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Consumers may prowl for homes in 2012: Fannie Mae

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Filed under: News, Economy, Financing, Foreclosures, Home Equity, Refinancing, Selling

Victims of the foreclosure mess and housing crisis are taking to the streets — literally. Street demonstrations are being planned in 10 cities, and in the crowd at the first one you are going to see Dixie Mitchell, a 74-year-old cancer survivor who refinanced her paid-off home to help one of the foster kids in her care — and is now losing it in a foreclosure.

Mitchell (pictured at left), who along with her 76-year-old husband raised eight biological children and 50 foster children in this house, says that she intends to make her voice heard loud and clear as she marches in front of bank offices in Seattle on Sept. 21. The march is the first in a 10-city rollout of protests organized by The New Bottom Line, a coalition of community groups that challenges big banks’ role in the housing crisis.

Mitchell’s story is particularly heart-wrenching: She and her husband were doing just fine living in the house they’ve owned for 44 years until he suffered a stroke that left him paralyzed and cost him his job. The house was fully paid off in the mid-1980s, but they borrowed against it to make roof and kitchen repairs. The straw that broke the camel’s back came in 2005, when Mitchell needed to hire a lawyer, at a cost of $20,000, in an effort to keep a 3-year-old boy who had been in her care since he was an infant.

She was advised by the bank to refinance her house to get the cash. She took out an adjustable rate loan that would reset in two years, at which point, Mitchell says, the lender told her that she would be able to refinance into another 30-year-fixed rate loan. But the original loan was bundled and sold multiple times to different lenders. It reset to a higher rate right around the time her husband suffered a massive stroke, and she quickly fell behind in her payments. Without his earnings, her monthly income is just $2,200 in Social Security and her monthly mortgage is $2,568.

Mitchell filed for bankruptcy, tried getting assistance from every social service agency she could think of, spent two years trying to get a loan modification and even offered to rent out rooms to boarders if the bank would just let her keep her house.

“My husband wants to die at home, at our home,” she says. Her home is set to be auctioned on Oct. 28 and she has no place to go.

Why is she going to participate in the demonstration?

“I need them [the bank] to look me in the eye and tell me why they think it’s better to put people out in the street,” she said. “They haven’t done their share to help. They don’t even give you a chance … all they do is lose your paperwork and make you send it over and over again. Each time you talk to somebody, you get a different answer.”

Those are sentiments shared by many.

LeeAnn Hall, executive director of Alliance for a Just Society and one of the organizational members of The New Bottom Line, said the Seattle area protests will be staged both in downtown Seattle and at the annual policy summit meeting of the Association of Washington Business, a statewide chamber of commerce. The meeting is being held in Suncadia, a mountain resort near Cle Elum, Wash. The governor is expected to attend the meeting and Hall said that the group hopes to engage her.

Subsequent demonstrations are planned across the country in Boston, Chicago, Denver, Los Angeles, New York City, San Francisco and other locations.

The New Bottom Line said that it is targeting “big banks that bankrupted the country and drained wealth from American families.” The direct actions primarily target JPMorgan Chase, Bank of America and Wells Fargo, and include taking over bank buildings, meetings of corporate officials, civil disobedience, prayer vigils and mass mobilizations.

“We are struggling with less and less, while the big banks profit more and more,” said George Goehl, executive director of National People’s Action, another organizational member of The New Bottom Line. “The big banks have done nothing but dodge taxes, throw people out of their homes and choke small business, all the while draining our wealth to pad their bottom line. It’s time for JPMorgan Chase, Bank of America and Wells Fargo to pay us back.”

According to a press statement, the group’s goals are that banks:

o. Pay their fair share of taxes — their statutorily required 35 percent corporate income tax and not “game” the system through off-shore tax shelters and loopholes.

o. Stabilize the housing market and revitalize the economy by reducing principal for all underwater homeowners to current-market value. “This would end the foreclosure crisis, reset the housing market, pump billions of dollars back into the economy and create one million jobs a year,” the group says.

o. Invest in American jobs by using their trillions of dollars in cash reserves to invest in small businesses — the main source of jobs in the U.S. — and other job-generating investments.

Also see:
Viewpoint: What’s Behind Banks’ Big Foreclosure Push?
101-Year-Old Foreclosure Victim to Get Home Back
Woman Faces Foreclosure on Home She Bought for $1

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

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Source: http://realestate.aol.com/blog/2011/09/19/foreclosure-victims-plan-protests-across-u-s/

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Filed under: News, Advice, Home Equity, Investing

While paying down the mortgage is undoubtedly one of the largest financial burdens many Americans have to contend with, it’s certainly not the only long-term investment homeowners need to consider. This is particularly true for homeowners nearing their 60s, for whom financial investments made today can have a lasting impact on their post-retirement income. Our sister site, DailyFinance, addresses this issue in the latest entry of their “Ask the Expert” video series with Regina Lewis.

For 57-year-old Ed, a homeowner nearing the end of his fixed-rate mortgage, the decision to pay off his debt early or begin investing his money elsewhere can make a real difference in just how far his savings will take him. Read his full question, and Regina’s video response, below.

Ed asks: I am 57 years old with a couple more years to work before I retire. I currently have an equity mortgage on my home with $30,000. The house payment is less than $100 a month. I pay $1,100 a month toward the loan. Here is my question. Should I be paying minimal on my mortgage and putting the rest in my 401(k) and hopefully make money on that money, or would you pay the house off by continuing to pay the accelerated payment to get it paid off as quickly as possible? What is my smartest move? I think I know, but want to hear a professional’s point of view.

And to ask the DailyFinance team your own personal finance question, add your comments here.

For more insight on mortgages and refinancing see these AOL Real Estate guides:

• Mortgage Jargon in Simple Terms
• How to Get a Low Mortgage Rate
  
• When to Refinance
• Four Ways to Benefit From a Cash-In Refinance

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/2011/07/13/watch-when-to-pay-off-the-mortgage-early/

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Filed under: Buying, Economy, Financing, Selling, Credit

Count me among the unpanicked over the Standard & Poor’s/Case-Shiller monthly housing index that shows housing values have dipped past a low set during the Great Recession. I’m not even getting goosebumps over the chilling words “housing double-dip.”

Nope. For the 70 million home-owning Americans who don’t have a need to sell their homes at the moment, this is not the end of the world. Yes, they can thank their lucky stars that they still have jobs and didn’t get ensnared in a toxic mortgage. And yes, they can feel for their friends and family who weren’t so fortunate — or, if they are feeling less charitable, weren’t as smart as they. But for the bulk of Americans, this is a problem that, well, doesn’t hit that close to home.

Want perspective? Of the 75 million owner-occupied homes in the U.S., about 5 million were sold in the past year, which means that there were tens of millions of home owners who were content to stay put, paying their bills and living obliviously to the drops in home prices. Of those five million sales last year, about one third were distressed sales.

Currently, there are 3.87 million homes on the market. In April, distressed homes were 37 percent of sales (24 percent foreclosures and 13 percent short sales). And 7 percent of new listings were foreclosures, but they’ve been entering the pipeline at a steady pace and selling quickly at bargain prices, says the National Association of Realtors.

Of course, scary Case-Shiller numbers are nothing new. Since last June, when a yearlong rebound in prices began to sputter out, the index has recorded losses every month. If there’s a bright spot, it’s that in the last quarterly report, all 20 cities tracked showed declines; in the most recent index, two of the 20 actually showed month-over-month improvement.

And for the record, the experts back in December offered the same explanations as did the experts commenting on this week’s report: The large number of foreclosures on the market and the expiration of the federal homebuyer tax credit are pushing prices down.

I’d throw in an even larger reason that the experts gloss over: Lenders aren’t lending money to even qualified buyers. They have imposed unrealistic standards for those applying for mortgages and then wonder where all the buyers are. Maybe they should look for them under the mountains of paperwork that they keep demanding and misplacing. Seriously, has anyone tried to get so much as a refinance lately?

NAR says, albeit more politely than I do, that “the recovery is uneven, held back by unnecessarily tight credit.” The association projects that “if the lending community simply returned to the safe, sound standards that were in place a decade ago (before the lax standards that led to the unprecedented boom-and-bust cycle), home sales would rise 15 to 20 percent over current projections.” Now wouldn’t that be nice?

These AOL Real Estate guides can help, no matter whether you choose to buy or sell:

• First-Time Homebuyer’s Guide
  
• How to Shop for Your First Home
• How to Price a Home to Sell Fast
• How to Get a Low Mortgage Rate

More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Get property tax help from our experts.

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Source: http://realestate.aol.com/blog/2011/06/02/case-shiller-the-sky-isnt-falling/

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Filed under: News, Credit

Rumors of Arthur Livingston’s demise have been greatly exaggerated — and they’re taking a toll on the South Carolina man’s credit rating.

Bank of America, Livingston’s bank of choice for the past 14 years, mistakenly declared him dead to the three major credit bureaus in May 2009, TV station WIS in Columbia, S.C., reports. As a result, Livingston has been stonewalled by lenders — who refuse to loan money to the deceased — and his dream of building a new home stymied by a 2½-year-old error.

Livingston said Bank of America promised to resolve the issue within 30 days of his complaint. It’s been more than three months now and the problem has yet to be resolved, he told WIS.

“I spend every free minute I have either sending a message, calling, faxing or just, you know, wondering if it is going to be resolved today,” he told the station.

While Livingston’s case is an extreme example, credit report errors are a very common — and costly — problem for Americans looking for a line of credit.

According to the U.S. Public Interest Research Group, one in four reports can have an error serious enough to hurt one’s chances of getting new credit. This is especially troublesome for prospective homebuyers today as mortgage lenders have, since the housing bubble burst, drastically raised the bar on qualifying for a loan.

Tips to Avoid a Costly Credit Report Error

The most basic step to protecting your credit score is regularly checking in with the three major credit bureaus. And contrary to a slew of popular commercials claiming to provide free credit reports, the only federally endorsed credit reporting site out there is annualcreditreport.com.

Once an error is identified, be prepared to maneuver through an entirely different bureaucracy. “Thousands of [dispute] letters get thrown out,” Glamis Haro, a lending manager at a New York credit union, told AOL Real Estate.

To ensure that your complaint isn’t lost to the void, Haro suggests sending any correspondence with the credit bureaus by certified mail with a return receipt request.

Under the Fair Credit Reporting Act, the bureaus are required to respond to your complaint within 30 days of receipt.

In Livingston’s case, however, because Bank of America has yet to correct the error on their end, his options remain limited. Bank of America told WIS that the issue is under investigation, but resolution has yet to be reached.

See also:
How to Dispute Credit Report Errors
Bank of America Plaza to Sell at Foreclosure Auction
80 Cent ‘Typo’ Almost Cost Man Home

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More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Finds homes for rent in your area.

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Source: http://realestate.aol.com/blog/2012/02/08/arthur-livingston-thought-dead-by-bofa-very-alive-and-frustrat/

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Filed under: News, Economy, Home Improvement

The first wave of Baby Boomers turned 65 last year, which will have a significant impact on real estate and the nation’s housing market. Not only should home sales increase, but hammers and nails will be flying as homes change hands from older to younger owners, while the home remodeling industry strikes it rich.

In fact, home remodels could be in for their best years ever. According to the Joint Center for Housing Studies at Harvard University, home owners over age 55 comprised a third of all home sellers between 1997 and 2007. That is a trend that experts say will only increase over the next 20 years as more Boomers retire.

And home remodelers have it made in the shade because if the Boomers sell their homes and move, younger buyers are extremely likely to remodel. If Boomers decide prices are too soft to sell and stay put, they are likely to adapt their home for old age, adding in more lighting, elevators, and principles of universal design. So the home remodelers win either way.

Looking at recent housing turnover data between the years 1997 and 2007, buyers of existing homes tend to be younger, the sellers, older. Of the 24.5 million owner-occupied sellers between 1997 and 2007, about 7.6 million, or almost one-third, were over age 55 when they sold their

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

home.

And who buys these homes? People under age 45, who purchased 57 percent of the homes the old folks sold off. In fact, the median age buyer was about 33. With the median age seller almost 68 years old, we see that buyers tend to be about 35 years younger than the owners of the homes they purchase. And old people tend not to buy other old people’s homes: Fewer than 25 percent of homes sold between 1997 and 2007 by sellers who were age 55 or older were swooped up by contemporaries.

Which means, of course, that the housing stock these Boomers are shedding is at least as old as they are.

In fact, the age of owner-occupied housing stock has been trending upwards over the last ten years. In 1997, the median age of the average American home was 29 years, but crept to 32 by 2007.

You know what we Boomers used to say: Never trust anyone over age 30.

With housing stock that old, the likelihood for a buyer coming in and remodeling is huge. The age and condition of these units makes them more affordable to younger buyers, and they tend to be located in the suburbs. On average, 80 to 90 percent of homes sold by older sellers to spring chicken buyers are single family detached units.

“The new owners of baby boomer suburban housing,” the report said, “will likely be concentrated in the 35-44 and 45-54 age groups and higher income categories that have historically spent the most on remodeling.”

But here’s a new headache for buyers: Thanks to the financial crisis, many seniors who planned to downsize and free up some home inventory are staying put, because the financial melt down took a toll on both the equity in their homes and their retirement accounts. Mobility rates among older homeowners posted sharp drops between 2005 and 2009. But fewer “senior” seniors have had home equity wiped out, because most of these folks have owned their home for years and paid down mortgages. Still, many Boomers may postpone moving out of their homes because they simply cannot afford to move.

Which means that when they do finally vacate those homes, the places are going to need a lot of work. The study also showed something we real estate reporters have always known: recent home buyers spend buckets of money when they first buy a home. There’s a reason why Lowe’s caters to the 45 to 54 year old age group: home buyer expenditures peak in the 45-54 age group because these are the wonder years when families, home equity and incomes grow and flourish. And goodbye Formica: what rooms do buyers who buy from older sellers focus on? Kitchens and baths. Which is why Lowe’s very best customer is the new homeowner. Home buyers age 35 to 44 spend more on average for home improvements than any other age group.

But then, the Boomers are the generation who did things “their way.” Don’t expect them to follow their parents’ retirement patterns. As this study notes, they have made different housing decisions the whole way. Boomers are more likely to live in newer, suburban homes, and continue to spend a lot on home improvements once the housing market stabilizes and mortgage lending loosens. Remodeling, says Dallas architect Gary Gene Olp, is in their DNA.

“I see more Boomers moving back into the city from the suburbs, to older homes they are remodeling because they love urban social fabric and cultural amenities,” says Olp, who specializes in LEED certified green architecture and building. “They are re-populating the inner city, ditching cars and walking, even in Dallas and Houston.”

San Antonio developer Leobardo Trevino of Ricchi Dallas Investments, LLC, who is undergoing three ambitious Dallas commercial projects, has begun building what he calls “Smart Mansions” outside of San Antonio, TX. His buyer: downsizing baby boomers who want it all but in 2500 square feet or less.

“These people want all the bells and whistles, ” he says, ” but not necessarily all the space.”

Trevino’s Smart Mansions have a main living room, dining room and Euro-kitchens, decked out marbled masters and secondary bedrooms. They have high ceilings and top energy efficiency but less lawn to tend, and zero wasted space.

“Boomers no longer want to overspend or overbuild,” says Trevino, “Been there, done that. But at the same time, there is absolutely no lowering of their standards.”

Candy is an award-winning, Dallas-based real estate reporter, blogger, and consultant. She’s the gal who brought House Porn to the Bible Belt! Read more at SecondShelters.com. and send story ideas and tips to CandyEvans@secondshelters.com.

Thinking about adding value with home improvements? Here are some AOL Real Estate guides to help you, whether you’re selling or staying.

• Home Improvements: Do It Yourself or Hire a Contractor?
  
• 10 Home Improvements That Pay You Back
  
• Home Renovation: Tips for Thrifty Upgrades

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Source: http://realestate.aol.com/blog/2011/04/18/baby-boomers-begin-remodeling-boom/

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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: News, Advice, Home Improvement

If you’re selling a home, you know the drill: Declutter, add a fresh coat of paint, clear out all your family photos and personal items.

That’s just for starters.

Once that’s done, you might want to take care of some things that could really turn buyers off and derail your hopes of unloading your home. And we bet you never would have thought of them.

Jessica Edwards, a Coldwell Banker real estate consumer specialist, offers her inside tips on what a seller should always — or never — do to make certain that buyers take the bait.

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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.

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Source: http://realestate.aol.com/blog/5-things-that-can-derail-your-home-sale/

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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: Home Equity

As a first time home buyer there is a lot of new concepts and terminology to get the hang of. The home buying game can be intimidating and you’ll need to seek guidance to learn the lingo.
You’ve finally found the perfect home and are working out the finances with your real estate agent and mortgage broker. This step of the home buying process can be eye opening and a shock to the

As a first time home buyer there is a lot of new concepts and terminology to get the hang of. The home buying game can be intimidating and you’ll need to seek guidance to learn the lingo.

You’ve finally found the perfect home and are working out the finances with your real estate agent and mortgage broker. This step of the home buying process can be eye opening and a shock to the wallet in many ways. The costs of financing and closing on a home can be staggering and you may wonder what each of the elements are that are making your monthly payment rise each time you run the numbers.

Often as a first time homebuyer you don’t quite have the twenty percent down on your home that is the standard when you use all those handy online mortgage calculators to figure out your payment. When you have less than the twenty percent down on the cost of your home, you are forced by the bank or mortgage holder to take out PMI, or private mortgage insurance. This protects or insures the bank against the possibility of you defaulting on your loan. The additional monthly cost of the private mortgage insurance can be a substantial line item and add a significant amount of money to your monthly mortgage payment.

Only once you have paid your mortgage down to 78% of the value of the current loan, and are in good standing with the bank, may they drop your PMI. Often times you’ll find it won’t just be an automatic process by the bank. It’s something you’ll probably need to call up and ask for. There may also be a chance you can get your home appraised if home values rise significantly in your area to prove you have 20% equity, and you then have an argument to drop the PMI. You will have to pay for the audit though, and it may not be a quick and simple process working with the mortgage holder to drop the insurance.

Mortgage insurance can be a pain on the pocket book and may seem an unnecessary cost for the struggling first time homebuyer, however this may just be the necessary evil that allows you to get a large loan in the first place. So save, save save your money and get that twenty percent down from the get go or expect to have higher payments for the first couple of years of your new mortgage loan.

Learn more about Types of Mortgages.

See current Mortgage Rates.

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Source: http://realestate.aol.com/blog/2008/11/11/explaining-mortgage-insurance/

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Filed under: News, Refinancing

By Marcy Gordon

WASHINGTON — The average U.S. rate on a 30-year fixed mortgage fell this week to a record low for the seventh time in eight weeks. Cheap mortgages have helped drive a modest recovery in the weak housing market this year.

Mortgage buyer Freddie Mac said Thursday that the average on the 30-year loan dropped to 3.66 percent. That’s down from 3.71 percent last week and the lowest since long-term mortgages began in the 1950s.

The average rate on the 15-year mortgage, a popular refinancing option, declined to 2.95 percent. That’s down from 2.98 percent last week and just above the record 2.94 percent reached two weeks ago.

The rate on the 30-year loan has been below 4 percent since December.

Low rates could 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.

Still, the pace of home sales remains well below healthy levels. Sales of previously occupied homes dipped in May to a seasonally adjusted annual rate of 4.55 million, although they are up from the same month last year.

Many people are still 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.

The U.S. economy is growing only modestly and job creation slowed sharply in April and May. U.S. employers created only 69,000 jobs in May, the fewest in a year.

Mortgage rates have been dropping because they tend to track the yield on the 10-year Treasury note. 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.

And the yield will likely fall even lower now that the Federal Reserve has said it will continue selling short-term Treasurys and using the proceeds to buy longer-term Treasurys. That goal of the program is to drive long-term interest rates lower to encourage more borrowing and spending.

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, unchanged from last week. The fee for 15-year loans was 0.6 point, down from 0.7.

The average rate on one-year adjustable rate mortgages fell to 2.74 percent from 2.78 percent last week. The fee for one-year adjustable rate loans was unchanged at 0.5 point.

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:
5 Things That Can Derail Your Home Sale
Home Affordability: How Much House (or Apartment) Can I Handle?
Home Costs: 4 Crucial Questions Reveal Hidden Expenses

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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/2012/06/21/30-year-mortgage-rate-falls-to-record-low/

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Filed under: News, Advice, Buying, Economy, Financing, Renting, Selling

Is it possible that the housing crisis is really just a problem caused by our state of mind, not the state of the economy? Is the thing stopping people from buying houses nothing more than their perceptions? Apparently, to some extent, yes.

We are having what, if economists talked like this, could be described as an irrational fear of commitment.

The facts: The recession is considered over, the country’s gross domestic product is growing, unemployment is down and consumer spending is up. Yet, the housing market remains comatose. The only explanation is that we are either all still unemployed and not being counted or we’re scared out of our boots.

Want some more evidence that we’re just one giant anti-anxiety pill away from fixing what ails the housing market?

1. The number of applications for mortgages is down.

It’s becoming a broken record: Interest rates are at all-time lows yet nobody is applying for loans. Yes, lending standards are tighter now — tight enough to put the kibosh on almost 16 percent of all home deals that open escrow — but the bigger problem is that potential buyers are afraid to even try to get a loan. Loan applications for home purchases were down 10 percent in a week, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.

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Buyers are just plain scared that banks won’t approve their loan. This is the grownup equivalent of hiding in the playground bushes during recess because you think the cool kids won’t pick you for their team.

2. People don’t believe the worst is over.

They are afraid that home prices might fall further. They are afraid that they could lose their jobs tomorrow. They are afraid of looking like a chump, buying when nobody else is buying.

Without question, the days of house-flipping are over. If you are buying, you are buying for the long haul. Remember this: Rents will most certainly go up — that’s why investors are buying properties like mad nowadays; but mortgages that are locked into the current record-low rates will not. If you are planning on staying put, doesn’t it make sense to buy?

As for losing your job tomorrow, ask yourself this: Really? Do you really think that’s likely? While new jobs aren’t being created with anything close to wanton abandon, neither are they being eliminated with the gusto of three years ago. Do you really want to put your life on hold while you wait to see if The Man sneezes in your direction?

Looking like a chump is a tough one. No one wants to be the last soldier killed before the war ends and no one wants to be a homebuyer who bought when prices were still falling. But that gets back to the long-term strategy. You aren’t buying for now, you are buying for the many years to come.

Fear can be paralyzing, but so can group-think. If you read how nobody is buying, you figure all those nobodies must know something. Yeah, they know how to be lemmings.

3. Consumer confidence has plunged, yet we are spending again — just not on houses.

A recent Nielsen poll found that nine of 10 Americans think the country is still in a recession. The memo went out a while ago that the recession officially ended in June of 2009. Pain and misery have clearly lingered and depressed consumers don’t spend money. But if we’re all so depressed, how do you explain why consumer spending rose in the third quarter by 2 percent. We’re even back to our old ways regarding charging and not saving: Consumer credit is back up to 2009 levels and our savings rate has dropped to 3.6 percent, the lowest level in four years. I see our old ways creeping back, don’t you?

We may not be happy, but we’re spending again. I have but one question: If you are willing to hit Macy’s with enthusiasm, why not the housing market?

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Also see:
Survey: Most Boomers Would Cover Kids’ Down Payment
Will FHA Be the Go-To Source for High-Cost Mortgages?
When It Comes to Mortgages, Women Don’t Shop Enough

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Source: http://realestate.aol.com/blog/2011/11/30/viewpoint-is-housing-crisis-just-a-state-of-mind/

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Filed under: Advice, Financing, Refinancing

Almost a third (31.4 percent) of homeowners with mortgages are underwater, according to the 2012 first-quarter Zillow Negative Equity Report, yet 90 percent of them are current on their mortgages and continue to make payments.
Deciding whether to “stay and pay” on a home that’s worth less than you owe is a tough financial decision, but ultimately, it is one that only homeowners themselves can make.

And while it’s fraught with emotion for most, there are a number of financial factors that you can and should consider. In fact, looking at the numbers may help you face the facts and make a better financial decision in the long run.

Own vs. Rent

When you were thinking about buying your home, you may have tried a “rent versus buy” calculator. (Of course, those were likely created before the housing meltdown and may have overstated some of the value of owning.) Now, however, you must flip the equation: Look at the cost of continuing to own versus the cost of renting.

To do this, spend a weekend hunting for apartments or houses. Go and take a look at rental homes. Find out what’s available, what they cost and what kinds of requirements landlords are looking for in terms of deposits and credit.

Get your free credit score and report card from Credit.com.

The goal? To get a realistic idea of how much you’d pay to rent so that you can compare the cost of renting with what you are paying for your mortgage. When you look at the “own” side of the equation, don’t forget to factor in periodic expenses such as maintenance (including repairs that will have to be done in the next few years) and property taxes (if they aren’t included in your mortgage payment).

One more twist: If your mortgage (or second mortgage, if you have one) is a variable-rate loan, then you should also consider the cost of your mortgage when interest rates rise. Try an online mortgage calculator to estimate your monthly payment at higher interest rates.

Getting Back to Square One

One of the arguments in favor of owning versus renting is that as you pay down your mortgage, you are building equity. But with so many homes underwater, the real question is “when?” When will your home be back in the black and start building equity? Until it does, you are effectively renting. And how much will that cost in the meantime?

Of course, trying to guesstimate future home-price appreciation is like trying to predict where the stock market is headed. Just take a look at the March 2012 Zillow Home Price Expectations Survey. It compiles predictions from a diverse group of 104 experts — economists, real estate experts, and investment and market strategists — to measure expectations about the projected path of the S&P/Case-Shiller U.S. National Home Price Index over the next five years.

Read more of this story at Credit.com.

See more at Credit.com:
10 Mistakes Homebuyers Make
What’s Really in Your Credit Report?
The Upside of the Foreclosure Crisis: Affordable Homes

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

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

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Source: http://realestate.aol.com/blog/2012/06/08/should-underwater-homeowners-just-walk-away/

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Filed under: News, Financing

By Les Christie @CNNMoney

NEW YORK — Not only can Costco shoppers find bulk-packs of chicken wings, 24-rolls of toilet paper and large-screen TVs at a discount, they can now land themselves a mortgage.

After a year of testing, Costco is rolling out a full-service mortgage lending program on its website in partnership with First Choice Bank, a New Jersey-based community bank, and 10 other lenders.

Costco’s partners have issued more than 10,000 mortgages to members under the program. But Lauren Kutschka, Costco’s manager of financial services, expects that number to swell as the warehouse retailer markets the service more aggressively to millions of members in its stores and in its weekly publication Connection.

“I went in to buy some bottled water, big bags of chips, cereal and some Nutri-Grain bars that I eat on my route,” said Ray Sheets, a FedEx courier from Canton, Ga. “I saw a home loan brochure on my way out and picked it up.”

Sheets went onto Costco’s site, put in his information and quickly accessed offers from four lenders. The rates, closing costs and terms were listed up front. And the closing costs — of about $2,500 — were about a third of what he would have had to pay through other lenders, he said.

Within a few weeks, Sheets refinanced his $170,000, 15-year fixed mortgage carrying a 4.25 percent rate into a 30-year loan with a rate of 4 percent. The move lowered his monthly payment by nearly $500 to $811 a month.

Mortgages are just one of several financial products available to Costco’s members. The warehouse club also offers health and auto insurance, as well as stock brokerage services, said Kutschka.

“We’ve always known that our members wanted more financial services,” she said. “Right now, we offer recreational vehicle and boat loans, and we’re going to add auto loans to that. We’re also looking to offer student loans.”

Costco had started offering mortgages a couple of years ago, but the service provider it was using didn’t share enough details about how it was dealing with Costco’s members, said Kutschka. So Costco started over from scratch, partnering with First Choice Bank to build a new mortgage lending portal.

Much like LendingTree, the site gathers quotes from various lenders. However, there is one key difference. Under the Costco program, the borrower’s identity is revealed only after they officially select the lender, said John Alexander, business development director at First Choice.

With many other lead-generation sites, the consumer fills out an application and any lender can make an offer and begin sending marketing communications to the applicant without restrictions.

Costco members will still need to do their homework and compare offers, though, said Keith Gumbinger of mortgage information company HSH.com. Even after a year of testing, Costco’s service is still new.

First Choice said it will police the other lenders to ensure they comply with Costco’s policies, which include giving accurate rates and terms, and following up quickly on questions and requests. The technology enables Costco to monitor individual applications and make sure that they are handled properly and expeditiously.

Costco takes no profit on the lending itself, but it does get paid to market the service.

In Sheets’ case, his lender, Bank of the Internet, sent a representative — an attorney — to his home to close on the loan, he said. She answered all his questions and explained all of the legal terms in the contract.

“There were no surprises,” he said.

Gumbinger said the service may prove better for people like Sheets, who are refinancing than those who are purchasing homes.

“The mortgage origination process is still a hands-on, face-to-face process,” he said. “It involves a comfort level and you don’t get that with an online service.”

That may be true in the initial stages of the borrowing process, but once a Costco borrower has chosen a lender, the level of service steps up, as in Ray Sheets’ case.

Given the size of Costco’s footprint and its ability to squeeze great deals out of vendors, Costco members should at least “include the site in their search plan,” said Gumbinger.

Read more on CNNMoney:
America’s Cleanest Cities
Foreclosure Logjam Breaking Up
Best Deals on Renovating

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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/2012/04/26/now-on-sale-at-costco-mortgages/

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Filed under: News, Financing

By Jeff Brown

Although the 15-year mortgage is invariably cheaper than the 30-year variety, it often gets little respect because of its larger monthly payments. Not so today. The 15-year deal is, in fact, quite appealing, offering substantial savings through rock-bottom rates.

Among the ideal candidates are homeowners who have plenty of equity and want to refinance at a lower rate. For them, the higher-principal payment on the 15-year deal may be easy to bear, allowing the borrower to focus on the low, low interest rate.

A BankingMyWay.com survey shows the average 15-year mortgage charging a scant 3.164 percent, versus 3.788 percent on the average 30-year loan.

The 15-year loan generally charges half to three-quarters of a percentage point less than the longer-term loan. But when the rates are this low, that margin is especially beneficial because it is bigger in relation to the overall rate.

At 3.164 percent, the 15-year loan charges 16.5 percent less than the 30-year deal. In June 2007, before the financial crisis, the 15-year charged 6.4 percent and the 30-year 6.73 percent. The 15-year, therefore, charged only about 5 percent less.

When the difference is very small, as in 2007, the 15-year loan does not provide enough savings to offset the big disadvantage: the larger monthly payment required to pay off the debt, or principal, in 15 years instead of 30. But today’s large margin relative to the overall loan rate can tip the balance in favor of the 15-year deal, so long as the payment is affordable.

At 3.164 percent, you would pay just under $700 a month for every $100,000 borrowed. While that is significantly more than the $465 you would pay to borrow for 30 years at 3.788 percent, the 15-year deal would dramatically cut interest charges over the life of the loan — to $25,729 versus $67,500 for the 30-year deal.

This makes 15-year loans especially attractive as a refinancing option for homeowners whose debt is not terribly large — people who have owned their homes for a number of years, for example.

In fact, financial experts generally recommend that in a refinancing, the borrower keep the term on the new loan to no longer than the time remaining on the old one. Otherwise, the savings from a lower rate will be offset by additional years of interest payments.

Is there a downside to the 15-year deal? As mentioned above, you’d pay about $235 more a month for every $100,000 borrowed. That’s not really money out of your pocket because it is a principal payment that reduces your debt. In other words, you would build equity in your home faster.

That $235 could go to other purposes, though. If you found an investment that could return more than the interest rate on the loan, it might make sense to invest instead. Payments toward mortgage principal can be thought of as a fixed-income investment with a yield equal to the mortgage rate. These days, earning more than 3 percent on a guaranteed investment is not bad, but someday it could look stingy.

More from TheStreet:
New Peer-To-Peer Trend: Direct Home Loans
10 Most Convenient Cities in America
10 Cities Poised for Greatness In 2012

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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.

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

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Source: http://realestate.aol.com/blog/2012/06/19/is-a-15-year-mortgage-right-for-you/

fixture bridge loan origination fee rent loss insurance real estate agent title company principal, interest, taxes, and insurance (PITI)

Filed under: Advice, Financing, Refinancing

Almost a third (31.4 percent) of homeowners with mortgages are underwater, according to the 2012 first-quarter Zillow Negative Equity Report, yet 90 percent of them are current on their mortgages and continue to make payments.
Deciding whether to “stay and pay” on a home that’s worth less than you owe is a tough financial decision, but ultimately, it is one that only homeowners themselves can make.

And while it’s fraught with emotion for most, there are a number of financial factors that you can and should consider. In fact, looking at the numbers may help you face the facts and make a better financial decision in the long run.

Own vs. Rent

When you were thinking about buying your home, you may have tried a “rent versus buy” calculator. (Of course, those were likely created before the housing meltdown and may have overstated some of the value of owning.) Now, however, you must flip the equation: Look at the cost of continuing to own versus the cost of renting.

To do this, spend a weekend hunting for apartments or houses. Go and take a look at rental homes. Find out what’s available, what they cost and what kinds of requirements landlords are looking for in terms of deposits and credit.

Get your free credit score and report card from Credit.com.

The goal? To get a realistic idea of how much you’d pay to rent so that you can compare the cost of renting with what you are paying for your mortgage. When you look at the “own” side of the equation, don’t forget to factor in periodic expenses such as maintenance (including repairs that will have to be done in the next few years) and property taxes (if they aren’t included in your mortgage payment).

One more twist: If your mortgage (or second mortgage, if you have one) is a variable-rate loan, then you should also consider the cost of your mortgage when interest rates rise. Try an online mortgage calculator to estimate your monthly payment at higher interest rates.

Getting Back to Square One

One of the arguments in favor of owning versus renting is that as you pay down your mortgage, you are building equity. But with so many homes underwater, the real question is “when?” When will your home be back in the black and start building equity? Until it does, you are effectively renting. And how much will that cost in the meantime?

Of course, trying to guesstimate future home-price appreciation is like trying to predict where the stock market is headed. Just take a look at the March 2012 Zillow Home Price Expectations Survey. It compiles predictions from a diverse group of 104 experts — economists, real estate experts, and investment and market strategists — to measure expectations about the projected path of the S&P/Case-Shiller U.S. National Home Price Index over the next five years.

Read more of this story at Credit.com.

See more at Credit.com:
10 Mistakes Homebuyers Make
What’s Really in Your Credit Report?
The Upside of the Foreclosure Crisis: Affordable Homes

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

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

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Source: http://realestate.aol.com/blog/2012/06/08/should-underwater-homeowners-just-walk-away/

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Filed under: News, Refinancing, Credit

Washington is acting to rescue tens of thousands of beleaguered homeowners by offering interest-free loans, some of which will ultimately be “forgiven” if borrowers follow the rules.

But the pre-screening deadline for applicants is July 22, so interested homeowners must move fast. Click here to get started.

Coming out of the budget of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the $1 billion allotted for the Emergency Homeowners’ Loan Program is expected to help about 30,000 of them, reports The Washington Post.

But qualifying for the relief program is not easy. Among other conditions, applicants must be unemployed or underemployed, 90 days behind on mortgage payments and have received a foreclosure notice.
Homeowners who qualify for the program — which is offered only in 32 states — receive a loan enabling them to meet up to two years or $50,000 worth of mortgage payments. The loan requires no payments for five years, as long as borrowers contribute 31 percent of their income or at least $150 to their mortgage payments. After that, the magic starts: The government reduces the loan balance by 20 percent each year until, poof — no more loan.

MSN Money offers a more thorough breakdown of the program.

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

• Stop Foreclosure Scammers Before They Scam You
• How to Get a Low Mortgage Rate
• Mortgage Jargon in Simple Terms
• Foreclosure Help: What a Housing Counselor Can Do

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/2011/07/05/cutoff-date-for-relief-loan-applications-fast-approaching/

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Filed under: News, Advice

There’s nothing quite like the lure of an open house sign. Granted, you might not be in the neighborhood (or tax bracket) for many of these outstanding properties, but there’s still plenty to admire — even from the comfort of your swivel chair.

From coast to coast, and everything in-between, we lay down the welcome mat at some of the most enticing open houses in the nation. So wipe your feet at the door and scroll right on through.

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Source: http://realestate.aol.com/blog/2012/02/17/open-houses-of-the-week-feb-17-19/

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Filed under: News, Advice, Economy, Financing, Refinancing, Selling, Credit

“Why won’t the bank just reduce the amount of my loan instead of taking my home and then selling it to someone else for way less than I would have been happy to pay?” It’s a question that gets asked repeatedly these days, especially by people who are facing foreclosure or are upside down on their mortgages.

For the answer, we turned to Jack Guttentag, the Mortgage Professor and Inman columnist.

Guttentag believes that lenders have been too stingy when it comes to reducing loan balances. Private lenders have offered loan reductions only sparingly, he says, and Fannie Mae and Freddie Mac not at all.

Here’s the professor’s take on why homeowners can’t catch a break on loan reductions.

1. The buck stops there.

The decisions to reduce principal loan amounts are made by the firms that service mortgages — the same folks who brought the country the robo-signing scandal. As servicing firms, anything they decide must be in the financial interest of their client — that’s your lender, not you. If they depart from customary practice — and writing down loan balances is a departure from customary practice — the buck stops with them, Guttentag says. In other words, who’s going to take the risk of reducing Joe Homeowner’s loan amount and then have to explain it to the boss? To take Nancy Reagan out of context: They just say no.

2. Banks are in the business of making money.

No lender is going to write down the balance of a loan in default just because you owe more than the home is worth. Truth is, there is no benefit to the lender to helping Joe Homeowner keep his house instead of selling it to the next guy. Plus, to help Joe would eliminate the possibility that the bank could also get a deficiency judgment against him. Banks are in this for the squeeze and think of Joe as just the orange. Nothing personal, of course.

3. In this economy, you will likely default anyway.

Sure, you want to believe that the economy is going to turn around and the value of your home will again rise to what you paid for it. After all, hasn’t listening to a fairy tale been a surefire way to fall asleep?

From the lender’s standpoint, the only reason to write down a loan balance is that it will reduce the chance that you will default. And evidence has shown that people who are heavily underwater — that’s deep in negative equity territory — are more likely to default than those who aren’t. Truth is, negative equity discourages people from making their mortgage payments. They figure: Why keep throwing good money after bad?

4. Banks are short-staffed and the staff they do have is untrained.

Most interactions between mortgage borrowers and servicers are handled by computers or relatively unskilled employees, says Guttentag. Borrowers in serious trouble are referred to a smaller number of more skilled and specialized employees, but until you enter the red zone, you are likely to encounter frustration.

Guttentag says that at the onset of the mortgage crisis, servicers were caught short-handed and the sheer volume of foreclosures in the pipeline hasn’t allowed them to catch their breath.

5. Mortgage insurance works against you.

When mortgages carrying mortgage insurance go to foreclosure, banks are protected up to the maximum coverage of the policy, which generally is enough to cover all or most of the loss. This discourages modifications, says Guttentag. Why would a bank do a modification for $15,000 if the $40,000 foreclosure cost is going to be paid by the mortgage insurer? Even if the insurance coverage falls short of the foreclosure cost, the shortfall has to exceed the modification cost before modification becomes financially more attractive.

So there you have it. A five-point plan for keeping homeowners on the hook for that hefty loan balance.

Also see:
Viewpoint: Where’s Housing in the ‘Occupy’ Protests?
Mortgage Mod Hell: Trapped Between Lenders, Collectors
The Mortgage Fix That Can Save the Economy

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Source: http://realestate.aol.com/blog/2011/10/18/mortgage-prof-why-banks-foreclose-instead-of-settling-for-les/

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Here’s a new video we just did explaining Balloon mortgages. Give it a quick view, it’s very short and informative! If you prefer to read a more detailed version, you can find that at Balloon Mortgage Explained.

Source: http://feedproxy.google.com/~r/TruthfulLendingDotCom/~3/hFIcEaZhCm4/

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Filed under: News, Buying, Investing, Selling

Flipping through the Detroit MLS these days produces some sad-trombone listings, but we keep coming back to a 10,395-square-foot baronial Tudor listed for $759,000.

Since not even the Motor City can stay woeful forever (that’s our inner Pollyanna speaking), we decided to feature what appears to be a steal. Yes, it is in Detroit proper. Properties in the suburbs, while down in value, still carry heftier price tags than those in the city — where officials were literally giving homes away to first responders who would take them and just agree to please live there.

But this one? It looks like a gem that needs some polishing to us. Your thoughts, readers?

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What you need to know: It’s the brick-and-limestone mansion built in 1922 for Charles Van Duesen, then the president of S.S. Kresge, one of the 20th century’s largest and best-known retailers. The Kresge chain was renamed the Kmart Corporation in 1977 and today is the parent company of Kmart and Sears. Let’s just say that Mr. Kresge had a good eye for the fine finishes and the wallet to back his tastes.

Located in Palmer Woods (for non-Detroiters: This is a good thing), the seven-bedroom mansion has gigantic rooms and has been completely restored. There is a large walnut-paneled central great hall with a fireplace and art-tiled flooring, another huge living room with a carved marble fireplace, and a dining room with a stenciled beamed ceiling. The library is built with quartersawn oak and there is lots of art-tiling in the bedrooms. The home has a billiards room and a two-bedroom apartment over the garage.

Kenan Bakirci, a Realtor with Max Broock Realtors in Birmingham, is both the owner and listing agent.

See more Houses of the Day and other homes for sale in Detroit, Mich. on AOL Real Estate.

Got a tip for House of the Day? Know of an exceptional or unusual property currently listed for sale? Please email ann.brenoff@huffingtonpost.com with your suggestions and be sure to include links to listing details and photos. (Due to the volume of response, we unfortunately are unable to respond to each submission.)

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Source: http://realestate.aol.com/blog/2011/08/22/house-of-the-day-detroit-gem-in-need-of-polishing/

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Filed under: News, Foreclosures

Marking the latest attempt to boost participation in a somewhat neglected foreclosure review program, the Federal Reserve recently released a video that explains the program.

Announced during settlement negotiations between the government and mortgage servicers over foreclosure abuses, the Office of the Comptroller of the Currency rolled out the program last year in order to provide wronged borrowers with an opportunity to seek redress.

The program covers a swath of more than 4 million homeowners who were foreclosed on between 2009 and the end of 2010, but so far participation has lagged. Only 25 percent of borrowers who were mailed questionnaires asking them about their foreclosure experience had responded as of April, the Office of the Comptroller of the Currency said.

Acting in response to the weak participation, the Office of the Comptroller of the Currency and the Federal Reserve announced in April that they were extending the deadline from April 20 to July 31, 2012, for qualified borrowers to request an investigation of their foreclosure experience. The video below, which spells out eligibility requirements and explains the process of a review, appears to be the Federal Reserve’s latest attempt to raise awareness of the program.

Learn more about the program, which is free, by visiting http://independentforeclosurereview.com/, or calling 1-888-952-9105.

See also:
Mortgage Settlement Windfall May Be Diverted in Some States
Netizens Deride Foreclosure Settlement
Terrell Owens Faces 3rd Foreclosure This Year

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Source: http://realestate.aol.com/blog/2012/05/24/foreclosure-review-fed-promotes-program-via-video/

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Filed under: News, Economy, Selling

WASHINGTON — The number of Americans who signed contracts to buy homes rose in January to the highest level in nearly two years, supporting the view that the housing market is gradually coming back.

The National Association of Realtors said Monday that its index of sales agreements rose 2 percent last month to a reading of 97. That’s the highest reading since April 2010, the last month that buyers could qualify for a federal home-buying tax credit and the last time the reading was above 100.

A reading of 100 is considered healthy.

The Realtors’ group also released revised data for 2011. That lowered November’s initial 19-month high of 100.1 to 96.9. But contracts have been markedly up since the summer when some feared a second recession loomed.

Contract signings typically indicate where the housing market is headed. There’s a one- to two-month lag between a signed contract and a completed deal.

A sale isn’t final until a mortgage is closed. One-third of Realtors complain that they’ve had at least one contract scuttled in January, December, November and October, according to the Realtors’ group. That’s up from 18 percent of Realtors in September.

Nonetheless, the gain in signed contracts supports other evidence of improvement in the housing market.

Pierre Ellis, an economist at Decision Economics, said home sales and building is in the midst of “ongoing general, but gentle, progress.”

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Builders are growing more optimistic after seeing more people express interest in buying this year. Sales of previously occupied homes are at their highest level since May 2010. More first-time buyers are making purchases. And the supply of homes fell last month to its lowest point in nearly seven years, which could push home prices higher.

Homes are the most affordable they’ve been in decades. And mortgage rates have never been cheaper.

Much of the optimism has come because hiring has picked up. More jobs are critical to a housing rebound.

“Easier mortgage lending criteria, very low rates and the improving labor market are all contributing to the beginnings of a real upturn in home sales, if not yet prices,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

Sales may also be rising because of an April deadline for higher mortgage application fees for Fannie Mae and Freddie Mac-backed home loans. The government-controlled mortgage buyers own or guarantee about half of all U.S. mortgages and 90 percent of new loans, and have been telling customers to submit their applications now.

Analysts caution that the damage from the housing bust is deep and the industry is years away from fully recovering.

Potential buyers are holding off for a number of reasons. High unemployment and weak job growth have deterred many potential buyers. Loans are harder to come by. Lenders are requiring bigger down payments and strong credit scores to qualify.

Even those with good credit and stable finances are hesitant to buy out of concern home prices will keep falling.

Also see:
New Home Sales Dip, But Beat Expectations
30-Year Mortgage Rate Up, But Still Under 4%

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Source: http://realestate.aol.com/blog/2012/02/27/pending-homes-sales-outlook-brightest-in-nearly-2-years/

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Filed under: News, Economy

By Martin Crutsinger

Confidence among U.S. builders ticked up this month to a five-year high, an indication that the housing market is slowly improving.

The National Association of Home Builders/Wells Fargo builder sentiment index rose in June to 29, the highest reading since May 2007. It increased from a reading of 28 last month, which was revised down one point.

The index, which was released Monday, has risen in seven of the past nine months. Still, any reading below 50 indicates negative sentiment about the housing market. The index hasn’t reached that level since April 2006, the peak of the housing boom.

In June, builders reported seeing the best sales level since April 2007, according to a separate measure in the survey. Their outlook for sales in the next six months, however, hasn’t changed from May.

The modest improvement among builders follows other signs that suggest the housing market could be slowly starting to recover.

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

Cheaper mortgages and lower home prices in many markets have made homebuying more attractive. Many economists believe that housing construction could contribute to overall economic growth this year for the first time since 2005. Jennifer Lee, senior economist for BMO Capital Markets, said that the June reading on builder sentiment was welcome news. She said that even with recent weak readings on employment, the builders’ outlook for sales over the next six months did not decline and foot traffic remained the same.

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

The economy is growing only modestly and job creation slowed sharply in April and May. U.S. employers created only 69,000 jobs in May, the fewest in a year.

Though new homes represent less than 20 percent of the housing sales market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to Home Builders’ data.

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:
Fed Report: Housing Meltdown Hit Middle Class Hardest
Underwater Mortgages Keeping Housing Market Afloat?
Hope That U.S. Can Weather New Foreclosure Storm

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Find out how to calculate mortgage payments.
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Source: http://realestate.aol.com/blog/2012/06/18/u-s-builder-confidence-reaches-5-year-high/

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Filed under: News, Advice, Home Improvement

If you’re selling a home, you know the drill: Declutter, add a fresh coat of paint, clear out all your family photos and personal items.

That’s just for starters.

Once that’s done, you might want to take care of some things that could really turn buyers off and derail your hopes of unloading your home. And we bet you never would have thought of them.

Jessica Edwards, a Coldwell Banker real estate consumer specialist, offers her inside tips on what a seller should always — or never — do to make certain that buyers take the bait.

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Source: http://realestate.aol.com/blog/5-things-that-can-derail-your-home-sale/

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Filed under: News, Advice, Buying, Economy, Financing, Renting, Selling

Is it possible that the housing crisis is really just a problem caused by our state of mind, not the state of the economy? Is the thing stopping people from buying houses nothing more than their perceptions? Apparently, to some extent, yes.

We are having what, if economists talked like this, could be described as an irrational fear of commitment.

The facts: The recession is considered over, the country’s gross domestic product is growing, unemployment is down and consumer spending is up. Yet, the housing market remains comatose. The only explanation is that we are either all still unemployed and not being counted or we’re scared out of our boots.

Want some more evidence that we’re just one giant anti-anxiety pill away from fixing what ails the housing market?

1. The number of applications for mortgages is down.

It’s becoming a broken record: Interest rates are at all-time lows yet nobody is applying for loans. Yes, lending standards are tighter now — tight enough to put the kibosh on almost 16 percent of all home deals that open escrow — but the bigger problem is that potential buyers are afraid to even try to get a loan. Loan applications for home purchases were down 10 percent in a week, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey.

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

Buyers are just plain scared that banks won’t approve their loan. This is the grownup equivalent of hiding in the playground bushes during recess because you think the cool kids won’t pick you for their team.

2. People don’t believe the worst is over.

They are afraid that home prices might fall further. They are afraid that they could lose their jobs tomorrow. They are afraid of looking like a chump, buying when nobody else is buying.

Without question, the days of house-flipping are over. If you are buying, you are buying for the long haul. Remember this: Rents will most certainly go up — that’s why investors are buying properties like mad nowadays; but mortgages that are locked into the current record-low rates will not. If you are planning on staying put, doesn’t it make sense to buy?

As for losing your job tomorrow, ask yourself this: Really? Do you really think that’s likely? While new jobs aren’t being created with anything close to wanton abandon, neither are they being eliminated with the gusto of three years ago. Do you really want to put your life on hold while you wait to see if The Man sneezes in your direction?

Looking like a chump is a tough one. No one wants to be the last soldier killed before the war ends and no one wants to be a homebuyer who bought when prices were still falling. But that gets back to the long-term strategy. You aren’t buying for now, you are buying for the many years to come.

Fear can be paralyzing, but so can group-think. If you read how nobody is buying, you figure all those nobodies must know something. Yeah, they know how to be lemmings.

3. Consumer confidence has plunged, yet we are spending again — just not on houses.

A recent Nielsen poll found that nine of 10 Americans think the country is still in a recession. The memo went out a while ago that the recession officially ended in June of 2009. Pain and misery have clearly lingered and depressed consumers don’t spend money. But if we’re all so depressed, how do you explain why consumer spending rose in the third quarter by 2 percent. We’re even back to our old ways regarding charging and not saving: Consumer credit is back up to 2009 levels and our savings rate has dropped to 3.6 percent, the lowest level in four years. I see our old ways creeping back, don’t you?

We may not be happy, but we’re spending again. I have but one question: If you are willing to hit Macy’s with enthusiasm, why not the housing market?

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Also see:
Survey: Most Boomers Would Cover Kids’ Down Payment
Will FHA Be the Go-To Source for High-Cost Mortgages?
When It Comes to Mortgages, Women Don’t Shop Enough

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Source: http://realestate.aol.com/blog/2011/11/30/viewpoint-is-housing-crisis-just-a-state-of-mind/

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May 4 28th Annual Old Town Cinco de Mayo Old Town comes alive with a celebration of art, culture, and history of the 1800’s.  Ride in a horse drawn stagecoach, enjoy music, carnival rides and games, car show, chalk art, riding and roping show, Mexican wrestling, and other activities.  Visit museums and specialty shops, and dine on delicious food and drink. Free. Time:  Fri.  5:00 pm – 10:00 pm / Sat. 11:00 am – 10:00 pm / Sun. 11:00 am – 5:00 pm Location:  Old Town State Historical Park, San Diego Ave. For more information visit www.fiestaoldtown.com May 5 The Salvation Army 3rd Annual Spring Fling Festival This festival will feature dozens of local crafters in indoor and outdoor booths.  There will also be live musical entertainment and a fun carnival zone for the kids.  A special feature will be the Silent Auction featuring donations from many San Diego businesses.  Time:  9:00 am – 3:00 pm Location:  The Salvation Army, 4170 Balboa Ave., Clairemont For more information visit www.sandiegocitadel.com May 5-6 Escondido Renaissance Faire Travel back to the 16th century and the glories of the reign of Elizabeth the First.  Activities include several of Will Shakespeare’s new plays, battle pageants, music in the streets, jugglers and hundreds of costumed re-enactors performing in this giant outdoor play.  There is an admission fee, which covers all entertainment. Time:  10:00 am – 6:00 pm Location:  Felicita County Park, 742 Clarence Lane, Escondido For more information visit www.goldcoastfestivals.com/Escondido.html May 6 16th Annual Festival Cinco de Mayo – Chula Vista Festival guests will receive a true cultural experience as they sway with Mexican dancers, peruse the work of local artisans and taste authentic south of the border cuisine.  Tune in for a Mariachi Band Battle at one of the two festival stages in addition to the popular Kids Fun Zone.  Come join the 30,000 community members who enjoy this celebration of Hispanic culture. Time:  11:00 am – 7:00 pm Location:  Downtown Chula Vista, Third Avenue For more information visit http://www.thirdavenuevillage.com May 6 Carlsbad Spring Village Faire The largest one day fair in California.  Features hundreds of exhibitors with a little of everything such as arts and crafts, antiques, clothing, a large variety of food stands serving International foods, and children’s rides.  Time:  8:00 am – 5:00 pm Location:  Carlsbad Village For more information visit www.kennedyfaires.com/carlsbad May 11-13 11th Annual Gator by the Bay A family event featuring Zydeco and Cajun bands, Blues bands and community musical groups performing on multiple stages.  Enjoy Cajun and Creole food, cooking demonstrations, strolling entertainers, dance lessons, and more. Time:  Refer to website for schedule Location:  Spanish Landing Park at Harbor Island – Harbor Drive – San Diego Bay For more information visit www.gatorbythebay.com May 12 Asian Cultural Festival of San Diego Enjoy musical performances, costumed dancing, martial arts, craft-making, merchandise booths, cultural exhibits and cooking demonstration. There will be a food court, picnic area, and a kid’s area. Time:  10:00 am – 6:00 pm Location:  Liberty Station – NTC Park, near Cushing & Roosevelt Rds, Point Loma For more information visit www.asianculturalfestivalsd.com May 13 4th Annual Mother’s Day Fancy Dress Swim Fundraiser for World Swims Against Malaria.  Mothers will “dip” in the ocean wearing their Mother’s Day finest.  A five dollar donation is all that is needed for this World Swim Against Malaria. Time:  10:00 am – 11:00 am Location:  Oceanside Pier, Oceanside For more information visit www.onesandiego.org/ May 16-20 Ocean Beach: Beach Ball Festival An outdoor live music, action sports, and microbrew festival.  Lots of food, merchandise, beach volleyball games, a big ferris wheel, a waterslide, mechanical bull rides and a human hauler contest. Time:  Wed.-Fri. 12:00 pm – 10:00 pm / Sat. 10:00 am – 10:00 pm / Sun. 10:00 am – 5:00 pm Location:  Ocean Beach: Saratoga Park, Veterans Plaza, Lifeguard & Municipal Pier Parking Lots For more information visit www.oceanbeachsandiego.com May 19 24th Annual Tierrasanta Patriot’s Day Celebrate Armed Forces Day with a delicious BBQ dinner under a shaded canopy while listening to pleasant music.  There will be  a beer & wine garden, game area for kids, raffles, dancing, plus a fireworks show. Time:  4:00 pm – 9:00 pm Location:  Tierrasanta Recreation Center, 11220 Clairemont Mesa Blvd., Tierrasanta For more information call 858-268-0044 May 19-20 7th Annual Encinitas Sports Festival Join 300 of your closest friends and family for two days of sports and fun in Encinitas. The City becomes a sports destination the weekend before Memorial Day and you don’t want to miss it.  Triathlons, Duathlon, Bike Tours, 5K Run, Kids and Family 1K Walk/Run, Moonlight Beach Paddle & Swim, and a 2-day sports expo. Time:  Refer to website for schedule Location:  Encinitas – various locations, refer to website For more information visit www.encinitasrace.com/esff.html May 20 Annual North Park Festival of the Arts An explosion of arts, culture and entertainment with live entertainment, specialty booths, food court, beer garden, Kid’s Art Beat, and tons more!  Time:  10:00 am – 6:00 pm Location:  North Park – University Ave. & 30th St. For more information visit www.northparkfestivalofarts.com May 20 26th Annual Navy’s Original Bay Bridge Run/Walk A running and walking event across the Coronado Bay Bridge is a rare opportunity, and now is the time to do it!  The route begins downtown and proceeds across the bridge to the Coronado Island to Tidelands Park, concluding with fun festivities. Time:  7:00 am – 12:00 pm Location:  Bayfront Hilton Parking Lot, One Park Blvd., San Diego For more information visit www.mwrtoday.com May 20 19th Annual Sicilian Festival Celebrate Sicilian-Italian American heritage and enjoy delicious cuisine from local restaurants in a festive setting in Little Italy.  Music, beer, wine, dancing, ethnic art & craft items to browse.  Free. Time:  10:00 am – 6:00 pm Location:  Little Italy, Downtown San Diego For more information visit www.sicilianfesta.com May 20 Escondido Street Faire This faire will feature live entertainment as well as over 600 booths showcasing arts & crafts, unique clothing, and international foods.  Children’s rides, rock climbing wall, and more! Time:  10:00 am – 6:00 pm Location:  Downtown Escondido, Grand Ave. between Center City Pkwy and lvy. For more information visit www.kennedyfaires.com/escondido May 26 Santee Street Fair Live bands, entertainment, food, arts & crafts, vendor booths, beer garden.  In just three years the Santee Street Fair has become one of the best events in town.  Over 300 food and vendor booths, 3 stages of live music and entertainment, and fun rides. Time:  10:00 am – 7:00 pm Location:  Santee Town Center – behind Santee Trolley Square, Mission Gorge Rd., Santee For more information visit www.santeestreetfair.com May 27 Annual Ethnic Food Fair A cultural food festival at Balboa Park will be offering a delicious assortment of ethnic foods along with entertaining costumed performances.  Free. Time:  10:00 am – 5:00 pm Location:  Balboa Park, House of Pacific Relations International Cottages For more information visit www.sdhpr.org May 27 Vista Strawberry Festival Strawberries will be the main event along with a 5K Fun Run and Kids Runs, as well as 200+ vendors at our street fair, carnival rides, a Strawberry Pie Eating contest, Strawberry Idol, Ms. Strawberry Shortcake, and much more!  Free admission. Time:  7:00 am – 4:00 pm Location:  Downtown Vista, 127 Main St., Downtown Vista For more information visit www.vvba.org

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Source: http://feedproxy.google.com/~r/SanDiegoRealEstateInformationInsightsByDrewAukerRealtor/~3/9SlrEmSu6lk/may-2012-san-diego-events

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Filed under: News, Credit

Mortgage lenders will soon have access to new details about a prospective borrower’s past — such as past rental applications, inquiries to pay-day lenders, and missed child support payments — that will be factored in to a new credit score.

Real estate and mortgage data aggregator CoreLogic says it’s signed an agreement to work with Fair Isaac Corp., the owner of the widely used FICO score, to develop new credit risk scores for the U.S. mortgage industry.

Much of the data CoreLogic collects on consumers hasn’t been available from traditional credit reporting agencies but is important to mortgage lenders, the company said.

CoreLogic says it will serve as a “supplemental credit repository,” augmenting data provided by TransUnion, Equifax and Experian with property ownership and mortgage obligation records, property legal filings and tax payment status, rental applications and evictions, inquiries and charge-offs from pay-day and online lenders, and consumer-specific bankruptcies, liens, judgments and child support obligations. The Santa Ana, Calif.,-based company will generate a CoreScore Credit Report for lenders to alert them to bad debts that might previously have gone undiscovered. The reports may also help some consumers by identifying previously hidden credit history that reflects well on them, the company said.

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

CoreScore consumer information will be “instantly merged” with traditional credit report data “in a single, integrated report only available from CoreLogic,” the company said in announcing the new reports last week.

At that time, it was unclear whether the CoreScore reports would also be used to calculate borrower’s FICO scores.

Today, CoreLogic and Fair Isaac announced that they plan to offer mortgage lenders a “credit scoring solution” that will combine data from CoreScore reports with Fair Isaac’s FICO 8 Mortgage Score. That product will serve as the basis for future solutions that “deliver additional loan level insight and support more intelligent and consistent lending decisions,” the companies said.

A spokeswoman for CoreLogic told Inman News that the FICO 8 Mortgage Score “will likely be an input” to a new score that will be provided along with the CoreScore Credit Report. There are no plans to update the FICO 8 Mortgage score itself to use the additional CoreLogic data, she said.

So lenders purchasing services from CoreLogic Credco will get back two scores: The score or scores they use for decisions today, such as the FICO 8 Mortgage Score or classic FICO score, plus a new score that uses the value of FICO 8 Mortgage Score and the CoreScore data.

“By blending the unique data from CoreLogic with the analytic expertise of FICO, we will be able to deliver a new and more predictive credit score with our recently launched CoreScore Credit Report,” said Tim Grace, senior vice president of Product Management and Analytics for CoreLogic, in a statement. “Together, this new credit report and credit score will provide the mortgage industry with increased visibility into consumer credit behavior and improved credit risk analysis.”

More from Inman News:
Top U.S. Areas With Rising Real Estate Prices
Real Estate Reality TV Family Publishes Fictional Novel
Top 6 Reasons Mortgage Applications Are Rejected

More on AOL Real Estate:
How Much Down Payment Do Homebuyers Need?
No-Money-Down Mortgage Can Still Be Found in Small Towns

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Source: http://realestate.aol.com/blog/2011/10/21/new-credit-score-will-tell-lenders-more-about-you/

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Filed under: News, Credit

By Kerri Panchuk

The average loan size that lenders issued to borrowers in the past three months grew by $20,000, suggesting a thawing in mortgage lending, Capital Economics said Wednesday.

While the report, which was released by Capital Economics analysts Paul Dales, Paul Diggle and Amna Asaf, stopped short of calling the good news a full lending recovery, Dales said, “it may be an early sign that buyer confidence is improving.”

In 2012, the average amount of a mortgage went from around $215,000 to $235,000. The higher loan amounts are not the only positive economic indicator highlighted by the research firm.

Capital Economics reported a 20 percent drop in visible home inventory over the past 18 months, resulting in a situation where a months’ supply of unsold homes is now at a level where existing home sales can support current prices. At the same time, Capital Economics believes there are currently 3.9 million homes in the nation’s shadow inventory.

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Even though employment numbers fell below the average analyst’s expectation of 200,000 new jobs in March, Capital Economics is more optimistic with the current three-month new jobs average sitting at 212,000 positions.

“We are not too alarmed by the 120,000 rise in payroll employment in March, which was exactly half the 240,000 gain in February,” Dales wrote. “Just as the unusually mild weather meant that employment grew at a faster rate than the underlying trend in the previous few months, it may now be growing at a slower rate than the underlying trend.”

Even though mortgage rates grew slightly in March, Capital Economics said the uptick will have little effect on housing activity since prices still remain affordable and undervalued.

The researchers believes there are signs in the market of a price bottom, but said significant home price gains are not expected in the near term since tighter lending restrictions are prohibiting a boom in real estate activity.

Read more on HousingWire:
Fannie, Freddie and the FHA Lead Surge in Multifamily Lending
Mortgage Applications Fall 2.4% as Purchases, Refinances Decline
RealtyTrac: Foreclosure Filings Fall to 4Q 2007 Level

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/2012/04/12/home-loan-thaw-average-mortgage-up-by-20-000-study-says/

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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: News, Credit

This $6.785 million residence, located in the luxurious Martis Camp community of North Lake Tahoe, Calif., boasts four bedrooms, 5½ baths, and an incredible array of cutting-edge amenities — including a home iPad interface system and hydronic heating throughout the flooring.

The master suite, which offers commanding views of majestic arboreal wilderness, includes a fireplace and spa-inspired bath. The lower level features a recreation-media room, complete with a surround-sound system and a bar, as well as a 1,000-bottle wine cellar and an exercise den. Moveable glass walls divide the living room from an outdoor patio and walk-out terrace, which offer extensive outdoor entertaining space including a spa, fire pit, dining area and landscaped lawn. Furnishings throughout are a combination of the rustic and the ultramodern.

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As if this all weren’t enough, Martis Camp residency offers several extra layers of luxury, including an 18-hole golf course, and a family recreation center with swimming, bowling, basketball, cinema and art. Finally, the community includes 26 miles of private trails for hiking, snowshoeing and cross-country skiing.

Brian Hull of Martis Camp has the listing.

Click on the images below to see more homes for sale near Lake Tahoe, Calif.

See more Houses of the Day on AOL Real Estate.

Got a tip for House of the Day? Know of an exceptional or unusual property currently listed for sale? Please email krisanne.alcantara@huffingtonpost.com with your suggestions and be sure to include links to listing details and photos. (Due to the volume of response, we unfortunately are unable to reply to each submission.)

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/2012/04/03/house-of-the-day-luxury-by-lake-tahoe/

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Filed under: Home Equity

Many of the people losing their homes to foreclosure today find themselves in this situation because they used their home as a piggy bank: tapping their home equity beyond what they could truly afford to carry. If you’re thinking of tapping into the equity in your home, be sure you can afford to make the payments. Remember you put your home at risk when you take an equity line. Your home becomes collateral; and if

Many of the people losing their homes to foreclosure today find themselves in this situation because they used their home as a piggy bank: tapping their home equity beyond what they could truly afford to carry. If you’re thinking of tapping into the equity in your home, be sure you can afford to make the payments.

Remember you put your home at risk when you take an equity line. Your home becomes collateral; and if you can’t make the payments, you could lose your home.

Also, given the uncertainty in the housing marketplace, don’t even think about taking a loan that would be above 80 percent of the market value of your home. That leaves you some room in case house prices drop further. You’ll also get better interest rate offers when you’ll still have 20 percent equity left in your home.

Now let’s map out the decision-making process for tapping equity safely:

Turn 1: Should you take a equity loan or equity line?

When borrowing against the equity on your home you can choose one of two types of loans. One is a equity loan, which is usually at a fixed rate for a fixed amount of money and time. When you pay off that loan the loan will be closed. The second option is an equity line of credit, which is usually at a variable rate. The advantage of an equity line is that once you have it in place you can pay it off and then tap it again through the term of the loan, which is usually 15 years, but other terms may be available. Check with your bank about the specific terms of their equity line or loan programs.

So which type should you take? That depends upon your plan. Also consider which way you think interest rates will be moving. A fixed-rate equity loan may be your best choice if you know that you only want to use if for one specific purpose, pay it off and close the loan. With a fixed-rate you know the interest rate won’t change.

An equity line of credit might be best if you know you have a series of projects you want to do or more than one major purchase you want to make. Your plan is to pay each project or purchase off and then tap the equity. If that’s what you want to do than an equity line of credit may be your best bet, but do remember that the interest rate will be variable and could start to creep up when the Federal Reserve starts to raise interest rates again.

Turn 2: What interest rate should you expect?

Interest rates will vary based on your credit score. Those with the best credit scores of 740 or above can get the best rates that you’ll see quoted on the Internet. For example, currently you can get a $50,000 equity line for as low as 4.84 percent and a $75,000 equity loan for 8.25 percent.

But those favorable rates only go to people with the best scores. FICO has an excellent breakdown showing what you can expect to pay in interest based on your credit score. This will not necessarily be the final quote that you’ll get from your bank, but it gives you an idea of how much more you might have to pay if your credit score is below 740. For example, someone with a credit score of 700 to 719 would pay 0.8 percent more for an equity loan. You can check your credit score for free at CreditKarma.com.

The final interest rate you’re actually offered will depend on the lender. Shop around for rates based on your credit score. Some lenders may offer better rates than others.

Turn 3: Check out the fees

You may find a great interest rate, but if the upfront fees are high that could wipe out any savings from a slightly lower interest rate. Generally it’s best to look for the lowest fees. In fact, some banks are even offering to pay your appraisal costs and waive any application fees. Make sure there aren’t any hidden fees, such as a broker fee to be paid to a third party. Some fees you will likely have to pay include recording fees and an annual fee to use your credit line.

Turn 4: Understand the Tax Benefits

Some people say an equity line is the best way to go, even better than an auto loan or other type of loan, because you can write off the interest. If an auto loan is being offered at 0 percent and you get a good price on the car you want, why put your home at risk at all?

In order to write off the interest on an equity line, you must itemize deductions. If you’re not doing that now, the interest on your equity line likely will not be enough to make it worthwhile in the future. So if you’re choosing an equity line so you can write off the interest, be certain you’ll be able to do so. Also, you can only write off interest on up to $100,000, so if you’re taking an equity line of greater than that amount, the interest on the loan above $100,000 won’t be deductible.

Equity loans and lines of credit can be a good option for you, but use them wisely. Be sure you’ll be able to make the payments for the length of the loan. If you have any doubts about your income, don’t put your home at risk.

Lita Epstein has written more than 25 books including The Complete Idiot’s Guide to Personal Bankruptcy and The Complete Idiot’s Guide to Improving Your Credit Score.

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Source: http://realestate.aol.com/blog/2010/12/09/how-to-tap-home-equity-wisely/

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A little over a month ago, I pulled the plug on my coffee addiction, quitting caffeine. I had been a moderate coffee drinker, mostly just consuming it in the mornings, though I’d regularly have two or more cups. That said, I love the taste of coffee and can drink it any time of the day or night. I don’t drink much soda pop, so avoiding that has been pretty easy.

Read more…

The post Quitting Caffeine: Save Money and Your Health appeared first on DailyPerk.

Source: http://dailyperk.perkstreet.com/quitting-caffeine/

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Filed under: Advice, Financing, Refinancing

Almost a third (31.4 percent) of homeowners with mortgages are underwater, according to the 2012 first-quarter Zillow Negative Equity Report, yet 90 percent of them are current on their mortgages and continue to make payments.
Deciding whether to “stay and pay” on a home that’s worth less than you owe is a tough financial decision, but ultimately, it is one that only homeowners themselves can make.

And while it’s fraught with emotion for most, there are a number of financial factors that you can and should consider. In fact, looking at the numbers may help you face the facts and make a better financial decision in the long run.

Own vs. Rent

When you were thinking about buying your home, you may have tried a “rent versus buy” calculator. (Of course, those were likely created before the housing meltdown and may have overstated some of the value of owning.) Now, however, you must flip the equation: Look at the cost of continuing to own versus the cost of renting.

To do this, spend a weekend hunting for apartments or houses. Go and take a look at rental homes. Find out what’s available, what they cost and what kinds of requirements landlords are looking for in terms of deposits and credit.

Get your free credit score and report card from Credit.com.

The goal? To get a realistic idea of how much you’d pay to rent so that you can compare the cost of renting with what you are paying for your mortgage. When you look at the “own” side of the equation, don’t forget to factor in periodic expenses such as maintenance (including repairs that will have to be done in the next few years) and property taxes (if they aren’t included in your mortgage payment).

One more twist: If your mortgage (or second mortgage, if you have one) is a variable-rate loan, then you should also consider the cost of your mortgage when interest rates rise. Try an online mortgage calculator to estimate your monthly payment at higher interest rates.

Getting Back to Square One

One of the arguments in favor of owning versus renting is that as you pay down your mortgage, you are building equity. But with so many homes underwater, the real question is “when?” When will your home be back in the black and start building equity? Until it does, you are effectively renting. And how much will that cost in the meantime?

Of course, trying to guesstimate future home-price appreciation is like trying to predict where the stock market is headed. Just take a look at the March 2012 Zillow Home Price Expectations Survey. It compiles predictions from a diverse group of 104 experts — economists, real estate experts, and investment and market strategists — to measure expectations about the projected path of the S&P/Case-Shiller U.S. National Home Price Index over the next five years.

Read more of this story at Credit.com.

See more at Credit.com:
10 Mistakes Homebuyers Make
What’s Really in Your Credit Report?
The Upside of the Foreclosure Crisis: Affordable Homes

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

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

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Source: http://realestate.aol.com/blog/2012/06/08/should-underwater-homeowners-just-walk-away/

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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, Economy

By Jeff Brown, BankingMyWay

NEW YORK — New data from Zillow.com shows that the housing market really has hit bottom. Cue the applause. Signal the all clear. Get Warren Buffett to pile on and say something encouraging about the U.S. economy. Then head back to reality, and eye the headlines about the housing market’s inevitable recovery with caution, especially if you are a prospective homebuyer. Conditions can vary widely from one neighborhood to the next.

The question isn’t ever whether the market has bottomed when it comes to housing — that’s good for journalists and economists and TV pundits, but near-useless, or at least dubious, for those involved in or contemplating real estate transactions. The relevant question is whether the market has bottomed in your neighborhood.

All politics are local — all real estate, too. So local, in fact, that the outlook for your metro area can matter less than the outlook for your five-digit ZIP Code (and vice versa: improving home values in a specific ZIP Code don’t imply that an overall metro area is on the mend, too). And sometimes, improvement within a ZIP Code doesn’t mean the home in that ZIP Code you are interested in — or looking to sell — is in the improving part of the “code.”

As Zillow puts it in the details of calling a bottom in the housing market, “The recovery is a highly local process.” Still the headlines won’t ever say, “(Highly Local) Housing Market Hits Bottom.”

This isn’t to say the news on housing isn’t good, especially for some of the most underwater markets:

“The United States has hit a bottom in housing values, and a majority of metros that the Zillow Real Estate Market Reports cover have also experienced their bottom,” Zillow’s recent report states. “Some metros showed signs of a healthy pick-up in appreciation, such as Phoenix and Miami with a V-shaped recovery. Others are undergoing more of a soft landing and are currently coasting in positive value growth territory.”

Zillow compares home prices from June 2011 to June 2012 in 167 metropolitan areas, with breakdowns by ZIP Code. While the results are encouraging overall, some ZIP Code and metro areas continue to fare poorly. Zillow uses red to show where prices have fallen and green for where they’ve gone up. In addition to the year-over-year maps, there are maps showing price trends in the most recent quarter and month. Using these visual aids, one can see, for example, that a positive trend over the past year has not been reversed in recent months.

So how can one make use of the data? By zeroing in on individual ZIP Code, prospective buyers can assess the risk that a home bought today might be worth less in a year or two — a good reason to postpone a purchase. There’s no way of knowing for sure, but if prices have been holding steady or begun to rise, the area is a better bet than if they are continuing to fall.

Similarly, signs of an upturn might encourage sellers to get off the sidelines and list their properties. If the market warms, there are likely to be more buyers willing to move quickly before prices rise even more. Of course, a prospective seller who’s not in a hurry might be wise to wait for prices to go even higher.

Still, it’s important to keep data in perspective. Like most surveys of this type, Zillow calculates average prices of homes sold in a given area during a given period. If only a small number of homes sell, the results can be skewed by just a few sales with especially high or low prices. Don’t put too much stock into a trend that’s only evident for the past month or quarter, as there may not have been enough sales to guarantee a statistically significant result.

The ideal survey would look at prices of individual homes that have changed hands more than once, but not many homes sell more than once in a 12-month period, so average prices for the area are generally the best data available.

People using the data should also keep in mind that a ZIP Code-level look is really not detailed enough, as a given ZIP Code will have many neighborhoods quite different from one another. Before making a final decision to buy or sell, look carefully at comparable homes that have sold, or are on the market, in the same neighborhood.

So when you read the next headline calling a bottom in the U.S. housing market, it would be best to ignore it as anything other than a way to re-frame the debate and begin the real detailed work of answering the more important question: Does that call apply to your neighborhood?

See more at TheStreet.com:
Kids Off to College? Time to Sell Your Home
10 DIY Projects for Your New Home
10 Home Improvements You’re Wasting Time and Money On

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.

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

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Source: http://realestate.aol.com/blog/2012/08/01/housing-swings-dont-matter-as-much-as-whats-happening-in-you/

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Filed under: News, Credit

Mortgage lenders will soon have access to new details about a prospective borrower’s past — such as past rental applications, inquiries to pay-day lenders, and missed child support payments — that will be factored in to a new credit score.

Real estate and mortgage data aggregator CoreLogic says it’s signed an agreement to work with Fair Isaac Corp., the owner of the widely used FICO score, to develop new credit risk scores for the U.S. mortgage industry.

Much of the data CoreLogic collects on consumers hasn’t been available from traditional credit reporting agencies but is important to mortgage lenders, the company said.

CoreLogic says it will serve as a “supplemental credit repository,” augmenting data provided by TransUnion, Equifax and Experian with property ownership and mortgage obligation records, property legal filings and tax payment status, rental applications and evictions, inquiries and charge-offs from pay-day and online lenders, and consumer-specific bankruptcies, liens, judgments and child support obligations. The Santa Ana, Calif.,-based company will generate a CoreScore Credit Report for lenders to alert them to bad debts that might previously have gone undiscovered. The reports may also help some consumers by identifying previously hidden credit history that reflects well on them, the company said.

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

CoreScore consumer information will be “instantly merged” with traditional credit report data “in a single, integrated report only available from CoreLogic,” the company said in announcing the new reports last week.

At that time, it was unclear whether the CoreScore reports would also be used to calculate borrower’s FICO scores.

Today, CoreLogic and Fair Isaac announced that they plan to offer mortgage lenders a “credit scoring solution” that will combine data from CoreScore reports with Fair Isaac’s FICO 8 Mortgage Score. That product will serve as the basis for future solutions that “deliver additional loan level insight and support more intelligent and consistent lending decisions,” the companies said.

A spokeswoman for CoreLogic told Inman News that the FICO 8 Mortgage Score “will likely be an input” to a new score that will be provided along with the CoreScore Credit Report. There are no plans to update the FICO 8 Mortgage score itself to use the additional CoreLogic data, she said.

So lenders purchasing services from CoreLogic Credco will get back two scores: The score or scores they use for decisions today, such as the FICO 8 Mortgage Score or classic FICO score, plus a new score that uses the value of FICO 8 Mortgage Score and the CoreScore data.

“By blending the unique data from CoreLogic with the analytic expertise of FICO, we will be able to deliver a new and more predictive credit score with our recently launched CoreScore Credit Report,” said Tim Grace, senior vice president of Product Management and Analytics for CoreLogic, in a statement. “Together, this new credit report and credit score will provide the mortgage industry with increased visibility into consumer credit behavior and improved credit risk analysis.”

More from Inman News:
Top U.S. Areas With Rising Real Estate Prices
Real Estate Reality TV Family Publishes Fictional Novel
Top 6 Reasons Mortgage Applications Are Rejected

More on AOL Real Estate:
How Much Down Payment Do Homebuyers Need?
No-Money-Down Mortgage Can Still Be Found in Small Towns

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Source: http://realestate.aol.com/blog/2011/10/21/new-credit-score-will-tell-lenders-more-about-you/

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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: Home Improvement

By Jason Notte

Want a summer home improvement project? Dig a big hole on your property, throw a bunch of money in it, throw a match in and bury it once the flames subside.

This is basically what a select, wrongheaded number of Americans do every year when they see the sun peek out in June and head to Home Depot, Lowe’s or Sears without much of a plan. That yard may seem like it’s begging for a pool and your front porch may look inferior to a sunroom, but that doesn’t necessarily make them good ideas.

In some cases, it’s never a good year to make those ideas happen. We asked those in the know which projects homeowners should stay away from this summer. The following is a list of home “improvements” in which the return on the investment is at best subjective and, at worst, a money- and time-draining waste of warm weather:

A pool

An in-ground pool is a $25,000 to $50,000 gamble before a homeowner even considers tucking into their first cannonball.

That same pool costs about $2,000 more a year to maintain, hundreds more to heat and insure and hundreds more in filter and pump repairs within less than a decade. When cracks inevitably appear, resurfacing can cost upward of $10,000 shortly after that first decade.

Sure, the National Association of Realtors’ National Center for Real Estate Research says an in-ground pool can add about 8 percent to a home’s resale price, but that value swings from 6 percent in the frosty Midwest to 11 percent in the most toasty Sun Belt. An above-ground pool with have cheaper upfront costs, but the Center for Real Estate Research says it adds no value to a house and can actually subtract 1.9 percent of a house’s value if the buyer decides the eyesore needs to come down.

An outdoor kitchen

Installing steel grills and gourmet pizza ovens outside in a fenced-in area in Arizona or California adds to your square footage and optimizes great year-round weather. In Traverse City, Mich., it does neither. If your outdoor kitchen is considered an actual kitchen, the return on a major remodel — in this case, 65.7 percent — would be roughly the same. While such things as range hoods and portable heaters make outdoor kitchens year-round propositions in markets as seasonally chilly as Nantucket and Northern Michigan, it’s never quite as comfortable and can cut your returns in half if residents start to shiver during a February pig roast.

Read more of this story at TheStreet.com.

Also see these AOL Real Estate guides:
o. Xeriscaping: 6 steps to Natural, Low Maintenance Lawn
o. Best Landscape Design Options
o. Home Staging for Every Season

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/2012/06/29/10-home-improvements-that-are-a-waste-of-money/

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appraiser title transfer of ownership remaining term promissory note purchase agreement no cash-out refinance

Filed under: News, Refinancing, Credit

Washington is acting to rescue tens of thousands of beleaguered homeowners by offering interest-free loans, some of which will ultimately be “forgiven” if borrowers follow the rules.

But the pre-screening deadline for applicants is July 22, so interested homeowners must move fast. Click here to get started.

Coming out of the budget of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the $1 billion allotted for the Emergency Homeowners’ Loan Program is expected to help about 30,000 of them, reports The Washington Post.

But qualifying for the relief program is not easy. Among other conditions, applicants must be unemployed or underemployed, 90 days behind on mortgage payments and have received a foreclosure notice.
Homeowners who qualify for the program — which is offered only in 32 states — receive a loan enabling them to meet up to two years or $50,000 worth of mortgage payments. The loan requires no payments for five years, as long as borrowers contribute 31 percent of their income or at least $150 to their mortgage payments. After that, the magic starts: The government reduces the loan balance by 20 percent each year until, poof — no more loan.

MSN Money offers a more thorough breakdown of the program.

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

• Stop Foreclosure Scammers Before They Scam You
• How to Get a Low Mortgage Rate
• Mortgage Jargon in Simple Terms
• Foreclosure Help: What a Housing Counselor Can Do

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/2011/07/05/cutoff-date-for-relief-loan-applications-fast-approaching/

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Filed under: News, Economy

Scott Hostetler didn’t bother to tell his family that he’d applied online to have their house in Buena Park, Calif., turned into an advertising billboard for the price of their monthly mortgage payment. He figured that it was like taking a chance on the lottery — and who ever expects to win the lottery? Then, about three weeks ago, he got the call from Romeo Mendoza, head of the advertising company that made the offer, Brainiacs From Mars.

Mendoza delivered the shocking news: The Hostetlers’ home had been selected out of some 38,000 applications to be the first to be branded with a very special custom paint job, a deal that would cover the monthly mortgage payment of $2,000 for at least three months and perhaps up to a year — depending on when either the homeowners or the ad company wants to end the contract. At the end of that time, the company promised to restore the home’s exterior to its original appearance.

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Until then, though, it would display the bright orange and green colors of Brainiacs From Mars (formerly known as Adzookie). The company signage in the photo above is just temporary; while Buena Park is OK with the paint job, city zoning laws prohibit permanent advertising signs on residences.

Hostetler and his wife, both of whom are deaf, have lived in the home for about 18 years. They both work for Goodwill Industries — he’s an information technology manager and she’s a rehabilitation counselor. Their 17-year-old daughter (pictured with her parents) lives at home; they also have a son who is a freshman at Rochester Institute of Technology in New York.

The Hostetlers say that they plan to use the extra money sent directly to them monthly from Brainiacs to pay down some bills, replace Scott’s old Chevrolet Suburban, and maybe go on vacation.

Getting Help Into the Hands of the People Who Need It Most

The idea for the Billboard House came to Mendoza, the company’s chief executive, as he picked up his 7-year-old from school. Every day they would pass a sign that advertised a bank-owned property. And when he visited his mother in Las Vegas, there were areas so hard hit by the housing crisis that, he says, they seemed to him like ghost towns. Government can only do so much, he says, while corporations have the money, and this seemed to him like a promising way to get some of that into the hands of people who needed it the most.

While Mendoza figures that about 10 percent of those who applied to have homes turned into billboards “wanted to have a good time” with it and were attracted to the novelty, he insists that “we’re here to help the homeowners.” Applications “have come from literally everywhere,” he says, though he has noticed a higher amount from the “foreclosure states” — Florida, Nevada, and California. Applications have also come from Japan, Spain, Russia, the Czech Republic and many other countries. One city councilman reportedly invited Brainiacs From Mars to paint an entire row of homes in his town.

The advertising company has plans for 100 such homes, Mendoza says, but a goal of 1,000 if they can attract the advertisers. In areas like Buena Park that prohibit advertising signage, they’ll stick to the brand’s colors, but where community zoning allows more, signs would go on the homes.

What Will the Neighbors Think?

While there is no set of particular qualities that Brainiacs is looking for in a homeowner, Mendoza says the Hostetlers are the kind of close-knit family that “felt right” to help debut the promotion. As for official requirements, the applicants must own the home, and local zoning laws must allow the paint job. Selected homeowners also have to be prepared for neighbors’ reactions.

You might think the company would be looking for homes in high-traffic areas, but the Hostetlers’ 1960s house is inside a quiet development of tract houses, at least a block away from main streets and within view of a neighborhood park. You might get a glimpse of the back of the home from nearby Knott’s Berry Farm, though, as you prepare to plunge from the top of its Xcelerator or another towering thrill ride. The house is practically in the shadow of the amusement park, one of Southern California’s top tourist attractions, whose roller coasters serve as a backdrop for the neighborhood.

After its official unveiling today, the house could become its own neighborhood attraction — along the lines of a elaborate Christmas display, the Hostetlers say. While AOL Real Estate was there on Sunday, members of a motorcycle club that was gathered at a house across the street were taking pictures, and a quartet of teens on skateboards stopped to take a look.

As for the neighbors, they found out last week, on the first day of painting, when Brainiacs From Mars went door-to-door to the closest houses to explain why the olive green and chocolate brown color scheme that the Hostetlers say had earned them compliments and admiring inquiries was dramatically changing. The neighbors were shocked at first, the Hostetlers say, but “that went away, and now they understand.” One neighbor even wanted to have his house turned into a billboard, too. Though another walked by and said, “Your house was so pretty before. What did you do to it?”

Vivian Largent, who lives across the street and a few doors down, says that she thinks the new paint is fine as long as it’s temporary. She would have some concerns about property values if it stayed up for the long term, though.

Largent said that she knows people who could really use some help on their mortgage right now, and had asked Brainiacs how those she knows could apply. (You can find the application on the Brainiacs website.)

She also wondered why the advertising sign that the roofers has posted in her front yard, as they’d worked on her home, was allowed, while the signage that Brainiacs From Mars attached to the Hostetlers house for media photographs had to be taken down.

Before:

After:

Correction: An earlier version of this story incorrectly identified the college that Scott and Elizabeth Hotstetlers’ son attends.

Also see:
How the Foreclosure Settlement Could Affect You
Home Swap: Exchange More Than Affection on Valentine’s Day

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More on AOL Real Estate:
Find vacation homes for rent.
Find vacation homes for sale.
Find out how to calculate mortgage payments.
Find homes for sale in your area.

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Source: http://realestate.aol.com/blog/2012/02/13/billboard-house-advertises-a-way-out-of-the-housing-crisis/

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Filed under: News, Advice, Celebrity Homes, Other

Why would former Penn State football coach Joe Paterno transfer ownership of his house, worth $594,484, to his wife for $1 in July, unless he knew that he was about to be drawn into the college’s sex-abuse scandal, with potential civil lawsuits and damages heading upfield toward him?

While his lawyer told The New York Times that the ownership transfer was nothing more than a step in a long-term financial estate plan, the move raised some eyebrows. Was the sale an attempt by Paterno to shield assets, fearing that some jury down the road might take him to the cleaners? And by transferring his home to his wife, Sue Paterno, did the coach who once walked on water just sink deeper into the dark hole of public scorn?

AOL Real Estate spoke to several estate lawyers and heard pretty much the same thing: Joe Pa probably didn’t do anything fishy, at least when it came to giving his wife the house for $1 plus “love and affection.” The couple (pictured at left) had previously held joint ownership of the property, for which they paid $58,000 in 1969.

David Shulman, an attorney in Fort Lauderdale, Fla., whose practice focuses on trusts and estates, says there’s no obvious reason to link the home transfer with an attempt to protect assets or do an end-run around prospective creditors. In Pennsylvania, Shulman noted, as long as the property is held jointly — as Paterno’s was — it can’t be subject to the creditors of just one of the spouses. And since Sue Paterno hasn’t been linked at all to the sex-abuse scandal, she has no liability or exposure.

“I haven’t seen the documents,” Shulman said, “but from what’s been made public, it just doesn’t make any sense that this was an attempt to protect assets.”

Then what was Paterno up to? Shulman said the 84-year-old Paterno’s decision to transfer the house more likely had something to do with age-related issues, such as Medicaid and tax planning. To qualify for Medicaid-covered nursing home care, for example, a recipient must “spend down” to a certain level. And people are constantly looking to protect their assets from taxes to ensure that their heirs inherit as much as possible.

Since Paterno has good insurance and a degree of wealth, he probably didn’t do it for Medicaid purposes. Far more likely it was done as an estate planning move to avoid probate, said Shulman. “It is a fairly typical thing for people of means to want to protect their assets for their children or whoever will inherit them,” he said.

Paterno, who was fired as the football coach at Penn State, has been harshly criticized by many for not taking more aggressive steps after a suspected sexual assault of a child by one of his former top assistants was reported to him. And if the reaction to the house transfer is any indication, it’s a safe bet that the burgeoning scandal will cast suspicion on everything else the coach does.

[Correction: An earlier version of this post incorrectly referred to Paterno as Joe Pop; his nickname is Joe Pa.]

Also see:
Taking a Tax Loss When Property Value Declines
Happy End of the Road for RVers: Assisted Living on Wheels

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Filed under: News, Foreclosures

California expanded its $2 billion program to help homeowners avoid foreclosure to those with second homes as well.

The California Housing Finance Agency established the four Keep Your Home programs using money from the Treasury Department’s $7.6 billion Hardest Hit Fund. Before, borrowers were restricted from modifications, unemployment funds, relocation assistance and even principal reductions if they had a second home.

Officials eliminated the exclusion, because they said many homeowners are co-signers on a second home or are underwater on their first property.

Other changes to the programs include allowing borrowers to take advantage of principal reduction offers even if they completed a cash-out refinance in the past, which many Californians did during the boom.

Read the full story at HousingWire.

See also:
How Much Down Payment Do Homebuyers Need?
No-Money-Down Mortgage Can Still Be Found in Small Towns
New Credit Score Will Tell Lenders More About You
Viewpoint: Obama’s Drop-in-the-Bucket Idea for Housing

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/2011/11/11/second-home-owners-eligible-for-mortgage-help/

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