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!
Tuesday, September 25, 2012
Monday, May 14, 2012
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.
Thursday, May 10, 2012
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!!!!!!!!!!!!!!
Wednesday, September 21, 2011
TOP REASONS TO OWN A HOME
1.SAVINGS-Long term home ownership is still a way to get big savings!!
2.TAX BREAKS-Interest deductions,rebates and tax credits are still available. They can add up fast.
3.EQUITY-Why build up a landlords equity? Invest in a home and build up equity for yourself and your family. And don't forget about appreciation. If you buy a home for $200,000.00, and hold it for 15 years you will have built up equity equal to about $24,000.00 by paying down your mortgage,plus if it appreciated $25,000.00 you would have realized almost $50,000.00. What would you have if you were renting???
4.BUDGETING-If you are renting you will never know how much your rent is going to go up - and it will go up. If you own, you will know exactly what your monthly expenses will be and you will be able to budget.
5.SECURITY-You own it!!! It's yours to do with what you like.
FSBO FOUNDER USES AGENT TO SELL MANHATTAN DIGS
For Sale By Owner .Com founder Colby Sambrotto recently abandoned his efforts to sell his 2 $million apartment himself and turned it over to a real estate broker. The Broker promptly sold the unit for $150,000.00 more than he had been asking. The For Sale By Owner.Com web site boasted that homeowners did not need real estate professionals to sell their properties. Hum! Kind of makes you wonder does it not?
HAVE YOU HEARD?
Foreclosures were reported to be down 7% in July. Here's what they did not tell you- the decline was largely due to problems in getting notices into the hands of consumers rather than an improving housing market. It looks like more distressed homeowners have been able to stave off foreclosure.
DO YOU OWN RENTAL PROPERTY?
Rental property owners continue to enjoy the benefits of a struggling real estate market. If you are able you can buy investment properties that will give you a return on your money 5 to 10 times what you will realize putting your money in a bank. Food for thought.
AND FOR US SENIORS-
AARP has found that 32% of seniors believe their home values have deteriorated so badly that they will be forced to put off retirement. They found that seniors had planned to sell their large homes and downsize and use the profit to finance their retirement. The question is how long will this last.
THE BRIGHT SIDE-
Despite all the negative news we get these days there is a bright side. That is, we are probably half way or better through this economic crises. We are Americans and we are tough -always have been- so we can handle this even though it is rather unpleasant.
1.SAVINGS-Long term home ownership is still a way to get big savings!!
2.TAX BREAKS-Interest deductions,rebates and tax credits are still available. They can add up fast.
3.EQUITY-Why build up a landlords equity? Invest in a home and build up equity for yourself and your family. And don't forget about appreciation. If you buy a home for $200,000.00, and hold it for 15 years you will have built up equity equal to about $24,000.00 by paying down your mortgage,plus if it appreciated $25,000.00 you would have realized almost $50,000.00. What would you have if you were renting???
4.BUDGETING-If you are renting you will never know how much your rent is going to go up - and it will go up. If you own, you will know exactly what your monthly expenses will be and you will be able to budget.
5.SECURITY-You own it!!! It's yours to do with what you like.
FSBO FOUNDER USES AGENT TO SELL MANHATTAN DIGS
For Sale By Owner .Com founder Colby Sambrotto recently abandoned his efforts to sell his 2 $million apartment himself and turned it over to a real estate broker. The Broker promptly sold the unit for $150,000.00 more than he had been asking. The For Sale By Owner.Com web site boasted that homeowners did not need real estate professionals to sell their properties. Hum! Kind of makes you wonder does it not?
HAVE YOU HEARD?
Foreclosures were reported to be down 7% in July. Here's what they did not tell you- the decline was largely due to problems in getting notices into the hands of consumers rather than an improving housing market. It looks like more distressed homeowners have been able to stave off foreclosure.
DO YOU OWN RENTAL PROPERTY?
Rental property owners continue to enjoy the benefits of a struggling real estate market. If you are able you can buy investment properties that will give you a return on your money 5 to 10 times what you will realize putting your money in a bank. Food for thought.
AND FOR US SENIORS-
AARP has found that 32% of seniors believe their home values have deteriorated so badly that they will be forced to put off retirement. They found that seniors had planned to sell their large homes and downsize and use the profit to finance their retirement. The question is how long will this last.
THE BRIGHT SIDE-
Despite all the negative news we get these days there is a bright side. That is, we are probably half way or better through this economic crises. We are Americans and we are tough -always have been- so we can handle this even though it is rather unpleasant.
Wednesday, August 17, 2011
MORE ON THE MORTGAGE INTEREST DEDUCTION
Recent speculation over eliminating or reducing the mortgage interest deduction has caused widespread rumors and myths about the vital tax benefit for homeowners. The MID is not only crucial to the stability of the American housing market and the overall economy, but any changes to it could lower the homeownership rate in the U.S.
“As the leading advocate for homeownership, Realtors® believe the MID makes a real difference to homeowners, especially hard-working middle-class families,” said Bob Neuwoehner of American Realty. “This fundamental tax benefit reduces the carrying costs of owning a home, making homeownership more attainable for families. It also helps those without thousands of dollars in savings who cannot buy their home outright begin to build their financial future through homeownership.”
As Congress has looked for ways to address the deficit, some have suggested placing additional limits on the MID. We question the connection public policy makers are trying to make between the debt and the MID.
“It’s ridiculous to say that the MID is suddenly part of the deficit problem – the MID has been part of the federal tax code for nearly 100 years,” said Mr. Neuwoehner “Reducing or eliminating it is a de facto tax increase on homeowners, who already pay 80 to 90 percent of U.S. federal income tax. That share could rise to 95 percent if the MID is eliminated.”
According to the 2011 National Housing Pulse Survey, Americans are adamantly against eliminating the MID. Two-thirds of respondents opposed eliminating the MID, and 73 percent of Americans said eliminating the MID would have a negative impact on the housing market and the overall economy.
We also dispute the misconception that only the wealthy benefit from the MID, when in reality it primarily benefits middle- and lower income families. Almost two-thirds of those who claim the MID are middle-income earners; 65 percent of families who take the MID earn less than $100,000 a year, and 91 percent earn less than $200,000 a year.
“Is focusing solely on tax rates a better goal than protecting the wealth of the middle class?” “Changes to the MID could further damage the housing market’s recovery as well as the overall economy and job market. It is imperative that the MID remain intact and that Americans continue to receive this important benefit.”
“As the leading advocate for homeownership, Realtors® believe the MID makes a real difference to homeowners, especially hard-working middle-class families,” said Bob Neuwoehner of American Realty. “This fundamental tax benefit reduces the carrying costs of owning a home, making homeownership more attainable for families. It also helps those without thousands of dollars in savings who cannot buy their home outright begin to build their financial future through homeownership.”
As Congress has looked for ways to address the deficit, some have suggested placing additional limits on the MID. We question the connection public policy makers are trying to make between the debt and the MID.
“It’s ridiculous to say that the MID is suddenly part of the deficit problem – the MID has been part of the federal tax code for nearly 100 years,” said Mr. Neuwoehner “Reducing or eliminating it is a de facto tax increase on homeowners, who already pay 80 to 90 percent of U.S. federal income tax. That share could rise to 95 percent if the MID is eliminated.”
According to the 2011 National Housing Pulse Survey, Americans are adamantly against eliminating the MID. Two-thirds of respondents opposed eliminating the MID, and 73 percent of Americans said eliminating the MID would have a negative impact on the housing market and the overall economy.
We also dispute the misconception that only the wealthy benefit from the MID, when in reality it primarily benefits middle- and lower income families. Almost two-thirds of those who claim the MID are middle-income earners; 65 percent of families who take the MID earn less than $100,000 a year, and 91 percent earn less than $200,000 a year.
“Is focusing solely on tax rates a better goal than protecting the wealth of the middle class?” “Changes to the MID could further damage the housing market’s recovery as well as the overall economy and job market. It is imperative that the MID remain intact and that Americans continue to receive this important benefit.”
HOUSING ISSUES CURRENTLY BEING DEBATED IN CONGRESS
HERE ARE SOME HOUSING ISSUES CURRENTLY BEING DEBATED IN CONGRESS THAT SHOULD BE OF INTEREST TO YOU.....
Mortgage interest decuction (MID)-This is one way some politicians are trying to address the deficit problem - they want to eliminate the MID. How about that!! Take your real estate taxes and multiply it by your tax rate and that's about how much it will cost you. You say you don't agree with that? Better contact your representatives soon!!!
Penalties for down payments less than 20%. A loan that is 80% or less of the value of the property being purchased (usually the purchase price of the property) is called a Qualified Residential Mortgage or (QRM). In a nut shell buyers who can't come up with 20% down would be required to pay .8 to 1.85% more interest. There was a time when that was probably appropriate. But given the situation now, and with the underwriting requiements that are in place now it does not make much sense to me. How about you???
FHA loan limits The FHA has been a big part of the backbone of home ownership for years. They help people who may not have that 20% down and who may not have high credit scores become homeowners. Some politicians want to shrink FHA and limit the number of buyers it supports. Bad idea in my book.
Give some thought to these issues. When you do remember that housing is a huge part of our national economy. SHARE YOUR THOUGHTS, WHATEVER THEY ARE, WITH YOUR LIGISLATORS AND REPRESENTATIVES
Mortgage interest decuction (MID)-This is one way some politicians are trying to address the deficit problem - they want to eliminate the MID. How about that!! Take your real estate taxes and multiply it by your tax rate and that's about how much it will cost you. You say you don't agree with that? Better contact your representatives soon!!!
Penalties for down payments less than 20%. A loan that is 80% or less of the value of the property being purchased (usually the purchase price of the property) is called a Qualified Residential Mortgage or (QRM). In a nut shell buyers who can't come up with 20% down would be required to pay .8 to 1.85% more interest. There was a time when that was probably appropriate. But given the situation now, and with the underwriting requiements that are in place now it does not make much sense to me. How about you???
FHA loan limits The FHA has been a big part of the backbone of home ownership for years. They help people who may not have that 20% down and who may not have high credit scores become homeowners. Some politicians want to shrink FHA and limit the number of buyers it supports. Bad idea in my book.
Give some thought to these issues. When you do remember that housing is a huge part of our national economy. SHARE YOUR THOUGHTS, WHATEVER THEY ARE, WITH YOUR LIGISLATORS AND REPRESENTATIVES
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