SENIORS - BE CAREFUL WITH REVERSE MORTGAGES!!!!!!!!!!!

 

 

Defaults on reversE mortgages aer reaching record highs and in some cases these types of loans are being blamed for turning seniors out of their homes!!  You have all probably seen the TV ads hosted by an actor, former senator, etc. promoting reverse mortgages.  They sure make them look like (as my kids would say) a "sweet deal".  Maybe, maybe not. 

 

If you are 62 years or older you can apply to borrow money against the equity in your home by executing a reverse mortgage.  These loans don't have to be repaid until you either move or you die.  Typically these types of mortgages are seen as a way to fund one's retirement by pulling the equity out of your home - equity you have worked hard to build up. 

 

Reverse mortgages make sense for some people - BUT NOT ALL PEOPLE!!  So be careful when you are considering this type of financing.  Think it through and ask for the advice of others that you trust.  AnD remember, you still have to pay taxes, insurance, and maintenance.

 

It seems that some lenders are advertising these types of loans as "free money"!!!  NOT TRUE!!  Just as with any type of loan you take out THERE ARE RISKS!!!  So again, always seek others advice.  One person you may want to talk to would be your attorney. 

 

According to a report in the New York Times several widows across the country have come forward saying they are facing foreclosure and eviction following their spouse's death because they were not included on the reverse mortgage deed - remember I said above to check with your attorney!!  These widows say they have no claims to live in the home unless they purchase it outright following their spouse's death.

 

The CFPB is working on a new set of rules for improving the disclosures on a reverse mortgages and the hidden risks as well as more supervision of lenders who issue these loans.  Meanwhile, be careful if you are considering a revers mortgage and again, SEEK COMPETENT ADVICE.

SEEMS LIKE EVERYONE IS IN DEBT THESE DAYS-EVEN THE FHA

 

The FHA was created about 78 years ago (during the great depression) to promote stability in the housing market and allow middle class families to attain the dream of "home ownership".  Have they done a good job?? - yes they have!! 

 

However, as predicted by a number of economists, this depression-era for homeowners seems to be going broke and may have to dip into the US treasury to keep it afloat.  Does that sound familiar?  And "wow" an audit seems to indicate that the shortfall will be in the 16 billion range.  This problem seems to be the result of the rolling housing debacle of the last decade.  Think of it - it only took about 10 years to undo 78 years of great service by FHA. 

 

I think it's fair to say though that without the FHA the current housing crisis might have been lots worse -but not without stress.  In times of crises when private financial institutions have fled the marketplace and have consistently failed to step up to the plate the FHA has remained steadfast. 

 

It will be interesting to see what steps the FHA takes to meet their current challenges.  Will they raise premiums; will they tap into the US treasury - who knows!!  It will be interesting to watch.

 

We will try to keep you up to date.



 

 

THE NEW EMERGENCY FORECLOSURE ASSISTANCE FUND

 

 

The recent landmark joint federal-state settlement involving the nation's five largest mortgage services will provide additional resources for foreclosure prevention services in Iowa through the Iowa Mortgage Help initiative. 

 

There is a new tool now available to eligible (and I emphasize eligible) homeowners through the new Emergency Foreclosure Assistance Fund.  This fund may assist homeowners in filling gaps to make their mortgage payment with up to $2,000 in assistance.  The program could possibly help about 500 Iowa homeowners avoid default and foreclosure.

 

Iowa homeowners who are behind, or feel they may soon be behind, on their mortgage are encouraged to seek assistance by calling eh toll-free Iowa Mortgage Help hot line at 877-622-4866.

 

This initiative is a partnership between the Iowa Attorney General's Office and the Iowa Finance Authority that offers free, confidential help from local, trained counselors. 

 

IF YOU KNOW OF ANYONE WHO MIGHT BENEFIT FROM THIS PROGRAM PLEASE LET THEM KNOW!!!!!!!!!!!!

PRICE YOUR HOME TO SELL

Home Gain.com, a real estate services website revealed that 76% of homeowners believe their home is worth more than the list price recommended by their real estate agent - what the heck, my home is worth more just because I live in it!!

Home buyers usually have a better grasp of current home values where they are looking to buy than sellers who live there do.  Buyers look at a lot of new listings - they make offers, know what sells quickly and for how much - AND they know what doesn't sell and why. 

Soooo- your home is worth what a buyer is willing to pay for it given current market conditions.  Unfortunately, this may not be the same as your opinion of what your home will sell for, or what you hope it is worth.  Relying on emotion rather than logic when selecting a list price for your house can lead to disappointing results. 

Your home will be most marketable when it is new on the market.  Buyers wait for new listings, and usually it's the new listings that receive the most showings and have the busiest open houses.  So don't forget that when your house is newly listed it's the best opportunity for your agent to show your house off - but don't forget it's the list price that will entice the buyer to look.

When establishing a list price for your house it helps to understand how real estate professionals and appraisers establish an expected selling price or price range for your home. Both research the recent listing inventory of homes similar to yours that have sold in the past 12 months and then they make plus and minus adjustments for the differences.  So, let's say that the house next to yours which sold 3 months ago for $150,000.00, is an exact duplicate except that yours has a fireplace. They would add the value of the fireplace (say $2,500.00) to the $150,000.00 and arrive at a probable value for your home of $152,000.00.  It can be a little more complicated than that but it gives you some idea of the process.

It's sometimes difficult for sellers to step back and take an attitude of detached interest in their home.  But, it's essential to do so if you want to sell successfully in any market. Don't rely on rumors circulating in the neighborhood about how high a home sold.  Prices tend to get inflated when passed from one person to another.  Select your price based on facts.  Beware of the agent who is willing to take your listing at any price!!  They are not working in your best interest.

FALL IS COMING!! DON'T LIGHT THAT FIRE UNTIL YOU HAVE YOUR CHIMNEY CHECKED!!!!!!

So you are chopping and stacking wood for that pleasant evening fire this winter.  When is the last time you had your chimney cleaned.  Here is some information on chimneys that may be of interest to you . 

As wood burns not all of it is consumed, and what isn't consumed goes up your chimney in the form of creosote and soot.  Creosote is a thick, oily (oil burns when it reached a certain temp) material that results from the distillation of wood smoke which solidifies as it cools. Soot on the other hand is basically particles of partially burnt material that builds up in chimneys.  If enough soot and creosote build up they can clog your chimney.  That's not good, but what is worse is if the temperature in the chimney gets hot enough the build up of creosote in the chimney can ignite.  I have seen chimney fires destroy entire homes.  Since the fire usually starts in the attic area it can go unnoticed until it is too late. 

What's the solution?  Either clean the chimney yourself or hire a qualified chimney sweep.  Notice I said "qualified".  Make sure they are licensed, bonded and insured.  I had a neighbor once have an unqualified sweep clean his chimney and he ended up with a house full of black soot.

So you want to do it yourself!!!  You can probably get the supplies you need at any fireplace shop or hardware store. Go on line and google "how to clean a chimney" and follow the directions.  However, don't be surprised if you end up with a house full or black soot. 

How often should you clean your chimney?  Depends!!  If you are in the habit of damping your fire down and depriving it of oxygen (bad idea) so it will burn longer the result will be more smoke and more partially burnt solids.  These solids can build up rapidly and the chimney will get much dirtier more quickly.  So you clean more often.  Make a visual inspection to determine what's appropriate for your situation. 

ENJOY YOUR FIRES THIS WINTER!!!

STRATEGIC DEFAULTERS

Have you ever heard of the term "strategic defaulters"??  They are considered underwater homeowners (for whatever reason) who walk away from their mortgages even though they still have the means to pay.  The Office of the Inspector General (OIG) at the Federal Housing Finance Agency is trying to find them so they can collect on what they still owe.

It is estimated that 20% of all foreclosures are from "strategic defaulters".  The OIG estimates that "strategic defaulters" owe more than $1 billion to Fannie and Freddie and they are ready to collect it.  They are looking!!!  They are working with Fannie and Freddie to develop a way to identify these culprits.

Here is a recent warning from the OIG in regard to "strategic defaulters" - Walking away from a mortgage that you can afford to pay constitutes mortgage fraud and those responsible will be referred for criminal prosecution.  Says Heather Wolfe, OIG assistant inspector general "We are going to lock people up". 

AND THEN WE WONDER WHY OUR COUNTRY IS IN SUCH BAD FINANCIAL CONDITION!

5 REASONS IT'S SMARTER TO BUY THAN TO RENT- 1. Real estate keeps pace with or exceeds the rate of inflation. Even in areas hit harf by foresclosures, virtually all of them have shown substantial increases in real estate values when viewed in the long term. 2. The lowest interest rates since the 50's. Consider buying now - here is why; With the government running huge deficits, it will have to sell treasury bills to cover the debt. Investors are feeling skittish about purchasing these securities. 3. Increasing interest rate add up quite fast. An interest increase of just 1 percent results in about a 25 percent increase in interest costs over the life of a 30 year fixed-rate loan. 4. The market may be close to bottomed out. Take a look at your local market in your specific price range. Look at the number of months of inventory now vs. six months ago and one year ago. If the number of months is declining that lets you know that your market may already have reached bottom. 5. Build your wealth - NOT YOUR LANDLOARDS. When you purchase you lock in a payment at today's rate. Assuming that inflation is average - 2.54 percent per year - 10 years form now your monthly payment will be the equivalent of 75 cents on the dollar.

HAVING YOUR HOUSE APPRAISED - READ THIS!!!!!!!!!!! Flawed appraisals seem to be killing deals in some areas. The inappropriate use of distressed and foreclosed properties as comparables in determining home values may be driving prices down in some cases. This practice prepetuates the cycle of declining home values in some markets. If you are having your home appraised you may want to check out the comps the appraiser uses to determine value. If necessary, argue your poing.

THINKING OF BUYING A HOME SOON? HERE ARE SOME FACTORS YOU SHOULD CONSIDER- 1. Although the market seems to be stabilizing some and home prices were down about 2.5% last year the recovery is still expected to take quite some time. You should factor his into your decision to buy. 2. With regard to potential price declines, even though most of todays sellers have some difficulty selling at current market value it's unlikely they will be willing to compensate you for a potential event that may not happen. What you really need to know is that you are not paying too much. 3. The more information you have about the market, in the area you are looking, the better. The market is different in different locations of the country. The big question is, is the market you are looking in healty. If it is consider yourself in a near normal market and act accordingly. 4. Take a look at the local economy. Are jobs being created or lost? Are public services being cut? The answers to questions like this will tell you a lot about your market. 5. If there are an oversupply of homes in your market you may have a compettive edge. 6. The inernet is a great source of information. However, it does not replace of seeing a home that interests you nor does it replace the value of a good real estate agent. 7. The best way to avoid overpaying is to look at enough homes that have the features you are looking for. You can actually become as good (or better in some cases) as the agent you are working with. They need to be up to snuff in all price ranges - which can be a daunting job. You only need to be up to snuff in the price range you are looking in. 8. Create files for flyers and information on homes you look at so you can catorgize them. Or better yet get hooked up with an agnet that can help you achieve that. Some agents can set you up with your own web site to help you manage your search. GOOD LUCK IN YOUR SEARCH FOR A NEW HOME!!!!!!!!!!!!!!