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Obama State of the Union Plan Inadequate for Housing?
Filed under: News, Refinancing
By Jon Prior
Even if the promising mortgage refinancing plan that President Obama announced Tuesday night passes Congress, critics say it will fall short of solving the deepest housing problems.
The White House did not release great amounts of detail, but the plan would help homeowners current on their mortgage to refinance down to a lower rate and save an average $3,000 a year on payments. The plan widens the Home Affordable Refinance Program to include mortgages not guaranteed by Fannie Mae and Freddie Mac and would tax banks to raise funding.
Analysts said Wednesday morning that the program could cost as much as $10 billion and could reach between 2 million to 3 million borrowers.
Read the full story on HousingWire.
Also see: Bernanke: Fed Should Help Turn Foreclosures Into Rentals Principal Reduction Better Than Short Sales, Report Says
More on AOL Real Estate: Find out how to calculate mortgage payments. Find homes for sale in your area. Find foreclosures in your area. Finds homes for rent in your area.
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Source: http://realestate.aol.com/blog/2012/01/25/obama-state-of-the-union-plan-inadequate-for-housing/
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Vacant House Targeted by Squatters, Scammers and Thieves
Filed under: News, Advice, Foreclosures
Empty houses — those either awaiting foreclosure or where the owners have moved out for other reasons — might as well have a “kick me” sign on them. Actually, make that “vandalize me” sign. They are frequently the targets of squatters who move in illegally, scammers who claim they own them and rent them out to unsuspecting tenants, or just plain old garden variety thieves who break in and steal the valuables right down to the copper plumbing and refrigerator.
Or, in the case of one Suffolk County house, all three. According to a story on ABCLocal News, the Bay Shore home of Richard and Lisa Scott slipped into foreclosure in 2009. The Scotts said they gave their lender, Bank of America, three short sale offers that went nowhere fast, with the bank citing incomplete paperwork that the Scotts and their agent insist was delivered. The Scotts, meanwhile, moved out to rebuild their lives in the South.
Shortly thereafter, Scott’s brother reported driving by and seeing a squatter living in the house, with the air conditioner running and lights blazing. Once the squatter was removed, someone ran a scam ad on Craigslist and leased out the house, collecting $4,000 from the unsuspecting tenant. And then, to add insult to injury, with the squatter and tenant gone, vandals broke into the house and stripped it bare, leaving holes punched in the walls and stealing the copper plumbing, the appliances, even the kitchen sink.
According to the report, BofA is now trying to hasten the foreclosure process.
As for those who may be forced to leave a home vacant, here are some tips to make sure this doesn’t happen to you.
1. Try not to move out. Vacant homes have increasingly been targeted by squatters. The bank can’t force you out of your home until they foreclose. Until then, you own it — no matter how many missed payments you have. If you must leave, consider renting it out. Let the tenant know you are pursuing a short sale and that the home may be foreclosed on, but that you are giving them a discount in the fair market rent in exchange for maintaining the property.
2. Notify the local police and utilities that the home is going to be vacant. Utility companies make it possible for squatters to set up shop. By presenting a doctored up lease agreement and some sort of “proof” of ID, anyone can get an account established and the electricity turned on in your home. By calling and putting it in writing that the house is going to be vacant, you are at least alerting the utilities — which likely won’t make a whit of difference.
3) Let your neighbors know. Nobody feels good about saying they are losing their home. But with it happening to so many, no one will be surprised. If the neighbors know that the house will be empty, they can keep an eye on it and report any suspicious activity to you and the police. In exchange, maybe you want to hire their kid to keep the grass cut and the yard tidy.
4) Stop thinking this isn’t really your problem. Yes, you fully expect that the bank is going to foreclose on you and are saying to yourself, “Why should I care?” Look at the Scotts’ example. They were sickened to return to their house — which they still own and are still responsible for — and find the damage.
Also see: Realtors’ Latest Challenge: A Surge of Squatters Woman Faces Foreclosure on Home She Bought for $1 Protesters ‘Liberate’ Foreclosed Homes
More on AOL Real Estate: Find out how to calculate mortgage payments. Find homes for sale in your area. Find foreclosures in your area.
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Does mortgage principal reduction work?
NEW YORK (CNNMoney) — The world will only have to wait a few more weeks to find out whether Fannie Mae and Freddie Mac will allow principal reductions on mortgages they back.
The Federal Housing Finance Agency will decide this month whether Fannie and Freddie should allow write downs on the balances of borrowers who owe more than their homes are worth, said Ed DeMarco, acting director for the agency.
Fannie and Freddie have been at the center of a tug-of-war over fixing the housing market. They have long resisted calls to write down the balances on the loans in their portfolio, saying it would be too costly for taxpayers.
But the pressure has been building, especially in the wake of the $26 billion mortgage settlement that will reduce principal for 1 million borrowers whose loans aren’t backed by Fannie and Freddie.
The agency, which regulates the government-controlled companies, had decided against allowing principal reduction after internal studies showed that alternatives such as adjusting monthly payments or forbearing principal were more cost effective.
DeMarco has said his agency is charged with protecting taxpayers’ interests, and principal reduction would amount to an expensive taxpayer bailout of troubled homeowners.
Since then, however, the Obama administration has sweetened the pot. It tripled the incentives it will pay to Fannie and Freddie for reducing principal under the Home Affordable Mortgage Program, or HAMP. This has prompted the agency and the companies to redo their analysis.
But will it even matter if Fannie and Freddie start allowing principal reduction?
How many are eligible?Together, Fannie and Freddie have about 3 million loans that are seriously underwater, according to company filings. But three-quarters of these homeowners are current on their payments and may not qualify.
“These borrowers are demonstrating a continued willingness to meet their mortgage obligations,” said DeMarco in a recent speech. “This should be recognized and encouraged, not dampened with incentives for people to not continue paying.”
In the end, the number of eligible underwater Fannie and Freddie loans could range from a few hundred thousand up to 750,000, according to estimates. That’s not that much considering there are 11 million underwater borrowers in the U.S., just over a quarter of whom are behind in their payments.
Click here to read the rest of this article…
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When It Comes to Mortgages, Women Don’t Shop Enough
Filed under: News, Advice, Financing, Refinancing
There’s a surprising new finding that says women get lousier mortgage rates than men, but not because of gender discrimination. It’s because instead of shopping around for cheaper loans, they rely on the recommendations of friends.
To recap: When it comes to mortgages, women don’t shop enough.
The report published in the Journal of Real Estate Finance and Economics set out to explain why women were 32 percent more likely to get a subprime mortgage than men in a 2006 study. According to a team of researchers led by Florida Atlantic University’s Ping Cheng, the answer wasn’t discrimination because of gender or even income disparities.
Women pay higher rates because they are more likely to listen to friends’ recommendations, whereas men are more likely to shop around for the best deal.
“Our empirical test confirms that search effort is rewarded in marketplace, and suggests that gender disparity in mortgage rates may be addressed by policies aimed at improving women’s financial literacy and search skills,” the report summarizes.
It makes sense to Daily Finance columnist Laura Rowley. “It’s not surprising, because mortgage shopping can be incredibly complex, so we look to people we can trust to help make the decision,” says Rowley. “But this is one area where you don’t want to get by with a little help from your friends.”
Instead, she advises, call two mortgage brokers and a direct lender, preferably a local small or mid-size bank, and try the following script: “Hi, my name is ____ and I’m in the market to buy a $____ house, and I’m going to put down ____ percent. I’m getting three written estimates, and then I’m going to choose. Can you email me a cost-estimate worksheet stating all the fees and the interest rate?”
Be sure to get the estimates on the same day, as rates can change quickly. Also, don’t ask for rates and fees by phone; unscrupulous brokers will simply low-ball their estimate to get you in the door, says Rowley.
For more tips on shopping for a mortgage, see these AOL Real Estate guides:
How Much Can You Afford [Video] How to Get a Low Mortgage Rate Mortgage Jargon in Simple Terms
More on AOL Real Estate: Find out how to calculate mortgage payments. Find homes for sale in your area. Find foreclosures in your area. See celebrity real estate.
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Source: http://realestate.aol.com/blog/2011/11/18/when-it-comes-to-mortgages-women-dont-shop-enough/
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You Can Still Get a Home Equity Line of Credit
Filed under: Home Equity
Not long ago, homes worked like giant credit cards. Home Equity Lines of Credit (HELOCs) helped borrowers cash in on the equity in the homes. You can still get a HELOC today, though the business is much smaller, with home prices down about 40 percent from their peak and banks tightening their lending standards. The volume of new HELOCs created in November was just $4.9 billion. That’s less a quarter of the HELOCs created two
Not long ago, homes worked like giant credit cards. Home Equity Lines of Credit (HELOCs) helped borrowers cash in on the equity in the homes.
You can still get a HELOC today, though the business is much smaller, with home prices down about 40 percent from their peak and banks tightening their lending standards.
The volume of new HELOCs created in November was just $4.9 billion. That’s less a quarter of the HELOCs created two years before, in November 2007, according to a recent report from credit tracker Equifax.
So banks are still creating billions of dollars in new HELOCs every month for borrowers who use them for purposes from an alternative to automobile financing to a credit line for small business.
HELOC interest rates now hover around 5 percent. That’s down from over 7 percent two years ago and is much better than the rates offered by many credit cards, according to Bankrate.com.
The new HELOCs are also smaller, averaging $80,724 in November 2009. That’s down from $80,724 two year before, according to Equifax. Banks also require strong credit to get a HELOC. Only borrowers with credit scores 820 and higher qualified for HELOCs over $100,000 in 2009. A credit score over 800 was needed to get a line over $80,000, compared to just 700 back in 2007.
The places where borrowers use HELOCs has also changed with falling property values. Borrowers Pennsylvania made up 8 percent of the market for new HELOCs in 2009, putting a state largely ignored by housing boom on par with the real estate gold rush state of Florida, which also had 8 percent of the HELOC market in 2009, and ahead of California, which had 7 percent.
Common sense should also limit the size of a credit line.
“Since many economists believe home prices have further to fall, don’t borrow the maximum you can,” said Amanda Gengler, writer for Money Magazine in a PBS interview.
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Source: http://realestate.aol.com/blog/2010/12/09/you-can-still-get-a-home-equity-line-of-credit/
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Foreclosure Victims Plan Protests Across U.S.
Filed under: News, Economy, Financing, Foreclosures, Home Equity, Refinancing, Selling
Victims of the foreclosure mess and housing crisis are taking to the streets — literally. Street demonstrations are being planned in 10 cities, and in the crowd at the first one you are going to see Dixie Mitchell, a 74-year-old cancer survivor who refinanced her paid-off home to help one of the foster kids in her care — and is now losing it in a foreclosure.
Mitchell (pictured at left), who along with her 76-year-old husband raised eight biological children and 50 foster children in this house, says that she intends to make her voice heard loud and clear as she marches in front of bank offices in Seattle on Sept. 21. The march is the first in a 10-city rollout of protests organized by The New Bottom Line, a coalition of community groups that challenges big banks’ role in the housing crisis.
Mitchell’s story is particularly heart-wrenching: She and her husband were doing just fine living in the house they’ve owned for 44 years until he suffered a stroke that left him paralyzed and cost him his job. The house was fully paid off in the mid-1980s, but they borrowed against it to make roof and kitchen repairs. The straw that broke the camel’s back came in 2005, when Mitchell needed to hire a lawyer, at a cost of $20,000, in an effort to keep a 3-year-old boy who had been in her care since he was an infant.
She was advised by the bank to refinance her house to get the cash. She took out an adjustable rate loan that would reset in two years, at which point, Mitchell says, the lender told her that she would be able to refinance into another 30-year-fixed rate loan. But the original loan was bundled and sold multiple times to different lenders. It reset to a higher rate right around the time her husband suffered a massive stroke, and she quickly fell behind in her payments. Without his earnings, her monthly income is just $2,200 in Social Security and her monthly mortgage is $2,568.
Mitchell filed for bankruptcy, tried getting assistance from every social service agency she could think of, spent two years trying to get a loan modification and even offered to rent out rooms to boarders if the bank would just let her keep her house.
“My husband wants to die at home, at our home,” she says. Her home is set to be auctioned on Oct. 28 and she has no place to go.
Why is she going to participate in the demonstration?
“I need them [the bank] to look me in the eye and tell me why they think it’s better to put people out in the street,” she said. “They haven’t done their share to help. They don’t even give you a chance … all they do is lose your paperwork and make you send it over and over again. Each time you talk to somebody, you get a different answer.”
Those are sentiments shared by many.
LeeAnn Hall, executive director of Alliance for a Just Society and one of the organizational members of The New Bottom Line, said the Seattle area protests will be staged both in downtown Seattle and at the annual policy summit meeting of the Association of Washington Business, a statewide chamber of commerce. The meeting is being held in Suncadia, a mountain resort near Cle Elum, Wash. The governor is expected to attend the meeting and Hall said that the group hopes to engage her.
Subsequent demonstrations are planned across the country in Boston, Chicago, Denver, Los Angeles, New York City, San Francisco and other locations.
The New Bottom Line said that it is targeting “big banks that bankrupted the country and drained wealth from American families.” The direct actions primarily target JPMorgan Chase, Bank of America and Wells Fargo, and include taking over bank buildings, meetings of corporate officials, civil disobedience, prayer vigils and mass mobilizations.
“We are struggling with less and less, while the big banks profit more and more,” said George Goehl, executive director of National People’s Action, another organizational member of The New Bottom Line. “The big banks have done nothing but dodge taxes, throw people out of their homes and choke small business, all the while draining our wealth to pad their bottom line. It’s time for JPMorgan Chase, Bank of America and Wells Fargo to pay us back.”
According to a press statement, the group’s goals are that banks:
o. Pay their fair share of taxes — their statutorily required 35 percent corporate income tax and not “game” the system through off-shore tax shelters and loopholes.
o. Stabilize the housing market and revitalize the economy by reducing principal for all underwater homeowners to current-market value. “This would end the foreclosure crisis, reset the housing market, pump billions of dollars back into the economy and create one million jobs a year,” the group says.
o. Invest in American jobs by using their trillions of dollars in cash reserves to invest in small businesses — the main source of jobs in the U.S. — and other job-generating investments.
Also see: Viewpoint: What’s Behind Banks’ Big Foreclosure Push? 101-Year-Old Foreclosure Victim to Get Home Back Woman Faces Foreclosure on Home She Bought for $1
More on AOL Real Estate: Find out how to calculate mortgage payments. Find homes for sale in your area. Find foreclosures in your area. 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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Your Facebook Status: Foreclosed
Filed under: News, Economy, Financing, Foreclosures, Other, Credit
Foreclosure via Facebook? With roughly 4 million foreclosures in the pipeline in this country, some legal experts say it’s just a matter of time until lenders win the right to serve foreclosure documents through the giant social network.
That day has already come for one couple in Australia. When they defaulted on a six-figure loan and couldn’t be found via a physical address or email, the lender’s enterprising lawyers located them on Facebook. The lawyers were able to verify the couple’s identities by matching up their names and birthdates — and, of course, the fact that they had “friended” each other.
Australian courts upheld the lender’s right to send foreclose notices via Facebook, citing the fact that the couple didn’t enable privacy protections on their Facebook accounts and were frequent enough visitors to the site that they would “reasonably receive notice as a result.”
While Marc Rotenberg, president of the Electronic Privacy Information Center in Washington, says he is unaware of Facebook being used in the U.S. to deliver legal notifications, but “it’s bound to happen,” he said. “The real concern the courts have is whether it’s a fair notice that the person actually receives.” According to Bloomberg BusinessWeek, courts in New Zealand, Canada and the U.K. already have adopted the Australian example to avoid having cases stall when people can’t be located and served in person.
“There are people who exist only online,” Joseph DeMarco, co-chair of the American Bar Association’s criminal justice cyber crime committee, told the publication. The ability to serve documents by social-media networks would be useful, he said.
Facebook has taken heat before about its policies protecting the personal data of its 694 million users worldwide. Following the case in Australia, which happened in 2008, company spokesman Barry Schnitt said the company was pleased to see the Australian court validate Facebook as a reliable, secure and private communication medium. (Facebook did not respond to messages left by AOL.)
Is it appropriate to use social networks to find people and deliver legal papers to them via the network?
“No one likes to receive a legal service,” said Rotenberg. Legal service, after all, usually isn’t good news: Someone wants you for something. And yes, he adds, “There are going to be privacy concerns, but in some respects they’re almost inescapable.”
Email, by contrast, is generally not considered by courts to be a safe or reliable way to deliver legal notices. We get too much email, much of it winds up in spam and we don’t always open everything in our in-boxes. Legal notices delivered this way can easily be discounted with a simple “I didn’t see the email.”
But Facebook, said Rotenberg, is different. If you don’t have thousands of friends and you regularly post status updates indicating that you are active on the site, you lose the excuse that you likely overlooked the notice. Of course not everyone with a Facebook page visits the site regularly, but save it for the judge whether you’re one of them.
Bottom line: It’s probably going to be determined to be legal, just not likely to be popular. And should use of Facebook as an electronic process-server escalate as a norm, you can expect it would have some adverse impact on the site’s participation levels. In the meantime, if you don’t want the banks to find you, the best defense is enabling your privacy settings on Facebook and be mindful of the personal data you post.
For more on mortgages and related topics see these AOL Real Estate guides:
- How to Buy Foreclosures
- Spot Foreclosure Scammers Before They Spot You
- Foreclosure: What it Means for Renters
- Foreclosure Help: What a Housing Counselor Can Do
More on AOL Real Estate: Find out how to calculate mortgage payments. 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/2011/06/17/your-facebook-status-foreclosed/
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Mortgage Rates Stay Low, But Homebuyers Aren’t Budging
Filed under: News, Economy, Financing, Refinancing
WASHINGTON — The average rate on the 30-year fixed mortgage fell to 4 percent this week, nearly matching the all-time low hit just one month ago.
Freddie Mac said Thursday that the rate on the 30-year loan dropped from 4.10 percent last week. Four weeks ago, it dropped to 3.94 percent — the lowest rate ever, according to the National Bureau of Economic Research.
The average rate on the 15-year fixed mortgage fell to 3.31 percent from 3.38 percent. Four weeks ago, it too hit a record low of 3.26 percent.
Mortgage rates tend to track the yield on the 10-year Treasury note. They yield fell this week after investors shifted money out of stocks and into the safety of Treasurys on fears that Europe’s debt crisis could worsen.
The Federal Reserve is also shifting more money into longer-term Treasurys to try to force mortgage rates lower. Treasury yields fall when buying activity increases.
Less Home Buying Than Expected
Federal Reserve Chairman Ben Bernanke said Wednesday that low rates have failed to spur the increase in home buying or mortgage refinancing that government officials had expected.
High unemployment and declining wages have made it harder for many people to qualify for loans. Many Americans don’t want to sink money into a home that could lose value over the next three to four years. And most homeowners who can afford to refinance already have.
%Gallery-137999% The number of Americans who bought previously occupied homes fell in September and is on pace to match last year’s dismal figures — the worst in 13 years.
Sales of new homes rose last month after four straight monthly declines. But the increase was largely because builders cut their prices. And it followed a peak buying season that was the worst on records going back nearly 50 years.
A Run on Refinancing
The low rates have caused a modest boom in refinancing, but that benefit might be wearing off. Most people who can afford to refinance have already locked in rates below 5 percent.
Rates have been below 5 percent for all but two weeks in the past year. Just five years ago they were closer to 6.5 percent. Ten years ago, they were above 8 percent.
The average rate on the five-year adjustable loan fell to 2.96 percent from 3.08 percent. That matches a record low hit four weeks ago.
The average rate on the one-year adjustable loan declined to 2.88 percent from 2.90 percent. It fell last month to 2.81 percent, the lowest on records dating to 1984.
The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for the 30-year fixed mortgage fell from 0.8 to 0.7. The average fee on the 15-year fixed loan was unchanged at 0.7. The average fees on the five-year adjustable loan one-year adjustable loan were also unchanged at 0.6.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.
Copyright 2011 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
Also see: Open Houses of the Week: Hobnob With the 1 Percent Where Are the Real Home Bargains? Not Where You Think! Mortgage Giant Asks Taxpayers for Another $6 Billion
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/2011/11/04/mortgage-rates-stay-low-but-buyers-arent-budging/
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Americans More Confident About Personal Finances
They may not be hopeful that the U.S. economy will rebound any time soon, but most Americans are optimistic about the future of their own personal finances. A newly released national survey conducted by KRC Research for the Certified Financial Planner (CFP) Board of Standards, Inc. finds that 83 percent of the 1,011 adults polled [...]
Source: http://feedproxy.google.com/~r/TruthfulLendingDotCom/~3/_IoLIckZHow/
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House of the Day: Iconic Redwood Grove Lists at $8.75M
Filed under: Design, News, Buying, Investing
The iconic Garberville estate known as Redwood Grove, designed in 1926 by Hearst Castle architect Julia Morgan, has come on the market at $8,750,000. Located in Northern California’s Humboldt County, the 5,416-square-foot home has been meticulously restored over the past four years with great attention to its architectural integrity.
The home sits on two acres that border the Eel River and are surrounded by protected California Redwood state parks. The grand manor house has a Gothic-style great room with an exposed redwood beamed cathedral ceiling. There’s a wood-burning fireplace and the original leaded glass windows. It is being sold furnished.
%Gallery-124573% The chef’s kitchen to-die-for has custom cabinetry, top-of-the-line appliances and a copper salad sink. The master suite overlooks the river and, of course, the ancient redwood forest beyond. It, too, has a cathedral ceiling.
There are two additional bedroom suites, an office with a built-in desk and cabinets, and a finished basement with a 1,000-bottle wine cellar crafted by a master artisan with bloodwood wine racks.
The property includes a two-bedroom, two-bathroom guesthouse with a fireplace. The original carriage house is a one-bedroom apartment over the two-car garage/shop.
The flat, expansive grounds include an organic orchard and garden, Koi pond with lilies and five terraces for entertaining — one which sits directly above the river and has a built-in Viking kitchen. Many of the furnishings are custom-made and include Persian rugs and artwork.
Julia Morgan is best known as the designer of the the Hearst Castle and nearby Hacienda at San Simeon Ranch. She designed more than 700 homes, institutional and commercial buildings in her 45-year career, including rebuilding The Fairmont Hotel after the 1906 San Francisco earthquake. Morgan’s trademark references to nature are evident throughout this home at Redwood Grove, which includes the restored hand-painted wall panels.
The home is co-listed by Melody Rogers-Kelley of Nourmand & Associates, Beverly Hills and Dave McKenny of McKenny Advisory and Suzi Schultz of Integrity First Real Estate Depot.
More on AOL Real Estate: Find out how to calculate mortgage payments. Find homes for sale in your area. Find foreclosures in your area. Get property tax help from our experts.
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Source: http://realestate.aol.com/blog/2011/05/27/house-of-the-day-iconic-redwood-grove-lists-at-8-75m/
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When It Comes to Mortgages, Women Don’t Shop Enough
Filed under: News, Advice, Financing, Refinancing
There’s a surprising new finding that says women get lousier mortgage rates than men, but not because of gender discrimination. It’s because instead of shopping around for cheaper loans, they rely on the recommendations of friends.
To recap: When it comes to mortgages, women don’t shop enough.
The report published in the Journal of Real Estate Finance and Economics set out to explain why women were 32 percent more likely to get a subprime mortgage than men in a 2006 study. According to a team of researchers led by Florida Atlantic University’s Ping Cheng, the answer wasn’t discrimination because of gender or even income disparities.
Women pay higher rates because they are more likely to listen to friends’ recommendations, whereas men are more likely to shop around for the best deal.
“Our empirical test confirms that search effort is rewarded in marketplace, and suggests that gender disparity in mortgage rates may be addressed by policies aimed at improving women’s financial literacy and search skills,” the report summarizes.
It makes sense to Daily Finance columnist Laura Rowley. “It’s not surprising, because mortgage shopping can be incredibly complex, so we look to people we can trust to help make the decision,” says Rowley. “But this is one area where you don’t want to get by with a little help from your friends.”
Instead, she advises, call two mortgage brokers and a direct lender, preferably a local small or mid-size bank, and try the following script: “Hi, my name is ____ and I’m in the market to buy a $____ house, and I’m going to put down ____ percent. I’m getting three written estimates, and then I’m going to choose. Can you email me a cost-estimate worksheet stating all the fees and the interest rate?”
Be sure to get the estimates on the same day, as rates can change quickly. Also, don’t ask for rates and fees by phone; unscrupulous brokers will simply low-ball their estimate to get you in the door, says Rowley.
For more tips on shopping for a mortgage, see these AOL Real Estate guides:
How Much Can You Afford [Video] How to Get a Low Mortgage Rate Mortgage Jargon in Simple Terms
More on AOL Real Estate: Find out how to calculate mortgage payments. Find homes for sale in your area. Find foreclosures in your area. See celebrity real estate.
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Source: http://realestate.aol.com/blog/2011/11/18/when-it-comes-to-mortgages-women-dont-shop-enough/
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Home Prices May Withstand Foreclosure Wave
At best, an increase in foreclosures takes a double-edged sword to the housing market. On the one hand, it means we may be inching toward stabilization, as shadow inventory begins to move through the pipeline. On the other, it spells more stress for beleaguered homeowners and puts downward pressure on home prices.
Housing economists predict that the next wave of foreclosures is about to hit, following the recent settlement between government and lenders in the “robo-signing” scandal. No doubt it will still cause pain to hard-pressed borrowers. But in a break from the past, it may avoid depressing home prices. #mini_module { width: 265px; height:220px; border: none; float:left; margin:10px; font-size:12px;} #mini_module img {border:none; width: 265px; height:131px; border: none; margin:0px; } #mini_module .mini_title { margin: 0px; padding:0px; width:265px; height:131px;} #mini_module .mini_main { margin: 0px; padding:0px; width:265px; height:85px; background: transparent url(http://www.aolcdn.com/travel/bg-short)} #mini_module .mini_item {padding:12px 0px; margin: 0px 20px; border-bottom:1px dotted #CCCCCC;} #mini_module a { color: #49A3CA; text-decoration:none; } #mini_module a:hover { color: #F98419; text-decoration:underline;}
“There are countervailing strengths,” said Mark Fleming, chief economist at CoreLogic, an analytics firm. “We could very well see increasing prices in some markets this year, even though they have significant shadow inventories.” The “shadow inventory” is the overhang of homes expected to move through foreclosure that are not yet listed on the market.
A report from CoreLogic released today said that completed foreclosures edged down from 71,000 in January to 65,000 in February, and that the number of homes in a state of foreclosure has shrunk by 115,000 homes from February 2011 to 1.4 million homes in February 2012.
Despite the slight month-over-month drop, foreclosure activity has remained relatively steady recently, but economists predict that it will rise in the coming months because of the resolution of an investigation into illegal foreclosures between the government and major mortgage servicers.
Fleming told AOL Real Estate that the housing market may feel the impact of the robo-signing settlement during the summer, after the five banks involved in the settlement implement government-approved foreclosure practices.
“All of this will result in more foreclosure pain in the short term as some of the foreclosures that should have happened last year instead happen this year,” Daren Blomquist, vice president of online foreclosure marketplace RealtyTrac, said in February. The economist predicts that completed foreclosures will jump by 25 percent in 2012, totaling 1 million.
But since the market must eventually absorb the excess supply of foreclosed homes, breaking the foreclosure logjam isn’t necessarily a bad thing. “I would like to see the pace increase, because that means we’ll be able to work off the inventory faster,” Fleming said. And the downward pressure on prices that’s caused by an increase in foreclosures may be mitigated by improvements observed lately in other sectors of the market, as well as the economy as a whole, he says.
Home sales have risen by 13 percent in the previous six months, according to Capital Economics, while the delinquency rate saw a year-over-year 14 percent drop as of February, according to Lender Processing Services. Homebuilder optimism is measured at a five-year high, and real estate agents’ optimism reportedly more than doubled in the first quarter of 2012, against the backdrop of positive market indicators.
If the positive trends continue, Fleming said, the market could begin to stabilize as early as this year.
%Gallery-150807% A recent report provided one of the most hopeful signs of recovery for the housing market yet. John Burns Real Estate Consulting found that home prices actually have risen marginally since January. The company says that its gauge of the market, the Burns Home Value Index, eliminates a three-month lag time that distorts other indices by recording contract signings of home purchases, not closings.
Its finding conflicts with most other indices, though, such as the Standard & Poor’s/Case-Shiller home-price index, which showed a drop in home prices in January.
Follow Teke Wiggin on Twitter (@tkwiggin), follow @AOLRealEstate, or connect with AOL Real Estate on Facebook.
See also: HARP 2.0: Do You Now Qualify for Mortgage Relief? Netizens Deride Foreclosure Settlement
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Source: http://realestate.aol.com/blog/2012/03/30/home-prices-may-withstand-foreclosure-wave/
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Low Refi Rates Are Great, But Not for Everyone
Filed under: News, Refinancing
Talk about pressure! Everyone and his brother is clenching a mortgage refinance application in his fist and rushing to a lender. With record-low interest rates, you’d be nuts to sit this one out, right?
Actually, wrong.
While no one disputes that mortgage rates really can’t get much lower, there are certain homeowners who actually are better off sitting tight with their higher rates. If any of the scenarios below apply to you, refinancing — even into a lower rate — could be a bad financial move. Here’s why.
1. You’ve had your loan a long time.
Mortgages work like this: In the beginning of the loan, what you are paying is mostly interest. But once you’ve had the loan a while, you begin to actually pay down the principal. If you’ve had your loan a really long time, you have reduced the amount you borrowed (your debt) substantially — a good thing by everyone’s scorecard. But if you take out a new loan, you are rewinding the interest clock and starting over and won’t be paying down the principal anymore — just the interest.
Refinancing rarely makes sense for a homeowner who has been paying for 20 years on a 30-year mortgage. Refinancing and signing up for another 30 years may lower his monthly bills, but he’ll be making payments for 30 more years instead of just 10.
If you are just a few years away from retirement and like the idea of not having a mortgage to pay each month, resetting the interest clock may not be in your best interests. If you need some cash out of your house to pay for college or a new car, a home equity line of credit (HELOC) may be a better bet than refinancing and taking cash out.
2. You plan to sell soon.
Refinancing a loan costs money — anywhere from $2,000 to $5,000 in closing costs, appraisals, fees and points. If your new loan saves you $250 a month but it takes you seven years to recoup those expenses and you are planning on selling next year, it isn’t worth the trouble. To find out whether it’s worth it, do the math: Divide your monthly savings into the total cost of the loan and that’s how many months it will take to recoup your closing costs (divide by 12 if you want to know how many years). If you are planning on moving before that, don’t bother.
And don’t be fooled into thinking your loan is “free” because the lender has so graciously rolled the closing costs into the amount being borrowed. All you are doing there is increasing your loan amount and taken yourself that much further away from paying it off. You pay now or you pay later, but you are paying it just the same. And in the meantime, you are paying interest on that extra amount you just borrowed.
3. You don’t have a real and present need for lower payments.
Sure, it sounds great to knock a few hundred dollars off your monthly mortgage, but what will you be using the money for? If you don’t have a need and are comfortable paying your current loan, why not consider increasing what you pay and knocking down your principal debt faster? “Mortgage repayment is a risk-less investment that yields a return equal to the interest rate on the repaid loan,” notes The Mortgage Professor Jack Guttentag on his website.
Here’s another way to think of it: You have a 6 percent loan. By paying down what you owe, you are saving that 6 percent interest you would have paid. How many investments are paying you 6 percent these days? If you don’t need the money — and we aren’t suggesting draining your rainy day fund here — and have some extra cash lying around, why not use it to pay off your mortgage faster?
But Guttentag makes a much more valid point: “The bigger story is that the people who most need to refinance are the ones who can’t.” Lending standards have tightened to the point where those without a job and/or who are struggling to stay in their homes aren’t able to get loans.
Also see: Refinancing Do’s and Don’ts Cash-Out Refinancing: Sign of the Times?
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Source: http://realestate.aol.com/blog/2011/08/22/low-refi-rates-are-great-but-not-for-everyone/
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Unete Al Reto Event A Great Success
This past Wednesday, May 16th 2012 Commissioner Elias. Maldonado attended and supported the “Join the Challenge” Unete Al Reto event held at the Maverick County Lake for the purpose of leading a healthier life. Residents could choose between walking or zumba.The mariachi and marching band from C..C. Winn also joined the challenge and walked. Commissioner Maldonado joined in the event and walked around the lake partaking with all residents on the importance of living a…
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Watch: When to Pay Off the Mortgage Early
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. For more expert advice from Regina Lewis, visit DailyFinance.
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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FHA Mortgage Loan Limits To Rise Again
Filed under: News, Economy, Financing
WASHINGTON — Congressional bargainers have agreed to increase the size of mortgages insured by the Federal Housing Administration in a compromise being hailed by the housing industry but criticized by conservatives.
Under the deal by House and Senate negotiators, the FHA would be able to insure mortgages worth up to $729,750 in the most expensive regions of the U.S. for the next two years. The ceiling had been raised to that level during the financial crisis, but by law it dipped down to $625,500 on Oct. 1.
However, in a bow to conservatives, the bargainers would not increase the current $625,500 limit on mortgages that can be backed in expensive communities by Fannie Mae and Freddie Mac, the government-controlled mortgage giants, and by the Veterans Affairs Department.
Realtors and home builders had lobbied hard to raise the loan limits for all four entities, arguing that the last thing the country’s stubbornly weak housing market needs is stricter limits on government-backed mortgages. They were backed by members of Congress of both parties from areas where housing costs are high, like Southern California and New York.
“We’d have liked broader language, but the FHA is still an important part of the puzzle,” Jamie Gregory, a lobbyist with the National Association of Realtors, said Tuesday.
‘Beyond Ridiculous’
Conservatives and a majority of House Republicans oppose the increase, saying the government should reduce its involvement in subsidizing housing in hopes that the private market would step up.
In a written statement, the president of the conservative Club for Growth called increasing FHA’s loan limits “beyond ridiculous” and said his group would note how lawmakers vote on the issue when they rate members of Congress seeking re-election. He said raising the limits does the opposite of reducing the federal role in housing markets — something that many conservatives and the Obama administration say they want to strengthen the private market and protect federal taxpayers.
It has so far cost the government about $170 billion to rescue Fannie and Freddie, which nearly collapsed in 2008 because of risky loans in their portfolios.
The size of loans that federal agencies can back is based on a formula that includes a region’s median housing cost. More than a fifth of the country’s roughly 3,100 counties would be affected by the higher FHA loan limits.
Helping Buyers With Small Down Payments
FHA insurance is often used by buyers who put down small down payments. The agency has insured more than 40 million homes since it was established in 1934, and last year three quarters of those it insured were first-time buyers.
“It’s good news for the more than 600 counties that faced loan limit decline,” said Robert Dietz, an economist for the National Association of Home Builders. “FHA is important for first-time homebuyers, so that will help support housing demand.”
The provision was included in a bill financing the departments of Housing and Urban Affairs, Commerce, Justice, Transportation and several other agencies for the rest of the government’s fiscal year, which began Oct. 1. It would also keep all other federal agencies functioning through Dec. 16 as lawmakers continue working on permanent spending bills.
The Democratic-run Senate had voted to increase the loan limits in its housing bill, but the version approved by the Republican-led House left the ceilings alone.
The House and Senate are expected to approve the overall compromise legislation later this week.
Also see: Fannie, Freddie Execs Score $100 Million in Bonuses Community Rescues Vet From Foreclosure After TV Story Airs
%Gallery-139176% 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/2011/11/16/fha-mortgage-loan-limits-to-rise-again/
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Home Mortgage Debt Declining At Rapid Pace
It appears that low interest rates, refinancing and other government measures aimed at reducing mortgage debt are working. The latest report from the Bureau of Economic Analysis (BEA) finds that total U.S. home mortgage debt during the first three months of 2011 is $10.3 trillion, compared with $11 trillion in mid-2008. Even better news, Americans [...]
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Why is pre-approval important?
Q: I have heard that we should get pre-approved for a mortgage loan before looking at homes in Washington or Oregon. Why is a pre-approval the important first step in the home buying process? A: I am glad that you asked that question because getting pre-approved for a home loan is the best way to [...]
Source: http://www.hassonblog.com/2011/11/why-is-pre-approval-important/
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Federal Housing Agency Says No to Principal Forgiveness
Filed under: News, Foreclosures
While the Obama administration may be pondering the idea of helping underwater homeowners through principal write-downs, Federal Housing Finance Agency Director Edward DeMarco said there is no current consideration for principal write-downs on underwater home loans.
DeMarco told C-SPAN in an interview that the FHFA has already assisted borrowers through principal forbearance programs and loan modification tools that have helped borrowers reduce their monthly payments. He said the other balance the FHFA has to strike is making sure home aid efforts do not afflict taxpayers with additional losses since public funds hold up the quasi-federal housing agencies. He placed write-downs on principal in this camp and suggested the FHFA is not going in that direction.
“Principal forgiveness does not accomplish our conservator mandate,” DeMarco said on CSPAN while speaking to reporters from Reuters and The Wall Street Journal. He added,”the borrower still has a responsibility and an obligation for the repayment of the loan.”
Read the full story at HousingWire.
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
%Gallery-137999% 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/2011/11/01/federal-housing-agency-says-no-to-principal-forgiveness/
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Mortgage Delinquency to Drop Sharply in 2012, Report Says
Filed under: News, Economy, Financing
NEW YORK — If the U.S. economy does not suffer more setbacks, the rate of mortgage holders behind on their payments should decline significantly by the end of next year, according to credit reporting agency TransUnion.
Mortgage delinquency rates — the ratio of borrowers 60 or more days behind on their payments — will likely tick up to about 6 percent through the first three months of 2012, TransUnion said in its annual delinquency forecast issued Wednesday.
But by the end of next year, it could drop to 5 percent, TransUnion said. That’s well off the peak of 6.89 percent seen in the fourth quarter of 2009.
Chicago-based TransUnion’s forecast takes into consideration several factors, including expectations that consumer confidence and the economy will improve next year.
Also, banks are expected to get a good portion of pending foreclosures off their books next year, said Charlie Wise, TransUnion director of research and consulting.
Slowed by Foreclosures
Banks are still working through a backlog of foreclosures created by issues including the robo-signing scandal, in which bank officials signed mortgage documents without verifying the information they contained. The issue surfaced last year in areas with large numbers of foreclosures, and banks had to backtrack and review foreclosures across the country to make sure their paperwork was in order.
That slowed down the process, Wise said, and left mortgages listed as delinquent for longer than they otherwise might have been, temporarily boosting delinquency rates.
Economic uncertainty has also contributed. In the third quarter of 2011, mortgage delinquencies saw their first uptick in six quarters, largely fueled by concerns over the economy as lawmakers were debating the U.S. debt ceiling and Europe’s debt crisis was unfolding.
Helping to cut the mortgage delinquency rate are a slowly improving job market and a stabilizing housing market.
While the drop will be significant, the rate will remain well above the pre-recession average of 1.5 to 2 percent.
“We have a long way to go to get back,” said Steven Chaouki, a TransUnion vice president.
The situation with credit cards is much stronger. Card delinquencies — payments late by 90 days or more — dropped to their lowest levels in 17 years during the spring, then saw a slight increase in the third quarter, but still remained near historic lows.
TransUnion expects further edging up in the current quarter and the first three months of 2012, but then late payments on bank-issued cards should fall again.
Credit Still Tight
One reason card delinquencies are expected to remain so low is that credit is much tighter than it was before the recession. TransUnion data showed that nearly a quarter million new card accounts were opened by people with less-than-stellar credit scores during the third quarter, which contributed to the slight increase in late payments during the summer months. But banks are mainly still going after consumers with top-tier credit histories.
“Lenders are willing to lend, but are still pursuing the best customers,” said Chaouki.
TransUnion predicts by the end of 2012, just 0.69 percent of cards will be considered delinquent, down from a predicted 0.74 percent in the current quarter. The rate has wobbled in the last few years, peaking at 1.36 percent in the fourth quarter of 2007, then dropping and bouncing back up to 1.32 percent in the first quarter of 2009.
The figures reflect a shift in which debt payments consumers consider most important, largely because home prices fell so far.
Chaouki said the conventional wisdom before the Great Recession was that homeowners would put their mortgages first because of concern about their reputation and the emotional attachment involved in owning a home. But what has become clear as housing prices have continued to fall, he said, is that bill payment is far more practical.
“People were protecting their home equity,” he said. Credit cards were relatively easy to come by in years past, he said, so when money got tight, it was an easy decision to default on cards and maintain house payments. Now it’s common to owe more on a mortgage than a house is actually worth, but credit cards are harder to get. So consumers are being practical and protecting what is more valuable to them.
He said he expects the equation will shift again if housing prices rebound and people go back to building home equity.
Copyright 2011 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
%Gallery-139870% See also: Detroit Mom Trades $96,000 House for Used Minivan Fannie and Freddie Freeze Foreclosures for the Holidays Viewpoint: Is the Housing Crisis Just a State of Mind?
More on AOL Real Estate: Find out how to calculate mortgage payments. Find homes for sale in your area. Find foreclosures in your area. Finds homes for rent in your area.
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Source: http://realestate.aol.com/blog/2011/12/07/mortgage-delinquency-to-drop-sharply-in-2012-report-says/
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‘Project X’ Copycat Revelers Allegedly Wreck $500,000 Home
It didn’t take long before the carnage in the hit house-party movie “Project X” spilled onto the real real estate market.
Thirteen teenagers are being questioned for their possible involvement in a wild house party that will cost the builder nearly $100,000 in repairs, reports KHOU in Houston, Texas.
“It’s devastating. This is a new home that was ready to sell,” said private investigator Mark Stephens, who was hired by the homebuilder to observe the property. Stephens estimates the home to be worth $500,000.
A tour of the once pristine, 4,000-square-foot-home today reveals gaping holes in the walls, heaps of broken glass and liquor bottles strewn across the property.
Stephens told KHOU that the night after the property was vandalized, he returned to the neighborhood in the hope of catching the culprits in the act. Just down the street, in another vacant home, he came upon a group of teenagers throwing another massive party.
Police took 13 teenagers into custody, with two minors being young enough to be released back to their parents.
Stephens said that when he asked the teens why they broke into the home, they simply said “Project X.”
Yet this isn’t the first time the riotous teen flick reportedly has inspired copycat revelry. Another party in Houston turned deadly after an unidentified teen was shot multiple times at an illegal party in another vacant home, ABC News reports. The party, which drew between 500 to 1,000 high school and college-age students, was shut down by police, but the gunman reportedly escaped on foot.
Idle Hands, Empty Homes
An underlying problem in these and other cases of home vandalism is the glut of vacant homes sitting idle on the market. As foreclosures have flooded local real estate inventories, vacant properties have attracted all manner of blight, lowering property values and putting more financial stress on already struggling neighborhoods.
And the vacancy problem could continue to rise. Despite a new report that shows a 13 percent drop in completed foreclosures in the first month of this year, as compared to January 2011, there are signs that foreclosures could soon rise. With the $25 billion mortgage settlement finally underway, experts expect foreclosure activity to increase through 2012, as banks begin to clear a massive backlog of disputed foreclosures. One in every 637 homes received a foreclosure filing in February, according to RealtyTrac.
In Houston, where both wild parties took place, one in every 689 homes received a foreclosure notice in February — up nearly 10 percent from the previous month.
Also see: Renters Beware: Fraudsters Still Lurking on Craigslist ‘Home Alone’ House Sells for $1.6 Million
%Gallery-146479% 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/2012/03/15/project-x-copycat-revelers-allegedly-wreck-500-000-home/
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Locking In Peace of Mind
WITH mortgage rates inching higher, some borrowers might want to consider a lock-in agreement, which freezes the terms of a loan while it is being processed, potentially saving borrowers thousands of dollars over the life of the mortgage.
This guarantee may be especially important for those who are refinancing, where even a quarter of a percentage point could skew a borrower’s calculations and make a refinancing less financially desirable, said Keith T. Gumbinger, a vice president of HSH.com a financial publisher in Pompton Plains, N.J.
Rates for the 30-year fixed-rate mortgage averaged 3.95 percent nationwide in March, up from 3.89 percent in February, according to Freddie Mac, though that is still significantly lower than the 4.84 average rate in March 2011. The average rate was 3.98 percent on Thursday, versus 3.99 percent the week before.
“We expect fixed-rate mortgages to gradually move higher over the next six months to about 4.25 to 4.5 percent as the country’s economic condition improves,” said Frank Nothaft, Freddie Mac’s vice president and chief economist. “This would be a move from the all-time record low rates we’ve experienced over the last few months but still at historically low levels.”
Rate lock-ins can provide buyers with some peace of mind, not to mention one less thing to think about in an otherwise onerous application process.
Lenders typically will give loan rate guarantee agreements when a borrower has a purchase agreement, but a few will provide them to those who are preapproved for a mortgage, said Rick Allen, the chief operating officer of Mortgage Marvel, an online site.
While shopping for a mortgage lender, Mr. Allen suggests inquiring about loan locks, too. “Get a copy of the rate lock agreement,” he said, noting that this would help borrowers better understand how the process works.
The cost of reserving an interest rate depends both on the duration of the lock and the amount of the loan. “The longer the lock, the more costly it is,” said Mark Lazar, an owner of Allied Financial Mortgage in River Edge, N.J. Most locks are for 30, 45 or 60 days, but some lenders will go as long as six months.
Most lenders offer some version of a free lock, Mr. Gumbinger said, though it may be only for 30 days. Others charge points — or fractions thereof — based on the loan size, which could amount to several hundred dollars. (A point is equal to 1 percent of the loan amount.) Sometimes these charges are refundable at closing, Mr. Gumbinger said.
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House of the Day: Luxury by Lake Tahoe
This $6.785 million residence, located in the luxurious Martis Camp community of North Lake Tahoe, Calif., boasts four bedrooms, 5½ baths, and an incredible array of cutting-edge amenities — including a home iPad interface system and hydronic heating throughout the flooring.
The master suite, which offers commanding views of majestic arboreal wilderness, includes a fireplace and spa-inspired bath. The lower level features a recreation-media room, complete with a surround-sound system and a bar, as well as a 1,000-bottle wine cellar and an exercise den. Moveable glass walls divide the living room from an outdoor patio and walk-out terrace, which offer extensive outdoor entertaining space including a spa, fire pit, dining area and landscaped lawn. Furnishings throughout are a combination of the rustic and the ultramodern.
%Gallery-152060% As if this all weren’t enough, Martis Camp residency offers several extra layers of luxury, including an 18-hole golf course, and a family recreation center with swimming, bowling, basketball, cinema and art. Finally, the community includes 26 miles of private trails for hiking, snowshoeing and cross-country skiing.
Brian Hull of Martis Camp has the listing.
Click on the images below to see more homes for sale near Lake Tahoe, Calif.
See more Houses of the Day on AOL Real Estate.
Got a tip for House of the Day? Know of an exceptional or unusual property currently listed for sale? Please email krisanne.alcantara@huffingtonpost.com with your suggestions and be sure to include links to listing details and photos. (Due to the volume of response, we unfortunately are unable to reply to each submission.)
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Source: http://realestate.aol.com/blog/2012/04/03/house-of-the-day-luxury-by-lake-tahoe/
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Home Builder Turns Trash into $10,000 Green Homes
Filed under: News, Home Improvement
Dan Phillips is one of the most unconventional home builders you’ll ever find. In fact, he’s more an ecological social messiah than a home builder (see video below). For $10,000, he builds affordable homes for low-income people that are attractive, energy-efficient and save landfills. Most builders purchase building materials — piles of wood, sheet rock, nails, bricks, and tiles — that are used in construction and then, when the house is finished, the waste is discarded to the dump. Phillips, 66, salvages those materials, hauling them from the trash or even picking them up on the road, to build or remodel homes for low-income buyers.
He says he’s just doing what people have been doing for years — using whatever they can scrounge up to to build shelter.
“And if you ponder what could be used,” says the Huntsville, Tex., resident, “then building materials are everywhere.”
Phillips himself has been “everywhere”: He worked as an intelligence officer in the Army, then as a dance instructor, an antiques dealer and a puzzle maker. Fourteen years ago he started a new career: Creating affordable homes for low-income families out of trash. He is a self-taught carpenter, electrician and plumber. His motivation came from the disparity he saw between
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landfills overflowing with discarded building materials and a lack of affordable housing. He started Phoenix Commotion, a for-profit company that hopes to solve the world’s social problems associated with housing.
Phillips builds homes for as little as $10,000, making them energy-efficient with tight insulation, solar hot water and even a rainwater catchment system. He hires unskilled workers, teaches them marketable construction skills and then helps them find jobs when the project is complete. He keeps the landfills shallow by using truckfuls of leftover building materials such as lumber, tile and granite. Locals even hand off their old fixtures and doors to Phillips when they remodel, which he keeps in a warehouse and distributes free to low-income and needy people and organizations.
Huntsville officials say he is saving costs as well as Mother Earth. In fact, his materials warehouse has inspired a spin-off in Houston, the nation’s third largest metropolitan area. The Houston warehouse opened in October, 2009 and within the first six months diverted 200 tons of building materials.
So far, Phillips has built 13 homes that are highly unusual, especially in Huntsville, a town of 
35,000 north of Houston whose main industry is the huge high security prison that houses Texas death row inmates.
There’s the “Bone House,” which features a stairway made of bones, floors covered in wine corks and beer bottle caps, and a skylight made from — are you ready? — a Pyrex baking dish.
There’s the Storybook House that has that medieval Hansel and Gretel feel. There’s the Budweiser House with an exterior of red, white and blue. There’s the 600-square-foot Doll House, built for Gloria Rivera, a doughnut-shop cashier who put her own thumbprints in the bright yellow stucco walls, which was constructed of almost 100 percent salvaged, donated or recycled materials.
To Phillips’s dismay, about half the homes he has built in Huntsville have been lost to foreclosure. As he told the New York Times in 2009, “You can put someone in a new home, but you cannot give them a new mindset.”
Undaunted, he is continuing to spread the story of what he does to others and preach his philosophy: You may not save the world anytime soon, but you can help tidy up your own backyard.
See photos of other amazing green homes here.
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For more green coverage, visit the Huffington Post Green section.
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.
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How Obama’s FHA Loan Plan Can Help You Refinance
Filed under: News, Financing, Foreclosures
WASHINGTON — The Obama administration is offering some relief to homeowners who have government-backed mortgages. Under a program President Barack Obama unveiled Tuesday, the government would cut the fees it charges to insure those borrowers.
The idea is that lower fees would persuade millions to refinance their loans while interest rates are near record lows. It’s the administration’s latest attempt to minimize the damage from the foreclosure crisis and help more people keep their homes.
Here’s a look at the program:
Q: What has the administration proposed?
A: Borrowers with mortgages insured by the Federal Housing Administration could refinance at half the current fee. A lower fee would follow years of rising mortgage insurance premiums. FHA is also reducing an up-front premium when it initiates a loan. The FHA charges the fees on top of standard interest rates because it backs riskier borrowers. #mini_module_blank { width: 269px; height:206px; border: none; float:left; margin:10px; font-size:12px;} #mini_module_blank img {border:none; width: 265px; height:131px; border: none; margin:0px; } #mini_module_blank .mini_main { margin: 0px; padding:0px; width:269px; height:206px; background: transparent url(http://www.aolcdn.com/travel/zing-background-no-photo)} #mini_module_blank .mini_item_header {padding:12px 0px; margin: 0px 20px; font-size:16px;} #mini_module_blank .mini_item {padding:8px 0px; margin: 0px 20px; border-bottom:1px dotted #CCCCCC;} #mini_module_blank a { color: #49A3CA; text-decoration:none; } #mini_module_blank a:hover { color: #F98419; text-decoration:underline;}
Q: Who’s eligible?
A: The administration estimates 2 million to 3 million homeowners. Most are first-time or low-income homebuyers. The FHA requires only a 3.5 percent down payment. And borrowers don’t have to prove that they’re employed. FHA borrowers can also refinance even if they’re “underwater,” or owe more on their mortgage than their home is worth.
Q: How much will those who get the reduced fees actually benefit?
A: The fee is now 1.15 percent of the mortgage balance each year. Those fees are unappealing to many borrowers who want to refinance. The plan would cut the fee to 0.55 percent. The current up-front premium would also be lowered, from 1 percent of the loan balance to .01 percent. As a result, a borrower who owed $175,000 on their mortgage could save about $1,750 in one-time fees and more than $1,000 per year in annual fees by refinancing. The borrower could save nearly $150 a month more if the interest rate declined from 5 percent to 4 percent.
Search Millions of Home Listings View photos of homes for sale and apartments for rent See Homes for Sale on AOL Real Estate See Rental Listings on RentedSpacesQ: Can those who are eligible be excluded from other government housing programs?
A: Most of the other federal housing programs, including its signature refinancing and mortgage modification programs, target other types of homeowners. So there’s little overlap with the FHA’s refinancing plan. For example, the administration’s refinancing and mortgage modification programs are for homeowners whose mortgages are owned or backed by government-controlled Fannie Mae and Freddie Mac, not the FHA.
Q: Will it work?
A: Possibly, if the reduced fees are well-advertised and borrowers are confident of saving on their mortgage payments by refinancing. If homeowners are wary of paying even a small amount to refinance, the program could fail to reach millions who are eligible. Economists said the lower fees are a modest way to help the troubled housing market but won’t turn it around. “The only thing that will do that are low interest rates and job growth,” said Susan Wachter, a professor of real estate at the University of Pennsylvania’s Wharton School. Stan Humphries, chief economist at the real estate website Zillow.com, predicted that a separate plan to compensate military service members who were wrongfully foreclosed upon would be a big help to that group. It’s unclear how many military service members would benefit.
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: Barbara Corcoran on Refinancing Do’s and Don’ts Homeowners Association Forecloses on Vet for $340 Foreclosure Starts and Sales Spiked in January, Report Says
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Protecting Your Home’s Value as Foreclosures Rise
Filed under: Home Equity
WASHINGTON (MarketWatch) — Gary Kent has more foreclosed properties to sell than ever before during his 23 years in the real estate business. The San Diego-based realty agent currently represents about 100 homes for sale, 85 of which are foreclosures. A year ago, Kent represented about 20 homes for sale with only a couple of foreclosures among them. “I feel sorry for the people who lost their homes, but I’m probably
WASHINGTON (MarketWatch) — Gary Kent has more foreclosed properties to sell than ever before during his 23 years in the real estate business.
The San Diego-based realty agent currently represents about 100 homes for sale, 85 of which are foreclosures. A year ago, Kent represented about 20 homes for sale with only a couple of foreclosures among them.
“I feel sorry for the people who lost their homes, but I’m probably going to have to best year I’ve ever had,” Kent said.
While all those foreclosed homes mean opportunity for Kent, they spell trouble for homeowners in the neighborhoods in which they are located. In addition to the potential for dragging down the values of surrounding homes as lenders try to unload, vacant foreclosures also present an inviting target for vandals and squatters.
“When there are a lot of foreclosures in a neighborhood, that will put downward pressure on other homes. The banks will try to get foreclosures off their balance sheet as fast as they can, and they will be aggressive at pricing them,” said Celia Chen, director of housing economics at Moody’s Economy.com.
Even when priced below the competition, foreclosed homes can linger on the market. Kent thinks it could take up to four months to sell the foreclosed properties in his listing book, particularly those that appeal to “low-ballers” and “bottom-feeders” willing to wait in order to pressure lenders into taking just 50 cents to 75 cents on the dollar for the homes.
Although Moody’s Economy.com sees home prices overall declining through 2008 due to excessive inventory, individual owners can take steps to make their property more attractive, Chen said. She recommended home improvements such as fresh paint and landscaping to ward off the impacts of falling prices due to a great number of foreclosures in a neighborhood.
Keeping watch
For those homeowners fearing that the “low-ballers” and banks trying to unload foreclosed homes will sap the value of their own properties, Kent suggested that residents could band together to watch out for a property.
“They could try forming a little neighborhood watch where people watch over that house to make sure there’s no vandalism, no squatters trying to move in, and to keep people from stealing the fixtures of the home,” he said.
Banks will board up houses that are vandalized or that people break into, Kent said. Making sure that doesn’t happen can keep banks from dumping problem homes at fire-sale prices, he said.
Homeowners who have to sell in an area where foreclosures are numerous might want to follow the lead of home builders, which are throwing in extras in to attract buyers while keeping up the selling price.
“One thing that the builders do is to offer to put all kinds of things into the house at no extra charge, like granite countertops,” said David Seiders, chief economist for the National Association of Home Builders. “That gives the buyer more house for the money.”
Also, paying your buyer’s closing costs is an option that some home builders take, Seiders said. Those strategies “help hold the price up, but they do come out of the builder’s margins,” he said, as they would cut into home sellers profits.
More than two million households in the subprime market have already either lost their homes to foreclosure or hold subprime mortgages that are likely to fail in coming years, according to consumer groups.
According to a recent survey from Yahoo Real Estate and Harris Interactive, 22% of homeowners are at least somewhat concerned about the possibility of foreclosure due to their inability to meet monthly mortgage payments.
But even more Americans think there is opportunity in the situation: 37% of all U.S. adults would be at least somewhat interested in buying a house in foreclosure.
Don’t sell in a panic
It’s important to think of homeownership as a long-term investment, said David Berenbaum, executive vice president with the National Community Reinvestment Coalition. “People have been in an environment where they’re flipping homes. We need to look at homeownership as promoting intergenerational wealth.”
Berenbaum added that owners should remain calm rather than panicking and trying to sell now. Owners don’t actually lose money on a home until they sell at a discount to the purchase price, he pointed out.
“We will weather this storm,” he said. “At some point the housing market will come around. What we don’t want to see are homes that are empty, home that create a destabilizing environment.”
Markets at risk
Here is a list of the 10 metro area markets where mortgage delinquency rates have increased the most between the fourth quarter of 2005 and the first quarter of 2007, according to Equifax and Moody’s Economy.com.
* Modesto, Calif. — 3.9% rise
* Stockton, Calif. — 3% rise
* Merced, Calif. — 2.8%
* Port St. Lucie-Fort Pierce, Fla. — 2.7%
* Miami-Miami Beach-Kendall, Fla. Metropolitan Division — 2.5%
* Riverside-San Bernardino-Ontario, Calif. — 2.5%
* Vallejo-Fairfield, Calif. — 2.4%
* Las Vegas-Paradise, Nev. — 2.3%
* Atlantic City, N.J. — 2.2%
* Cape Coral-Fort Myers, Fla. — 2.2%
Ruth Mantell is a MarketWatch reporter based in Washington.
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Source: http://realestate.aol.com/blog/2008/01/28/protecting-your-homes-value-as-foreclosures-rise/
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Obama: Mortgage Help Coming for Military, FHA Borrowers
Filed under: News, Foreclosures, Refinancing
WASHINGTON — President Barack Obama is aiming mortgage relief at members of the military as well as homeowners with government-insured loans, the administration’s latest efforts to address a persistent housing crisis.
In his first full news conference of the year Tuesday, Obama was to announce plans to let borrowers with mortgages insured by the Federal Housing Administration refinance at lower rates, saving the average homeowner more than $1,000 a year. Obama also was detailing an agreement with major lenders to compensate service members and veterans who were wrongfully foreclosed upon or denied lower interest rates.
A senior administration official described Obama’s proposals to The Associated Press, ahead of the announcement, on the condition of anonymity.
The efforts Obama is announcing do not require congressional approval and are limited in comparison with the vast expansion of government assistance to homeowners that he asked Congress to approve last month. That $5 billion to $10 billion plan would make it easier for more borrowers with burdensome mortgages to refinance their loans.
Lower Refinancing Fee
Under the housing plans that Obama was to announce Tuesday, FHA-insured borrowers would be able to refinance their loans at half the fee that the FHA currently charges. FHA borrowers who want to refinance now must pay a fee of 1.15 percent of their balance every year. Officials say those fees make refinancing unappealing to many borrowers. The new plan will reduce that charge to 0.55 percent. #mini_module { width: 265px; height:220px; border: none; float:left; margin:10px; font-size:12px;} #mini_module img {border:none; width: 265px; height:131px; border: none; margin:0px; } #mini_module .mini_title { margin: 0px; padding:0px; width:265px; height:131px;} #mini_module .mini_main { margin: 0px; padding:0px; width:265px; height:85px; background: transparent url(http://www.aolcdn.com/travel/bg-short)} #mini_module .mini_item {padding:12px 0px; margin: 0px 20px; border-bottom:1px dotted #CCCCCC;} #mini_module a { color: #49A3CA; text-decoration:none; } #mini_module a:hover { color: #F98419; text-decoration:underline;}
With mortgage rates at about 4 percent, the administration estimates a typical FHA borrower with $175,000 still owed on a home could reduce monthly payments to $915 a month and save $100 a month more than the borrower would have under current FHA fees.
Though 2 million to 3 million borrowers would be eligible, the administration official would not speculate how many would actually seek to benefit from the program. The FHA provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. The loans typically go to homeowners who do not have enough equity to qualify for standard mortgages. It is the largest insurer of mortgages in the world.
Review of Vets’ Foreclosures
For service members and veterans, Obama will announce that major lenders will review foreclosures to determine whether they were done properly. If wrongly foreclosed upon, service members and veterans would be paid their lost equity and also be entitled to an additional $116,785 in compensation. That was a figure reached through an agreement with major lenders by the federal government and 49 state attorneys general.
Under the agreement, the lenders also would compensate service members who lost value in their homes when they were forced to sell them due to a military reassignment.
Obama is holding the news conference in the midst of a modestly improving economy. But international challenges as well as a stubbornly depressed housing market remain threats to the current recovery and to his presidency.
Obama has not held a full news conference since November. The White House scheduled this one on the same day as the 10-state Super Tuesday Republican presidential nominating contests. While aides insisted the timing was coincidental, it follows a pattern of Obama seeking the limelight when the attention is on the GOP.
The news conference comes amid a new sense of optimism at the White House. Obama’s public approval ratings have inched up close to 50 percent. The president recently won an extension of a payroll tax cut that was a main element of his jobs plan for 2012. Economic signals suggest a recovery that is taking hold.
Still, he will probably face questions about the pace of the recovery. The unemployment rate in January was 8.3 percent, the highest it has been in an election year since the Great Depression. With rising gasoline prices threatening to slow the economy, Obama has also faced attacks from Republicans over his energy policy.
Iran’s nuclear ambitions will also command attention in the aftermath of his meeting Monday with Israeli Prime Minister Benjamin Netanyahu. Tension over Iran has already contributed to higher oil prices, and Israel’s threats of pre-emptive military strikes to prevent Tehran from building a nuclear bomb have dominated Washington discourse for weeks.
Other developments in the Middle East, where turmoil has soured some of the promise of last year’s Arab Spring, are also likely to be addressed. Syria’s bloody crackdown on protesters has increased pressure on Obama to intervene. Republican Sen. John McCain on Monday urged the United States to launch airstrikes against Syrian President Bashar Assad’s regime to force him out of power.
Copyright 2012 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
Also see: Only 5% of Underwater Homes May Qualify for Write-Downs REO to Rental: Fannie Mae Dips Further Into Foreclosure Pool
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Mortgage Rates Stay Low, But Homebuyers Aren’t Budging
Filed under: News, Economy, Financing, Refinancing
WASHINGTON — The average rate on the 30-year fixed mortgage fell to 4 percent this week, nearly matching the all-time low hit just one month ago.
Freddie Mac said Thursday that the rate on the 30-year loan dropped from 4.10 percent last week. Four weeks ago, it dropped to 3.94 percent — the lowest rate ever, according to the National Bureau of Economic Research.
The average rate on the 15-year fixed mortgage fell to 3.31 percent from 3.38 percent. Four weeks ago, it too hit a record low of 3.26 percent.
Mortgage rates tend to track the yield on the 10-year Treasury note. They yield fell this week after investors shifted money out of stocks and into the safety of Treasurys on fears that Europe’s debt crisis could worsen.
The Federal Reserve is also shifting more money into longer-term Treasurys to try to force mortgage rates lower. Treasury yields fall when buying activity increases.
Less Home Buying Than Expected
Federal Reserve Chairman Ben Bernanke said Wednesday that low rates have failed to spur the increase in home buying or mortgage refinancing that government officials had expected.
High unemployment and declining wages have made it harder for many people to qualify for loans. Many Americans don’t want to sink money into a home that could lose value over the next three to four years. And most homeowners who can afford to refinance already have.
%Gallery-137999% The number of Americans who bought previously occupied homes fell in September and is on pace to match last year’s dismal figures — the worst in 13 years.
Sales of new homes rose last month after four straight monthly declines. But the increase was largely because builders cut their prices. And it followed a peak buying season that was the worst on records going back nearly 50 years.
A Run on Refinancing
The low rates have caused a modest boom in refinancing, but that benefit might be wearing off. Most people who can afford to refinance have already locked in rates below 5 percent.
Rates have been below 5 percent for all but two weeks in the past year. Just five years ago they were closer to 6.5 percent. Ten years ago, they were above 8 percent.
The average rate on the five-year adjustable loan fell to 2.96 percent from 3.08 percent. That matches a record low hit four weeks ago.
The average rate on the one-year adjustable loan declined to 2.88 percent from 2.90 percent. It fell last month to 2.81 percent, the lowest on records dating to 1984.
The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for the 30-year fixed mortgage fell from 0.8 to 0.7. The average fee on the 15-year fixed loan was unchanged at 0.7. The average fees on the five-year adjustable loan one-year adjustable loan were also unchanged at 0.6.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.
Copyright 2011 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
Also see: Open Houses of the Week: Hobnob With the 1 Percent Where Are the Real Home Bargains? Not Where You Think! Mortgage Giant Asks Taxpayers for Another $6 Billion
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/2011/11/04/mortgage-rates-stay-low-but-buyers-arent-budging/
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Renters: Raise Your Credit Score Now
Filed under: News, Renting, Credit
It’s probably safe to say that it isn’t having a new apartment that’s hard, it’s getting it. First, there’s the legwork, then there’s the scraping together a security deposit and first and last months’ rent. But for some people, it’s that pesky credit score that stands between them and the garden apartment with tons of light and the in-house washer and dryer.
So how can you start fixing your credit score before you find yourself crying as someone else closes on the affordable two-bedroom of your dreams? #mini_module { width: 265px; height:220px; border: none; float:left; margin:10px; font-size:12px;} #mini_module img {border:none; width: 265px; height:131px; border: none; margin:0px; } #mini_module .mini_title { margin: 0px; padding:0px; width:265px; height:131px;} #mini_module .mini_main { margin: 0px; padding:0px; width:265px; height:85px; background: transparent url(http://www.aolcdn.com/travel/bg-short)} #mini_module .mini_item {padding:12px 0px; margin: 0px 20px; border-bottom:1px dotted #CCCCCC;} #mini_module a { color: #49A3CA; text-decoration:none; } #mini_module a:hover { color: #F98419; text-decoration:underline;}
1. What is a credit score?
A credit score is a number between 300-850 based on — primarily — a person’s credit history. The higher the number, the more reliable the renter. The credit score can be assessed by a landlord to reveal the likelihood that a potential renter will follow through on his or her monthly rental agreement.
2. Where does a credit score come from?
A credit score — also known as a FICO score (from the Fair Issac Corporation) — is derived by looking at five major categories (listed in order of the most to least heavily weighted): The renter’s payment history; what the renter still owes; the length of the credit history of the renter; how much new credit the renter has; and the type of credit the renter has used.
3. How does ones credit score go down?
When a renter does not make his or her credit or rental payments on time or they have racked up so much debt that they become unable to pay a re
See photos of apartments and homes for rent in your area on RentedSpaces
gular minimum payment, their credit score might be primed to plummet. Further, if a person is a new credit holder or if they are applying for multiple credit sources, they can expect their number to appear less than stellar to a landlord. But more than any of those, filing for bankruptcy can knock a renter’s score down up to 250 points and will stay on a credit report for 10 years.
4. What number does a landlord expect your credit score to be?
When a bank loans money, according to this recent Investopedia.com article, lenders consider anything above 770 a top-tier score and anything below 620 subprime. Landlords renting homes are — in some cases — willing to overlook a mediocre credit score if the would-be tenant is able to pay a larger down payment or get a co-signer.
5. So what can you do to raise your credit score?
o. Don’t Use Credit: It might sound obvious, but the best way to rebuild bad credit is to stop accruing debt. Cut up your credit cards and go back to paying with checks and cash. It might sound old fashioned, but it will help you in the future.
o. Make a Calendar: It’s easy in the throws of the day-to-day to forget a monthly bill or two – especially if there are five or six or more bills to pay off each month. So put it on your calendar or have reminders sent to your inbox. Even better, set up an automatic bill pay so you can’t forget.
o. Have Fewer Credit Cards: Another no-brainer – why overtax your pocket book with all that plastic? The more open credit cards you have, the lower your credit score will be.
o. Stay in Touch With Your Creditors: Make sure to devote some time each month to going over your monthly statements. Catch mistakes early and report them immediately. The more mistakes you stop in their tracks, the higher your score will be – and it will keep your interest from skyrocketing.
o. Pay More: Don’t just pay what you have to, pay more. If you overpay the interest or your minimum balance on your credit cards or student loans each month, you will be improving your overall credit. So look and see what you owe, then add fifty.
Your credit score isn’t the only thing in the way of a great rental, but it’s an important one. And the good news is, it’s never too late to make it the number you know you should have.
Want to know how to deal with other rental issues? Here are some AOL Real Estate guides that can help:
- Tips for Finding a Rental Apartment
- Apartment Security for Renters
- Are You Paying Too Much for Your Rental?
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Source: http://realestate.aol.com/blog/2011/01/26/renters-raise-your-credit-score-now/
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Where Are the Real Home Bargains? Not Where You Think!
Filed under: News, Advice, Buying, Financing, Foreclosures, How To, Investing, Renting, Selling
What if you could buy a house for $25,000 in a neighborhood that wasn’t a battle-scarred slum and rent it out for $750 a month as soon as the ink was dry on the deal? Where are these deals that let you recapture your investment in just three years and from then on enjoy a steady monthly income from the property?
If you said Phoenix, Las Vegas or south Florida, you’d be wrong says Paul Habibi, a principal of Habibi Properties and real estate professor at UCLA Anderson School of Management.
Here’s a hint to the place Habibi thinks is the hottest investment around.
Yep, Habibi is humming “Kansas City” right along with Wilbert Harrison, Fats Domino and the 50 or so other recording artists who covered that tune. As for a real estate investment, Habibi says Kansas City, Mo., is ripe for the picking.
Habibi’s approach to real estate deals is not for novice investors, but it is for those who can tolerate some risk and buy into a statistician’s mind. He’s developed a matrix that filters the top 30 MSAs (metropolitan statistical areas) through their projected growth rates (increasing population is good), unemployment (the lower, the better), and whether the city has a diversified job platform (Silicon Valley won’t get his money).
He also rejects places where other investors have already scooped up the bargains (forget Florida and Las Vegas). Phoenix, popular with many investors, also fails his litmus test. It was built as a retirement community and lacks a job infrastructure for future growth, he says. And those Texas cities that everyone bandies about — Dallas, Austin, San Antonio — while their prices have remained flat and they seem to have escaped relatively unscathed from the recession, there are so many investors already there that they’re tripping over one another.
Kansas City is just about perfect, said Habibi, whose company recently concluded its first phase of buying 32 single-family homes there in “C-level” neighborhoods for a price point of $25,000 each, spent $5,000 to $10,000 on repairs and now rents them out for about $750 each. He expects to double or triple his holdings in Kansas City with his second investment fund, for which there is a minimum buy-in of $100,000 for accredited investors to participate.
Kansas City’s population grew at a faster-than-national average pace from 2000 to 2010. With an unemployment rate of 8.7 percent, it falls below the national level of unemployment of 9.1 percent. The city has a diversified industry base that includes Sprint Nextel Corporation, Hallmark Cards, the Fort Leavenworth military base, UPS and a Ford assembly plant. Google has selected the city for its ultra high-speed broadband network project. Plus Kansas City has a business-friendly reputation for encouraging retention of companies.
Habibi discourages individual investors without much experience or tolerance for risk to try to fly solo. He credits much of his success from having an infrastructure in place — people to scout and inspect the homes, screen for tenants, manage the properties on-site and swiftly deal with eviction issues.
For those who don’t want to listen to the expert, click on the images below of some homes for sale in the Kansas City area that are worth checking out:
See other homes for sale in the Kansas City area at AOL Real Estate.
Also see: College Town Real Estate Investments Score High Marks Upside Down on Your First House? Just Buy a Second One! Viewpoint: Why No New Houses May Be a Good Thing
%Gallery-137999% 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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After Slowdown, Foreclosures Rise Again
Filed under: Foreclosures
LOS ANGELES — More U.S. homes entered the foreclosure process in October than in the previous month, with Florida, Pennsylvania and Indiana registering among the largest monthly increases, new data show.
Some 77,733 properties received an initial default notice last month, up 10 percent from September, foreclosure listing firm RealtyTrac Inc. said Thursday.
The number of homes scheduled to be auctioned or repossessed by lenders also posted monthly increases.
All told, notices of default, scheduled auctions and bank repossessions – warnings that can eventually lead to a home being lost to foreclosure – hit a seven-month high in October.
The numbers are further evidence foreclosure activity is picking up.
The activity slowed a year ago after problems surfaced with the way many lenders were handling foreclosure documentation, namely shoddy mortgage paperwork comprising several shortcuts known collectively as robo-signing. Many of the nation’s largest banks reacted by temporarily ceasing all foreclosures, re-filing previously filed foreclosure cases and revisiting pending cases to prevent errors.
But banks appear to be moving past those problems now and starting to tackle a swelling backlog of homes with mortgages that have gone unpaid – something that lenders are seeing more of as the economy struggles and unemployment remains high.
The rate that homeowners were 60 or more days late on their mortgage payment rose in the June-to-September period for the first time since the last three months of 2009, according to TransUnion.
The credit reporting agency said 5.88 percent of homeowners missed two or more payments, an early sign of possible foreclosure. That was up from 5.82 percent in the second quarter of 2011.
The number of U.S. homeowners underwater on their mortgage, or owe more than their homes are worth, represent another potential source of trouble for lenders.
As of June 30, some 22.5 percent of all U.S. homes had a mortgage that was under water, according to CoreLogic. That’s 10.9 million properties. Another 2.4 million borrowers had less than 5 percent equity in their home, the firm said.
Industry experts say a housing market turnaround isn’t likely to occur as long as there remains a glut of potential foreclosures hovering over the market, so October’s increase in foreclosure activity means a potentially faster revival for housing.
“We all know that there is an underlying amount of properties that need to go into foreclosure and the sooner we clear that the sooner we can get housing to a normal level,” said RealtyTrac CEO James Saccacio.
In some states, the number of homeowners put on notice by banks for missing payments far exceeded the national average for October.
Florida posted a 28 percent jump in October from September in homes receiving an initial default notice. Pennsylvania saw a 50 percent increase and Indiana registered a 61 percent gain, according to RealtyTrac.
In some cases, though, government intervention is slowing lenders down.
Take Nevada, where a law went into effect Oct. 1 requiring that foreclosure documents must be filed in the county where a property is located and a lender must provide a notarized affidavit detailing their legal right to proceed.
Saccacio said the law helped cause a 75 percent drop in initial default notices in Nevada last month versus September, bringing defaults to the lowest level since June 2006 at the peak of the housing boom.
“It’s like a rain delay,” Saccacio said. “We’ll eventually see foreclosure processing go up.”
Despite registering a 34 percent drop in foreclosure activity overall, Nevada still registered the highest foreclosure rate in the nation for October, with one in every 180 households receiving a foreclosure-related notice, RealtyTrac said.
In all, 230,678 U.S. homes received a foreclosure-related warning last month, up 7 percent from September, but down nearly 31 percent from October 2010.
Foreclosure auctions rose 8 percent from September, but climbed by more than 35 percent in several states, including Florida, Minnesota and Illinois.
Lenders took back 67,624 properties in October, up 4 percent from the previous month, but down 27 percent from a year earlier.
Bank repossessions increased by a far larger margin in several states. In Oregon they climbed 45 percent, while in New Jersey they posted a 48 percent jump. Indiana registered a 73 percent increase.
Copyright 2011 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
Also see: ‘Mortgage Prof’: 5 Reasons Banks Would Rather Foreclose The Mortgage Fix That Can Save the Economy 5 Foreclosure Flip Tips From the ‘Flip Men’
%Gallery-133958% 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/2011/11/10/after-slowdown-foreclosures-on-the-rise-again/
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Home Equity Loan Equals Affordable Education
Filed under: Home Equity
After 18 years, Kate Hoy of Phoenix was sick of her career as sales representative for company that sold electrical and mechanical components. She was ready for change. But the single mother didn’t have a spouse’s second income to help her through a transition period. So to help explore the options, Hoy, 48, took out a home equity line of credit (HELOC) for $50,000 while she still had a steady income. Unlike a traditional home
After 18 years, Kate Hoy of Phoenix was sick of her career as sales representative for company that sold electrical and mechanical components. She was ready for change.
But the single mother didn’t have a spouse’s second income to help her through a transition period. So to help explore the options, Hoy, 48, took out a home equity line of credit (HELOC) for $50,000 while she still had a steady income. Unlike a traditional home equity loan, which is a one-time lump sum loan usually at a fixed rate, a HELOC is tapped only when bills are paid, like the line of credit on a credit card. With a HELOC, the interest rate fluctuates month to month.
What also made a HELOC attractive to Hoy was she was able to finance her life change without knowing exactly where she was headed. Most school loans were not an option due to Hoy’s income at the time she opened her HELOC.
She soon began attending night classes at Scottsdale Community College. The film program caught her interest, and she became a full-time student in fall 2005, graduating with a motion picture and television associate’s degree in 2008.
“I opted to go to school full-time, and the loan made it possible,” says Hoy. “I couldn’t have made a better decision.”
Now Hoy is a multimedia video producer for Arizona Department of Health Services E-Learning Team and building her own production business on the side.
Despite the housing slump, home equity loans remain a popular option for paying education costs, since the interest is tax deductible and “the rates are unbelievably low,” says Hoy, whose rate adjusts monthly between 3 percent and 4 percent. Still, some families are not comfortable putting their home at risk to foot the bill for college or grad school.
Another concern is that the interest rates on most home equity loans and lines of credit are higher than the rates on federal loan programs such as a Stafford or PLUS loan. However, home equity rates are generally lower than those on most private education loans.
Lastly, using a home equity loan to pay for college will lower a student’s eligibility for financial aid, since proceeds from a home equity loan that aren’t used for tuition will be factored into the need-analysis formula. Opening a home equity line of credit eliminates this concern because the line of credit is tapped only when paying bills.
As with any other loan for education, it is important to reconsider all costs. Hoy has 10 years to repay her HELOC, which she says is currently tapped out. Though her current income hasn’t yet caught up to what it was in her previous career, she is confident she will be able to pay off the loan with her new vocation. But the educational experience her home equity loan provided is priceless.
“I had never gone to school full-time before, I had always worked,” says Hoy, clearly pleased by her accomplishment. “It was awesome.”
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Source: http://realestate.aol.com/blog/2010/12/09/home-equity-loan-equals-affordable-education/
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Tips for Choosing Home Builders
If you have decided to build your next home, congratulations! You will have plenty of crucial decisions to make within the upcoming months from where to build your home to what colour to paint the master bedroom walls. The first decision to make, of course, is what builder to hire. There are dozens of different home builders [...]
Source: http://www.brothernwla.org/tips-for-choosing-home-builders/
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Loan Officer FREE Video Mortgage Training Marketing Tips
www.loanofficersforprofit.com Free video training, software, blog and newsletters close more loans now! Here go over marketing tips that i use to generate 7.1 million in commissions.
Source: http://fha-interest-rates.org/2012/05/14/loan-officer-free-video-mortgage-training-marketing-tips/
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Are Low Mortgage Rates Killing the Housing Market?
Filed under: News, Advice, Buying, Economy, Financing, Investing, Selling
This may fall under the category of “too much of a good thing,” but there is growing sentiment that the historically low interest rates on mortgages are actually fueling the stagnation of the housing market.
By keeping rates low, the hope was that more people would be motivated to buy homes. And when that didn’t happen, fingers of blame were pointed in the direction of more stringent lending standards. People can’t qualify for loans, can’t avail themselves of the low rates — so went the bank-bashing.
But along came some numbers that tell a different story. Yes, lending standards are making it tougher to qualify for loans now, but the reality is that fewer people are even trying. The national Mortgage Bankers Association, which tracks new mortgage applications weekly, says those applications were down 14.9 percent last week from one week earlier. The group expects to see mortgage originations fall from an estimated $1.2 trillion in 2011 to $900 billion in 2012.
Could it be that when Federal Reserve Chairman Ben Bernanke announced that the low interest rates would be around through 2013, buyers just plopped back on their couches waiting to see if the housing prices would fall even further?
The ‘Luxury of Waiting’
“By keeping rates low for two years, you gave buyers the luxury of waiting to see if the market is at the bottom,” says Paul Habibi, professor of real estate at UCLA’s Anderson School of Business Management. “Why wouldn’t you wait if you were a buyer?” he asks. “There are no expectations of home value appreciation, so all that low interest rates have done is create a big holding pattern in buyer behavior.”
So should we be praying for rates to start creeping up?
“Rising rates are absolutely a better motivator than falling ones,” says Dan Green, loan officer with Waterstone Mortgage, who runs the award-winning TheMortgageReports.com website. He notes that for the second straight year, low rates sparked a boom in refis, but did little to help the purchase market.
It’s kind of maddening for mortgage guys like Green who underscore that a 1 percent mortgage rate drop, like the one we’ve had since last year, translates into an instant 11 percent increase in purchasing power.
“Falling mortgage rates do more to help home affordability than falling home prices,” he says. Yet still no one is buying.
Which leads to the next line of thinking: If lower interest rates immobilized buyers, might not rising rates serve as a cattle prod? A few good pokes in the bellies of reluctant buyers might just get them off the couch and back into the game.
Also see: Want a Mortgage? Avoid These 8 Mistakes Upside Down on Your First House? Just Buy a Second One! Mortgage Mod Hell: Trapped Between Lenders, Collectors
%Gallery-137795% 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/2011/10/31/are-low-mortgage-rates-killing-the-housing-market/
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Young Real Estate Investor: Where to Stash Extra Cash?
Filed under: Advice, Investing, Refinancing
Andy Buman, 29, got interested in real estate a few years ago while working in construction. Since then, he has purchased two bank-owned single-family homes near Omaha, Neb., as rentals, and last fall bought a primary residence for himself and his fiancée, Valerie (both pictured at left). He has managed to save $20,000 in cash, and is looking for the smartest way to apply it.
Buman, an Iowa State graduate who now manages a call center, comes from a family of strivers. His great-grandfather emigrated from Germany and started the farm in Harlan, Iowa, where Buman grew up — and where his uncles and grandfather still raise 2,000 head of cattle and 1,000 acres of corn. (His dad went into banking.)
From the outset, Buman focused his real estate interests on a few small towns surrounding a retail distribution warehouse and a trucking center, about 25 miles from Omaha. The Omaha/Council Bluffs, Iowa metropolitan area had an unemployment rate of 4.9 percent in June, which explains how Buman managed to rent both homes five hours after listing them.
“There’s a lot of employment — services, farming, cattle, railroads, stores — it’s not hard to get a job here,” says Buman. “A lot of employees want to be close to work and the cost of living in these little towns is next to nothing.”
His first purchase was a two-bedroom, 900-square-foot home for $24,000. He invested $5,000 in repairs, rented it for $550 a month, and has already paid off the mortgage. Buman followed up with a four-bedroom 1,500-square-foot home. He paid $34,500, invested $7,000 in repairs and rented it for $700 a month. The home still has a mortgage balance of $16,500 at 5.5 percent.
Last fall, Buman and his college sweetheart, who are marrying later this month, bought a three-bedroom ranch 10 minutes from Omaha for $185,000. It’s close to family, and to the University of Nebraska Medical Center, where Valerie begins her residency next spring.
The home has a 30-year, fixed-rate mortgage at 4.25 percent, and a balance of $168,000. When the balance on the loan falls below $148,000, the couple can stop paying mortgage insurance, which costs $94 a month.
Buman’s question: With his extra $20,000, should he pay off the mortgage on the rental property? Pay down the single-family home to eliminate the mortgage insurance payment? Or consider another option?
See the full story at Daily Finance.
Also see: College Town Real Estate Investments Score High Marks Low Refi Rates Are Great, But Not for Everyone 5 Reasons Why Real Estate Deals Collapse
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/2011/09/08/young-real-estate-investor-where-to-stash-extra-cash/
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5 signs that it’s a good time to sell
5 signs that it’s a good time to sell
Why desperate homeowners could find relief this year
Traditionally, most homes have sold during the spring months. In the current volatile housing market, the time of year is not the most reliable predictor of the best time to sell.
Homes certainly show better in spring than they do on a dark and dreary winter day. Lately, however, weather patterns are hard to predict.
The weather has some effect on home sales. It can slow things down if incessant rain keeps sellers from being able to prepare their homes for sale. However, a bigger influence on the housing market is the overall economic situation and its impact on buyers’ psyche.
Normally, the home-sale market ramps up in March or April and stays busy until the beginning of July when the market tends to slow down for the summer. The 2011 home sales went counter to this. The market was active at the beginning of the year, but stalled in April. If you waited until spring to sell last year, you would have missed the best selling opportunity of the first half of 2011.
Impatient Buyers Target Homes Before They Go on Sale | RISMedia
Impatient Buyers Target Homes Before They Go on Sale
By Jim Buchta
(MCT)—House hunters frustrated with the market’s supply of homes have shifted their search from the streets to underground.
More buyers are targeting homes that haven’t yet hit the market, a trend agents say will grow as inventory shrinks and the mismatch of what’s available and what’s desired continues.
Such back-pocket deals used to involve mostly luxury homes where buyers and sellers wanted to keep the sale hush-hush. But lower-priced houses are becoming a bigger part of the mix because even those are in short supply.
Working behind the scenes gives buyers access to the deep well of homeowners who would like to sell, but don’t think the market is healthy enough to list. Agents say they identify these sellers through referrals, as well as track those who listed their homes but backed out when they couldn’t sell. There are also buyers who work with agents to make unsolicited bids on homes they think fit their needs.
“There is a shadow market out there with a lot of people who want to sell,” says Joe Grunnet, a broker in Minneapolis. Homeowners “just don’t know they can sell in this market. They still think the world is coming to an end.”
Housing experts say there is a robust stash of homes that aren’t on the Multiple Listing Service. CoreLogic says that for every two houses available in the United States in January, there was one in the “shadow,” or not yet on the market. There’s also a deep overhang of prospective sellers who have already decided to rent their homes rather than sell.
Mike Blood, who struggled to find a $150,000 to $200,000 home in the northern suburbs, recently caught a break. He spotted a construction dumpster in front of a house in Blaine, Minn., that he saw during an earlier hunt.
After learning that it was being readied for resale, he and his agent made an offer even though the home was months from being listed.
“I was so frustrated,” says Blood, who expects to close on the home next month. “And felt like I didn’t have anything to lose.”
Blood didn’t disclose the purchase price. He said he looked at about 60 homes, but they needed too much work or he got outbid.
Grunnet, whose firm specializes in sales and rentals of urban condos, said the stock of available units downtown is so tight that he often runs down the list of owners who are renting out their units to see whether they would sell.
During the first four months of this year, he said his brokerage has already sold more off-market properties than in the previous three years combined.
For Alison and Fred Parks, the decision not to list was a way to test the market and avoid having strangers traipsing through their $1 million-plus condo near the Mississippi River in downtown Minneapolis.
“We’re private people, living in a popular neighborhood,” they said.
The Parkses contacted Cindy Froid, a local agent who says that, on average, 30 to 40 percent of her deals come together before a public listing.
The couple gave Froid three months to sell, and it ended up selling within days to someone who already lived in the neighborhood for the full list price of $1.4 million.
Unusually low inventory is forcing Froid to get more creative in her efforts to reach prospective sellers. “It is a function of necessity,” she said. “It’s hunting and gathering. If it’s not online, I’m going to try to find it for you.”
Graham Smith, the agent who helped Blood, said that in some ways these premarket deals are simply a return to the basics.
“It’s good old-fashioned networking, that’s all it is,” he said. “It’s just using the tools available today to make it easier and more efficient to sell houses.”
©2012 the Star Tribune (Minneapolis) Distributed by MCT Information Services
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Gazillionaire Larry Ellison Lists Mansion at a Loss, Ho-Hum
Filed under: News, Buying, Celebrity Homes, Economy, Lifestyle, Selling
Don’t cry for him Argentina, for the truth is he never visited you anyway. Gazillionaire Larry Ellison has listed his Woodside, Calif., property at $19 million, which is a few million less than he reportedly paid in 2005. Sorry, we’re still not crying here; Forbes puts his wealth at about $33 billion, so this is chump change.
Ellison, co-founder and CEO of Oracle, owns multiple homes and while he used this estate to hold his fourth wedding — a marriage since ended — he never lived here full time. Nevertheless, it’s an awful nice mansion — if but one of many owned by the flamboyant software king.
The main home on the property is a two-story Colonial with about 5,800 square feet, built in 1968. The gated compound has almost seven acres and loaded with spacious lawns, mighty pretty gardens and lots of equestrian trails. There is a dark-bottom swimming pool rimmed with rock waterfalls and stepping stones across the water. The property has a beach volleyball court, a private guest house and two barns housing nine stalls, each with private turnout. Since Ellison is a major tennis buff — or at least likes to watch it — we assume there is a tennis court somewhere here as well.
%Gallery-137618% The most surprising thing for us about this property was to learn it isn’t the most expensive place in Woodside. Maybe that’s why Ellison, who owns more properties than any one real estate writer can possibly be expected to keep track of, has put it on the market. We know that he has the best house on Malibu’s best beach — an affair built from five contiguous properties he snapped up for a couple of hundred million — and we know that last spring he bought a San Francisco neighbor’s adjacent home for $40 million (heck, can you really put a price tag on having an unobstructed view?). Ellison also had his Atherton, Calif., estate — the one that he built to replicate a 16th century Japanese tea house — listed a few years ago for $16 million. Records show he no longer owns it, but offer no clues what it sold for or to whom. And then of course there was his purchase last January of the Porcupine Creek estate in Rancho Mirage for a reported $42.9 million. Nice golf course and all.
We are sure there are other homes — not to mention the yachts — but listing them would only raise the question of just how many homes does one actually need. Perhaps it’s time to do a real estate purge.
Brent Gullixson of Alain Pinel Realtors and Mary Gullixsen of Unique Homes share the Woodside listing.
Click on the images below to see other Woodside, Calif., homes for sale.
More on AOL Real Estate: Find out how to calculate mortgage payments. Find homes for sale in your area. Find foreclosures in your area. See celebrity real estate.
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Mortgage Rates Stay Low, But Homebuyers Aren’t Budging
Filed under: News, Economy, Financing, Refinancing
WASHINGTON — The average rate on the 30-year fixed mortgage fell to 4 percent this week, nearly matching the all-time low hit just one month ago.
Freddie Mac said Thursday that the rate on the 30-year loan dropped from 4.10 percent last week. Four weeks ago, it dropped to 3.94 percent — the lowest rate ever, according to the National Bureau of Economic Research.
The average rate on the 15-year fixed mortgage fell to 3.31 percent from 3.38 percent. Four weeks ago, it too hit a record low of 3.26 percent.
Mortgage rates tend to track the yield on the 10-year Treasury note. They yield fell this week after investors shifted money out of stocks and into the safety of Treasurys on fears that Europe’s debt crisis could worsen.
The Federal Reserve is also shifting more money into longer-term Treasurys to try to force mortgage rates lower. Treasury yields fall when buying activity increases.
Less Home Buying Than Expected
Federal Reserve Chairman Ben Bernanke said Wednesday that low rates have failed to spur the increase in home buying or mortgage refinancing that government officials had expected.
High unemployment and declining wages have made it harder for many people to qualify for loans. Many Americans don’t want to sink money into a home that could lose value over the next three to four years. And most homeowners who can afford to refinance already have.
%Gallery-137999% The number of Americans who bought previously occupied homes fell in September and is on pace to match last year’s dismal figures — the worst in 13 years.
Sales of new homes rose last month after four straight monthly declines. But the increase was largely because builders cut their prices. And it followed a peak buying season that was the worst on records going back nearly 50 years.
A Run on Refinancing
The low rates have caused a modest boom in refinancing, but that benefit might be wearing off. Most people who can afford to refinance have already locked in rates below 5 percent.
Rates have been below 5 percent for all but two weeks in the past year. Just five years ago they were closer to 6.5 percent. Ten years ago, they were above 8 percent.
The average rate on the five-year adjustable loan fell to 2.96 percent from 3.08 percent. That matches a record low hit four weeks ago.
The average rate on the one-year adjustable loan declined to 2.88 percent from 2.90 percent. It fell last month to 2.81 percent, the lowest on records dating to 1984.
The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for the 30-year fixed mortgage fell from 0.8 to 0.7. The average fee on the 15-year fixed loan was unchanged at 0.7. The average fees on the five-year adjustable loan one-year adjustable loan were also unchanged at 0.6.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.
Copyright 2011 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
Also see: Open Houses of the Week: Hobnob With the 1 Percent Where Are the Real Home Bargains? Not Where You Think! Mortgage Giant Asks Taxpayers for Another $6 Billion
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/2011/11/04/mortgage-rates-stay-low-but-buyers-arent-budging/
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Loan Thaw? Average Mortgage Up by $20,000, Study Says
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.
%Gallery-146461% 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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Cutoff Date for Relief Loan Applications Fast Approaching
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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9 Unconventional Ways to Remodel Your Home
Filed under: News, Home Improvement
By Conventional wisdom, as it relates to houses, is often too much convention and not enough wisdom.
Every year, somebody publishes a list of which conventional home improvements will give you the best (or the worst) return on your remodeling investment: Remodel a bathroom. Replace your siding. Don’t build a swimming pool. Paint everything neutral colors.
If “return on investment” (ROI) is why you bought a home, or why you’re remodeling one, you can stop reading now. Because the rest of this article isn’t for you.
Three, two, one … still here?
You invest in your home to improve livability first, not value. If you get more value in the process, consider it a bonus, but don’t make ROI your prime directive.
Let me rephrase the remodeling-ROI question this way: What are some cost-effective ways to improve the livability of your house?
Here’s my short list:
1. Walk-in pantry instead of kitchen cabinets.
Kitchen cabinets are expensive. Half of them are up high on the wall where they’re hard to reach, and the wall space they take up could be better used for windows. A pantry takes up less space, stores a lot more, is much easier to use, and costs less to build.
2. Comfortable shower instead of big bathtub.
My firm does a lot of work in late-70s/early-80s neighborhoods that are loaded with huge tubs. We’re taking them all out, one at a time, and replacing them with comfortably-sized showers (not the racquetball-court sized ones you see in home shows) that people actually use every day.
A shower takes up less space, uses less hot water, and is far more sanitary than a big tub.
3. Group windows together facing best views instead of scattering them around the house.
Got a great view somewhere? Bring it into the house with lots of glass. Take excess windows from bedrooms and baths and use them to connect the inside of the house with the outside.
We once remodeled a house on the coast of Lake Erie that had one window — one — facing the lake. Hey pal, did ya notice the Great Lake in your backyard?
4. Keep ceiling heights reasonable for the room size.
“Volume” ceilings do not automatically make better rooms. They just make taller rooms. Rooms that are harder to decorate and more expensive to heat and cool. Instead, focus attention on a view, a large fireplace, or other element and away from the ceiling height. Use wall trim and multiple paint colors to break up the volume of the room and create the illusion of height.
5. Spend more time planning, and less money building.
I toured a client’s existing home before we began designing the new one. “Of course,” she said as we peeked in on the kids’ rooms, “these bedrooms are way too small.” Really? I thought. The smallest was probably 14-by-15 feet. But each bedroom had at least one door or one window on each wall. Pretty, but the design left little room for furniture.
I suggested we more carefully design the new bedrooms — keeping the furniture placement in mind. In the end, we were able to easily accommodate each child’s bedroom furniture comfortably in smaller bedrooms than what they’d had before.
6. Consider the simple elegance of the box-form house.
Subtlety and restraint used to be virtues in home design. These days, far too often, inexperienced designers attempt to attract attention to their homes by adding more stuff –more gables, more materials, more bays, etc. Others know that proper proportion, scale and details are what turn heads.
The simple box house is a classic American form that’s survived 150 years of stylistic changes. Greek Revival, American Four-Square, Tidewater Georgian — all simple boxes. Great proportions, great details — done.
And here’s a bonus — the box form is easier and cheaper to build, and because it encloses a larger volume in less perimeter, it’s less expensive to heat, cool and maintain.
7. Share part of the master bath.
This isn’t for everyone, but it really tightens up the budget and the floor plan. Make the toilet and a sink in the master bath accessible to the rest of the house, instead of building a separate half bath — it won’t be used much by you during the day, and rarely by guests at night.
Why have two baths when one will do?
8. Spend it when you have it, not before.
Sure, it’d be great to have those granite countertops now, but your budget’s tight and granite is 10 times the cost of laminate tops. So how about putting in nice laminate tops now, and replacing them with granite in five years when you have the cash? You can easily do the same with light fixtures, flooring, window treatments.
9. Compartmentalized bathrooms — two baths in the space of one and a half.
Each kid doesn’t need his/her own bath, but they do need privacy and room to share. A compartmentalized bath puts two sinks in one room and the toilet and tub/shower in another — so three kids can use the bath at once and keep a little more harmony in the family home.
I doubt any of these ideas will ever make a magazine’s list of “Best Remodeling ROI” projects. But every one saves you money over a more “conventional” design strategy, and every one increases the livability of your home.
%Gallery-150238% More on Zillow: Beware of Value-Killing Home Renovations Tips for Fire Safety in Your Home Know the Tax on Your Investments
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/2012/03/23/9-unconventional-ways-to-improve-your-home/
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Impatient Buyers Target Homes Before They Go on Sale | RISMedia
Impatient Buyers Target Homes Before They Go on Sale
By Jim Buchta
(MCT)—House hunters frustrated with the market’s supply of homes have shifted their search from the streets to underground.
More buyers are targeting homes that haven’t yet hit the market, a trend agents say will grow as inventory shrinks and the mismatch of what’s available and what’s desired continues.
Such back-pocket deals used to involve mostly luxury homes where buyers and sellers wanted to keep the sale hush-hush. But lower-priced houses are becoming a bigger part of the mix because even those are in short supply.
Working behind the scenes gives buyers access to the deep well of homeowners who would like to sell, but don’t think the market is healthy enough to list. Agents say they identify these sellers through referrals, as well as track those who listed their homes but backed out when they couldn’t sell. There are also buyers who work with agents to make unsolicited bids on homes they think fit their needs.
“There is a shadow market out there with a lot of people who want to sell,” says Joe Grunnet, a broker in Minneapolis. Homeowners “just don’t know they can sell in this market. They still think the world is coming to an end.”
Housing experts say there is a robust stash of homes that aren’t on the Multiple Listing Service. CoreLogic says that for every two houses available in the United States in January, there was one in the “shadow,” or not yet on the market. There’s also a deep overhang of prospective sellers who have already decided to rent their homes rather than sell.
Mike Blood, who struggled to find a $150,000 to $200,000 home in the northern suburbs, recently caught a break. He spotted a construction dumpster in front of a house in Blaine, Minn., that he saw during an earlier hunt.
After learning that it was being readied for resale, he and his agent made an offer even though the home was months from being listed.
“I was so frustrated,” says Blood, who expects to close on the home next month. “And felt like I didn’t have anything to lose.”
Blood didn’t disclose the purchase price. He said he looked at about 60 homes, but they needed too much work or he got outbid.
Grunnet, whose firm specializes in sales and rentals of urban condos, said the stock of available units downtown is so tight that he often runs down the list of owners who are renting out their units to see whether they would sell.
During the first four months of this year, he said his brokerage has already sold more off-market properties than in the previous three years combined.
For Alison and Fred Parks, the decision not to list was a way to test the market and avoid having strangers traipsing through their $1 million-plus condo near the Mississippi River in downtown Minneapolis.
“We’re private people, living in a popular neighborhood,” they said.
The Parkses contacted Cindy Froid, a local agent who says that, on average, 30 to 40 percent of her deals come together before a public listing.
The couple gave Froid three months to sell, and it ended up selling within days to someone who already lived in the neighborhood for the full list price of $1.4 million.
Unusually low inventory is forcing Froid to get more creative in her efforts to reach prospective sellers. “It is a function of necessity,” she said. “It’s hunting and gathering. If it’s not online, I’m going to try to find it for you.”
Graham Smith, the agent who helped Blood, said that in some ways these premarket deals are simply a return to the basics.
“It’s good old-fashioned networking, that’s all it is,” he said. “It’s just using the tools available today to make it easier and more efficient to sell houses.”
©2012 the Star Tribune (Minneapolis) Distributed by MCT Information Services
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Viewpoint: Is Housing Crisis Just a State of Mind?
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?
#mini_module { width: 265px; height:220px; border: none; float:left; margin:10px; font-size:12px;} #mini_module img {border:none; width: 265px; height:131px; border: none; margin:0px; } #mini_module .mini_title { margin: 0px; padding:0px; width:265px; height:131px;} #mini_module .mini_main { margin: 0px; padding:0px; width:265px; height:85px; background: transparent url(http://www.aolcdn.com/travel/bg-short)} #mini_module .mini_item {padding:12px 0px; margin: 0px 20px; border-bottom:1px dotted #CCCCCC;} #mini_module a { color: #49A3CA; text-decoration:none; } #mini_module a:hover { color: #F98419; text-decoration:underline;}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.
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?
%Gallery-139870% 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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Luvin De Leon signs letter of intent to play football at Loomis Chafee Prep School
By: Jose G. Landa Throwing the winning touchdown or breaking a fifty plus yard run for the winning score at the Super Bowl, is a dream for many young men in the United States. C.C. Winn High School Maverick standout football player Luvin De Leon and District 29-5A rushing champion running back, on Friday, May 11, 2012, inked his way one step closer to keeping his dream alive of one day making it to the…
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Viewpoint: Obama’s Drop-in-the-Bucket Idea for Housing
Filed under: News, Advice, Economy, Financing, Foreclosures, Refinancing
Let’s hold off blaring the triumphant trumpets just yet for President Obama’s plan to allow holders of underwater loans to refinance at a lower rate through revisions in the Home Affordable Refinance Program.
What this change does is amend the loan-to-value ratio in a refinance. By removing the cap on how upside-down you can be, it will allow more people to avail themselves of the lower interest rates out there. You still will owe more than your house is worth, but you can pay less for the privilege.
Here’s what the proposed plan doesn’t do:
1. Reach many people.
The only homeowners who will qualify are those who are current on their underwater loans and have loans that are backed by Fannie Mae and Freddie Mac. (No jumbo loan holders or those with mortgages backed by the FHA or the USDA.) That’s an estimated 800,000 homeowners who can avail themselves of this. To put things in perspective, most experts say there are between 8 million and 9 million people in the foreclosure pipeline — and some put that number as high as 11 million. So 800,000 is hardly a game-changing number.
It is, perhaps somewhat ironically, about the same number of homeowners that HARP has helped to date. When the program was announced in 2009, we were told it would help 4 to 5 million underwater borrowers. To date, just 838,000 homeowners have been able to refinance through HARP. So even if this new tweak doubles the number of people helped, it’s still just a fraction of the number of people in trouble.
2. Reach the people who need it the most.
To qualify, you can have missed only one mortgage payment in the previous year and none in the past six months. The group being targeted here are those who are potential strategic defaulters — folks who go to sleep at night calculating whether it makes financial sense for them to just walk away. They have demonstrated that they can afford the loan because they are current on their payments.
The people who are not being helped here are the ones who can’t afford their mortgages anymore. These are the people at risk of losing their homes because of job loss, income reduction, illness, divorce or adjustable rate loan resets.
So to recap: If you are heading for foreclosure because you choose to be, this could change your mind. If you have no choice in heading for foreclosure, tough noogies to you.
3. Reduce anyone’s principal loan amount.
If your house is worth $200,000 and your loan amount is $250,000, you will still owe the bank $250,000 — just at a lower interest rate than what you originally signed up for. The underlying assumption here is that the housing market will recover sufficiently so that in a few years you will no longer be upside down on your loan — or if that doesn’t turn out to be the case, Obama won’t be running for re-election anymore and you become the next guy’s problem.
4. Help the unemployed.
The days of stated income — or no doc — loans are long gone. Consider them something you’ll tell your grandkids about, along with cell phones without cameras. To qualify here, you’ll need pay stubs, W-2s, tax returns and other documentation. And of course if you don’t have a job, you won’t likely be able to refinance your home into a lower-rate loan.
Here’s a little salt in the wound: Many long-term unemployed keep themselves afloat by working multiple freelance jobs. This puts them in the self-employed category — and even if they’ve managed to stay current on their mortgage, qualifying for the HARP relief would prove difficult because of their fluctuating income.
So the bank would rather keep them at a higher interest rate and wait for them to stumble than let them refinance into a lower interest rate. The fact that they have been making their payments faithfully doesn’t matter. The tweaks to HARP don’t tweak in the direction of the unemployed.
5. Pump more money into the economy.
The underlying logic behind this measure is that the money that those 800,000 lucky homeowners aren’t spending on their mortgage each month is money they’ll spend on other things — eating out, traveling, shopping — and that such spending is good for the economy.
Sorry, but this one has me laughing all the way to the credit union, which is where I suspect most of those homeowners will be headed too. First of all, their numbers are just too thin to make a statistical difference. This isn’t a “jump-start the economy” measure by a long shot. At best, it will allow a proverbial handful of homeowners to splurge on the occasional Friday night pizza, assuming there is enough left over from the “windfall” savings after they pay their health insurance and grocery bills.
Also see: Obama’s Refinance Plan Explained The Mortgage Fix That Can Save the Economy Republican Candidates: Short on Housing Policy, Long on Houses
%Gallery-135214% 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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Arthur Livingston, Thought Dead by Bank, Very Alive and Frustrated
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
%Gallery-146461% 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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Superstar real estate agent plots comeback
Filed under: Home Improvement
Motivated by greed and ego Those were the days when Americans were addicted to real estate. It seemed like on every cable channel, there was a different program featuring the nation’s collective obsession. Justo was in the middle of it all; a promo for “Million Dollar Agents” described him as “the biggest fish in Miami’s shark-infested pool of real estate.” Crews filmed him racing maniacally around Miami, showing luxury homes by
Motivated by greed and ego
Those were the days when Americans were addicted to real estate. It seemed like on every cable channel, there was a different program featuring the nation’s collective obsession. Justo was in the middle of it all; a promo for “Million Dollar Agents” described him as “the biggest fish in Miami’s shark-infested pool of real estate.”
Crews filmed him racing maniacally around Miami, showing luxury homes by day (from a helicopter) and going to parties at night (in a chauffeured Rolls Royce). Cameras captured his unorthodox methods of doing business: using a lunar calendar to plan deals, going barefoot during meetings, meditating with his sales team.
Justo was a natural on TV, with his amber eyes, bald head and perpetual tan. His custom-made, silk suits — white or black or occasionally red — looked suspiciously like pajamas, which he wore to closings and clubs alike.
“We get paid for having fun!” Justo roared in one episode.
Justo spent $1,000 on sushi lunches. $3,000 a month on life coaching. He didn’t accumulate many things — he enjoyed sparsely decorated, all-white furniture and rooms — and freely let his friends stay in the various homes he owned.
Justo says that during those years, he “wasn’t operating out of integrity” — and that many of the people surrounding him weren’t, either. Greed and ego were his motivation. He took advice, he says, from the wrong people and didn’t pay attention to details.
He also didn’t make many friends, says Kevin Tomlinson, a real estate blogger and Miami Beach agent who says Justo stole on of his clients in the late ’90s.
“When I got into the business, he was the king. He was the legend that everybody looked and aspired to be,” Tomlinson said. “But over the years, his reputation within the broker industry is a mixture of people being afraid or intimidated by him and his success or downright loathing.”
Justo took out mortgages he couldn’t afford, tapped into equity, splurged with credit cards. He didn’t diversify his portfolio and didn’t save a penny.
“I knew the market was going to crash,” he said. “It was irresponsible what we did, what all of us did in the United States. We took out huge loans, we bought things that people had no business buying.”
Checking account balance: $49.73
Friday, Feb. 13, 2009. A clerk at the federal court in Miami stamped “RECEIVED” on Justo’s bankruptcy filing.
For three years, Justo had tried to avoid filing Chapter 7, even borrowing $15,000 from his 85-year-old mother and $75,000 from his 83-year-old aunt to pay his monthly debts. But he was underwater on too many mortgages. There were other creditors, too, including the IRS, which claimed that he should have filed his taxes in the United States, not in the Virgin Islands, which Justo says is his principal residence.
He was named in two lawsuits, one filed by a former real estate agent who worked for his team, and another by Padron, his former business partner. Both sought hundreds of thousands of dollars, alleging that Justo didn’t pay commissions on various deals.
Justo had no savings, no stocks, no bonds.
His checking account hit bottom at $49.73. His financial picture was summed up in one dry sentence in the bankruptcy filing: “At the current time, the debtor has no income due to the state of the real estate market.”
That week, at the urging of a friend, Justo had offered his penthouse as a crash pad to a group of traveling Buddhist monks from Tibet. As the monks chanted in an even baritone, Justo’s mind reeled in turmoil.
“What happens if everything is gone?” he thought.
He wrote a $3,000 check as a donation to the Buddhist monks. It bounced.
‘A world with all possibilities’
Sparked by a former co-worker, Justo had studied New Age and Buddhist philosophy for years, visiting meditation retreats, spiritual centers and monasteries. But somehow, he said, the concepts of attachment and greed never really sank in until he went bankrupt.
It was the scariest thing he had ever done; scarier than meeting Fidel Castro twice in the mid 1990s, more daunting than coming out as a gay man to his parents.
“Fear is not something I’m familiar with,” he says.
It was scary, he said, because it forced him to confront the truth: He had failed. He had come close to bankruptcy before, always somehow pulling himself back from the brink by selling a property or getting a loan. There was no safety net this time, not in this economy.
When he first realized he was about to lose everything, Justo wondered whether it was better not to exist at all. It was the first time, he says, that he had ever considered suicide.
“Then I thought, I’m alive, I love my life. I have my health. I don’t have cancer,” he says. “I started to realize how little I need to really live.”
As he sheds mansions (five have already been taken by the bank, and it seems like the penthouse will be gone soon, as well) and possessions (he only owns about $6,000 worth of stuff, including furniture, clothing and, some Buddhist art), Justo insists that material possessions mean nothing to him.
And if he manages to make money again, he insists he won’t be foolish with it.
“I’m creating a real estate empire based on love,” he says, adding that he plans to give large chunks of his cash away to charity — once he puts a million dollars each in the bank accounts of his mother and aunt.
“In the past, I created my own hell. I needed to be brought to my knees,” he says. “Whatever you believe, you create. Today, I live in a world with all possibilities.”
But for Justo, those possibilities still include luxury. “I’ve been rich and I’ve been poor, and I like being rich a lot better,” he says.
He says that after he pays his family back, he wants a yacht. And maybe a personal chef.
Which begs the question: Has he really learned from his mistakes?
He’s back and ready to sell
It’s 8:30 a.m. on a bright Miami morning and Justo has assembled a dozen people in his penthouse. They sit in a circle facing the boss and drinking coffee.
Four of Justo’s “Billion-Dollar Team” are in attendance. One of his lawyers is there. So is Justo’s masseuse. And a banker who is foreclosing on the penthouse. There’s also an interior designer, a former client who owns a $12 million estate and the architect who is designing Michael Jordan’s Florida home.
Justo talks, nonstop, for nearly two hours. The message: He’s back and ready to sell. If he is afraid of the future — one in which he has to borrow money to pay his bankruptcy attorney, his cell phone bill and food — he’s not showing it. It seems as though Justo is actually having fun talking about his troubles.
“That Bernie Madoff guy, the day he came clean and said he stole all those millions, that’s the day he was freed,” Justo says.
It’s Justo’s acceptance of his failure that will propel him back to the top, his friends say.
“I fully expect him to land on his feet,” says Jeffrey Rubenstein, one of Justo’s lawyers. “He owns what has happened to him. In this day and age and particularly in Miami, that’s a very unusual thing.”
But his brother, Alex Justo, is worried.
“To me, I don’t think my brother needs what he’s trying to build again,” said Alex, who thinks his brother should focus on what he’s good at — selling — and not involve others in his success. “Forget about making this billion dollar whatever. There’s no other Realtor in town that does what my brother does. He’s a genius.”
Justo and two of his agents descend from the penthouse and hop in a Range Rover — the Rolls Royce is long gone — and they begin a daylong frenzy of appointments and meetings. First, a cup of turbocharged Cuban coffee with his mother. Then, a powwow with his bankruptcy attorney. In the lobby, a flat-screen TV broadcasts a CNN headline: “Good Borrowers Go Bust!”
When Justo emerges from the hour-long meeting, an agent tells him that a Saudi Arabian sheik wants to know if there are any estate rentals in Miami for $20,000 a month. Justo orders the agent to follow up, immediately.
In the car, there are calls to clients, showings arranged, listings discussed. Then, a break for lunch.
There are no more three-hour lunches. Justo and a few of his agents go to South Beach to eat on lounge chairs on the sand. His sales manager — a man from Macedonia who started as his chauffeur three years ago — totes a small bottle of sake in a lunch pail for Justo. Another agent brings a plastic bag filled with plastic foam cartons of ceviche.
Justo kicks off his loafers and strips his white pajama-suit off. He’s down to his black Speedo.
Finally, he’s stopped talking. He runs on the sand alone, toward the turquoise ocean. Wading into the water, he dives, head first, into a wave.
Return to Page One: Superstar Agent Plots a Comeback
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Young Real Estate Investor: Where to Stash Extra Cash?
Filed under: Advice, Investing, Refinancing
Andy Buman, 29, got interested in real estate a few years ago while working in construction. Since then, he has purchased two bank-owned single-family homes near Omaha, Neb., as rentals, and last fall bought a primary residence for himself and his fiancée, Valerie (both pictured at left). He has managed to save $20,000 in cash, and is looking for the smartest way to apply it.
Buman, an Iowa State graduate who now manages a call center, comes from a family of strivers. His great-grandfather emigrated from Germany and started the farm in Harlan, Iowa, where Buman grew up — and where his uncles and grandfather still raise 2,000 head of cattle and 1,000 acres of corn. (His dad went into banking.)
From the outset, Buman focused his real estate interests on a few small towns surrounding a retail distribution warehouse and a trucking center, about 25 miles from Omaha. The Omaha/Council Bluffs, Iowa metropolitan area had an unemployment rate of 4.9 percent in June, which explains how Buman managed to rent both homes five hours after listing them.
“There’s a lot of employment — services, farming, cattle, railroads, stores — it’s not hard to get a job here,” says Buman. “A lot of employees want to be close to work and the cost of living in these little towns is next to nothing.”
His first purchase was a two-bedroom, 900-square-foot home for $24,000. He invested $5,000 in repairs, rented it for $550 a month, and has already paid off the mortgage. Buman followed up with a four-bedroom 1,500-square-foot home. He paid $34,500, invested $7,000 in repairs and rented it for $700 a month. The home still has a mortgage balance of $16,500 at 5.5 percent.
Last fall, Buman and his college sweetheart, who are marrying later this month, bought a three-bedroom ranch 10 minutes from Omaha for $185,000. It’s close to family, and to the University of Nebraska Medical Center, where Valerie begins her residency next spring.
The home has a 30-year, fixed-rate mortgage at 4.25 percent, and a balance of $168,000. When the balance on the loan falls below $148,000, the couple can stop paying mortgage insurance, which costs $94 a month.
Buman’s question: With his extra $20,000, should he pay off the mortgage on the rental property? Pay down the single-family home to eliminate the mortgage insurance payment? Or consider another option?
See the full story at Daily Finance.
Also see: College Town Real Estate Investments Score High Marks Low Refi Rates Are Great, But Not for Everyone 5 Reasons Why Real Estate Deals Collapse
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/2011/09/08/young-real-estate-investor-where-to-stash-extra-cash/
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2011 in Real Estate: The Top 11 News Stories
It seemed like a race to the bottom this year: Along with continued declines in property values, every season seemed to see another record low in interest rates — though fewer-than-expected buyers were inclined to take advantage. Also on the way down or stuck in the cellar: the number of Americans who expected to buy their own home and their chances of qualifying to own one — though some scaled down their aspirations by looking into building smaller, more economical houses.
But perhaps the most significant decline came in the realization of the American dream. U.S. Census figures put the rate of homeownship at its lowest level since the Great Depression — 65.1 percent, with some analysts saying that the U.S. might never return to its mid-decade housing boom peak, when about 70 percent of occupied households were owned by their residents.
And though some analysts were still predicting even lower housing prices, and still more foreclosures, there were hopeful signs. A rise in home construction inspired more optimism among homebuilders. And some of the cities that have suffered most during the housing crisis finally saw significant movement in their real estate markets.
(Pictured above: An eviction team removes a family’s possessions from a foreclosed home in Longmont, Colo., in September.)
%Gallery-142375% Also see: Celebrity Real Estate Trends of 2011 Most Controversial HOA Moves of the Year Homes Lose $700 Billion in Value in 2011, Report Says
More on AOL Real Estate: Find out how to calculate mortgage payments. Find homes for sale in your area. Find foreclosures in your area. Finds homes for rent in your area.
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Source: http://realestate.aol.com/blog/2011/12/26/2011-in-real-estate-the-top-11-news-stories/
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Superstar real estate agent plots comeback
Filed under: Home Improvement
MIAMI – It’s the perfect Miami morning at Carlos Justo’s penthouse — warm and bright, with luxury yachts powering through the sparkling blue Atlantic Ocean some 30 stories below. Justo, a 53-year-old real estate agent, has been awake since 3:30 a.m. but he shows no sign of fatigue. His eyes scan back and forth, from the high rise condos, to the water, and back to the condos. An assistant, sitting at
MIAMI – It’s the perfect Miami morning at Carlos Justo’s penthouse — warm and bright, with luxury yachts powering through the sparkling blue Atlantic Ocean some 30 stories below.
Justo, a 53-year-old real estate agent, has been awake since 3:30 a.m. but he shows no sign of fatigue. His eyes scan back and forth, from the high rise condos, to the water, and back to the condos.
Carlos Justo, who once appeared on shows such as TLC’s ‘Million Dollar Agents,’ has filed for bankruptcy and has roughly $50 in his checking account.
An assistant, sitting at a glass table with her back to the stunning view, is talking business. She wants to know whether he will receive any commissions or checks anytime soon.
“Right now, we don’t have any money,” Justo says. He continues talking. Fast. Pacing back and forth, he gazes out the window.
“There’s money to be made,” he says, grinning. “I’m creating the team. I’m creating the billion-dollar real estate team.”
In fact, Justo is $20 million in debt. He is five months into a massive bankruptcy filing. The IRS is after him for $6 million.
And yet, he dreams.
Your Credit Score Can Cost or Save You Thousands. Know Where You Stand. Get Your 2009 Credit Report | Get Your 2009 Credit ScoreA Cuban immigrant who came to the United States with nothing, Justo’s is a rags-to-riches-to-rags story, a peculiarly American dream.
Carlos Justo meditates at his Miami penthouse. “I knew the market was going to crash,” he says. “It was irresponsible what we did, what all of us did in the United States.”
Once, he starred on the TLC network program “Million Dollar Agents.” There was a time he appeared in social columns for brokering real estate deals for one-named celebrities like J-Lo, Shaq, Versace, and two-named notables like Gloria Estefan, Sylvester Stallone, Rosie O’Donnell.
Like so many of our modern titans — like Donald Trump — he inspires both admiration and contempt. Greed, he acknowledges, fueled his rise. Hubris ensured his fall.
Next time, he says, it will all be different.
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A Star in the high-end market
Living among the wealthy didn’t come naturally to Justo; he was born in Cuba, and as a child lived without electricity, running water or plumbing.
His family came to Miami in 1967 when Justo was 11. He got his GED at night school but by the time he was 19, Justo had learned English and bought his first home — a modest, stucco triplex — for $20,000 with money he made as a janitor.
For the man who grew up with so little, talking about homes came easily. So he got his real estate license. Early on, he targeted the top end of Miami’s real estate market, the places most folks see on TV: mansions accessorized with palm trees, sugar-sand beaches and turquoise waters.
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In 2000, he brokered the $19 million sale of the area’s most famous home, the Ocean Drive mansion where fashion designer Gianni Versace was killed.
Justo’s success was astronomical, the product of his aggressive enthusiasm, uncanny knowledge of the ultra-rich and a phenomenal real estate market.
In 2005, Justo was worth $20 million. He and the agents who worked for him sold $200 million in real estate in a single year. He was also the owner of 12 multimillion dollar estates in the county’s most exclusive enclaves; he intended to eventually flip them and make a profit. Justo and his business partner, Irving Padron, were awarded a prestigious Sotheby’s franchise and opened its offices in one of the few historic mansions in downtown Miami.
His strategy seemed like a sure thing in a city filled with speculation.
Unlike most other brokers in Miami at the time, Justo never dealt in new condominiums — he thought they were too risky. In 2005, he was quoted in the Miami Herald as saying, “I refuse to sell condos; I think it’s irresponsible. They will end up falling on their asses.”
Continued on Page Two: Motivated by Greed …
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Source: http://realestate.aol.com/blog/2010/12/09/superstar-real-estate-agent-plots-comeback-02/
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Arthur Livingston, Thought Dead by Bank, Very Alive and Frustrated
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
%Gallery-146461% 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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