipeline. On the other, it spells more stress for beleaguered homeowners and puts downward pressure on home prices.

Housing economists predict that the next wave of foreclosures is about to hit, following the recent settlement between government and lenders in the “robo-signing” scandal. No doubt it will still cause pain to hard-pressed borrowers. But in a break from the past, it may avoid depressing home prices.

“There are countervailing strengths,” said Mark Fleming, chief economist at CoreLogic, an analytics firm. “We could very well see increasing prices in some markets this year, even though they have significant shadow inventories.” The “shadow inventory” is the overhang of homes expected to move through foreclosure that are not yet listed on the market.

A report from CoreLogic released today said that completed foreclosures edged down from 71,000 in January to 65,000 in February, and that the number of homes in a state of foreclosure has shrunk by 115,000 homes from February 2011 to 1.4 million homes in February 2012.

Browse through photos of millions of home listings or search foreclosure listings

Despite the slight month-over-month drop, foreclosure activity has remained relatively steady recently, but economists predict that it will rise in the coming months because of the resolution of an investigation into illegal foreclosures between the government and major mortgage servicers.

Fleming told AOL Real Estate that the housing market may feel the impact of the robo-signing settlement during the summer, after the five banks involved in the settlement implement government-approved foreclosure practices.

“All of this will result in more foreclosure pain in the short term as some of the foreclosures that should have happened last year instead happen this year,” Daren Blomquist, vice president of online foreclosure marketplace RealtyTrac, said in February. The economist predicts that completed foreclosures will jump by 25 percent in 2012, totaling 1 million.

But since the market must eventually absorb the excess supply of foreclosed homes, breaking the foreclosure logjam isn’t necessarily a bad thing. “I would like to see the pace increase, because that means we’ll be able to work off the inventory faster,” Fleming said. And the downward pressure on prices that’s caused by an increase in foreclosures may be mitigated by improvements observed lately in other sectors of the market, as well as the economy as a whole, he says.

Home sales have risen by 13 percent in the previous six months, according to Capital Economics, while the delinquency rate saw a year-over-year 14 percent drop as of February, according to Lender Processing Services. Homebuilder optimism is measured at a five-year high, and real estate agents’ optimism reportedly more than doubled in the first quarter of 2012, against the backdrop of positive market indicators.

If the positive trends continue, Fleming said, the market could begin to stabilize as early as this year.

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A recent report provided one of the most hopeful signs of recovery for the housing market yet. John Burns Real Estate Consulting found that home prices actually have risen marginally since January. The company says that its gauge of the market, the Burns Home Value Index, eliminates a three-month lag time that distorts other indices by recording contract signings of home purchases, not closings.

Its finding conflicts with most other indices, though, such as the Standard & Poor’s/Case-Shiller home-price index, which showed a drop in home prices in January.

Follow Teke Wiggin on Twitter (@tkwiggin), follow @AOLRealEstate, or connect with AOL Real Estate on Facebook.

See also:
HARP 2.0: Do You Now Qualify for Mortgage Relief?
Netizens Deride Foreclosure Settlement

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Source: http://realestate.aol.com/blog/2012/03/30/home-prices-may-withstand-foreclosure-wave/

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Filed under: News, Advice, Economy, Financing, Foreclosures, Refinancing

Let’s hold off blaring the triumphant trumpets just yet for President Obama’s plan to allow holders of underwater loans to refinance at a lower rate through revisions in the Home Affordable Refinance Program.

What this change does is amend the loan-to-value ratio in a refinance. By removing the cap on how upside-down you can be, it will allow more people to avail themselves of the lower interest rates out there. You still will owe more than your house is worth, but you can pay less for the privilege.

Here’s what the proposed plan doesn’t do:

1. Reach many people.

The only homeowners who will qualify are those who are current on their underwater loans and have loans that are backed by Fannie Mae and Freddie Mac. (No jumbo loan holders or those with mortgages backed by the FHA or the USDA.) That’s an estimated 800,000 homeowners who can avail themselves of this. To put things in perspective, most experts say there are between 8 million and 9 million people in the foreclosure pipeline — and some put that number as high as 11 million. So 800,000 is hardly a game-changing number.

It is, perhaps somewhat ironically, about the same number of homeowners that HARP has helped to date. When the program was announced in 2009, we were told it would help 4 to 5 million underwater borrowers. To date, just 838,000 homeowners have been able to refinance through HARP. So even if this new tweak doubles the number of people helped, it’s still just a fraction of the number of people in trouble.

2. Reach the people who need it the most.

To qualify, you can have missed only one mortgage payment in the previous year and none in the past six months. The group being targeted here are those who are potential strategic defaulters — folks who go to sleep at night calculating whether it makes financial sense for them to just walk away. They have demonstrated that they can afford the loan because they are current on their payments.

The people who are not being helped here are the ones who can’t afford their mortgages anymore. These are the people at risk of losing their homes because of job loss, income reduction, illness, divorce or adjustable rate loan resets.

So to recap: If you are heading for foreclosure because you choose to be, this could change your mind. If you have no choice in heading for foreclosure, tough noogies to you.

3. Reduce anyone’s principal loan amount.

If your house is worth $200,000 and your loan amount is $250,000, you will still owe the bank $250,000 — just at a lower interest rate than what you originally signed up for. The underlying assumption here is that the housing market will recover sufficiently so that in a few years you will no longer be upside down on your loan — or if that doesn’t turn out to be the case, Obama won’t be running for re-election anymore and you become the next guy’s problem.

4. Help the unemployed.

The days of stated income — or no doc — loans are long gone. Consider them something you’ll tell your grandkids about, along with cell phones without cameras. To qualify here, you’ll need pay stubs, W-2s, tax returns and other documentation. And of course if you don’t have a job, you won’t likely be able to refinance your home into a lower-rate loan.

Here’s a little salt in the wound: Many long-term unemployed keep themselves afloat by working multiple freelance jobs. This puts them in the self-employed category — and even if they’ve managed to stay current on their mortgage, qualifying for the HARP relief would prove difficult because of their fluctuating income.

So the bank would rather keep them at a higher interest rate and wait for them to stumble than let them refinance into a lower interest rate. The fact that they have been making their payments faithfully doesn’t matter. The tweaks to HARP don’t tweak in the direction of the unemployed.

5. Pump more money into the economy.

The underlying logic behind this measure is that the money that those 800,000 lucky homeowners aren’t spending on their mortgage each month is money they’ll spend on other things — eating out, traveling, shopping — and that such spending is good for the economy.

Sorry, but this one has me laughing all the way to the credit union, which is where I suspect most of those homeowners will be headed too. First of all, their numbers are just too thin to make a statistical difference. This isn’t a “jump-start the economy” measure by a long shot. At best, it will allow a proverbial handful of homeowners to splurge on the occasional Friday night pizza, assuming there is enough left over from the “windfall” savings after they pay their health insurance and grocery bills.

Also see:
Obama’s Refinance Plan Explained
The Mortgage Fix That Can Save the Economy
Republican Candidates: Short on Housing Policy, Long on Houses

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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/2011/10/24/viewpoint-obamas-drop-in-the-bucket-idea-for-housing/

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Filed under: News, Advice

As Tropical Storm Isaac threatens to accelerate into a Category 2 hurricane targeting the Gulf Coast, it’s a reminder to homeowners in areas exposed to such destructive storms that they should always have measures in place to protect their homes from such severe weather.

Analytics firm CoreLogic said Isaac alone threatens nearly 270,000 homes worth a total of $36 billion, most of them in already storm-battered New Orleans.

Batten Down The Hatches

In the event that a hurricane does hit, make sure your property is ready to weather the storm by following these tips from ACE Private Risk Services.

o. Wash out all your rain gutters and exterior drains to avoid water backups. Water in gutters may not just spill over onto the ground — it could back up and cause water to seep into a home’s walls.

o. Install a battery backup system for your water pump to guard against flooding and interior damage. “When these storms come through, power lines are knocked down,” said Dale Tomlinson of ACE. “So it’s important that you do have a battery backup to keep that [pump] going while there’s water coming.” Having a backup generator is also a way to ensure that necessary equipment can continue to function in the event of a blackout.

o. Reinforce your windows with shutters, add heavy-duty hinges and deadbolts to doors, and make sure that roof sheathing can withstand strong winds. If wind bursts into your home, the risk of structural damage to the home’s roof and doors increases substantially. “The internal partitions of your home are not built to withstand positive and negative pressures from the exterior,” Tomlinson said.

o. Trim trees whose branches could fall and cause damage, and be sure to clear all items that could become projectiles during a storm. “Move any outdoor furniture that could become debris that would either float or cause damage,” Tomlinson said.

Make Sure You’re Covered

In order to safeguard your home’s value, you should make sure that you have homeowners insurance, flood insurance, and, in some cases, wind insurance.

Homeowners insurance usually covers wind damage and other hurricane-related losses. However, in some coastal areas especially prone to hurricanes, wind coverage may not be part of a policy, and you may have to purchase wind insurance from a different carrier. There is usually a deductible amount for named-storm wind damage, such as 2 percent of the value of the home, Tomlinson said.

Flood insurance covers water damage and can be obtained through the government’s National Flood Insurance Program. The government insurance, which has a $2,000 deductible for high-risk areas, may cover up to $250,000 in property damage and $100,000 in damage to personal belongings, depending on the premium you choose to pay. To receive coverage for damage beyond those two amounts, you can sign up for a supplementary policy with a private insurance company like ACE.

To make sure that you get the most protection out of your policy, you should be sure to take inventory of and document your belongings and property before the onset of a storm.

Use Know Your Stuff, a free insurance software provided by the Insurance Information Institute, to help efficiently take inventory and store records of your belongings. Doing so will enable you to speed the claims process and maximize your settlement if some of your possessions are damaged.

Filing a Claim

If your home sustains damage and you have insurance to cover it, you may contact your service provider to file a claim. To do this, you must provide evidence of the damage to your home and possessions by taking photographs of the property damage and making a list of damaged items with their date of purchase, value and, ideally, receipts.

When you and your insurer agree on the amount of damages, you should receive payment.

See also:
Underground Real Estate Boom: Bomb Shelter Sales on the Rise
Earthquake Preparedness: Are You Ready?

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Source: http://realestate.aol.com/blog/2012/08/27/hurricane-isaac-tips-for-protecting-your-home-against-dama/

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Filed under: News, Economy, Financing

After years of economic turmoil faced by millions of Americans, a large number of consumers now have new attitudes toward the kinds of financial missteps that can land borrowers in credit trouble, including strategic defaults.

A sizable amount of Americans now consider it socially acceptable to have a low credit score or strategically default on their outstanding mortgage balances, according to new data compiled by JZ Analytics as part of a poll for ID Analytics. In all, 36 percent of those polled said they believe it’s acceptable to have a poor credit score these days, accounting for 77 million people across the country if the data is extrapolated out.

More interesting, however, is that many consumers have seen their attitudes toward intentionally falling behind on underwater mortgages change drastically in the last few years, the report said. A total of 32 percent of those polled — 68 million people nationwide — say homeowners should be able to strategically default on their mortgages without facing any consequences whatsoever for doing so.

Further, 13 percent, or 28 million Americans, say they would likely strategically default, the report said. Another 17 percent, or 36 million residents, say they know people who have already done so.

“Our research into the consumer opinion of the economic crisis of 2008 found alarming results,” said John Zogby, a senior analyst at JZ Analytics and creator of the Zogby Poll. “What jumped out is how many Americans feel it is acceptable for homeowners to walk away from a mortgage and go into foreclosure. If Americans carry on with that mindset, it will continue to cause problems as the economy undergoes a slow recovery.”

Another area in which consumers have more relaxed attitudes toward certain aspects of their credit rating is whether they would exaggerate their standing to obtain new lines of credit, the report said. In all, 17 percent of those polled said they would do so, making up some 36 million Americans.

Finally, another 35 percent of respondents — 75 million Americans in all — said they are now more afraid of being victimized by identity theft than they were five years ago, the report said.

Identity theft and account mismanagement can lead to serious damage to a borrower’s credit score, and therefore all financial documents, including credit reports, should be monitored closely as often as possible.

See more on Credit.com:
How Often Does Your Credit Report Change?
5 Reasons Why Your Credit Score May Not Matter
The Ultimate Credit Report Cheat Sheet

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 homes for rent in your area.

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Source: http://realestate.aol.com/blog/2012/10/08/more-americans-consider-strategic-default-on-mortgages-acceptable/

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Filed under: News, Advice, Buying, How To

By Leonard Baron

It’s hardly page-turning literature, but there are many reasons why you should read these documents before making any property purchase:

o. Title abstract
o. Title insurance policy and schedule of exclusions
o. Plat or a survey while you walk the property boundaries
o. Homeowners’ association documents (bylaws, board of directors minutes, etc.)

What if you inspected a foreclosure, and everything about it looked great, especially the two parking spaces on the side of the house? Everything was so perfect you didn’t look at the county plat or take the time to have a survey done – you simply rushed to buy it. Then, a week after closing, you show up and there’s a fence closing off the parking spaces you thought were part of your land – turns out they weren’t. The neighbor let the previous owner use those spaces because they were friends. You? You’re out of luck.

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Or, what if you bought a house and the previous owner had given a recorded easement to the neighbor to use your driveway? In this case your neighbor – whom you might like now, but who knows about the future – has the absolute right to park in your driveway, drive across it and work on his car in it.

Or, what if there was a significant restriction on your property, recorded in the property chain of title? Perhaps you’re required to clip your trees so they don’t block the neighbor’s view, or there’s a height restriction on new construction.

Or, maybe someone else owns the subsurface (oil, water, minerals, natural gas) rights to your land and has the right to drill for them from an adjacent property?

Or, perhaps the parking spaces you received in your new condominium garage were also given to another unit?

These are all real situations that occur on real properties. In fact, I’ve either read about or personally been apprised of each one of these issues within the past two years.

The hard truth is: In almost every circumstance listed, the potential for trouble would have surfaced if the new owners had read important documents before purchasing their property. You may decide you can live with a restriction, but wouldn’t you like to know about it before you make the decision to purchase?

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When you buy a property through a multiple listing service transaction, the escrow company will generally provide you with documents relating to the legal rights and responsibilities that come along with your purchase. It may also provide a plat of the property showing its boundaries (or in some areas you may need to have a survey done).

The title insurance company will provide an insurance policy stating that the seller has the right to sell it to you – with some exclusions to the policy. That’s the Schedule of Exclusions, and you need to read and review the issues noted on it. You should also fully review all of homeowners’ association documents.

You, as the buyer, will generally receive all these documents in an inch-thick packet of papers after you are going into escrow. Read them. Get together with your real estate sales professional, title insurance officer and, if necessary, your lawyer. Protect yourself.

You are making one of the most expensive and complicated purchases you will ever make. A little reading, review and research will go a long way toward reducing the chances of something going wrong.

Related:

How to Vet an Investment Property
Buying? Use This Checklist to Avoid Surprises
Demystifying HOA Fees and Special Assessments

Leonard Baron, MBA, CPA, is a San Diego State University Lecturer, a guest blogger on Zillow.com, the author of several books including “Real Estate Ownership, Investment and Due Diligence 101“, and loves kicking the tires of a good piece of dirt! See more at ProfessorBaron.com.

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

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Source: http://realestate.aol.com/blog/2012/07/03/what-a-homebuyer-should-know-before-closing/

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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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Filed under: News, Advice, Financing, Refinancing

There’s a surprising new finding that says women get lousier mortgage rates than men, but not because of gender discrimination. It’s because instead of shopping around for cheaper loans, they rely on the recommendations of friends.

To recap: When it comes to mortgages, women don’t shop enough.

The report published in the Journal of Real Estate Finance and Economics set out to explain why women were 32 percent more likely to get a subprime mortgage than men in a 2006 study. According to a team of researchers led by Florida Atlantic University’s Ping Cheng, the answer wasn’t discrimination because of gender or even income disparities.

Women pay higher rates because they are more likely to listen to friends’ recommendations, whereas men are more likely to shop around for the best deal.

“Our empirical test confirms that search effort is rewarded in marketplace, and suggests that gender disparity in mortgage rates may be addressed by policies aimed at improving women’s financial literacy and search skills,” the report summarizes.

It makes sense to Daily Finance columnist Laura Rowley. “It’s not surprising, because mortgage shopping can be incredibly complex, so we look to people we can trust to help make the decision,” says Rowley. “But this is one area where you don’t want to get by with a little help from your friends.”

Instead, she advises, call two mortgage brokers and a direct lender, preferably a local small or mid-size bank, and try the following script: “Hi, my name is ____ and I’m in the market to buy a $____ house, and I’m going to put down ____ percent. I’m getting three written estimates, and then I’m going to choose. Can you email me a cost-estimate worksheet stating all the fees and the interest rate?”

Be sure to get the estimates on the same day, as rates can change quickly. Also, don’t ask for rates and fees by phone; unscrupulous brokers will simply low-ball their estimate to get you in the door, says Rowley.

For more tips on shopping for a mortgage, see these AOL Real Estate guides:

How Much Can You Afford [Video]
How to Get a Low Mortgage Rate
Mortgage Jargon in Simple Terms

More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
See celebrity real estate.

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Source: http://realestate.aol.com/blog/2011/11/18/when-it-comes-to-mortgages-women-dont-shop-enough/

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Filed under: Design, News, Investing, Lifestyle, Other, Selling

Many investors have Miami Beach in their sights, so we thought we’d do a little bargain-hunting ourselves. We turned up this uber-sophisticated 20th-floor condo on Miami Beach’s Millionaires’ Row with a price tag of $1.2 million. At the market’s peak, it would have been listed at least 30 percent more.

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The two-bedroom, two-bath unit was built in 2008, a year that will likely go down in Florida real estate annuals as the year they wished never happened. But as a result of the housing market crash, there’s this 1,322-square-foot marbled-floor gem with ocean views, glass sliding interior doors that replace room partitions, and loaded up with designer fixtures and appliances.

The kitchen has glass counter-tops and top-of-the-line everything. And the master suite has a heated Neorest toilet, spa tub and a rain shower.

The unit is in Mei, an Asian-influenced building. It’s located on 175 feet of beachfront and the building is covered in shimmering glass, surrounded by flowing water.

Amenities include a lagoon pool, 24-hour concierge, valet parking, tea lounge, Zen library, spa, yoga studio, and a state-of-the-art fitness facility with private massage rooms.

Judy Zeder at The Zeder Team has the listing.

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Source: http://realestate.aol.com/blog/2011/08/15/house-of-the-day-a-sparkling-waterfront-condo-for-much-less/

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Filed under: News, Financing, Refinancing

By Marcy Gordon

WASHINGTON — Average U.S. rates on 30-year and 15-year fixed mortgages this week fell to fresh record lows for the sixth straight week. Cheap mortgages continue to help boost prospects for home sales this year.

Mortgage buyer Freddie Mac says the average rate on the 30-year loan dropped to 3.67 percent. That’s down sharply from 3.75 percent last week and the lowest since long-term mortgages began in the 1950s.

The 15-year mortgage, a popular refinancing option, declined to 2.94 percent. That’s down from 2.97 percent last week.

Rates on the 30-year loan have been below 4 percent since early December. The low rates are a key reason the housing industry is showing modest signs of a recovery this year.

A drop in rates could also provide some help to the economy if more people refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend.

A Federal Reserve survey issued Wednesday showed the economy growing moderately in most regions of the country this spring as companies continued hiring. Manufacturing and home sales improved in most of the Fed’s 12 regional districts, as did residential and commercial construction.

In April, sales of both previously occupied homes and new homes rose near two-year highs. Builders are gaining more confidence in the market, breaking ground on more homes and requesting more permits to build single-family homes later this year.

Mortgage applications rose by 1.3 percent during the week ended June 1, the Mortgage Bankers Association reported Wednesday, mainly because more people applied to refinance their homes. Applications to buy a home actually fell for the fourth straight week.

A better job market also has made more people open to buying a home. But a dismal jobs report for May from the government last Friday fanned fears that the economy is sputtering.

U.S. employers created only 69,000 jobs in May, the fewest in a year, and the unemployment rate ticked up.

The Labor Department also said the economy created far fewer jobs in the previous two months than first thought. It revised those figures downward to show 49,000 fewer jobs created. The unemployment rate rose to 8.2 percent in May from 8.1 percent in April, the first increase in 11 months.

The pace of home sales remains well below healthy levels. Economists say it could be years before the market is fully healed.

Many people are having difficulty qualifying for home loans or can’t afford larger down payments required by banks. Some would-be home buyers are holding off because they fear that home prices could keep falling.

Mortgage rates have been dropping because they tend to track the yield on the 10-year Treasury note, which fell last week to a 66-year low. Uncertainty about how Europe will resolve its debt crisis has led investors to buy more Treasury securities, which are considered safe investments. As demand for Treasurys increase, the yield falls.

To calculate average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average does not 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 30-year loans was 0.7 point, down from 0.8 last week. The fee for 15-year loans also was unchanged at 0.7 point.

The average rate on one-year adjustable rate mortgages rose to 2.79 percent from 2.75 percent last week. The fee for one-year adjustable rate loans was steady at 0.4.

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:
Housing Prices and Existing-Home Sales Rise in April
Senator’s Mortgage Trouble Highlights Positive Housing Trend

Follow us on Twitter at @AOLRealEstate or connect with AOL Real Estate on Facebook.

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Source: http://realestate.aol.com/blog/2012/06/07/mortgage-rates-drop-to-record-lows-for-6th-straight-week/

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Filed under: News, Home Equity, Refinancing, Selling

Peter Safronoff drives a Hyundai and lives in a rental bungalow in Encinitas, Calif., a beach community north of San Diego. At 63, it’s not the golden-years lifestyle the financial consultant planned on, but it’s the one he has.

“I live in a beautiful place, in more modest circumstances,” he says, “but at least I know I won’t go bankrupt now.”

That’s because last November, Safronoff walked away from his 1,600-square-foot home near San Diego, which he bought for $400,000 in 2005 with a 10% down payment. Like so many American homeowners, he lost his job in the financial crisis and watched the value of his house plunge. Unable to modify his loan — and unwilling to push himself into complete financial ruin to keep his condo — he made a strategic decision to pack his bags and leave the keys for the bank.

Homeowners like Safronoff keep the lending industry awake at night.

A report released in April by FICO, a credit-scoring and analytics company, offered tools to mortgage lenders to spot potential defaulters. They weren’t who you might think: FICO’s red flags included people with high credit ratings who were up to date on credit card and auto payments. As a financially savvy businessman with a credit score above 800 until very recently, Safronoff fits the profile.

His story follows a familiar trajectory. He bought his home in a boom market. When the economy turned, he lost his six-figure income, the value of his home plunged and his homeowner fees doubled. Relying on his $1,500 social security income and savings, Safronoff (pictured) found himself struggling to keep up with his monthly payments, which had ballooned to more than $3,700. Still, he never missed a payment. As he dug further into his savings, he was unable to qualify for refinancing, and his attempts to get a loan modification failed. Hundreds of faxes and many loan servicers later, he was at the end of his rope.

Safronoff says that while his attempts to find a solution met a dead end, he doesn’t besmirch his lender, a national company. Still frustrated, however, he looked for other options and found YouWalkAway.com, an agency specializing in foreclosure planning or strategic defaults.

He is not alone. A study from the University of Chicago’s Booth School of Business reported that 35% of mortgage defaults in September 2010 were strategic, compared with 26% in March 2009.

Jon Maddux, CEO of YouWalkAway.com, says his business mirrors that growth. Business is up 10% this year — and had 40% annual growth in 2010 — as more and more homeowners view walking away as a financially prudent decision.

Maddux says that his first wave of customers, in 2008, were much different than the ones he sees today. “In 2008 people were very saddened and in distress. They felt they had to save the house at all costs,” he says. “But now people who were holding on really can’t hold on any longer. We’re seeing people who called three years ago call back.”

Home Prices Expected to Keep Falling

The news for homeowners continues to get worse. A Zillow study this week reported that home prices have experienced the biggest quarterly drop since 2008 and may not hit bottom until 2012. Today, prices are down nearly 30% from the peak in 2006, and the number of negative-equity, or underwater, homes has hit a new high. Two million homes are in foreclosure, Zillow reported, with another 1.5 million seriously delinquent.

Ellen Harnick, a senior policy counsel at the Center for Responsible Lending, suggests that part of the reason that strategic defaults are occurring is that continued unemployment and the lengthy process for loan modification are leaving more people with fewer options.

“Studies have shown that negative equity is necessary but insufficient. People who walk away have had some other event, so that it’s not a choice but a lack of options,” she says. “For primary residents, you have to live somewhere. Most people will continue to pay mortgages as long as they can.”

Some help could come for homeowners in proposed legislation for the Housing Opportunity and Mortgage Equity Act, which would allow any homeowner with a loan backed by Fannie Mae or Freddie Mac to refinance at the current rate, regardless of home value, income or credit rating.

What Is the Real Cost of Walking Away?

Public debate has centered on two issues: the ethical or moral question of walking away from a contract and the systemic risk to the housing market. Vocal critics of strategic defaults, such as economist Luigi Zingales at the University of Chicago, argue that walking away hurts market efficiency, increases mortgage prices, damages the community, and depresses the overall housing market. Add to that the damage of a broken promise.

But others, including University of Arizona law professor Brent White, say the question of whether to default strategically comes down to contract law. In White’s view, the lender-lendee contract “explicitly sets out the consequences of breach.” He argues that the agreement allows for a walk-away, provided the goods in question are returned. In other words, sending the keys back to the bank is part of the contract.

The possibility of walking away is a flashpoint for homeowners and lenders alike. Until recently, the only time planned foreclosures occurred were after major life-altering events: divorce, medical emergency, or business failure. In the last two years, the term “strategic default” has gained traction to describe walking away from a loan–also “jingle mail,” from the sound of metal house keys clanking in an envelope.

For underwater homeowners, strategic default is one way to preserve remaining wealth, says Augustine Diji, a former real estate broker and founder of the website The Strategic Default Monitor.

Safronoff says that his decision to walk away was painful financially and emotionally. But it came down to economics and the relief he stood to gain as opposed to “sit in the house and freak out.” He didn’t see the process as ethically questionable because he says that he had tried all other options and saw this as a business decision.

The major penalty for strategically defaulting is the substantial hit of 150 or more points to a credit score. That means higher interest rates, more restrictive terms on credit and other difficulties obtaining financing. It could be hard to qualify for rental properties as well. In some states, lenders who sell a foreclosed property for less than the amount owed on the mortgage can pursue the defaulter for the difference, according to the FICO report.

The trend toward defaults underscores that credit may not be the king it once was.

“People’s perceptions of credit are changing as we speak,” Diji says. “There was a time when credit meant so much, and your score gave you so many benefits. Today, defaults throw that upside down.”

Nicholas Carroll, blogger and author of “Walk Away From Your Debt,” says the dot-com crash in the Silicon Valley in 2000-2001 foreshadowed the current wave of strategic defaulters. Looking back, he says, “people who walked away were back on their feet much sooner than people who tried to hang on.” He adds that cash — rather than a home — is increasingly the new nest egg.

With peace of mind today, Safronoff is focused on rebuilding his financial life and reconstructing his credit. He doesn’t regret walking away from his house but does not endorse it for other homeowners either.

“It was the right decision for me,” he says, “but for others it may not be right. There is no simple answer.”

Catherine New is a reporter with the Huffington Post Media Group.

For more on foreclosure and related topics see these AOL Real Estate guides:

• Stop Foreclosure Rescue Scammers Before They Scam You
• Foreclosure Help: What a Housing Counselor Can Do
• How to Buy Foreclosures

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/2011/05/11/who-walks-away-from-a-mortgage-not-who-youd-expect/

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